It’s Time to Talk, Face to Face.The GCLA F&I Town Hall is on the Books!
I mentioned last week that the GCLA has been working on a virtual Town Hall for its members. Well, I’m happy to report that we have secured the dates and are moving full steam ahead with planning the program.
The GCLA Town Hall is an association first and there is already much buzz! This event will be held on Tuesday, November 10th from 1:00pm – 3:00pm. The program is broken into two parts – starting with an expert panel from the credit and finance world followed by another expert panel from the insurance industry.
The GCLA Town Hall will be moderated by Selim Aslam, CEO of MIB Worldwide Chauffeured Services and Harry Dhillon, CEO of Ecko Worldwide Transportation Group.
Attending this FREE event requires you to (a) be a current GCLA member. If you’re not, go to www.gcla.org and sign up (our membership’s affordable at only $6.25 a month) and (b) register for the event. We will have the registration forms available next week after we secure all of the speakers and an event sponsor.
What You Can Expect from the GCLA Town Hall
We expect more than 100 attendees so all mics will be muted. The moderators will lead a debriefing on what panelists will be asked. Then the Town Hall, made up of questions from our attendees, begins.
You must submit your questions to us in advance. Once you’ve registered to attend, you will receive an email from us soliciting up to 3 questions you want answered by either panel or by both. You are required to submit them by the deadline on the email. The moderators will read the questions on a first-come, first-served basis until our time runs out.
We will record the session and make it available to GCLA members who cannot attend the virtual Town Hall.
Topic Descriptions
The F&I Town Hall will try to clear up the confusion on equipment deferments, address all options for managing fleet overhead and let operators know what are our realities moving into 2021.
On the insurance front, we will unpack confusion surrounding the costs to ramp up portions of fleets. We will address workers comp matters and discuss what is left on the table to negotiate, including extensions if any.
We believe this session will be a positive experience for our members and will do our best to help put your fears to rest by clarifying the uncertainties that we all are facing.
Stay Strong,
Sara Eastwood Richardson
And Now A Word from Our Airlines….
Just today, the CEO of Delta Air Line, Ed Bastian, gave his viewpoint on the return of flight. “In [my] 20 years dealing with crisis, business travel has always come back stronger than anticipated despite what critics say.” Delta’s president, Glen Hauenstein confirmed the worst is over and said the company believes the pandemic's impact on business travel would be behind them in two years or more. “With a slow and steady build in demand, we are restoring flying to meet our customers’ needs, while staying nimble with our capacity in light of COVID-19.”
Hauenstein concedes that, “While it may be two years or more until we see a normalized revenue environment, by restoring customer confidence in travel and building customer loyalty now, we are creating the foundation for sustainable future revenue growth.”
Let me repeat Mr. Hauenstein’ s key point here. We must RESTORE consumer confidence. But how? By working alongside the airline and hotel efforts. We must be singing from the same sheet of music and since we have a program that is earning praise from the White House to the School House, I urge you to do your research (www.SafeCleanRidecert.com). This is the only frontline training and testing program available to the transportation industry – including school, commuter, luxury, taxi, trucking, military/government, hospitality and corporate fleets. And, the GCLA recently endorsed it which is exciting news in and of itself.
Today I participated on a strategy panel with Scott Calhoun, P.E., PMP, USDOT Policy Advisor to the Secretary of Transportation, Dr. Jonathan Yoder, Lead of the Water, Sanitation, and Hygiene (WASH) team and COVID-19 Response at the Centers for Disease Control and Prevention (joined by his team) and two of the SafeCleanRide advisory panelists, Dr. Amesh Adalja, Ph.D., Senior Scholar at the Johns Hopkins University Center for Health Security, Dr. Dennis Harp, Ph.D., Chief Scientist and Vice President of Food Safety and Quality Assurance. They are all extremely enthusiastic about SCR and its mission to help mitigate risks associated with infectious and contagious disease through education.
The objective of our meeting was to review the best path forward in getting the SafeCleanRide program adopted by states and within all markets. The great news for transportation – that includes YOU – is that this program exists. I am personally involved. From the inception of SCR in April, I worked with the Advisory panel and the training/testing company’s teams along with dozens of other health groups and focus groups to bring this program to life and deliver it to you. We now must educate our employees, our affiliates, our customers, our communities, our airports and municipalities. Importantly, I encourage you to expose SCR to your insurers since training and certificated testing programs can help lower business liability expenses.
