The Survival Chauffeur (Part One)

Wow. It is five years since I last contributed to this chauffeur blog. In hindsight, it has taken five years to recover from the crisis that was Covid-19. We had plans to grow. Plans to diversify. Plans to chase something significant. They all went on hold while we dealt with an unprecedented situation in the travel industry. The new ‘ManchesterAirport Taxi Ltd’ never even received its first booking and DrivenByQ nosedived 90% in turnover.

I can still remember calling each member of our team and explaining the situation. We went with a strategy of last in, first out. It seemed only fair. This lasted three weeks until there was nobody left. It was then a fight for survival. Luckily, we had around £25k of outstanding payments owing to us and a looming VAT bill of another £10k. I personally took the option to defer the VAT payment. My reasoning: if we were going bust, what we owed out was irrelevant.

Ironically, by June 2020 we were cash rich. Outstanding payments were in, and we effectively recovered all our working capital. Deferring our VAT added to the capital amount and in addition, we received a £10k grant from the Government. The only caveat of the grant was that we had to (be a Limited Company and) close the business for three months. Luckily, one of our self-employed sub-contractors carried on working under his own licence. With the booking volume  so low, he was able to satisfy the tiny demand our existing customers had.

The next lifeline was the furlough scheme. Thankfully, three of us received monthly financial support. The next step was enacting something I heard ten years earlier at a networking event. Someone I respected dearly highlighted the importance of contacting a finance company if there was ever an inability to pay them. I wrote to Mercedes Benz Finance and explained our situation. They were brilliant with us and they granted a three-month payment break on two vehicles.

Thankfully, restrictions finally eased, and I was able to work again. Throughout Covid, airports surprisingly stayed open, and flights operated. The only trips allowed were essential ones. Like engineers keeping factories open or senior directors making key decisions or chemists keeping the world safe. With volumes low however, the flights were mostly from London Heathrow Airport. Thankfully, two or three of those trips each week kept DrivenByQ alive. It was eerie walking into Heathrow and being the only person there. It was like an apocalypse!

The Crisis Chauffeur

No sooner had I published ‘How to be an airport transfer specialist’ the world went in to quarantine and all the airport bookings disappeared. New reservations dried up, cancellations flooded in and work simply stopped. There was something on the news about a virus back in December. It was in China but that was miles away. Like many people, I just didn’t make the connection. The SARS Virus from 2002 spread to other countries but it never really affected the UK. For all I knew, this was probably going to be the same.

With the current COVID-19 virus declared a global pandemic, it is an unprecedented time. As an airport transfer provider for business customers, we are now at a standstill. Business passengers have been instructed by their employers, not to travel. The United States has blocked flights from Europe. The risk of spreading the contagious outbreak from one nation to another is becoming a reality. Likewise, airports have witnessed massive reductions in passenger numbers. Since the start of March, most bookings we completed were to repatriate people with numbers declining all the time.

It is a volatile world we live in and things change all the time. Occasionally, something affects the travel industry on a very large scale. Sometimes you are behind the curve and other times you are at the cutting edge of what happens in the wider economy. After twenty years in the travel industry I have seen different things. The recession of 2008/9 was probably the first crisis Iencountered. It had a detrimental effect for DrivenByQ, but it was relatively short lived. Most companies cut back on their travel but luckily a few customers went into overdrive.

Just as we were recovering from the effect of the Global financial crisis, a volcano in Iceland erupted in 2010. The ash cloud it created blocked the airspace of Europe with its fine particles which could damage a jet engine. It was initially very concerning. I still remember seeing job after job being cancelled in just a matter of hours. Luckily, people could still travel but, just not by air. As a ground transportation provider, we suddenly boomed. We had some fantastic long-distance bookings. One of which went as far as Spain.

If anything, experience has taught me not to panic. Something usually comes along and makes up for the financial losses encountered. Luckily in the current environment, DrivenByQ has a mix of work which is mostly paid on account. This means, despite zero future bookings there should be money coming in for the next two months. Eventually it might run out, but it buys some time to formulate a plan. In addition, as we are a VAT registered company and submitting monthly figures to both HMRC and PAYE, any claim for assistance is verified.

