SPEAKER_01 0:00

This has been an unbelievable travel summer for me. I've taken 51 chauffeur cars. I've been in and out of London. I've been and out of New York several times, Chicago, Florida, California, Texas, and Las Vegas. And I also secret shop. I secret shop, Black Lane, as well as just, you know, regular chauffeur companies. Out of those 51 trips, I can tell you I was disappointed quite a few times. The tracking is inconsistent. Some people send you confirmations by email and the tracking that the chauffeur is on the way by email. Other people text message you, automated messaging. Other times the chauffeur will send you a message and a few times didn't spell my name right, but it was so inconsistent it was unbelievable compared to what we compete against.

SPEAKER_00 0:52

You're listening to the Ground Transportation Podcast with Ken Lucci of Driving Transactions and James Blaine of PAX Training. Learn how you can build a thriving transportation business with real profits, repeat clients, and enterprise value. And now for your hosts, Ken and James.

SPEAKER_01 1:09

Well, good afternoon, Ground Transportation Podcast audience. My name is Ken Lucci. I am the principal business analyst, actually senior business analyst. Now I'm getting old at driving transactions. And this is another episode of the Ground Transportation Podcast. I'm sad that I'm not joined by my co-host, James Blaine, but it's going to be a solo episode because it's going to be all about the state of the industry data. This is a presentation I gave at the chauffeur-driven NLA conference in DC, but I've expanded a little bit and I want to spend a lot more time on it because I'm just the intro act, but I want to spend a lot more time drilling down on it. So I'm pleased to report that the U.S. chauffeured and motor coach industry combined, when you look at all aspects of it broken down by vehicle size, we're $21.42 billion industry. Now, the strict chauffeured side of the business and luxury sedan and SUV, as well as vans and minis, those are growing at about 2.67% compounded annual growth rate. Whereas the motor coach industry, the buses, the big coaches, are growing at 5.2% compounded annual growth rate. Now, am I telling operators to go and buy buses? No, I'm not. Because it's a totally different business. And as someone I really admire said to me the other day, you just can't dip your toe into this. You absolutely need to completely pivot and shift your business from a safety perspective, from a regulatory perspective. It is quite intense. But the entire industry is growing at about 21.42 billion, and the entire industry is growing. We are concerned slightly when you look at this question mark. We're concerned about the luxury sedan and SUV space, and we'll get into that in a little bit. I want you to remember this number. $6.96 billion a year of our industry is coming from luxury, sedan, and SUV. But everything is looking solid, but we are concerned about expansion of market share in that space. I want to take you through the recent survey that we did in conjunction with our partner, Shoeffer Driven Magazine. Lots of love and shout out to Chris Weiss and Susan Rose and Rob Smentek for working so hard with my producer and survey guy, John Tireman, to put out these quarterly surveys. So this data we're going to talk about is our respondents, survey respondents, plus our internal data. And it's over 200 survey respondents plus our internal data on about 100 companies. And the beautiful thing about this is what you're looking at as far as company revenue size is a perfect, almost perfect demographic to the industry. 31.8% of our industry, of the survey respondents, and about 30% of the industry, they're small operators, less than $1 million in total revenue. And then when you talk about the bigger operators above $5 million, that above $5 million all the way through 20 million and greater is about 30% of our industry. Take a look at the greater than 20 million. I'm astounded that we have data on this many companies. And it's great information to help you grow your business. So from a perspective of the entire industry, about 62% of the survey respondents basically state that they're expecting their annual revenue growth to be above 2025, which is really good. 23% about the same, and 16% are lower. And when you take a look at the revenue growth, we've got it on the right side. The smaller operators, less than $1 million in total revenue, they're up about 9.2%. And the big operators, the large ones, over 10 million, they're up by 13.7%. Some takeaways here. We're seeing the airport service as flat. Again, getting back to the Sedan and SUV. We're seeing a lot of growth in the large vehicle classes from vans, mini coaches, especially, 10% revenue growth. And obviously, the industry benefited from a major national event in the middle of the year, FIFA. So 62% of the companies are growing. The profit trends, about 37% of those companies surveyed, are higher profitability. Now, our retained clients, about 80% of them are higher in terms of profit because we're helping them manage their entire financial reporting. The key takeaways, 39% are about the same as far as profitability, 24% are lower. We'll kind of get into some reasons why on the lower side when we get to the next slide. But the companies that are more profitable, drilling down into the data, are managing their cost, the cost to do the work, and they're getting greater fleet efficiency. What do we mean by that? A lot of companies that we work with are doing balance between in-house fleet and the work that they're sending to the local provider IOs that they work with. We're seeing a lot of people doing much more revenue generation from national trips where they farm out. So what does that usually do? It means you're turning one transaction potentially into the round trip, potentially into four legs. So their overall operations, they're