The airlines and the hotels are making the same efforts here. They too are working on certificated program, albeit they are much more complex and thus taking much longer. That just means transportation is ahead of the curve and we will be that much more prepared as travel continues to come back. Delta's CEO Ed Bastian stated that, “Roughly 90% of its primary corporate customers have business travelers who are traveling in small numbers, but are getting their own sense for what the new travel experiences is." The recovery has begun.
Stay Safe,
Sara Eastwood Richardson
The Skinny on Transportation Insurance in Today’s COVID Climate
Everyone in this industry took most of their vehicles out of service last spring. Those that did so, received a discounted insurance rate. As counties throughout California and beyond are opening, we are seeing signs of life – albeit mostly retail work – return. It’s probable that many of you are considering taking a vehicle or two out of mothballs. When you do so, I regret to inform you that your premiums will be much higher than they were before they were shuttered. It is simple math and nothing nefarious on the part of the insurance companies. One vehicle is more expensive to insure than, say three or four or ten or fifty. Whatever your old plan was is no longer so you must start anew with literally a new program.
Insurance companies are finding other industries to underwrite while transportation across all channels is in a lull. That means there is less competition. As an example, Northland Insurance is no longer writing in California effective this month. Philadelphia, Lancer and limited to select companies National Interstate are still underwriting in our state. That’s only three companies (or at least that is all I could find and I made a lot of calls). There is a reason there are so few – reward vs. risk and the transportation revenues just don’t bear out for insurers at this time. The good news is that the companies who are in the market have been very fair to us during these times while they have suffered heavily on the commercial side. I believe they will continue to nurture us back to health and will work with each of you on an individual basis – relationship plays a huge role in all outcomes so let civility reign.
What can the GCLA do about this you ask? Just what I am doing now. We can inform our members of the realities of what it costs to fire back up. We can give you advice on what to do, help you to consider all options like pooling fleets, and more. This is one reason we feel it’s time to get a Town Hall meeting on Zoom initiated for you. Selim Aslam, GCLA board of director and CEO of MIB Worldwide Chauffeur Services has offered to moderate for us. Watch for a date to our first Town Hall as we sort out the details. Also, email me a must-have topic and I’ll do my best to accommodate you.
There is something else you need to be aware of regarding insurance. Risk management is now front and center in every conversation I have with travel management companies. Corporations are scared to death to have their employees travel on business or even return to their offices because they fear liability issues relating to Covid-19. As an employer, you too must face the new reality that your frontline has to be protected. You do not want any illness on your watch – regardless of passenger or driver.
This is the absolute reason the GCLA endorsed SafeCleanRide. This is a 3rd party TRAINING program that requires participants to be TESTED on hygiene and sanitation safety. Those that pass the test receive a certificate of completion. This is a standardized program that helps mitigate risks and this MATTERS to the risk management team at insurance companies – and it will help protect you as an employer. Covid has opened a pandora’s box to a world on hyper alert of germs. Operators who are taking a passive stance on this, who think they have covered their basis because they have created company protocols need to think again. Training and testing conducted independently takes this matter to a more secure level. It will help to mitigate risks involved with contagions and public and employee health matters and may help, God forbid, if you should ever have to legally defend yourself. Go to www.GCLA.org and get certified.
Stay strong!
—Sara Eastwood Richardson
GCLA - Year in Review
"Never Doubt That A Small Group of Thoughtful, Committed Citizens Can Change the World; Indeed, It's the Only Thing That Ever Has.”
—Margaret Mead
This was a very busy and very exciting week here at the Greater California Livery Association. The board of directors met Tuesday for nearly three hours to hammer out strategies ranging from Prop 22 to ending the year with a face-to-face meeting for our entire membership.
Here’s an update that I know you’ll find enlightening:
On Government Assistance: The HEROS Act was revised to $2.2 trillion. Democratic lawmakers introduced the measure on Monday with Treasury Secretary Steven Mnuchin. It is unlikely to pass before the November 3 election. Operators wanting information on the PPP loan forgiveness program must first apply for that at https://www.sba.gov/document/sba-form-paycheck-protection-program-loan-forgiveness-application.