For drivers who are self-employed and dealing mostly in the cash market, I worry for their future. The COVID-19 outbreak has been rapidly detrimental for their livelihood. It is different to anything before. This is because there is little opportunity to find an alternative income source as the crisis persists. While the country is in lock-down, people are advised to stay at home. On top of this, any financial assistance from the government will be based on annual profits rather than costs. That means anyone who purchased a vehicle or re-invested in their business could be penalised.

I guess we will just have to wait and see how things develop in the months ahead?

A Qualified Chauffeur

A couple of weeks ago I travelled to Liverpool for an assessment with the Guild of Professional Chauffeurs in the hope of becoming a qualified Chauffeur. Gladly I passed and am now a member of the Guild. Initially I was unsure of joining but that changed a few weeks ago. The Guild of Professional Chauffeurs is a fairly new movement in the chauffeur industry - it only carried out its first assessment in 2018. Initially the uptake was slow. Although I was aware of the efforts to grow the membership, I was probably similar to many people who were waiting to see if it gained momentum.

As an effort to dispel the myths of it being a cloak and dagger type organisation the Guild held an open meeting in Walsall. They wanted to reassure potential members there was a recognised procedure for assessment and everything was above board. As an opportunity to meet other operators in the Chauffeur Industry and network, I went along. It was good to talk to so many like-minded people and share experiences. It gave me the confidence needed to believe the Guild would be more than just a member’s directory. A lot of time and effort had been invested in establishing the organisation as a professional body.

The Guild of Professional Chauffeurs (or GoPC for short) needed members to join if it was really going to get the ball rolling. It was time for people to sign-up and become a qualified Chauffeur. All the hard work had been done by the committee. What it required now was for those wait-and-see type people to undergo assessment. It would then become their Guild and grow with their requirements. Anyone with vision will see the potential for the Guild to become an industry body and represent the niche market of the chauffeur world. The capability exists in its members to help each other with licensing issues, vehicle purchasing questions, discounted insurance schemes and a whole lot more.

As someone who has always believed ‘one man can make a difference’, it was time to stand up and be counted. Luckily in 2019, I had already completed a one day first-aid course with the Guild. This meant all I had to do was complete a practical assessment and a written Highway Code test. Obviously you have to send over some documents, just to ensure your vehicle is licensed and legal but this can be done in advance. On the day, it is truly nerve-racking! Being assessed by your peers is quite something. However, I simply took the approach that, if I was lacking in any department, there would be constructive feedback and a second opportunity to attempt the assessment at a later date.

True to their word in Walsall, if you carry out a chauffeuring role on a daily basis (and you are working to a good standard), there is every likelihood you will achieve success. Gladly, my advanced driver training with RoSPA was noted and it made a difference. This was praised by my assessor. The feedback was all positive (apart from a minor setback on the practical test). To end the day, a lapel badge was pinned to my suit and a certificate was dispatched in the post. Now I proudly have something to differentiate my skills from anyone branding themselves a Chauffeur. I have been assessed by my peers and approved as a Qualified Chauffeur.

The Specific Chauffeur

Last weekend I attended a meeting for the Guild of Professional Chauffeurs in Walsall. It was a great event with a variety of people. Some were looking to set up a new chauffeur business and others were well established in the chauffeur world.

Over a few beers at the bar I spoke to a mixture of people in the trade. One was an experienced and professional chauffeur who was employed to drive for an organization. He was looking to start up on his own but was unsure where to divert his efforts. One of the experienced guys was explaining to him that you cannot be all things to all people. It was better to focus on a specific area. My contribution was the Richard Branson philosophy of ‘finding the niche in the overcrowded market’.

I spoke to another individual who setup two years ago and was growing in the corporate sector. The way he did this was to use LinkedIn. He had spent considerable time and money on employing a specialist who showed him a way to structure his connections and content. This enabled him to constantly be in the forefront of people’s minds. Rather than adopting the hard-sell he simply wanted to be considered until the time was right for someone to reach out to him.

I know from experience that someone can take a business card and keep hold of it until they require a chauffeur driven car service. It might be the next week or it might be ten years later. Either way, if they call you, the way you represented your company must have made the right impression. The only thing is, if you need to pay the bills, the model you adopt and the market you chase must be capable of sustaining you. In North Wales where DrivenByQ is based you can guarantee someone new will enter the trade every few years with a specific (but somewhat doomed) objective.

