Revolutionizing the Limousine Service: Limos.com CEO T.J. Clark (Part 6)

Sramana: You mentioned that Uber is trying to get the taxi market segment. Are you going after that as well?

T.J. Clark: We are with price parity. We want to get you in a Town Car at a price point that is within 10% of the taxi, tip included. We are going to launch our own on-demand product in many markets in the spring.

Sramana: What is the additional TAM you are servicing?

TJ Clark: That is the private car service, which is a market that has traditionally been served by limousines. That segment represents a $17 billion opportunity, of which $7 billion is in the leisure space. The leisure space includes events like birthdays, wine tours, weddings, and other social occasions. Those average tickets are in the range of $500. Our strategy there is to enable the customer to search and book online, which is something they cannot do today.

The $10 billion segment is corporate. Those are primarily rides to the airport. Those average $100 a ticket. We are there to displace legacy carriers like Boston Coach simply by offering better pricing and technology.

Sramana: Are you working with a 20% commission rate assumption across all of those markets?

T.J. Clark: That is about right.

Sramana: You are essentially talking about a $40 billion global market with about 20% commission on the top line, of which 20% is serviceable with these models.

T.J. Clark: The thing that is so exciting about this market is that we think this is very early. Fewer than 5% of car service transactions are done online. No single company has consolidated even 1% of this market opportunity.

Sramana: Where are your competitors at in terms of development?

T.J. Clark: We don’t know precisely. We expect that Uber is at a $1 million annual commission rate right now. That means they are doing a couple hundred rides per day in the $30 to $40 commission rate.

Sramana: How long has Uber been around?

T.J. Clark: They have been around for two years.

Sramana: This space has not really been prominent until recently.

T.J. Clark: That is correct. Our booking engine and Uber’s booking engine both launched around two years ago.

Sramana: I have seen a company in India that is doing extremely well in a related space. They are called RedBus. They do the same function for bus services. The bus market in India is an extremely fragmented one. That is a very interesting story.

T.J. Clark: That is very interesting. I love those types of stories. We added 13 cities in India last year.

Sramana: Was it difficult to get the Indian market to provide data?

T.J. Clark: No, because we went with companies that could provide multi-city coverage. We have three suppliers and they offer the coverage we need in those large cities. That is much easier than penetrating Des Moines, Iowa, for example.

This segment is part 6 in the series : Revolutionizing the Limousine Service: Limos.com CEO T.J. Clark
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