On the Financial Fitness of the GCLA: The association hit a yearly low in reserves this past July only to rebound thanks to new members, a surge in sponsorships and a $8,500 grant from the National Limousine Association.
On Industry Recover Efforts: The GCLA endorsed the SafeCleanRide sanitation training, testing and certification program. This project was 5 months in the making and we feel strongly that it will play a vital role in business recovery for the state of California and beyond. Go to the www.GCLA.org for more information.
On Board Seats: Our association election efforts for board seats kicks off next week. If you are interested in running for the board and/or participating on committees please reach out to me at sara@gcla.org. I have applications ready to email you right away. The deadline for board applications is closed of business on Monday, October 26th.
On Legislative Work: Vote NO on Prop 22 is our #1 focus. We have retained the Marketing/PR firm of Curtis Gabriel to handle social media strategies. We are part of the www.NOonCAPROP22.com coalition. As of now, the No’s are essentially tied with the Yes’s with 25% of likely voters’ undecided. We set up a GoFundMe campaign to raise money to support the Coalition, who’s set to raise $10 million. Our industry is expected to do our part to support the NO efforts so if you haven’t given yet, please do so! The Coalition is not expecting a huge check from us, they know we are suffering. Our goal is to raise $10,000 for the cause. https://charity.gofundme.com/o/en/campaign/gcla-campaign-vote-no-on-prop-221.
Watch your inbox! Coming this weekend in a GCLA – TV exclusive interview with Assembly person Lorena Gonzalez, the author of AB 5 and champion of the Vote No initiative. This program is facilitated by Mo Garkani, GCLA president along with Mark Stewart, GCLA Legislative Chair. Assembly Member Lorena Gonzalez unpacks the details of this landmark legislation. It is a must see!
On Uniting Our Membership in a Face-to-Face Event: The discussion with the board on whether or not to plan for a 1-2 event that includes business strategy meetings, a state of the industry, awards event and a holiday dinner was met with mixed feelings. Many of us are craving the comradery and human interaction that live events afford us. Some directors are concerned about the optics in light of so much pain and suffering this year. We have dates on hold at the Portofino Hotel and Conference Center, Redondo Beach on December 14-15 just in case but we need a consensus. Directors are reaching out to members by email to get feedback. Feel free to contact me as well and let us know if this is something you want to see happen this year.
In close, I must say how proud I am to be a part of such a fighting and spirited group. This industry represents the best of the true American Entrepreneur. These are extremely difficult times for the travel and hospitality industry but still we forge ahead. We are constantly thinking about ways to get mobility “unstuck” and our efforts are paying off…slowly BUT surely. It is an awesome thing to see backyard competitors who are coming together to support one another in the most unselfish of ways. Together we are better and remember, we are In this to WIN this!
Stay strong!
—Sara Eastwood-Richardson
Unpacking Prop. 22
Unpacking Prop 22
The Uber, Lyft and Instacart $180 million ad campaign launched this month. You’d have to be living under a rock somewhere in the California wilderness to have missed their ads. So compelling was their advertising “story” that many of our GCLA members became disheartened and figured the fight was over. The GCLA had just set up a GoFundMe account to raise money to contribute to the Coalition we joined when pushback from operators ramped up. Transportation owners got spooked about spending good money on bad, and worse, retaliation if Prop 22 should pass. All of a sudden, we felt people starting to pivot on something we’ve worked on for 6 years.
If you re-read my letter to you from last week, I said we had to see this through; we are in this to win this. I want to thank the brave hearts that listened to me and sent money our way so we could continue to fight. We are on the right side of this argument because our business model will never pass the smell test to employ IOs the way the TNCs have been able to do. If anyone thinks they can remake their businesses if Prop 22 passes, you are in for a rude awakening. Uber and their counterparts are suggesting a hybrid version of the labor law and asking the voters in California to bless it. But those voters are now hearing our side of things and feeling queasy about saying YES to something that underserves the drivers they’ve come to care about – especially during a pandemic when so many people are in financial straight jackets. The sob story, followed by veiled threats to stop serving the residents of California created panic at first. But, as reality – and our messaging - is sinking in, people are turning on Uber, Lyft et al.