For some reason, new entrants to the North Wales chauffeur market have a belief that there is an overwhelming demand for golfing trips with groups of wealthy individuals. Having been in the trade for almost twenty years now, it is a specific customer that I am yet to see materialise. Despite this, you can guarantee there will be another new start-up who will chase this market. My advice to them is stop! Don’t do it. Unless you know specifically that there is a demand for a service, simply don’t go anywhere near it.

Only last week I spoke to someone in his fifties who had retired and was looking to set up tours or something enjoyable. We spoke for a little while and I could hear the enthusiasm in his voice and romance which accompanied it. We then went through what is required to get up and running. Firstly the licensing aspect would cost around £1,000. Next the insurance would be around £3,000. Then there was the vehicle which would need to be at least £15,000. This was before road tax, fuel, repairs, servicing and the unquantified and ongoing marketing costs.

In that situation I felt ambivalent. On one hand you are crushing someone’s dreams. On the other hand you are giving them a reality check. In the long run, it would be much better to spend £20,000 on something which will give you a return. Better still, why not spend it on yourself, doing something you enjoy? Take a holiday or a cruise or buy a caravan or even a boat. I can also guarantee that if you have a partner who is also retired, they would appreciate your nest egg giving you both some joy and quality time together.

So what is my advice to someone thinking of starting a chauffeur company in this day and age? Well, firstly, ask yourself how you are going to make profit – not just turnover. Ask yourself what sort of a margin you can produce and then ask yourself, is it sustainable and can you grow it? Can you do it twelve months of the year and how much of your time will it demand? On top of this, ask yourself what you would do if you had two bookings at the same time or what you would do if your vehicle was off the road at short notice. Can you provide a back-up?

When you speak to some people who have been in the chauffeur trade for a while they can be a bit downbeat or even a bit grumpy. That is because they have adapted their life around their business and it has cost them valuable time and money. In reality what they really wanted was a lifestyle they could adapt their business around. It takes time to build a chauffeur business and it takes time to build something capable of producing a regular wage. For many people, the time it takes to figure it all out is costly and the return on their investment is lengthy.

My advice therefore is simple. Do your research. Compile a list of your costs and be generous on what you expect to pay out (in fact, double it). Then do some projections and be conservative on what you expect to earn. The next bit is what it will cost in time (not just money) to work ON your business as well as IN your business. Then decide whether it is profitable in the short, medium and long term. If, after all this you can still make money, have fun and take time off to enjoy life, go for it. I can guarantee, it will definitely be an adventure. Just don’t expect it to work overnight. After all, if it was that easy, we would all be doing it!

Time To Split

For some time now, I have been increasingly concerned that this Chauffeur Blog is conflicting. For anyone who has been reading will know, I am growing an established business while also growing a new one.

There is some crossover but the two companies serve different markets and different sectors, they are at different stages of development too and even have different marketing plans. It might be better to keep the themes running side by side?

From this point of view I have decided it would be better to write two separate Blogs. One for each company. I also think it would be better if the Blogs were actually on the websites of the companies they represent.

What I haven’t decided is if I should still keep this Blog as an overview of the other two? Either way, you can now find the two Blogs on their relevant websites by following the links below:

Manchester Airport Chauffeur Blog

DrivenByQ Chauffeur Blog

Turbo Lag

Standing outside a hotel, I’m waiting for a group to finish their meal when the first passenger comes out and strikes up a conversation. We talk about the economy, Brexit and how his business is doing. I drop in to the conversation that DrivenByQ have just had twenty-four months of continuous growth. He says that is impressive in the current climate.

Our figures for 2018 reflect a 30% growth in turnover. We brought in new drivers, bought new vehicles and improved our processes. It all sounds good - and it is! There is just one small thing to note though. Our profitability remained the same. The reason? We had to change our accounting method (a conundrum I previously wrote about).

As the turnover grew we were forced to abandon one VAT scheme and adopt another. At the threshold of £230,000 we could no longer use the flat rate scheme. Instead we had to use a traditional scheme. The difference meant claiming back VAT on purchases rather than retaining a generous portion of VAT on invoices as we previously did.

Purchasing vehicles and taking on an employee was the first step toward making the new scheme work for us. The reality however is that we are still in a transitional phase. I’m sure most companies go through stages where their business model changes and sometimes, you don’t really know the effect of that change until after the event.

