BY MADELEINE MACCAR AND SUSAN ROSE
Dav El/BostonCoach CEO Scott Solombrino is easily one of the industry’s busiest leaders. When we caught up with him at the end of July, he was fresh off the dynamically successful Global Business Travel Association (GBTA) Convention in Denver—of which he plays a major part as president of the GBTA Leadership Allied Council—and was gearing up for his annual affiliate meeting during the second week in August. He also just made some pretty huge announcements at GBTA, including the debut of an on-demand app that he is developing with EmpireCLS Chairman and CEO David Seelinger (a once fierce competitor, according to Solombrino) that he hopes will transform chauffeured ground transportation—or at least help it evolve.
It’s just hours after landmark legislation was passed in Massachusetts—a bill he and his industry peers have been advocating for by working in tandem with the taxi industry for more than three years, and which finally came to fruition at literally the eleventh hour before the legislative session ended for the year—and Scott Solombrino is riding high. The CEO’s time is rightfully in demand as he has been a candid and willing critic of TNCs in Boston and a spokesperson for TNC-accountability advocacy group Ride Safe MA, especially regarding the all-too-critical background checks.
“TNCs are pretending they’re happy but they’re not; you can tell by them not doing live interviews. I did 16 interviews on TV, radio, and print yesterday. Try to find an Uber or Lyft live interview—there isn’t one,” quips Solombrino.
The late-night weekend session ended with a compromise bill passed by both the Massachusetts House and Senate and yielded many of the things that our industry was hoping for: established insurance thresholds for TNCs, a two-step background check for drivers that will be conducted by the TNC and verified by the state, and vehicle inspections. Although, regrettably, TNCs gained the right to pick up passengers at the Boston Convention and Exhibition Center and Logan Airport, which was previously not allowed.
“We couldn’t be happier because we’re dragging TNCs kicking and screaming into the world of chauffeured car and taxi regulation, and that’s not making anybody happy on their end but there’s not a damn thing they can do to stop it,” he says. TNCs will also be required to pay commercial toll rates and will be subject to a 20-cent surcharge per ride, which will have to be paid by the company and not passed on to the consumer as a tack-on fee. (Of course, it’s been reported Uber recently increased its share of a driver’s fare from 20 to 25 percent in what seems to be its way of passing that fee onto its embattled drivers instead of cutting into its own profits.) Fingerprinting, one of our industry’s key points, ended up on the floor of the Massachusetts State House, but Solombrino says he’s undeterred.
“We got an awful lot of stuff that people told us we would never get and that makes it even more of a victory because the naysayers on the lobbying front kept saying that we were asking for too much. Even state senators said we can’t do that—but we never backed off and ultimately got 90 percent of what we asked for. What we got will fundamentally change the way they have to operate to run a business in the state of Massachusetts,” he says. “For once, we’re winning in the chauffeured car space. It’s something that’s really live now, and Massachusetts is a huge, huge story that can be duplicated across the country because we finally figured out that you need a coalition with the taxi industry.”
The victory in Massachusetts would be sweet on its own, but it was extra savory thanks to a very public debate between Solombrino and Lyft Chief Business Officer David Baga at GBTA several days before the legislation passed. The two were part of a panel, The Future of Ground Transportation, moderated by CNN’s Richard Quest, that was an attempt to explore the rapid changes in ground transportation in relation to business travel.
Baga also tried to pivot from the duty-of-care issue by using the tired-and-worn trope that TNCs are simply ‘technology companies,’ but Solombrino didn’t suffer fools gladly—and the audience wasn’t buying it either.”
Solombrino says that the initial reaction by the audience to him was lukewarm, but it wasn’t long before he was able to highlight the key issue that separates the chauffeured ground transportation industry from ridesharing: duty of care.
“By the end of the conversation, the audience flipped and anybody in that room was stunned at how everything changed in a matter of minutes,” he says. “Once they saw that David [Baga] had no answers, they really got turned off by him. At the end of it all, he lost the audience and so did Richard Quest because you can’t lie about safety—you’re either taking the right steps and do it properly or you’re not.”
Clearly the skilled debater was talking to the right audience, largely comprising corporate travel management and others who procure transportation for traveling executives. Duty of care has been a hot-button issue for GBTA as companies continue to send their executives to all corners of the globe, often to places that have been riddled with localized terrorist attacks or health-related crises like the current Zika virus.
“The one thing I’ve learned is when you run a TNC you can make up your own facts,” he says. “The public is happy with TNCs until you bring up the safety question. At the NLA, we conducted a poll through online research agency Harris asking 3,000 adults ages 18 and older if they think these companies should be fingerprinted and background checked—96 percent said they thought they already were. The public assumes that TNC drivers have already been vetted and are regulated—and they go crazy when they find out TNCs aren’t regulated and aren’t safe.”
Baga also tried to pivot from the duty-of-care issue by using the tired-and-worn trope that TNCs are simply “technology companies,” but Solombrino didn’t suffer fools gladly—and the audience wasn’t buying it either.