focusing on getting more efficient. We're seeing lots of activity in the larger vehicle space and with higher profit trips. Now, just because you have large vehicles doesn't mean your profits could be higher. Actually, it can be quite the opposite if you don't know how to manage the business properly. But vans and minis, typically the quality vehicles for corporate groups and meetings and private events, the quality sells at higher prices. So the newer equipment, the operators that are pricing in the top one-third of their market, that's where the profitability comes from. We're also seeing a really massive trend with people lowering their administrative labor and cutting overhead expenses. A lot of people are using AI and they're lowering their administrative overhead labor by streamlining with technology, trying to cut out manual processes. Pricing trends. We asked a question on the survey, and plus we looked at obviously the retained data. 60% of the operators out there raised pricing. I am shocked that 39% kept their prices the same. I actually went back and looked at all of the survey data to make sure that we formulated that question the right way. And we did. I'm shocked because on average, repair and maintenance has gone up 22% since pre-pandemic. Parts of labor have gone up 14% to repair vehicles year over year. So I'm shocked that people are not adjusting their prices to keep with their cost. And that's probably one of the main reasons why their profitability is lower. So we're seeing price increases where the market will bear it on large capacity vehicles. Large capacity vehicles, there's much less pricing pressure in the market. We are not seeing a lot of increases in sedans and SUVs, but we're seeing increases in fuel pricing, the fuel surcharge or STC. What we are seeing is the successful companies we work with have a balance of in-house fleet to do their sedan and SUV work, plus really good quality, independent operators that they can work with locally, and they're able to make good margin on that work. So the companies that are really more profitable and they're not adjusting their prices on sedan and SUV, but they're still not saying no. They're saying, yes, of course we can take care of that. And they have a system in place where they're issuing that job to independent operators. The second takeaway, third takeaway, is every operator we work with is scrutinizing all their contract pricing. I cannot tell you the number of customers we deal with where we've said, look, let's look at that airline crew contract or let's look at that shuttle contract. And we're seeing contract prices that have not been adjusted in a few years and costs have gone up. So you have to absolutely look that at that. That's almost like an annual or semi-annual review. Of the price increases by company size, you can see that the smaller companies raise the prices by 9.2%, and the large, large companies raised by about 5.3%. Why? Larger companies are dealing with corporations that are much more difficult to negotiate with, and their terms are out there, maybe 45%, 60% or even 90-day pairs. So I'm not surprised to see that. So another not surprise is fleet insurance is the leading cost increase in the industry. The leading category of increased cost on the PL has been fleet insurance for three to five years. And you can see here that operational expense, basically, insurance has increased across the board on 82.1% of the operators. Fuel, obviously, that's up. Parts and labor, way up, chauffeur labor is way up. But insurance leads the pack, and here's why. The top three reasons commercial fleet insurance premiums are increased is number one, large liability verdicts, what they call the nuclear verdict, where there's multi-million dollar judgment and high litigation cost, higher claim severity, rising medical costs. Vehicles are massively more expensive to repair and maintenance. I was talking to an operator the other day that had a brand new Lincoln Navigator, I think it was a navigator, it might have been a Nautilus that got hit by a deer. There was very little damage to it except the airbag was back ordered for six months. And it was a $14,000 bill. So you have to look at that, right? That's why it's so high. And then prior year claim deficiencies, insurance claims from prior years, they've had to increase their reserves for older claims with higher than expected settlement costs. So here's one of the things that I want, because I want to pause on this slide. Stop blaming your insurance agent or your insurance brokers. It's not their fault. Let me tell you what I mean by that. Last year in 2025, the U.S. commercial auto insurance industry experienced approximately a $1.2 billion net underwriting loss during 2025. Now that's an improvement. The year before they lost $4.9 billion. But what does that mean? For every thousand dollars that they write, they're losing $1,900. For every $100 that they write in policy, they're paying out $190. So for every buck, they're paying out almost two bucks in losses. So we as an operator have to get deathly serious about our safety. And if you're just using safety as a checkoff instead of a cultural change, you have to go back and listen to the podcast where we had the author of one of the best safety books in the industry out there. You have to, you have to instill a culture of safety and coaching and changing behaviors. But stop blaming the insurance companies. It's just nothing they can do about it. It's a permanent hard market, permanent hard market. But let's get on to some fantastic news. Global air travel passenger growth forecast are unbelievably strong in sustained growth. It's going to be through 2052. And these this is really exponential growth. When you look at and you're looking on YouTube, it's almost, you know, it's kind of like a hockey stick. And this is, we'll source this in the report, but this is right from the airport airline