So in order to generate more profit we have two options: The first (and easiest) is to reduce our turnover and go back to the previous scheme. The second is to grow our turnover, purchase more vehicles as a company and take on more employees. I will let you decide which one you think we are actively working toward.

The Rise of The Corporate Citizen

When I sit down and look at figures, the one thing which always amazes me is the way in which card payments have grown. A few years ago we introduced the option to pay in-car by card in all vehicles. Previous to this we had just one card machine which was a large (shoe size) device complete with a till roll for printing long receipts.

While the card machine was useful and offered flexibility it had some issues. Firstly, the battery did not last very long and always required charging for considerable time. Secondly it was expensive! Not only was a deposit required before receiving the machine but there was a monthly rental fee of over £30 and the fee on every transaction was an additional six percent.

The machine did help bring in new customers, especially if they wished to pay by Amex but it was clunky and slow. Added to this was the logistics of swapping the machine between cars and drivers which was challenging to say the least. With the advances in mobile phones and Bluetooth technology, time came to ditch the machine and instead use an app with a card reader.

The advantage of using a mobile phone meant a better data connection using the digital 3G network. Added to this was the removal of a monthly rental fee, no setup cost and finally the drastic reduction of transaction charges. They tumbled from six percent to 2.75% and now it is less than that. Tracking the sales figures is very revealing as the uptake is huge.

In the five years that I used the big old clunky machine, sales were at best £5k a year. As soon as apps were introduced the sales increased to ten times this amount in the next five years. The reason is what is known as ‘The Rise of the Corporate Citizen’ - which basically means travellers taking control of their own travel budgets.

Imagine having a large global company where hundreds (or even thousands) of people travel on business. In the old days a department (with staffing costs) would control the budget. They would be responsible for purchasing airline tickets, train tickets, hotel accommodation and ground transportation. These were all swallowed up in one big account which was then difficult to decipher.

Now compare this to all the people who travel having their own credit card. It becomes a lot easier to get a breakdown of costs and quickly identify an individual who is spending more than anyone else. It also provides a history specific to the individual so that trends can be tracked and interrogated for their data.

An additional bonus in all of this is the simplification of administration within an organization and the reduction of work for their accounts departments. Before the corporate citizen, we would have sent an invoice to a local site who had booked the travel for another site (usually overseas). The overseas site would then have been invoiced by the local site to recover the costs.

Although we charge the same amount for a journey on account as we do for card, the layers of administration which are removed by using card payments often means a company could pay more but still make a saving. There is also the transferring of payments across borders and exchange rates to consider and the time required to process all this.

For me, one of this biggest advantages to using card payments is the speed in which drivers receive payments. Today some payments are almost instant and at most a couple of days. In comparison to that big old clunky machine I had years ago, that is fast! I still remember having to wait up to three weeks and then work out what the lump sum related to.

For passengers, the biggest advantage is speed and convenience. Just yesterday afternoon I did a local transfer for less than £30. That meant the passenger could pay using contactless technology just like he did with a colleague in the morning. The only difference was when he asked for a receipt, I smiled and simply said ‘already sent’ - the app recorded his email address from the earlier trip. Simples.

Going The Right Way

Recently I have been writing about how I first started working in the private hire industry. Following on from that once I decided to make a go of it, I then started looked for a niche. With both DrivenByQ and Bluestone Cars, a crucial part of the business model was to introduce online booking. Today it is the norm but back then it was quite revolutionary. One thing to note here is that smart phones were new and only sold in small numbers, broadband didn’t really exist and computers were quite expensive. In 2003 the Internet was still in its infancy with most people using a 36k dial-up modem.

At the time, most companies were using fax to book their executive travel but this wasn’t great. First off, a fax could drop on the floor and be trampled. It could be mixed with other faxes and be lost or it could even get wet. If the information had been received intact, it still had to be transferred to a diary. This in itself introduced issues. Taking the experience of my engineering background and looking at the situation, I drew on a project I completed for my apprenticeship in the 1990s. This considered CAD/CAM and computer integrated manufacturing techniques.