“If you watch the interview carefully, David never answered one of the questions directly. TNCs start this nonsense where they say things like, ‘We’re not in your business.’ Well, if you drive people for money, you’re in my business no matter which way you split it. They all try to spin it into something it’s not. In the corporate space, the world is different: You don’t just get to do what you want to do. You shouldn’t be in the corporate space if you’re not going to follow the rules,” he says.
“People care about rapes and murders. I’m shocked that more women’s groups haven’t come out against these companies because of the assaults,” he continues. “If you just follow Ride Responsibly, Who’s Driving You?, or AFT, you’d be horrified. How does this happen in America, where every week there’s five or six assaults occurring in these TNC cars? Where are all these women’s groups? Meanwhile, there’s a lot going on and none of it’s good: Massachusetts has had four assaults and rapes in the past 20 days in either Uber or Lyft vehicles, and it wasn’t even a topic of discussion at the state level. I think it’s politics, how else can you explain it?”
Of course, the biggest groan-worthy moment came when moderator Quest called the chauffeured ground transportation industry “dinosaurs.” Solombrino says that he wasn’t offended but many attendees were. The reception from the crowd turned fiery quickly.
“The audience feedback about Richard Quest was awful,” he says. “They thought he was a bully. They took it as an affront—he wasn’t just coming after me, he was coming at them. I think Richard thought I was going to play nice because I’m president of the Allied Leadership Council, but what he didn’t know was that I knew this was the only time I’d get an executive officer of a TNC on stage with me in front of thousands of people. They’ll never do it again and I knew that before going into it, which is why I put the event together. I had to be respectful of the audience because they are my clients—I wanted to get crazy but I would have looked unprofessional. I stood my ground though.”
Solombrino says that he ran into Quest at the airport after the convention where the two exchanged pleasantries. “He said, ‘By calling you a dinosaur, I gave you a perfect opportunity to respond. I did you a favor because it then became the talking point in all the articles written afterwards. People thought it was unfair that I said that but I did it on purpose.’ So everybody tries to spin what they can spin,” he says. “A lot of great articles were written in Silicon Valley about me challenging that BS, so I think I accomplished my goal. I also think that Lyft accomplished nothing and regrets going on stage—but I knew that going in because they were trying to get out of the session before it even happened. Their egos got in the way.”
Of course, the most conspicuous absence was on the part of the world’s largest and best funded TNC, Uber. Solombrino says that they tried to get onto this panel once they heard that Lyft was involved, despite turning down invitations for a debate for more than two years. Solombrino upped the ante by drawing the line in the sand indicating it would only be a panel amongst executive officers: In other words, send Uber CEO Travis Kalanick, not some lower-level mouthpiece, or don’t bother. Uber didn’t show.
With all of the bluster and incendiary barbs rightfully tossed at TNCs, it’s easy to forget that Solombrino is doing this because, at his core, he is an operator. He’s well aware that this is the fight of a lifetime, but he is still focused on his 40-year-old transportation company in everything he does.
He’s been in the industry since he was 18 years old, buying a used stretch limousine as a freshman at Boston’s Suffolk University. It should come as no surprise that the sharp-witted, quick-tongued Solombrino—as his debate skills demonstrate—had dreamed of becoming a lawyer, but put the idea on hold when he realized that his college startup was a sustainable business pulling in $3 million by the time he graduated. Over time, he grew the local company into a massive nationwide network.
The company’s biggest move came in 2014 when Solombrino’s network was acquired by BostonCoach owners Marcou Transportation Group. The combined operations brought the vehicle count to more than 1,700 with 3,000 employees. Solombrino was appointed as the CEO of the joint companies.
One of the reasons the merger worked was because Solombrino and Marcou owners David and Derek Marcou are both family-oriented. Solombrino is pleased to have the opportunity to work with his two adult sons: Anthony, 30, and Zachary, 25.
“My kids have grown up in the business, and while they had options to have other careers, they’ve chosen to stay in this organization,” he says. “They each do different things, they’re both very successful at what they do and, if at any point in the time they said, ‘Hey, I want to go become an investment banker or doctor,’ I would support them. The one thing I want is happy, well-adjusted children because I’ve gotten to this point in life by having happy kids. I tell them every day not to take business too seriously, there’s more to life than this, and relish that I get to work with them. My mother worked for me for 30-plus years in our reservation department, I was thrilled to have her. I’m a big believer in families, and the Marcou brothers are very family-oriented, as well, so they’re extraordinarily supportive and they get it. There’s one thing you can never replace and that’s the trust of a family member.”
Continued acquisitions was always part of the game plan, and it’s been steadily happening over the past two years, but especially in the previous 12 months with the purchase of Metropolitan Limousine in Chicago, Torrey Pines Transportation in San Diego, and Worldwide Transportation in Miami. They currently have company-owned locations in New York City and the surrounding area, New Jersey, Philadelphia, Baltimore, Washington, Palm Beach, Miami, Chicago, San Diego, San Francisco, and Los Angeles—in addition to Boston, of course.
