A Better Model. A Better Service.

My last few blogs have discussed how the private hire industry works and how the drivers within it are engaged. DrivenByQ has a mix of employees who drive company owned vehicles and self-employed sub-contractors who have their own vehicles. The full-timers are mostly exclusive to DrivenByQ. The part-time drivers however might sub-contract to multiple companies and will also have some of their own clients who use their service.

At every stage of growth, DrivenByQ has depended on sub-contractors to help at times of peak demand. At the executive level however there is only a small pool of sub-contractors in our local area. Very few people can offer the same level of quality as ourselves. Rivals will even resort to using a taxi company when they are busy. This drastically reduces the quality of the vehicle used and means no plate exemption too.

At DrivenByQ, we believe that if a customer expects an executive car service, they should receive an executive car service. To ensure this happens, we use our sub-contractor network from across the region and upgrade the service from executive to VIP if needed. This often costs DrivenByQ more than we charge to a customer. On the flip side, it not only ensures quality is maintained but it gives passengers a pleasant surprise.

Some of the VIP vehicles will be the latest (long-wheelbase) Mercedes S Class. These cost over £70,000 when new and represent the pinnacle of a large, luxury car equipped to the highest standards. Features of these cars include double glazed windows, electric sun blinds, massaging seats, adaptive lumbar support, digital TV and ambient lighting. The L version (for long) even adds an extra six inches over the standard car. This gives generous legroom and the rear seats have an additional electric recline function.

It may seem overkill to send such high-end vehicles for DrivenByQ customers but it ensures the ongoing relationship with corporate customers is maintained. It also builds the relationships required for us to transition from our local market to a regional one. With over one-hundred airport transfers a week to and from Manchester International Airport, it seems only natural to make Manchester Airport the next focus.

A Different Model. A Different Company.

My last Chauffeur Blog set out the difference between an executive car company and a minicab office and the way drivers work for them. An executive company largely accepts bookings in advance where passengers have planned ahead. A minicab office mostly accepts spontaneous bookings. There has been a massive upheaval in both of these markets in recent years by new ‘tech’ companies. Uber, Lyft and Ola are typical of disruptors using mobile phone technology to book and organize journeys.

The way new ‘tech’ companies offer cars at short notice is just the same as traditionally cab companies have done for years. They ask a self-employed driver to pay them a fee in return for work. The driver will then work a shift and be available on-demand. For a busy driver it can be lucrative, for a quiet driver it can be dire. Some drivers work sixty hours a week with many hours spent sitting around waiting for a job. The hope is that over a week, the busy times cancel out the quiet times and the average is sufficient to make a wage.

Last week, one of the UK’s biggest private hire companies ‘Addison Lee’ made the media after three of their drivers took them to court. The ruling said the drivers should not have been self-employed. The impact could be immense and I wonder whether many operators will survive as the knock-on effect is huge. Just to highlight a simple fact: historically what a driver earned from fares was their income, now it would be considered the companies. This in turn leads to all sort of complications when managing money!

Firstly, the operator (or company) would no longer receive a fee from individual drivers as their income. Instead they would have to collect the all fares which would be considered collectively for multiple drivers. Ultimately this requires VAT to be charged at an extra 20%. For business customers like we have at DrivenByQ this is not an issue but for the general public this could be catastrophic. The money would need managing and a payroll established. Add administration costs to the equation and there would no doubt be cash-flow issues.

Since becoming a Limited Company in 2007, DrivenByQ registered for VAT and at all times informed drivers in advance of what their bookings would be. Between jobs, drivers go home or have downtime. This means their hourly rate is favourable because there is no requirement to sit around for hours on end and wait for a journey. We never charged a weekly fee either. Instead we earned a commission from each driver’s journeys. The commission increases with their turnover so it is favourable to increase their overall earnings.

I wonder where the industry will now start heading. With the Taylor Review having an effect, court cases coming to a head and new technologies emerging, I am sure there will be lots more change to come. Just consider electric vehicles, driverless cars, workers rights, drones and the possibility of car ownership becoming a thing of the past and you could quite easily be excused for feeling gloomy. On the other hand, this change we are seeing could lead to a very exciting time where there are lots of opportunities on the horizon. Maybe, you just need a different vision to see it?

A New Model. A New Chauffeur.

In the last year, DrivenByQ has been through some fairly big technical changes which have mostly occurred in the background. If you were to go back and read through my Chauffeur Blog you would see that acquiring a new account customer lead to a domino-effect. Simply increasing the turnover past a certain point meant changing our VAT arrangement. This lead to the purchase of new company owned Mercedes vehicles and that in turn lead to the hiring of our first ‘employed’ driver.

Not many people know it but the private hire industry works quite differently to most business models. The majority of the time, the cars and drivers are not owned or employed by the company. Instead, they work on a self-employed, sub-contract basis. Historically, DrivenByQ has been the same. Using self-employed drivers who own their own vehicles. The advantage of this is that it keeps costs fixed and it provides a flexible workforce. Additionally (and it may be brutal but) anyone underperforming is quickly replaced.