Yesterday, the LA Times endorsed a NO on Prop 22. The article is critical about the 3rd tier employee model the TNCs created. It boils down to paying 20% less than minimum wage and only half of the mileage standard of the IRS. They receive no sick or family leave. The newspaper sites a myriad of reasons that Prop 22 fails to be worthy of a YES, and we’ve included that story in this week’s e-news so I encourage you to review it. In the end, the voters will decide but as of this week it looks to be an uphill battle for Uber and friends. A new statewide poll conducted by UC Berkeley Institute of Governmental Studies poll shows “that 39% of the 5,900 likely voters surveyed from Sept. 9-15 would side with the companies and vote yes on Proposition 22, compared with 36% who said they would vote no and 25% still undecided. The poll's margin of error is plus or minus two points.”
As for our industry’s support, the ball is squarely on the 50-yard line with momentum swinging our way. You’re our team and now is NOT the time to walk off the field. We need everyone suited up and ready to play – that means whether it’s a $10 or $1,000 or anything in between, you must contribute to the win.
I believe in you and I think we’ve got this!
—Sara Eastwood-Richardson
Finding Something to Smile About
How to Find Your Smile After 6 Months of Quarantine
If there is one thing, we can all agree on it’s that this year has been an absolute slog. As time marches on, self-isolation and the fear of the unknown are wearing down our resilience.
I get it, but I am hear to say that we all need to find our second wind and hang on. Getting to November 3rd in tact both mentally and financially is all you should be focused on right now.
That said, let’s tackle the issue of depression. Many of us have fallen out of our routines. Feeling like you’re in a state of limbo is terrible on the psyche. It’s important to maintain a daily and weekly schedule that closely resembles your pre-confinement regimen to include waking up, showering, dressing well and eating structured meals at regular times. It might be tempting to stay up late or sleep in, but such sleeping issues are associated with risk factors for depression.
On the business front, most of what we are all facing is tough stuff. That said, you are going to need a healthy mindset in order to deal with hard decision-making. It’s never been more important to get the blood flowing – so commit to at least taking a walk every morning before you pull up a chair for work. Most people don’t exercise because the time commitment they believe they have to invest. I promise you, a 30-minute walk (even up and down a flight of stairs in your home) is easy and will radically alter your mood and strengthen your mental fitness. It takes 19 days to create a habit so force yourself to commit.
Face the tough stuff head on. It’s so tempting to avoid the stressful realities of life these days. Dealing with creditors, insurance companies, employees…it is all hard. You have to set goals every day. What I do? I have found success by dividing my days into blocks of time to be in control of how much energy I spend on negative things. That way the bad stuff doesn’t consume me. I block one hour in the morning to work on my “worst” job of the day. It is a block of time I have actually come to enjoy because each day that I’ve tackled something I hate; I feel more confident in my abilities and closer a resolution. I don’t always get a positive outcome but I always get closure and that helps me to keep moving forward. I spend at least 2 hours every day on being creative, learning new things or tackling a project that I like or developing a new skill. I have NEVER been tech savvy but thanks to COVID lockdowns, I am certified in 5 different digital design programs. Learning new skills has turned my sense of being overwhelmed into a sense of “I got this.”
Our industry is operating at 10% (or less if you’re a charter bus operator). Who would have thought we could do this for 6 months? We have already tackled the impossible. We must continue to bet on ourselves. Do so, requires a healthy attitude which comes from within. Let’s pull ourselves up and out of this funk. If we get financial relief by November 3, great, but let’s stay busy while we await hear from our government and to find out who is going to be in control of our country’s agenda in 46 days from now.
Stay Safe, Stay Strong,
Sara Eastwood-Richardson
Why You Should Vote "NO" on Prop. 22
Why Voting No on Prop 22 Is Better for Chauffeured Transportation
The short answer is that we all just want a more fair and equitable playing field. I am a business traveler. Until 2014 I routinely used livery services when traveling. Ten years ago, the price to go from LAX to my headquarters in Torrance (12 miles) was $250 – one way, including fees/gratuities. My company paid the bills as if that was the norm. Why? Because it was. We enjoyed a corporate account with a chauffeured service for years until one day, Uber knocked on our door with a “sweetheart deal” and just like that, our longstanding relationship with the limousine company ended. Fast forward to now, those rates of old seem surreal. Uber charges $50 for that same ride.