industry, right from the industry statistics. So the key takeaways when you look at this global airline passenger growth is 5%. The international growth segment is the most where we're seeing the most growth. International passenger growth is broadcast to grow steadily at 5% compounded annual growth rate through 2042. Over the next five years, 25% more passengers are going to be traveling internationally. Domestic growth, really good. 3.8% compounded annual growth rate. So when you look at that over five years, compounded, that's about 20% more people are going to be traveling domestically. Internationally, by 2042, 45% of all passengers will come from the international segment. We should be growing our businesses globally. We should be asking the question: can I provide service in your destination cities and give them the value proposition? One secured transaction. I'm going to track your travel. I'm going to make sure that driver in Italy and Rome is going to be there for you. You don't have to give anybody internationally your credit card. I've got you covered. So international growth regions, Middle East, Asia Pacific, big growth areas, semiconductors, rare earth definitely is driving the growth in those areas. Domestic growth, it's all the sunny states. It's Texas, Florida, Arizona, North Carolina, South Carolina. In all of those states, massive growth in airport, massive undertaking of infrastructure growth in those areas. So you need to take advantage of it. Why is it important? Why do I always focus on airline and airport and the shofer airport transfer? Simple. 67% of the reasons why corporations use shofer services specifically to or from airport transfers. It represents the largest and most consistent revenue opportunity. In addition to that, 86% of corporations use us for sedan and SUV almost exclusively. And that's for groups and meetings, that's for executive meetings. That would be FBO travel. That would be keeping the car in an urban city all day when they're traveling in and then traveling out. But the largest reason why corporations use us is to and from airports. Now, we need to let all corporations know that we do a lot more than just airport. There is by increasing awareness and showcasing our relevant use cases, we do motor coach, we have better luxury motor coaches, we are better at it than bus providers, et cetera. We absolutely can capture a larger share of the corporate travel spend, but it is imperative that we hold on to the airport, Schauford Airport service for our growth. If we give up that, it makes it much more difficult to what I call grow the travel wallet for corporations, to grow the depth of the relationship with every corporation. In addition, airline passenger trends, did you know that three out of four trips by airplane are taken for personal reasons? I had a really solid questioning of this data with a network operator who I really enjoy speaking to. And we we coined the phrase never never question the data. This comes right from a AAA air travel survey. It's an ongoing survey by Ipsos, one of the best research firms and polls, polling companies. And it's from 2015 to present. It's done by the airline, it's paid for by the airlines. And by the way, the statistic on airline passengers, airline passengers who travel for personal reasons and reside in the suburban wealthiest zip codes, they're perfect demographic for us. Perfect demographic. And guys, 80% of private travel decisions are made by women. The women in our lives make the travel suggestions or travel decisions. And personal trip categories, leisure and recreation, scheduled vacations, to and from colleges, to and from family events, job interviews, funerals, medical, et cetera. So what am I saying here? Instead of fighting for the 16% of every airplane that's corporate, let's go after the personal. Let's build the use case that we are the safest, most reliable way to get to and from the airport. You don't have to wait in lines, the Uber line. You don't have to worry about surge pricing. You don't have to worry about a driver picking you up at your house with your luggage, who's not been criminally background checked, who's going to tell his friends that you're going on vacation for 10 days. Okay. So here are the top 50 U.S. airports by O and D passenger. What's an O and D passenger? That is originating passenger or final destination passenger. This is not connecting passengers. These are the people who are originating, fly it out, or it's their final destination flying in, the top 50. So I want you to take a look at, and I hope you're watching this on YouTube, but I'll try to explain it. The top 50 airports in the United States make up, there are 1.2 billion people who either originate or it's their final destination, those 50 airports. 36.1 million of them, or 3% of all those passengers, travel first class. Those are the ones that sit up front. They pay the most for their tickets. 16% of the airplane is business travelers. The originating or final destination in these top 50 airports, that's 192.5 million passengers every single year. Now we fix this. We have calculated this. If you look at the average first-class passenger trip at $300, and the average business trip at $180, which by the way, I think we're light on that one. We're looking at a total for just first class and business travelers, 228 million people, $45.48 billion annual revenue opportunity, what they call the total available market for chauffeur airport transportation. Now remember back to the beginning when I said to you the current total sedan and SUV segment of our of our $21 billion, the total sedan and SUV is $7 billion. What does this mean? This means there's 5X. I don't need coal for this math, but it's pretty close. It's five X growth capability left in the total available market for first class and business travelers. Forgetting about the 80% of the back of the plane, forgetting about them