As computer aided design (CAD) started to become popular so too did CNC machining. This allowed a skilled tradesman to program a precision tool path which cut a shape out of a piece of metal. The toolpath was determined from the CAD drawing. At some stage, someone realised the CNC programmer was simply copying the information on the CAD drawing but with the opportunity to introduce errors. The solution was to electronically feed the CAD data to the CNC machine with no manual transposing of data. This eliminated errors, reduced the time, simplified the process and decreased paper waste.

For me, creating a fax, feeding it through a machine and then reversing the process to create a diary entry was exactly the same as printing off a drawing and manually programming a machine from it – old fashioned and prone to ‘transposing’ errors. To add to this, in the early days I would receive numerous phone calls on a Friday afternoon from companies who wanted to check and confirm their bookings for the following week. With my lean hat on, I realised this was not ‘value add’. After all, what a customer really pays for is a vehicles wheels to turn, not for us to do admin. What they really required was access to share my diary.

Again, going back to my engineering background I had read multiple books about Toyota. One principle they have is that projects should be managed using a sheet of A3 paper and posted on a wall. This keeps the data simple and available to all users. It also ensures no matter how many times the data is updated, it is always the ‘current’ version which is shared. For me, this was a great principle to adopt and combine with the CAD/CAM integration. Quite simply, if a customer used an online booking form, they had created the data – all we had to do was share between users.

By introducing a database driven website, it gave the opportunity to collect data accurately from a customer through an online booking form. The data was automatically added to a diary system where it could be manipulated by an admin user (or manager). This process eliminated the need to transpose data and the need for paper. By using a smartphone the manager could be anywhere thus eliminating the need for bricks and mortar too. Not only did we do a great job with data by speeding up the process and reducing errors, we cut the cost of overheads too. Essentially a booking could now be received and processed within 30 seconds.

Another benefit of the online booking system was that customers could access it. Now they could view their bookings without needing to call. They could also access the system and make changes or just look at who the driver was. The final benefit to working this way was when it came to invoicing. No longer did we need to separate customers and drivers manually and create separate documents. This was now done through the database reporting tools where an invoice took just three seconds to produce and then it could be sent electronically further reducing costs. My Dad always said my head was in the clouds – these days, so is my business too.

Reflection Time

Every once in a while (like January), it is good to stop, reflect and review a few things. For a business to succeed, there has to be a strategy or goal so that our efforts are not wasted. I love the principle Toyota use for this of ‘Hoshin Kanri’ or True North. Hoshin Kanri is setting a compass needle and then following it to a desired destination. Having such direction is great as it keeps a team focussed, it informs everyone where they are going and it makes everyday decision making easier - all you have to ask yourself is, ‘will this help us fulfil our goal’?

So what is our goal? Well, it was set out in our original business plan many moons ago: First we wanted to create a great local company with a reputation for customer service. Second we wanted to manage it with an online booking system and then we wanted ‘growth’. That growth would utilise economies of scale - which were possible through the efficiencies created by our booking system and regional branding. So how are we doing?

Well, our ten-year-old cloud system needs a rebuild. Luckily, we have already started work on a state-of-the-art new system which comes online later this year. This time it can be sold to other companies too (so it will generate revenue).

To keep growing locally, we changed our VAT system last year so we could increase from £200k a year turnover to £1m without any more hurdles. This has already seen the employment of new staff members and the introduction of a pension scheme.

Further to this we replaced older cars with ‘brand new’ Mercedes vehicles. We also recognised that to grow regionally we needed work from a new source. To achieve this we went live with our new Manchester Airport website and had our first booking.

On reflection, despite the technicalities of specifications and regulations and legalities, we are on track. It is encouraging too when DrivenByQ keeps growing despite new customers saying they had “never heard of DrivenByQ”. Maybe that wasn’t part of our plan but at least it saved on marketing.

A-to-B, B2B or B2C?

In the early days of setting up my airport transfer business, I initially targeted the general public (or holiday makers). For the uninitiated this is known as business-to-consumer or B2C marketing. It requires a lot of input and constant effort to build it up. Back in 2003 the Internet was still in its infancy so attracting new customers required local advertising campaigns complimented with business cards and leaflets which could be costly.

I realised that to develop an airport transfer business in my local B2C market was futile. It required either a collaboration with a travel agent (giving them a cut of your profit) or constant advertising in a local magazine week after week. Either of these options ate in to your revenue and prevented you growing bigger than a busy one-man-band. This is because there was not enough margin left to bring in other drivers and exceeding the VAT threshold would kill you on price.

