Revolutionizing the Limousine Service: Limos.com CEO T.J. Clark (Part 5)

Sramana: How does your review and rating service work?

T.J. Clark: It is limited to customers who have taken a ride with a company. We know the email for consumers who have booked the job. We collect feedback from those customers. We also have ride fulfillment data in the form of incident reports and on-time reports. Those are two key objectives that we look at.

In addition, we look at reputation data among our industry peers. We go to limo conferences, and we get a lot of reputation data based on company feedback. Companies send jobs to each other, and we pay attention to which companies are trusted by other companies.

Sramana: What does the competitive landscape look like for your business?

T.J. Clark: We look at the competitive landscape on a two-by-two quadrant. In one quadrant there is utility, which is the usefulness for the customer. In the other quadrant you have value, which we define as the best possible price at the best possible service level. In the bottom left of that quadrant there are a range of legacy networks. Those are traditional players that are primarily playing in corporate spaces, such as Boston Coach, which has been around for 40 years. They offer a premium level of service at a high price point, and they lack technology when it comes to searching and booking.

In the upper left hand quadrant are the local little companies that offer great service. Their only limitation is that they are local. If you are not in that area, it is hard to know who to use. We really like those companies and that is whom we are here to help. In the bottom right quadrant, there are a host of new web distributors that are entering this space. This includes companies like Uber, Winston, and Taxi Magic. They are trying to do on-demand service, which means they provide service within the hour. It is a really cool space, and we think they are doing well. The limitation is that you can get that level of service in only a few cities. It will never work across 14,000 markets. It will work great in New York City.

There is another company in this quadrant, which is GroundLink. They are primarily based in New York and they distribute more broadly, but they do not offer a marketplace. You do not get to see the price value of local companies competing for your business. It is like going to the American Airlines website, you don’t see the competition.

We want to play in the top right quadrant, which offers the best possible value for the customer. You get a marketplace where local suppliers compete for your business, so you get the best price for your trip along with the best utility for the customer. That model is more broadly available in the 14,000 markets throughout the world. You can access that service through the web or through a mobile.

Sramana: How big do you think this market really is? Clearly there has been a lot of activity lately. Some of those companies have raised a lot of money. What kind of TAM are we talking about?

T.J. Clark: One of the reasons we entered this space is because of the overall market opportunity here. The TAM is big. We know that in the U.S. and Canada, 3$6 billion was spent on private car and taxi service. We believe that overseas and Asia added another $10 billion to that figure.

Sramana: What is the average commission that companies in your space are drawing?

T.J. Clark: We really look at the market in segments. The taxi segment is about $19 billion. That has a lower ticket in the range of $50 if you are going to the airport or $25 for in-town segments. That is the segment that Uber is going after. The commission structure in that range is 20% of whatever share you can steal from that consumer base. How many of those travelers would rather be in a Town Car? The strategy is to displace travelers into Town Cars. This is a new and exciting area, but we can’t say exactly how much of that $19 billion can be brought into Town Cars.

This segment is part 5 in the series : Revolutionizing the Limousine Service: Limos.com CEO T.J. Clark
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