completely. Schauford Airport, or what I like to call private by reservation airport service, is a $45.48 billion market opportunity. And I'd bet my life that that number's low. Okay, so how do we actually make market share gains? When I look at the market growth for the entire industry, we're a $21.42 billion industry. When you look at market share, there's two things there's what's called market shift, and there's market share growth. So when I look at the annual revenue growth in this industry, and 62% of the companies are higher, that's a lot of market shift. That is a lot of one operator lost the job or lost the contract, and now they're going to someone else. It's not a ton of market share growth, which is what we need to focus on as an industry. Sorry to take you on that little rabbit hole, as I like to say to James. But how do we actually gain market share? We have to have two concurrent priorities. One, deliver a better digital experience, deliver digital convenience, and a superior high-touch experience. What do I mean by that? We've got a study coming out later on where we've taken distilled down five travel studies that are trying to determine the trends of younger travelers. The overwhelming message of all five of those reports, and some of them were literally commissioned by people like booking.com. Overwhelmingly, the next generation wants total digital experience. To us, that means booking on a phone or booking on a laptop within seconds, not within minutes, within seconds. Real-time tracking of the trip. They don't want phone calls. They don't want to call your office and press five to find my car. They want live trip tracking anywhere they go. They want automated updates and they want consistently automated updates for every single trip. And they want easy pricing anywhere they go. So let's start with those top 50 airports for anybody who's listening, right? Because that captures the market we want. Easy pricing whenever they look up what a trip would cost, and they want easy payment. So I told this story at the state of the industry that this has been an unbelievable trip travel summer for me. I've taken 51 chauffeured cars, and I've been in and out of London, I've been and out of New York several times, Chicago, Florida, California, Texas, etc., and Las Vegas. And in many cases, I don't take my clients because if I'm going to meet with a customer who wants to sell potential, you know, bus company or another chauffeur company, I can't let anybody know what I'm doing, right? So I don't want them to know I'm in the city. And I also secret shop, I secret shop Black Lane, I'd shop some other companies out there, as well as just, you know, regular chauffeur companies. Out of those 51 trips, I can tell you I was disappointed quite a few times. The tracking is inconsistent. Some people send you confirmations by email and the tracking that the chauffeur is on the way by email. Other people text message you, automated messaging. Other times the chauffeur will send you a message and a few times didn't spell my name right, you know, like I'm on my way, type of a thing. But it was so inconsistent it was unbelievable compared to what we compete against. What we compete against is unbelievably consistent. The Uber and the Black Lane experience is consistency in relationship to the digital experience wherever they go. So they're going to get real easy booking, real-time tracking the same way wherever they go. So we need to match the digital experience. Do we need to have exactly what Uber offers? No. I think we can jump over it with AI. That's just my personal opinion. The second thing we need to do is exceed the client experience, which is the other reason why I was disappointed this summer. I've had some real flawless experiences, and I'm not going to call out any company, but in other cases, there's a lot of blurring of the lines. There's a lot of times where I've got in and out of a suburban that, frankly, besides maybe the guys got a suit on, there was no appreciable difference. There was no difference between that ride and a ride with an Uber black, which to me is absolutely a death knell for our industry. Because it's like there's no difference between going to a longhorn steakhouse or going to a five-star steakhouse with white tablecloths and unbelievable wine list. We look the same. The vehicle is the same. The only thing that can be different is the personalized experience and the complete client journey. The client journey is how the customer finds you, what your website looks like, how you interact with them communication-wise, how you talk to them. Yesterday, I swear to God, I called a chauffeur operator at 6:30, and the person answered the phone, dispatch! I swear to God, I almost hung up. I was just like, this is 2026. Dispatch. I just literally almost lost my mind. So we need to look at the client journey and the client experience, the in-car experience. Massively increase our professionalism. Total reliability, demonstrate total reliability. And when there's a problem, we need to immediately own it and fix it. And we need to deliver personalized service. How do you start doing that? You use the client's name. I've had some excruciating experiences this past summer where making chauffeur and June made some reservations and the reservations took me eight to ten minutes. The guy never used my name. I had come into that city before and they had my credit card stored. Never said, Welcome back, Mr. Lucci. What's bringing you to town? Business of pleasure. Do you need anything, Lloyd? Nothing. It was never use my name. The chauffeurs that I've met in baggage claim in cities that I haven't traveled to in a while, like Atlanta, the chauffeur's like, Well, I'm going to meet you at the bottom of the escalator. How about meeting me in baggage claim right next to the baggage carousel? So we have massive inconsistency problems. The bottom line is if we are