The alternative I chose was to target people from outside the UK who were travelling in to Manchester International Airport. The black cabs based at the airport were so expensive that there was plenty of scope to be competitive on cost and still have a margin. The only issue here was that I was based nearly 50 miles away from the airport and attracting any such customers would require good rankings on Google. In 2003 however, there was very little competition on the Internet.

As an experiment I built a website (www.bluestone.gb.com) and added a lot of tourist information. I added the site to a few directories such as DMOZ and surprisingly it ranked. Initially it was a top twenty page for the search term ‘manchester airport taxi’ and with some fettling behind the scenes it improved. I started to learn about the dark art of Search Engine Optimisation and things improved further still until eventually the site ranked in the top three of Google.

The result was some great work. I started to meet celebrities, VIPs and other interesting people. I also started to visit all sorts of new places across the UK. I had some great conversations too. There were a few issues with this business though. Firstly, it could be seasonal. Secondly, despite good prices there could be a lot of dead mileage and hidden cost which affected your margins and thirdly, it could be dramatically affected by a change in Google’s algorithm.

For anyone who doesn’t know, Google’s algorithm is its closely protected secret formula for how Google decides to rank web sites in the search results. In 2003, if your web site was your only income, it could be nerve racking! In fact, when Google rolled out a major change to its search criteria you could plummet down the rankings in an instant. This would effectively mute the business overnight.

Although the work Google provided could be rewarding it was sporadic. It was simply too wild to provide a regular income too. Recognising this fact, it was time to look for something more regular and something more stable. After dipping a toe in the B2C market and recognising its turbulent nature I turned to the local business community instead. With the tenth largest industrial estate in Europe on my doorstep and two major airports less than an hour away it seemed a logical step.

I had a few contacts which eventually brought in some good work. It was regular too and it began to grow. Now, after thirteen years of building my company DrivenByQ, it is established as the main airport transfer supplier to companies on Wrexham Industrial Estate and Deeside Industrial Park. This gives us a very stable customer base which (although slightly seasonal) keeps us busy all year round and pays the bills. It is our bread and butter income and has facilitated steady growth.

While DrivenByQ has been my main focus for all these years, I have to admit that the excitement which came from www.bluestone.gb.com was something which never left me. For that reason I have been working away quietly in the background creating a new company called Manchester Airport Taxi Ltd. With the extensive network of professionals I have come to know over the years and with Google rankings now easier to control with paid advertising, it is time for a second attempt at the International B2C market.

Where It Began

Not many people know it but when I first entered the private hire industry it wasn’t meant to be permanent. I was actually working as a self-employed Draughtsman creating engineering drawings on a computer aided design system. To be honest, it didn't go well. The work was patchy and on reflection maybe I should have waited until I was older?

With intermittent work and late payments, I needed money. An advert in the local paper read ‘drivers wanted, cash paid’. I called and reached a local taxi firm. The owner invited me in for a chat and before long I completed an application for a private hire licence. The cost was just £39 with very little to prevent you getting it – today you need a medical, an enhanced police check and references.

I soon became no stranger to a twelve-hour shift on a Friday and Saturday night. It was character building to say the least - working for a taxi firm next to a nightclub! Unfortunately, about a year later, I experienced a violent incident. At the time it was scary but in hindsight, it was probably the wake-up call I needed.

Unwittingly I had transitioned from a time-served, precision engineer with a string of professional qualifications to a full-time taxi driver. Two years previous I was working for a multinational company with an attractive package and a comfortable office. The days of Monday to Friday were over and gone. It was time to take stock and ask myself where I was really headed in life.

I loved being self-employed but the chances of building a business as an engineer were fading. Considering a long-term career as a taxi driver depressed me (despite the fun times) and a change of career seemed unlikely. I started to recognise however that because I trained as an engineer it didn’t mean I had to remain an engineer. I could use what I had learned though.

As a Draughtsman it is vital you understand document control. Furthermore as an apprentice I had studied BS5750 as a quality system to gain ‘Technician Guides’. This highlighted the importance of an audit trail and ‘root analysis’. Reviewing how a taxi office managed data and processed information was just shocking and it explained the complaints!

