Scott Solombrino, Dav El/BostonCoach President and CEO
Dav El/BostonCoach President and CEO Scott Solombrino has not been secretive about his determination to bring an on-demand platform to the industry in an attempt to combat the continued encroachment by TNCs.
Even so, when this industry talks about mergers and acquisitions, it’s typically in regard to one transportation company buying up another: So when the news came out that Marcou Transportation Group—which owns Dav El/BostonCoach—acquired both GroundLink and Limo Anywhere at the end of January, many were taken aback by the announcement. (You can read the BTN article in its entirety at goo.gl/LXjmw0.)
Chauffeur Driven sat down with Solombrino to set the record straight on what this technology acquisition means for the companies involved, as well as how it may impact the industry at large.
Chauffeur Driven: How long were you in talks before the actual acquisition?
Scott Solombrino: The deal began approximately eight months ago. At one point we were not sure it would transact. You have to understand: Buying technology is complex and we were buying two companies at the same time. We are extremely excited because we not only got a new on-demand corporate platform, but also obtained a massive distribution network.
CD: Did Marcou or GroundLink initiate the conversation?
SS: It’s not a secret in the corporate marketplace that we have been extremely acquisitive in our quest to consolidate our sector. Under those circumstances, every seller seems to find a pathway for some type of dialogue with our group. Not all deals fit our strategic plan, but in the case of GroundLink and Limo Anywhere, it was a perfect fit to achieve our strategic technological goals.
CD: How are you going to be involved with GroundLink and Limo Anywhere?
SS: As the architect of the entire strategy, I am here to find the easiest pathways for us to achieve our global goals for a corporate on-demand service. Liz Carisone will be staying on as CEO of GroundLink, which will still manage its existing business and partnerships. Limo Anywhere President Mark Gentry will also remain independent with the Limo Anywhere platform. I am thrilled to be working with such an experienced and savvy team of professionals.
CD: Why do you feel this move will be beneficial for Dav El/BostonCoach?
SS: Over the past three years, we had already built the largest global chauffeured transportation network. With the addition of the Limo Anywhere team, we have now multiplied that times three. It gives us tremendous scale and flexibility. It also gives us the ability to do distribution from our corporate clients to our global duty of care compliant distribution system. Dav El/BostonCoach has no interest in any limousine company’s back-end operations that are on the Limo Anywhere platform. The Limo Anywhere team will maintain their independence and be given great latitude and investment to enhance the technological capabilities of the software.
On the GroundLink side, we have made it very clear in the corporate travel space that we are building the most comprehensive on-demand platform that will meet all duty of care requirements for the corporate travel marketplace. GroundLink’s robust technology allows us to reduce both our development investment and, more importantly, our roll-out schedule. The GroundLink team has developed a leading autodispatch program that will allow us to more efficiently manage our new global on-demand network.
CD: You made the announcement at GBTA about creating an app with David Seelinger of EmpireCLS Worldwide. How does this acquisition factor in to that alliance?
SS: He was the first phone call I made. David knew for quite some time that we were doing an acquisition—he didn’t know specifically what it was but we told him that this is the final step to solve the globalized autodispatch portion of this project. There was a piece of technology missing that we had to either build or buy, and building was unnecessarily complex when it was available to buy. We were really interested in the technical platform of GroundLink, which had an autodispatch piece integrated already—autodispatch is a really big deal because as you get to a certain level of transaction volume, you need to be able to deliver in an efficient manner. Our thought process is to have the best possible technology and be able to run the most efficient operation in the world. Let me be very clear that our alliance with our partners needed the GroundLink organization, and along the way, the Limo Anywhere transaction became the bonus that helped to broaden our offering. We believe the industry has to be united on one platform in order to be competitive and have the ability to push back on the onslaught of TNCs in the global business travel sector.
CD: There’s already a buzz in the industry and on social media about the security of data and customer lists regarding the Limo Anywhere acquisition. How will you address that concern?
SS: I think people will see that all we want to do with Limo Anywhere is invest in the platform and improve the software—if we can do that, we think people will be happy with us. If the software gets more robust, works better over a period of time, and has more features than anything else in the marketplace, then we’ve succeeded in proving that.
This marketplace is consolidating whether we like it or not, and if we want to compete with TNCs, we’re going to have to take some risks. You have to believe that we’re doing the right things and all you’re going to get from it is better software, a better back end, and more distribution.
CD: How will you deal with those concerns from your affiliates?
SS: The Dav El/BostonCoach network goes back to 1966, and within that distribution channel we have relationships that are more than 50 years old. Our affiliate network will be a huge beneficiary to this whole transaction. If this project takes off at the level we are expecting it to, our bigger problem will not be who gets the business first but if there will be enough companies with duty of care compliance to cover it. At some point, you will run out of drug tested, background-checked, insurance-compliant, and defensively trained chauffeurs. There is a finite number of operators in our space and we are facing an unemployment level below 5 percent, which means the employment market will continue to get tighter. I am more worried about meeting the demand of the product because Uber alone is typically doing more than 200,000 transactions a day in New York City alone.
CD: One of GroundLink’s newest initiatives was offering “near-demand” service—or a car within 20 minutes—in select cities. Will this impact the Dav El/BostonCoach operating model or plans to roll out the same service in other markets?
SS: In our largest markets, Dav El/BostonCoach has been in the near-demand business for more than a decade. What you will see from us is that their near-demand product will get an immediate boost from our already significant distribution channel. You will also see a very fast transition from near-demand to on-demand in our biggest markets across the globe. The GroundLink team now has to work on the integration to make sure that the technology is stable and in fact create the efficiencies that we need to expand the platform.
CD: What constitutes the ideal test market for the platform and how will you identify those initial test markets?
SS: Common sense would say that since both of our operations have our largest locations in New York, it should be New York. But we also have huge operations in Boston, Chicago, Los Angeles, Washington, San Francisco, and Miami. We will do a market analysis to determine where we have the least amount of risk to test the platform.
CD: Elaine Chao, who favors deregulation of transportation and speaks highly of TNCs, has passed the first step in her confirmation hearing as Secretary of Transportation, while in New York state, Governor Cuomo is attempting to deregulate TNCs. What are your thoughts on these developments?
SS: I think we have to wait and see how it plays out, but I am more concerned about what’s going to happen with the Department of Labor. If they want to deregulate some transportation, why would we care? I care about how companies have to pay people, and I think that’s an unknown quantity right now. The NLA, myself, and plenty of others are working hard to figure that out and make contact with the administration. We’re already trying get our placeholder in there so we can deal with that. I think the Trump administration needs to spend its first 100 days getting its cabinet approved, then we can react to what’s good and what’s nonsense and what we’re doing about it. We need to have an intelligent response when we know what the true outcome is, rather than speculate on everything. [CD0217]