going to capture the next generation of travelers, we absolutely have to change our digital experience. Younger corporate travelers and private travelers who are spending a lot of money because travel is a big piece, big part of the of their lifestyle, expect a total digital experience. And I'm going to stop you here. There are operators who are going to listen to, well, you know, they're going to say, well, those software companies need to do this. You know something? It is not the problem of the software company. It's a problem of the industry. The entire industry from top to bottom has to invest in new technology. Now, I'm blessed to do business with Full Steam. I was a very open critic when they started to have consolidation. I've seen it in the security space, okay, where somebody comes in and consolidates all the software. But I have to tell you something, I am unbelievably impressed with that company. But you know what I'm not impressed with is if you as an operator expect to have your business improve through technology, also need to prepare to invest in that technology, however way, shape, or form that takes. And also make sure you're maximizing every possible feature that you can use to gain consistency as you take on jobs. And that to me is the number one problem. Use what you have now, absolutely gain consistency around the industry of how things are done. And then without question, I think you're going to see AI speeding up software. Which brings us to our industry is going to be redefined, totally redefined by three strategic inflection points, three forces. So what's a strategic inflection point? A strategic inflection point is literally something that changes an industry normally from outside, normally not from inside, and it changes the way an industry operates. There are three things that are going to dominate and redefine our industry. Frankly, it's going to be 18 months to 36 months, not 36 to 60 months. 18 to 36 months, you're going to see massive changes. And they come down to three topics MA, AI, and AV. Every conversation will lead back to MA, AI, and AV. How? Force number one, MA activity. You're going to see more and more companies come up for sale for a variety of reasons. The number one reason why people have sold, when I first started this in 2018, it's hard to believe it's been eight years. The number one reason was they were aging out. And then in the middle of the pandemic, everybody wanted out because they, you know, from a capital perspective, before the government subsidies came, they couldn't survive. But in 2021, the other reason, the next reason people wanted out is they couldn't rebuild their companies fast enough. They couldn't rebuild. The number one reason we're seeing people now, their insurance rates have gone through the roof and they don't have the capital to put down as a deposit. And quote, my insurance rates are putting me out of business. Actually, no. What's putting you out of business is the fact that you're not migrating your business to the current market, which is a market where safety has got to be your primary culture. Can't be a meeting every once in a while, can't be a topic in a show for a meeting. It has to be safety has to be managed every minute of the day. And unfortunately, when insurance companies don't see that happening, yes, they have to protect themselves and they have to go up in rates. So that's the number one reason. The second reason is people are aging out. So there's a couple of things I would like people to understand about MA. It's very, very complicated, but the odds of selling a private business are low for the unprofitable and unprepared. What do I mean by that? Nobody wants to buy an unprofitable business or a lifestyle business where the profitability can't be proven on the financial statements. It does not matter what's not on the financial statements. All that matters is the financial statements. The monthly financial statements are accurate and the business is profitable. You need 8% to 12% net ordinary income from the operation, and your EBITDA should be 15 to 17% for the typical company. It does vary based on size and diversification of fleet. But people do not want to buy unprofitable and unprepared companies. And we're just seeing people throw stuff on the market because their businesses are in trouble. And here's what that looks like. Out of 145 companies that were advertised for sale on five separate business for sale platforms, only 21 have reported being sold over the past 18 months. And we've checked on every one. We have literally made phone calls to see if these businesses are for sale. That's a 14.5% success rate. Unprofitable, unprepared companies, amateur for sale methods, and flawed representation is the reason why this success rate is so low. Now I always tell people don't believe me, just go out and look at the SBA tracks, the success rates, and why businesses sell and why they don't. And it's pretty shocking. Success for selling your business at a value that's somewhat close to what you're looking for, because the market dictates the value. The seller does not. And I do not. The market and lending environment, the cost of money dictates the value. But successfully exiting selling your business requires meticulous preparation and extensive documentation, which takes many months, maybe up to one to two years. People don't believe me, shop around. You know, there are other people that do what I do. We have much better success rate because if you are properly preparing your business and fixing the things that are wrong, like low profitability, you have a four times improved chance of selling. So there'll be a lot of businesses that will go on the market that have not been properly operated. They're lifestyle businesses where the owners have made lots of money, but they have not updated their fleet. So their fleet is very, very old. And I'm coming out with something