Town Car Services Category Procurement Intelligence Report

The market for Business Travel and its sub-segments such as Town Car Services are at an interesting intersection. The availability of advanced technologies has prompted travel and event service suppliers to heavily invest in them to improve efficiencies and customer experience. However, most have learnt that technology alone is not a replacement for the human touch when it comes to customer service. As a result, suppliers are spending on both counts - technology and customer service staff. Till the time a formula for perfect balance between the two is discovered, buyers should expect to bear some of this increased OPEX of suppliers.

As costs rise, companies will be pushed towards finding better cost efficiencies in their travel and entertainment programs. Buyers are leveraging new management tools to analyze the costs using a Total cost of trip/event approach as against cost of an individual trip/event cost item. It is now also expected of suppliers to assess the cost effectiveness of any service they provide from a more holistic point of view.

To simplify the corporate travel and events process and enhance the end-to-end experience of users, suppliers are innovating with tools that aggregate the multiple fragments of this process such as booking, management of disruptions, customer service and spend within a single interface.

Trends like these and many others discussed in this report are necessitating a relook at the way Town Car Services is procured and the procurement cost saving opportunities that exist.

It has become imperative for category managers to remain as agile as possible in terms of their procurement practices. However, it is not always easy to quickly spot and implement alternative practices in a category like Town Car Services. To help quick decision making, this report advises on several procurement best practices that have worked well for category managers.

For example, Bundling of services allows buyers to mitigate the risks involved in managing multiple stakeholders for various aspects of travel and event management. It also offers buyers spend visibility and allows them to negotiate for better pricing during the procurement of services.

Investing in benchmarking studies help category managers enhance their knowledge about market pricing or billing rates based on job roles and functions. This allows them to not only save costs but also negotiate with suppliers. For example, while negotiating on rates of bundled services, buyers can save significantly on a single service by cross verifying the rates quoted by suppliers against industry benchmarks.

Suppliers often charge substantial fees for cancelation and rebooking. Buyers should negotiate for low prices on these aspects to realize direct cost-savings.

Town Car Services procurement managers also need to proactively identify and mitigate potential risks that can arise in the supply chain or contracts for Town Car Services procurement. Some examples include: