Ed Halil brought up the very interesting issue of how the
market can be disrupted by brokers. Some of these operations appear to ride
right over the licensing rules of local authorities.
London currently has a large number of companies that are
app-driven chauffeur services and all do the same thing. They claim to be
partners with established companies and offer digital booking services that are
promised to send business to firms that are well established.
Blacklane, a German company that is growing quickly, is the
latest provider that has wasted absolutely no time doing business in the UK.
The company’s founder says, "We work in close partnership with local
limousine service providers, bringing additional business rather than
generating competition."
That sounds reasonable however, at some point in the future
Blacklane will want to take a cut for the referrals it gives. The same applies
for Uber in the United States, which is testing a fairly similar service. At
least three companies are pretty open about their fees. You can see their
fares. The result is that the chauffeur company will have to agree with the
fare price Blacklane or Uber will give them.
Less professional brokers work a bit differently. They offer
lower priced fares like airport runs on a take-it-or-leave-it basis. The
majority of the better operators refuse this work, but the operators at the
bottom of the ladder will not.
Customers may believe they are getting a great deal, until
they see the driver dressed in flip-flops, shorts and a football shirt.
Scruffy! Kudos, to Maidstone Council for requiring its driver’s to follow a
dress code. This entire means that the respectable local providers lose out on
a job. The only one winning is the broker.
The London PCO model provides a great template for taxi and
PHV licensing and we would like to see a more regional approach taken which
follows this template. Cross-border operations are reasonably well controlled
even though we have a very fragmented mess. However there are some local
councils who happily license and operator who is pursuing trade via the
internet far away from his minor base.
If you are feeling a sense of déjà vu, it is because this is
one of the principal reasons beyond the demise of the market for stretch limos.
Here a small number of brokers employing search optimization experts could
easily trap people into using their services.
Price is king. It always has been. The customer cannot
communicate with the actual company who will provide the service. The broker
may appear professional but the job can be given to any operator, professional
or not, who is willing to take it. It is important to remember that most of
this business still remains outside any governmental control. It is no surprise
that VOSA continues sending its Town Cars to be crushed.
If we don’t make changes soon, we may very well fact a
similar situation in the licensed private chauffeur and hire sector. Hopefully
the Law Commission is paying attention to these trends and will soon
incorporate a reasonable strategy with regional PCOs located in major cities.