on its own about MA, the top 10 reasons why the top 10 fatal mistakes operators make when they try to exit. And number one, high, high trip volume, low profit trips. That's number one. Number two, an overconcentration on wholesale work, whether it's airline crews or affiliates, no growth in revenue and no profitability. So the first thing we're going to see on MA is we're going to see lots of companies for sale. And the second thing we're going to see is we're going to see a lot of movement in the top end of the industry. There's going to be more large transactions. Because when typically when companies come in like Uber and they make a purchase, they don't stop at one. And does it mean your business is worth more? No, it doesn't. What dictates what your business is worth is basically about a hundred different elements that we calculate when we review a company. But the bottom line is the values for these businesses are just the values for these businesses. Blacklane, the Uber Black Lane deal, was one of the largest in the industry because that was one of the largest companies. But you can't compare a $380 million revenue company to a company that's $10 million or even a company that's $30 million or $50 million. And certainly it's not going to companies that are small and not going to give the bring the same values. So that's force number one on MA. But I will tell you, buyers are being much, much, much more selective. Buyer personas and buyer patterns have changed this past year, specifically because of the Black Lane Uber deal. Here are the eight key value drivers. This is going to be in a separate document that we send out a report that's available. But when we look at a company and we measure a hundred things, we actually score them. Financial performance of the business is number one. Is the businessman profitable? Financial statements are they accurate and professionally kept every single month? The quality of the revenue. Is it repeat and contract customers, client revenue trends are up, low concentration, et cetera? So this is the whole gamut of what we look at. And it takes 40 to 50 hours to value even the smallest company out there. So you can imagine the larger companies take longer. But there's a total of eight elements if you'd like to get a complete overview and what that looks like. Reach out to me separately. The second force, which is going to be to me, it's going to be a force multiplier, is AI artificial intelligence. You know, the immediate use cases, number one, use it to reduce labor and manual processes. The average company spends anywhere from 4% to 6% of total income to take a reservation, to assign a driver, to assign the vehicle, to dispatch it, track it, bill it, et cetera. Just imagine if part of those, if you do it, 10,000 reservations, what happens to your total transaction cost? We've calculated some people are spending between $20 and $30 on each transaction. What happens if you can automate 50% of what I call vanilla ice cream reservations? You should be using AI to improve operational efficiency, streamline your operations and do more with existing resources, improve data and improve decisions, turn data into real-time insights. We are building customized dashboards for customers, both financial and KPI, and sales data. Those are three different things. And it's changing the way these businesses are operating. It's giving them unbelievable insight. Automate client communications. You know, the where is my car? Or calling people to say the driver is on his way. You know, that should be replaced with AI. And then number five is drastically improve the overall client experience with faster responses, personalized service, and much more seamless experience. We only capture the next generation of travelers if we drastically improve the client-facing digital experience, everything they go through with us. And it is absolutely not entirely the job of the software companies. A rising tide will lift all boats, or frankly, we will become more marginalized if we don't act now. The easiest AI integrations to cut down manual process, start with the reservations process. Look at AI sitting on top of emails and extracting the data and creating the reservation that can be just checked by an agent instead of manually entered. I think AI voice reservation agents, I'm being told by John Bruton, who is our AI expert, and we've done our own, you know, total relational database. We have more pieces of data than anybody else in the industry. And John helped us build our own secured AI tools. But he tells me that the agents are getting pretty damn close, and all the airlines are starting to use them, and all of the other hotels and travel that our clients use. So AI voice reservations, certainly to handle, you know, your driver is on the way, or you know, wake-up call, or you know, your driver is on location, et cetera, whether that's by phone or by text message. And then AI auto data entry, you know, from multiple sources from your website. And and, you know, again, dashboards. But the the bottom line is that if whatever you can do to stop the manual key punching into the reservation system so that you are paying your labor to review and not type. Pay them to review. Okay. Here's my wish list for anybody who's listening or watching. This is what Ken wants. Ken wants to be able to pick up the phone and call. Now, is this assumes I'm an existing client? Pick up the phone and say, hey, um, fly down at SBY tomorrow on American Airlines 2648. It's leaving at 10 a.m. Pick me up at 8:30. Please confirm that's enough time. Send me a text message. Boom. How long did that take? 15 seconds. If I give my credit card to a company and I establish an account, that's what I want to see. And I want the AI agents to say, got it, Ken, all taken care of. Text is coming your way. And it, you know, if I'm an idiot and I don't review the text message, just like when I make