Ride Hail businesses crushed us with price because they circumvented our labor laws from the beginning. It was only a matter of time that they’d go public at which point their financials would be on full display (including the $46 million package for their CEO…hem hem). Cast their outrageous spending against the backdrop of a blue-collar driver, who truly clears about $5 an hour, and it really begins to smell like a sweatshop.
If Uber loses this argument because VOTE NO wins, we ALL get to reset the consumer’s expectation on pricing. In other words, we get a very much needed bounce. Uber has vowed to downsize their business model and focus on intercity transportation allowing us to expand our turf - or in some cases reclaim - the suburbs (there’s good money there).
If Uber wins with a VOTE YES they will get a special carve out that we may or may not be entitled to. You can bet that the GCLA is looking at this from both sides and we will be prepared to pivot.
Which is the better path for us in California? Winning the VOTE NO campaign offers more surety that we will be able to increase market share. Further, the demand will be greater than the supply and you know what that means to pricing, right? It goes up. That is better in the long run than if Uber wins. If the YES has it, chauffeured transportation will make the argument that we should get the same deal as Ride Hail businesses but it’s easy to imagine a lot of pushback from the state of California. There are other worries in a YES scenario. Our pricing will likely be pushed down while quality control and liability issues will rise.
The GCLA has worked long and hard to get AB 5 passed and made into law this year. We must see this through with all the muscle we have as an industry. This is our one shot and if we win, rest assured, you are gong to be the beneficiaries of a rebound of business the likes we have not seen.
Every vote counts; yours, your relatives, your friends, your customers. And, with time on our hands there’s no excuse for you to stay on the sidelines. Take action in your community with all you’ve got and use the GCLA VOTE NO slicks on all your emails and social media marketing.
We’re in It to Win It.
—Sara Eastwood-Richardson
A Second Stimulus Package - What's in it for You
Senate Comes Back Next Week:
What You Need to Know About the Bill That's on The Table
On September 8th, the Senate returns from recess and will take up the matter of finalizing another economic stimulus package.
Steve Mnuchin and House Speaker Nancy Pelosi met by phone yesterday to try and find a compromise. President Trump is considering more executive orders to sidestep Congress if the bottle neck is not fixed.
This excerpt is from CNET. These are actions underway that are specifically important for you to understand:
1. The new eviction moratorium
What it is: On Sept. 1, the Trump administration under the CDC banner issued a nationwide order temporarily halting millions of US renters from being evicted, in hopes of reducing the spread of COVID-19. The order will cover all 43 million US residential renters so long as they meet certain requirements, and will last through Dec. 31, 2020.
How it could help you: To be eligible for the CDC's eviction moratorium, you must not expect to earn more than $99,000 this year (or $198,000 for joint filers). You're also eligible if you did not report income in 2019, or if you received a stimulus check earlier this year. You must also demonstrate that you've sought government assistance to pay rent, declare that you are unable to pay rent because of COVID-19 hardships, and affirm that you are likely to become homeless if you are evicted.
However, it's important to note that the order does not set aside any new federal funding for renters -- even if renters can't be evicted, they will eventually owe that rent, along with any late fees, penalties or interest. And in the meantime, landlords might struggle without that income from renters. Renters can also still be evicted for reasons other than not paying their rent.
2. A second stimulus payment to spur spending
What it is: A payment sent to qualifying individuals and families, based on annual income, age, number of dependents and other factors. The first stimulus payment authorized under the CARES Act has been sent to over 160 million Americans -- as a check, as a prepaid credit card or via direct deposit. But there have been problems, and after three months some are still waiting for their stimulus payment.
How it could help you: The payment isn't taxable and you can use it however you want -- to pay for food, housing, clothing and so on. The idea is that spending the checks will help the economy recover faster.
Why we think a second payment will pass: The CARES Act authorized payments of up to $1,200 per eligible adult and so does the $1 trillion HEALS Act. The House of Representatives' $3 trillion Heroes Act also called for $1,200 stimulus payments, but for more people. The White House supports another round of checks, which makes it likely that sending out payments will be part of the final bill.
3. Payroll Protection Program designed to help small businesses retain employees
What it is: Intended to help you retain your job, the Paycheck Protection Program provides forgivable loans to small businesses as an incentive to keep employees on the payroll.