Minicab offices use the same model and always have done with drivers paying a rental fee (or settle) for their radio equipment. At DrivenByQ we use a commission rate which is proportional to what a driver earns. The difference however between a minicab (or taxi) office and the executive work which DrivenByQ carries out is that a minicab driver will work a shift pattern of up to twelve hours and wait to see what they earn - which is sometimes very little. An executive driver will know in advance what they are working and will only work when required.

The real separation between the two models is that a minicab (taxi) office will have drivers ready to go ‘on demand’ whereas the executive company will struggle to cover jobs at short notice. This was the industry standard until a few years ago when digital disruptors (like Uber and Deliveroo) arrived in the market. They attracted a new kind of person to the industry who demanded conditions more akin to a traditional type job. Comparing earnings to hourly rates of pay resulted in legal claims being made and over time, the government’s response was to publish the Taylor Review.

The outcome of this report was to recommend more people be employed on an hourly rate where they could also receive worker’s rights. I am proud of the fact that DrivenByQ has always paid some of the best rates to self-employed drivers and they have in turn been able to invest in nice vehicles. This summer however, with the purchase of company owned vehicles and a change in the way we reclaim VAT, we spent time constructing a bespoke ‘contract of employment’. We then took on our first ‘employed’ driver who has sick pay, a set hourly rate and a holiday entitlement.

Out With the Old, In With the New

This week we said goodbye to our oldest car. Namely the 2009 Mercedes E Class which proved to be a very reliable motor with some 291,000 miles on the clock when sold. As we said goodbye to this car, it was also an opportunity to say goodbye to Euro4 (European Emission Standards).

In 2017 we said goodbye to the last of the Euro3 vehicles being employed. This signalled our commitment to improving our green credentials and considering our clients’ CSR policies. Looking at specifications shows how engines have changed in the last few years.

Comparing our old 2009 E Class with the brand new 2018 E Class (purchased September) reveals the improvements: Power and performance has increased, efficiency has been enhanced (greatly) and most importantly emissions have reduced.

Mercedes E220	2009 CDI	2018 SE
BHP	170	194
0 – 60 mph	8.6	7.3
MPG	42	65
Gearbox	5 speed	9 speed
Co2 (g/km)	177	122
Engine size (cc)	2145	1950

This change is aided by modern materials and energy saving features like LED lights and new post combustion technology (which reduces harmful nitrogen oxide gases). There are more developments too including voice control, a 12” widescreen display, auto-braking and a five star Euro NCAP safety rating.

Two Out of Three Ain’t Bad

My last few blogs have been about purchasing brand new Mercedes vehicles. In reality however, DrivenByQ never bought brand new cars in the past for its executive fleet. This did not prevent the company growing though. So why change?

From the all the books I’ve read in the last few years, one in particular stands out. That book is ‘The Discipline of Market Leaders’ by Treacy & Wiersema. It argues there are three (market leading) strategies available to stand out from your competitors.

One strategy is to offer the best service. DrivenByQ has done this since day one and it is why we have grown. It's what the company is renowned for too: Outstanding Customer Service. The other two options relate to the product and price.

By building a modern fleet of Mercedes Benz, DrivenByQ now offer the best products to compliment the best service and enhance the customer experience even further. Therefore the only thing a customer can say is average about DrivenByQ, is the price!

The Mercedes E Class

After receiving fantastic feedback from the passengers travelling in our 2018 Mercedes V Class, it seemed only natural to go back to the dealership and buy another Mercedes. This time we opted for a vehicle which could carry out the majority of our work - an executive saloon car for up to three passengers, offering comfort and style.

The choice boiled down to the Mercedes C Class, E Class or S Class. The C Class was too small to be classed as an executive vehicle and the S Class had a list price of over £70,000. While DrivenByQ does occasionally have work for such a vehicle, the majority of our bookings are for executive travel so it is more cost-effective to sub-contract the VIP trips.

The remaining choice of the Mercedes E Class was split between the SE or AMG model (with extra styling and bigger wheels). For the chauffeur driven experience, an SE offers a comfortable and relaxed environment and presents the more sensible choice. The E220d engine with a two litre displacement mated to a silky smooth (nine speed) automatic gearbox only enhances the luxury.

It is no slouch and is capable of regularly returning over 60mpg which is 50% more efficient than the vehicle it replaces. Rather than specifying a basic model, we requested the SE Premium with a three-year unlimited mileage warranty. The projected overall figures were surprisingly only £1,000 more than buying a three-year old car and working it for three years (including the repair bills).

I suppose some people might go with the three-year old option as it is a lower financial risk and not such a commitment. We saw this as a marketing opportunity though. After all, why would a passenger want to travel in a second-hand, three-year old vehicle when they could ride in a brand new Mercedes E Class? Not to mention all the latest features it offers and choice of sixty-four ambient lighting colours.