an American Airlines reservation and triple check it, that's on me. But the whole idea is I don't want to call you. I really don't. And the next generation doesn't even know where to find you. We are going to see people paying for private concierge services. We need to be integrated as an industry. Hey, I'm flying up to New York tomorrow. Do me a favor, check on the available flights between 8 a.m. and 11 o'clock. Report back and give me the best case scenario. Oh, by the way, book me at the Kirby. I'm going to need a car. We're going to see that happen. All I would like us to do at the moment is replace the reservation agent. Replace the reservation agent so they're checking the reservation and not key punching, but that's just Kent. So force number three, strategic inflection point. What's number three that's going to change the industry, autonomous vehicles? All right, let's start with protecting our existing market share. You know, our existing market share is not going to shift over to Robo Taxi unless some bad things happen. But we need to enhance our premium service. We have to give them every single reason to understand that we are the best value in private transportation. And now A A Vs can deliver a more consistent and safer and high quality customer experience, but not at the executive level, not the FBO, not at the concierge level chauffeur. We need to enhance our premium service. The more we blur the line and look like Uber Black, the worse off we are. And I'm seeing some issues there, and I'm going to call them out. People who wear too much damn cologne and the vehicle smells like you and not a car. People that talk too much, people that don't provide concierge level service and there's a lot of junk in the cars. Not up to me to tell you how to raise your standards, but there are a lot of networks out there that are really enhancing the customer experience and they're coming out with some decent initiatives. My buddy James from PAX Training, he'll tell you how to do that. But the more we blew blur the line, that's the only time I worry about market share. In addition to that, we have to keep our premium placement at the airports. We have to have exclusive access, preferred curbside, and preferred parking. What do I mean by that? You know, if I'm paying for chauffeur service, I want my chauffeur in baggage claim with my name, Mr. Lucci, wanting to grab my bags and I want a short walk to the vehicle. If we're relegated way out, we have a problem. People need to understand the airport people need to do the planning and understand we don't just service the wealthy blue chip. We service the blue hairs. We service older people. And that's we they want a premium experience. So that's the key to us keeping our market share. I would also encourage everybody to diversify their fleets. Go more up into the vans, more up into the Cadillac Escalades, the sprinters, the mini coaches. And if you have the capital, and I mean massive amounts of capital, sure, go into motor coaches, but it's not for the light and the faint of heart. It's killed more shopered services, you know, than bad pricing. So diversify your fleets, diversify your service offerings, and look for the shuttle opportunities and look for the hotel contracts, etc. Secondly, be ready to participate in the autonomous economy. Position your business to capture the new revenue as the business cases become clear. And by the way, some of the stuff that's being quoted on as far as from other people on what you can make on Robo Taxi is totally wrong. But I will tell you, if you don't have the driver, you have 30% more to work with, right? Because the average chauffeur costs anywhere from 25 to 33, 34% of the total cost of what you charge. That's a lot of money to work with, right? So I think you're going to see a lot more opportunity in AV than disruption. So don't panic, but be prepared. Large fleet operators are really going to have great opportunity. However, if you're a college town and you're an established, profitable company, there's great use cases for you to work directly with the college or university or large corporations to provide a level of service that's autonomous, and then obviously bigger equipment, you know, with the chauffeur-driven vehicle. Number one, A V's going to need places to park. They're going to need places to charge. They're going to need places to maintain. You know, when the poor thing gets confused, it's going to need somebody to go get it. AVs are going to need 24-hour fleet operations centers. Yeah, people don't understand that there are people that are that are responsible for those AVs. There are tellies right now that monitor X number of vehicles, but on top of that, they've got to be detailed. They've got to be cleaned. They absolutely have to be maintained. They've got to stay on the road many, many, many more hours than we do to be profitable. But there needs to be an operation center. And again, fleet field capability. So it, and that definitely the AV providers right now are looking for fleet operators. I mean, we've been contacted by some family offices and private equity firms. And there are use cases where it makes perfect sense to buy 10, 20, 30, 40, 50 of these things if you have secured contracts. And it's going to strengthen your core business. And A V and human chauffeurs are going to work together. Groups and meetings, you're going to see large capacity vehicles, and you're going to see some A V outliers, right? But overall, if you are a profitable fleet operator and you have decent facilities, you're going to benefit not only from the smaller robotaxi type use cases, but as the larger, you know, the autonomous vans or the transit routes, they need fleet operators. Something I didn't bring up, but I want to bring up today is the new model of fleet ownership. It's a logistics and fulfillment company. They don't have reservation as their dispatchers. This is a