Manoeuvre

In the last couple of blogs, I’ve been writing about commission rates. They’re not the most exciting of things but are critical if we are to continue investing in growth and development.

In the last few months we have constantly altered and adjusted our commission rates until eventually deciding on a completely new system. Rather than a global percentage rate we have gone adaptive.

What we have come up with is a system where drivers who do just one or two jobs a month as sub-contractors pay a very low commission (just 5% in fact) – this effectively acts to motivate them and gives incentive.

As a sub-contract driver takes on more work for us and their turnover from DrivenByQ increases so too does their commission. We think this is much fairer and drivers seem to like it too. Now they all want to pay us as much as possible!

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Last week I wrote about the commission rates we charge our drivers. The percentage rate was the same for years but we have been tweaking it over the last few months.

 

Initially we increased the rate by a fixed amount and everyone paid the same percentage. A month later we increased it again so it was 5% higher than the original rate.

 

In theory a driver with a turnover above £4,000 a month will have achieved numerous link-ups. For them a higher commission is largely irrelevant because they are more profitable.

 

On the other hand, drivers helping on a few occasional jobs find a higher commission a disincentive. In response we’ve ditched a fixed amount and announced an adaptive system instead!

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Since day one of trading my intention was to grow. It needed investment so I set prices to pay myself, run a vehicle and have something left.

As other drivers joined I took a slice of their payments. They had other sources of income though, my volume of work was erratic and few journeys linked up.

To encourage driver availability, I worked hard to ensure the business was as efficient as possible with no waste so I could keep my cut to a minimum.

Now we are bigger, with full-time drivers, high volumes of work and real efficiency our commission rates are under review.

Driven By Quality

Last year I wrote a blog about airport transfers and how some people compete on price for the cheapest part of the market. It is relevant again now because we have been gaining customers who have never travelled with us before. Primarily they are business passengers who book their own travel and like to pay by card.

One company close to our area had gained business because of their unbelievably low prices. They even emailed our corporate customers and offered discounted accounts! When they first launched we didn't focus on them because there was no clash with our niche, although we heard lots of concerns from other operators.

In hindsight a really cheap operator is a blessing in disguise. They seriously weaken the competitors at the bottom of the market and jeopardized their own future at the same time. Their prices are so low, nobody can compete with them and so too nobody will work with them. Eventually they struggle to meet demand and let people down.

As the downturn ends, account customers are travelling more, independent business passengers now prefer best value (not price) and holiday makers want luxury. At DrivenByQwe have always provided quality and reassurance! Gladly it seems there is a real appreciation and demand for it again.