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Working with car services.

Article Excerpt
Amid intensive price competition and cost challenges, several chauffeured transportation providers have reported a slight increase in bookings during the past year. Meanwhile, a growing majority of the largest corporate travel spenders are developing contracts with car services providers as they seek to capture and leverage this spend.

Rising insurance costs, escalating fuel prices and a soft market continue to keep the pressure on chauffeured transportation services providers. This industry segment further is challenged with the perception of extravagance, although it can provide comparative cost savings or support business purposes that require enhanced privacy, security or productivity measures.

While this is a service that is provided locally, buyers increasingly have been working with nationwide or international vendors or networks. Those larger organizations can provide--to varying degrees--one-stop shopping, standardized service, enhanced tracking and reporting and other technology tools, such as wireless Internet service and satellite radio. Many buyers also negotiate deals with a few local vendors for their top cities and then use the larger vendors to provide coverage elsewhere.

Even though this is an area for corporate travel contracting that is gaining critical mass, it still is lacking standardized contract terms, such as what constitutes an hourly minimum, especially in regard to airport transfers. With rates remaining competitive in the face of reduced demand, many providers have been depending on surcharges to stay viable. For corporate buyers, this means the actual cost of a chauffeured sedan or limousine usually is much higher than the published rate. These fees also are not standardized. Buyers need to spell out clearly in their requests for proposals the type and amount of surcharges to ensure they are comparing apples to apples. They also should try to ensure that no subsequent increases or new charges will be implemented during the life of the contract. Buyers should ask if fuel surcharges just cover fuel and are temporary, and if the supplier is committed to reducing the cost once fuel prices decrease.

Significant variations among vendors also are apparent when it comes to whether they offer real-time...

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