How it could help you: The PPP is intended to encourage businesses to keep employing workers who would otherwise have lost their jobs during the pandemic.
Why we think it could get extended: The Republican proposal will target the hardest-hit small businesses, Sen. Susan Collins of Maine said during the rollout of the bill. That includes those with revenue losses of 50% or more over last year.
4. Employee retention tax credit could help companies cover worker pay
What it is: Under the program, an employer can receive refundable tax credits for wages paid to an employee during the pandemic. The employer can then use the credits to subtract from -- and even receive a refund for -- taxes they owe.
How it could help you: Again, it's not a direct payment to workers, but the program encourages businesses to keep workers on the payroll.
Why we think it could happen: The HEALS Act includes further tax relief for businesses that hire and rehire workers, and the Democratic-backed Heroes Act also builds on the tax credits that were part of the initial CARES Act. And there's additional bipartisan support besides.
5. What's happening with Trump's payroll tax cut?
What it is: The president has for months pushed the idea of including temporary payroll tax cuts in the next stimulus package. Another directive he signed earlier this month includes deferring certain taxes retroactively from Aug. 1, through December for people earning less than $100,000.
How it could help you: If you have a job, a payroll tax cut would let you keep more of your earnings from each paycheck for now. The plan would not help those who are unemployed and don't receive a paycheck. Workers and employers would still need to pay those taxes the following year.
Will it stick? Trump signed a memorandum Aug. 8 to enact the payroll tax cut, but it isn't clear if he has the legal right to do so. Typically, financial decisions like tax cuts are authorized by congressional vote, not a presidential order. We'll have to wait and see if legal action is brought against the order. Neither the proposed Heroes Act nor the Senate plan includes a payroll tax cut. US Industry trade groups say the tax cuts may be "unworkable."
Stay Safe,
Sara Eastwood-Richardson
Update Your GCLA Membership - Get Free Directory Listing
Update Your GCLA Membership and Get a FREE Business Directory Listing!
Last week we beat the drums to call attention to our new digital membership directory which will be marketed to business travel managers, meetings/events/wedding planners, DNCs, Concierges, the FBO marketplace and high-net worth lifestyle managers.
It will also be available on the www.gcla.org website for all to see. This week we began to upload hundreds of members data into the portal. If you received an email from us, open it! We sent out access codes for you to go into your business listing and customize it.
To those that want to be a part of our exciting networking tool, the cost to join the GCLA for the balance of 2020 is only $25! So, ditch a few donuts and foo-foo drinks at Starbucks and join us.
This is a membership benefit we are very proud to offer our community. Our association members have pledged to uphold our Code of Standards and Ethics which helps assurances with transportation buyers – your customers.
https://www.gcla.org/code-of-standards-ethics
As I stated last week, operators and vendors listed in our directory will have a competitive advantage in the rebounding market. The GCLA members directory will legitimize our association – and our members – in a time where peace of mind to the consumer really counts.
If you need to update your membership or want to join for the first time, it’s super easy. Go to www.GCLA.org and click the JOIN tab.
This is probably the least expensive and easiest way to get your company out in front of travel buyers and global affiliates so I urge you to make it a priority to sign up as a GCLA member if you haven’t already. If you are a current member, watch your inbox next week for your directory “update” link.
We are in this to win this. I know people are weary. We need Congress to get off their butt and approve the new rounds of recovery money, but that has been delayed until September so they could vacation for the month of August (don’t get me started).
We can’t wait on the government to solve our problems, no, we need to continue to push forward and do all that we can to help ourselves and our industry. The GCLA business directory will help connect people and move the business needle for you so please reach out. We’re here to help you.
Stay safe,
Sara Eastwood-Richardson
GCLA Launches New Membership Directory
Big News!
The Greater California Livery Association Gears Up to Launch its ALL-NEW Digital Members Directory – A Major Step Forward in Connecting the Recovering Marketplace with Our People
California, with its 40 million residents, was the first to decree a state of emergency and order shelter-in-place restrictions and by all accounts, it’s likely to be one of the last to remove them.
With travel, tourism, live events, and all of hospitality at a standstill, which has forced our mobility world to screech to a halt, your team at the GCLA could have saved a lot of money, let everyone in the office go, furlough our lobbyist and suspend board meetings and just taken a hiatus until things got better.