“We’re still buying companies in regions across the country,” he says. “I’m looking at about three or four deals as we speak; it doesn’t mean we’ll close but it does mean we’re doing our due diligence. We’re also growing organically. Business is up this year, we’re having a solid year on the top line, for sure. Things like healthcare costs are rising, insurance is also starting to harden up a bit so we’re looking at our expense line very carefully, always trying to find synergies to drive more profit to the bottom line because that’s what it’s all about. We’re a little more focused on the bus business, specifically the minibus business. We’re expanding those operations across the country and looking to buy bus companies if the right ones came along. Of our past three large deals, all three owners have stayed on with the organization and will be presenting at our affiliate meeting about what life is like after the acquisition.”
But their nationwide presence is the very reason that Solombrino continues to be one of the most vocal proponents of operating on a fair and level playing field with TNCs since it is affecting his operations in many different cities. He’s been doing it through his position on the NLA Board (he’s up for re-election this year), local associations, and his relationships with taxi operators. Boston was a win, but there are more cities to go.
In what became one of the biggest stories out of GBTA, Solombrino and Seelinger jointly announced the development of the app to the industry. But before they even made the announcement, they already had the support of hundreds of companies through their networks. At the same time, there were reports that Carey was in talks to partner with Lyft—a conversation that Solombrino says he also had with the TNC but refused to take further because of all the reasons he highlighted in his debate with Baga. This app doesn’t necessarily seek to compete with TNCs, but to offer clients that on-demand option through legal, regulated transportation providers.
In what became one of the biggest stories out of GBTA, Solombrino and Seelinger jointly announced the development of the app to the industry ... This app doesn’t necessarily seek to compete with TNCs, but to offer clients that on-demand option through legal, regulated transportation providers”
“Scott and I have been talking for some time, so we got together to start developing this technology with our two IT teams—we each have pretty big IT teams with programmers and such,” says Seelinger. “I’m not personally looking to compete with TNCs, that’s not why we’re doing this. I’m doing this is because our corporate customers are asking us for an on-demand solution that incorporates duty of care, ensures them that the chauffeur has been background-checked properly, and assures them that the vehicle is safe—just like they ask us for today and what we’re proving them today. I’ve known Scott for 35 years and I think we make great partners in this.”
The biggest issue has always been supply and a unified app that a large portion of the industry could get behind. “We believe that the best way to manage this is through our networks. We can’t control the fulfillment because there would never be enough supply in the industry, so this app is a way for us to have consolidated assets of a whole bunch of companies with a duty of care compliance. Remember, you can’t just be some crazy driver on this app, you have to be approved by us, you have to have duty of care, you have to have the right standards, and if you meet all of those requirements, then you can participate. We have hundreds of companies that are in the middle of that right now. The closest car, based on geometric GPS, gets the job, and all the pricing is determined by time and distance,” says Solombrino.
“And that’s important because if we do it that way, there’s no commission, there’s no negotiation on what the rate will be,” says Seelinger. “It’s calculated by a computer using some enumerator depending on time and distance, and that’s what the customer will be charged, and I think it’s a great way for operators to fill the gaps they have throughout the day during any slow time. And they’re getting a fair, reasonable rate to do it.”
The plan is to roll out the service in the country’s largest market—New York City—this fall, with other cities to follow shortly after. The app was also a part of the conversation at Solombrino’s affiliate meeting in early August.
“For us, you can’t trade safety for profits and we’re just going to make that blatantly clear and prevail in the marketplace. The industry has to save itself, or it’s going to get wiped out long-term by Uber and Lyft, so we think we have a solution for the industry to actually come out ahead here,” says Solombrino.
Solombrino also recognizes that the app, while having demand from customers, is just a tool. He says that transportation has to shift according to the needs of corporate clients, and that the industry could look very different in a matter of years—possibly with heavy consolidation.
“The industry has to settle into a pattern of how travelers choose to transact their business,” he says. “The more on-demand it gets, the fewer number of operators there’ll be; the less on-demand it gets, the more operators there’ll be. And I don’t think the market has made that choice yet. So you could see huge consolidation and shrinkage, but then there’s always going to be a wedding market, a funeral market, a prom market, and those aren’t the places where companies like ours tend to participate.”
He adds that there’s no question, change is the only constant in this industry, which is why he found the “dinosaur” comment so out of place. “I’m evolving and utilizing new technology every day,” he says. “If I’m a dinosaur, then I’m an alligator because the alligator survives. So I say ‘be careful’ to Lyft and Uber, because we’re going to bite them in the ass, and if they land on my snout, I’m going to eat them. We’re never going to be a major tech player, we’re not a tech company nor do we pretend to be. We’re a transportation company using technology.” [CD0816]