Everything was paper-based! When staff changed shifts, information was lost or thrown in the bin and when bookings were made, the details were sketchy. The basics were non-existent and contract customers suffered as a consequence. Considering all this, I realised there was a lot of room for improvement and I knew the Internet was about to be a revolution.

If ever there was an opportunity in front of me, I suppose this was it.

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.

The Mercedes V Class

So, we made a decision to purchase a brand new chauffeur vehicle. Simple right? Well, not quite because there are options to consider. Who would have thought it could be so complicated? As someone who has never had the luxury of selecting vehicle options before, it soon became apparent that choosing quite a few can lead to a significant cost!

Then there is the length. Normal, Long or Extra Long? Then there is the style. Sport or AMG? And do you really want the bigger AMG wheels with low profile tyres which can make the ride harsh? Then there is the colour and the option of metallic paint. The list goes on and that is before you even think about the interior which offers the choice of five, six or seven passenger seats.

There is an option to have a centre console between the front seats with a refrigerator. How about an electric sunroof? Well, at some point I guess you have to be practical and think about what gives the most value to the passenger and the driver? A quick bit of research on the Internet reveals second-hand prices are robust but nearly every V Class has a black interior with carbon fibre trim effect.

So what do we do? We decide to be different and go for a wow factor. We specify a silk beige leather interior complimented by a walnut wood trim. We be pragmatic and choose an Extra Long body style in metallic silver with seven passenger seats and we add a few sensible options such as electric memory seats, a parcel shelf, a 360 degree parking camera and the uprated 250d engine.

To save a little we opted for the Sport instead of the AMG but still kept the electric sliding doors, electric tailgate and ambient lighting to impress passengers. After weeks of deliberation it seemed we finally had the right specification - except for that one last little thing. The icing on the cake for yours truly: A fifteen speaker Burmester theatre system with exceptional sound quality.

A New Mercedes Benz

Last year when it became apparent our VAT scheme would need to change, it was also evident the existing VAT scheme would generate a surplus revenue in a relatively short space of time. Coupled with this were two ageing vehicles on our company fleet which would need changing. With this in mind it seemed like a good time to take up the offer of an extended test drive.

Not too far from where I live there is a Mercedes Benz showroom for commercial vehicles. One weekend I popped in to have a look and was offered the loan of a ‘Vito’ people carrier for almost a week. It seemed rude not to accept. If I am honest, it was also good fun to drive something a little larger than I would normally.

So what did I think? Well, it was extremely practical. It wasn’t too unwieldy and a vehicle that size has the potential to generate extra revenue. On the flip side, the test vehicle was somewhat basic with its plastic bumpers and steel wheels. It was some way off an executive standard too (even if my wife did spontaneously purchase a washing machine which we took home with us).

After a few days of driving the vehicle in different environments and seeing how it measured up as a people mover, it made sense to have something this size. It also made sense to have something with such reasonable running costs. So what did I say to the salesman when I took it back? “I like it and it makes sense so I have placed an order for a Mercedes V Class” which is something you can only buy at the car dealership.

The VAT Advantage

My last blog spoke about VAT changes. In relation, its biggest affect is on a vehicle purchase. Historically I bought vehicles about three years old and they were preferably ex-company cars which had been on lease. The reasons? They were well maintained, had been under warranty and had done most of the depreciating in the price department.

In the last few years, I have realised two drivers sharing one car generates more profit. The consequence is the car wears faster. That wear can be expensive too, especially if you clock more than 60,000 miles a year. For example a clutch could cost £1,500 to fix and another £2,000 in lost revenue while off the road. Buying a second-hand car also means the inability to specify certain features or colours.

In contrast, Mercedes Benz offer a three-year, unlimited mileage warranty on a brand new vehicle. Add the advantage of reclaiming VAT on the running costs and purchase price and it makes a new vehicle much more appealing. With the volume of our work building and already supporting ten full-time drivers, projecting figures over three years gives some interesting calculations.

If you consider our pricing structure adds 50% when carrying more than four passengers, the extra revenue would help contribute toward a vehicle. Additionally, Mercedes people carriers offer a potential 28,000 miles between service intervals and they have solid residuals. With this in mind, a new vehicle doesn’t look so expensive after all when calculated over three years.