new subsidiary of Hertz that just raised $80 million. And it's called URO. And it's a dedicated commercial fleet infrastructure. And they're providing drivers, they're managing rideshare fleets. Hertz is providing vehicles, and they are recruiting part-time Uber drivers. And they're doing it only so until the autonomous vehicles hit the streets. And Oro will be the one to operate autonomous robo taxis for their A V partners, the biggest one being Uber. So there's no reason why, if you're a large operator, you can't be doing the same thing. You already have the infrastructure. This concludes the state of the industry briefing. And we've got around the holiday season a chauffeur transportation state of the industry business planning report that takes this data and actually gives you executable suggestions and executable recommendations and kind of like an outline for you to grow your business. So, example, I'm going to give you industry averages on vehicle revenue production by top-tier, second-tier, third-tier markets. So that you should know wow, if I buy that Mercedes S500 or I buy a brand new jet sprinter or a brand new executive sprinter, what should my revenue averages be? And then we're also going to give you a cost calculator and pricing planning calculator that will allow you, that will probably be a separate Excel, but it'll allow you to actually calculate your cost. Don't do this stuff with chat. Chat just doesn't know the right data. We're going to give you the 50 largest U.S. airports and give you in your area your first class count and business passenger count, as well as the 50 largest international airport passenger data, so that you can actually start looking at offering international service. We're going to give you the largest corporations that use our type of service, the wealthiest occupations that use our services. We're going to give you 10 ways to improve profitability in 27, which is going to be pretty key. 10 ways to cut costs and what are they, what costs to watch and what expenses to watch, 10 ways to increase your enterprise value, and 10 ways to prepare your business to buy or sell. So if you want to buy an operator, and this happens a lot, you know, a guy calls me and buy, he wants to buy an operator, and I say, okay, send me your financial statements to review. What? I don't have them. I don't have financial statements. Okay. You're not in the condition to buy a company. Your own ship is not it's a it's a skew, it's adrift, it might be taken on water. So that's why we determined we're going to add that into the business planning report because I want you to be prepared to grow, borrow, buy, or sell. And we're going to include some of that stuff in the business planning report. And when it is ready, we will send you a link, but we're not ready to do that because we're still in the process of putting it all together. That is my report on the state of the industry. It took 11 minutes at the chauffeur-driven show. And I think we're about 50 minutes. And I added a little bit more to it and went into more detail so that you try to get you get more out of it than me talking real fast. But I'm pretty pretty bullish on the industry. I'm pretty optimistic about 2027. I'm concerned that some operators, instead of cackling about how great revenue is, I want you to be very proud of how high your profits are. And the only way you can do that is to manage your financial metrics. Just a shout out to all of the people that stopped by my booth at DC Chauffeur-Driven. For those of you who are interested, check out limoceo.com. And John will put that on the screen. It's limoceo.com. That's our new platform for smaller operators or operators that are new to the industry to learn and to be able to watch content, pull down workbooks, participate in live masterclasses on specific subjects. And it's very, very affordable. We're going to limit it to a certain number of people. You have access to the live workshops, you have access to a live QA on a small subject. My master classes are usually 60 minutes to 90 minutes. And then we have a separate meeting with I'll just deal with one issue for 15 or 20, and then we open it up to QA. You'll also be able to get into the content anytime you want, request specific content where we should be focusing the academy. And you're kind of building it with us. And there'll also be an opportunity to have office hours and get some one-on-one consulting. I hate to call it coaching, to get some one-on-one insights so we can look at how to grow your individual business. We did it separately than driving transactions because our client for the driving transactions is the more seasoned operator who's making massive decisions. you know, I want to get into Motor Coach, or I want to sell my business, or I want to prepare to sell, or I wanna start a succession plan. So we really focused and built limoceo.com. We call it Limo CEO Academy, but limoceo.com for all of the new operators because we want you in the position to grow, to borrow, to buy, or sell, and to make your time in the industry as successful as possible. So this has been, I hope you've enjoyed it. Another exciting episode of the Ground Transportation Podcast. Hopefully, I will be doing a joint episode with my partner crime, James Blaine, soon. But uh, thank you for checking in. Thank you for listening or watching. And please be on the lookout for our full report when we're ready to put it up. Thanks and have a great day.

SPEAKER_00 56:03

Thank you for listening to the Ground Transportation Podcast. If you enjoyed this episode, please remember to subscribe to the show on Apple, Spotify, YouTube, or wherever you get your podcasts. For more information about PAX Training and to contact James, go to PAXTraining.com. And for more information about driving transactions and to contact Ken, go to driving transsactions.com. We'll see you next time on the Ground Transportation Pod.