Abandoning our people was never an option. On the contrary we are leading by example and we are on the frontlines and at the front steps of the state Capital on a regular basis. We are in this to win this. Over the course of this shut down, the GCLA has dramatically beefed up our outreach to include this weekly e-newsletter PACKED with useful information to help you navigate these rough waters. The GCLA e-news now has a following of more than 5,000 operators.
Next up, GCLA (your association of operators in CA) is producing a promotional video making the case for booking more for-hire transportation. It’s called the WE MOVE CALIFORNIA campaign and will feature GCLA members and spotlight the associations new online MEMBER DIRECTORY which roles out next week!
Operators and vendors listed in our directory will have a competitive advantage in the rebounding market. Why? Because the GCLA intends to sell the merits of its members to travel buyers and global affiliates – to also tout our new Code of Standards & Ethics that all members must abide by. We believe the traveling public will come looking for such reassurances and will come to the GCLA for the best references.
Check out a quick screen grab to get an idea of what our new digital directory looks like this: https://my.communitybox.co/gcla
The GCLA members directory will legitimize our association – and our members – in a time where peace of mind to the consumer really counts. Furthermore, our digital directory makes it SIMPLE for all of our members to reach out to one another. I can’t tell you how many people contact me to ask who is still operating and who is not. Confusing times likes these make it that much more important for you to show your brand is alive and well!
Here’s the catch…you have to be a current member of the GCLA to be listed in our directory. The good news, the cost of our membership is less than $7 per month for operators to join and only $300 for vendors/suppliers. We established a new membership category as well call the VENUE MEMBER so that destinations like wineries, event centers, restaurants, clubs and resorts can also become a part of our community.
If you need to update your membership or want to join for the first time, it is super easy. Go to www.GCLA.org and click the JOIN tab. Even though our directory will debut next week, it is updated in real time so as soon as your membership is processed, your company will be added to our online members directory (not to mention you will have access to many other membership benefits).
This is probably the least expensive and easiest way to get your company out in front of travel buyers and global affiliates so I urge you to make it a priority to sign up as a GCLA member if you haven’t already. If you are a current member, watch your inbox next week for your directory “update” link.
Stay Safe,
Sara Eastwood-Richardson
Will Uber Suspend California Operations?
Uber Is THIS CLOSE to Suspending Operations in California.
Will that Open Any Doors for Us?
If you think you’re having a tough go at it, be glad you’re not at the helm of the big TNC’s of Silicon Valley these days.
Uber and Lyft, who are suffering a very bad 4 months in the state of California just can’t seem to catch a break. Assembly Bill 5, a new law which went into effect early this year prevents Uber and Lyft from classifying their drivers as independent contractors or freelancers. For several months thereafter, no enforcement happened as the state heard carve-out appeals for other “gigs” such as musicians, who got entangled in the Bill. Uber and Lyft also presented their case for exemption but were denied. This all went on last spring during the Covid-19 shut down that caused the mobility industry to completely stop. By May the lawsuits against the TNC titans were filed, first by Attorney General Xavier Becerra, along with city attorneys of Los Angeles, San Francisco and San Diego and another by California Labor Commissioner Lilia García-Brower.
The drama has ensued. This past Monday, California Superior Court Judge Ethan Schulman issued an injunction on Uber and its contemporaries, compelling them to change IO drivers into employees immediately – well actually they have 10 days. With no time to spare, Uber is heading back to court on an emergency appeal. At the same time, the TNCs in California have vowed to take AB 5 to the people and get it voted down at the polls this November in the form of Prop 22 (they want people to vote YES).
CEO Dara Khosrowshahi stated yesterday that, "We think the ruling was unfortunate. We respect, obviously, the law and the court and the judge," Khosrowshahi said. "If the court doesn’t reconsider, then in California, it’s hard to believe we’ll be able to switch our model to full-time employment quickly, so I think Uber will shut down for a while."
Stephanie Ruhle of MSNBC Live, asked Mr. Khosrowshahi how this this law would ultimately affect Uber’s business model. He replied, "You would get a much smaller service, much higher prices, and probably a service that's focused in the center of cities versus a bunch of the smaller cities or the suburbs that we operate in right now." Lyft stated they too would shut down operations if they were ordered to make the switch to the employee-based business model. Certify states that Uber’s market share within the business travel community is 12% of business expenses (by volume, not value) compared to a 3.5% Lyft market share. Their strongest revenue bases are here in California with San Francisco Bay Area at the top.
So, if the Rideshare companies of California suspend their operations, likely until the election in November, can chauffeured transportation pick up any of that business? Can we start a dialogue (finally) with the leadership of the TNC community and brainstorm on how we can help each other rather than kill each other assuming we’re moving to a more even playing field? If their numbers are to be believed, they generate 2.5 million trips per month in California so if Uber work is currently 75% off, that still means there is 25% that isn’t – or 625,000 monthly rides. If 15% of that is business travel related (our bread and butter) luxury transportation providers in California could reasonably pick up almost 100,000 trips per month. I contend that in a decimated mobility marketplace everything has to be put on the table. We may be catching a big break.
Stay Safe,
Sara Eastwood-Richardson
Defunding the Police
If the Movement to Disband or Defund the Police Sticks,
How Will We Keep Our People Safe?
Yesterday, Mike Kucharski, one of the owners of JKC Trucking announced to various News outlets that his company will not send delivery trucks into cities that have a compromised police force. He took this stand because he is refusing to risk the safety of his employees and the cargo of his clients by entering cities that are defunding - or disbanding as in the cases of Portland, Seattle and Minneapolis – their police force.
This struck a chord with me because our industry’s market is primarily intercity/intrastate. We rely on hubs like Los Angeles and New York and these cities, among many others, are acting swiftly in the wake of the George Floyd killing to make sweeping changes that will impact our protections and change the dynamics of our city streets. Just two months ago, Los Angeles mayor Eric Garcetti unveiled a proposal to divert up to $150 million from the Police Department’s budget to social programs. Meanwhile New York’s Mayor Bill DeBlasio announced a $1 Billion police budget cut.
The scenes we have all witnessed this summer, out of control riots from coast-to-coast, paint a horrific visual of what’s to become of our cities if plans to disband or financially cripple our police departments sticks. The messaging to our men and women in blue is bad as well. Just take Buffalo, New York for example. After curfew, a belligerent protestor was pushed by an emergency responder and fell to the ground. The officer, who put his life on the line, was chastised. Immediately 57 officers turned in their resignations rendering the citizens of that city seriously compromised.
You could argue that WE have a bullseye on our back. We operate our services using expensive vehicles that attract attention. Our precious cargo ranges from executives in the C-suite to young people enjoying a night out to employees of corporations and senior citizens. Those are only the people in the back of our vehicles! We also have to be vigilant about the safety of our drivers and chauffeurs. They are our #1 asset.
Sadly, this is something real that we have to reconcile with. We have liability matters to contend with on this issue as well. We have a moral responsibility to our people. We have a fiscal responsibility to our businesses. Now is the time to talk about this issue and to pull our leaders together to strategize about for the future wellbeing of our own transportation community.
Stay Safe,
Sara Eastwood-Richardson
Repossessions: Why Banks Should Not
This Is Why Financial Institutes Should Avoid Repossessions at All Costs!
We all saw this coming - the end of vehicle loan deferments is looming and people are bracing for things to get “bloody.” Here is why it is imperative that lending institutes and YOU work together NOW on a long-term strategy to avoid involuntary repos at all costs.
Without awareness, history repeats itself. That said, we want to avoid the mistakes of the past and instead learn what not to do. Let’s look at what happened in the height of the recession years of the 2007-2009. The first mistake we made is that we panicked. Transportation loans, of which more than half are originated by non-bank finance companies, rely on short-term funding markets for their own financing. In those years, they panicked and acted swiftly to reclaim their collateral. The side-effects to doing that, however, exacerbated the long and very painful transportation recovery of the Great Recession.
It created a glut on the market of used equipment which drove values down. Repos created so much inventory that NEW vehicle sales stalled out for years. Further, repossessions ruined consumer credit, which in turn negatively impacted NEW vehicle sales by a lot. If people are not credit worthy and cannot buy, funding companies dry up. It’s that simple. Such was the case during the Recession. In 2017, there were 16 million new car sales. By 2009, sales crumpled to only 7.9 million sales and caused the collapse of major automakers in Detroit.
It only takes a spark to get a fire going. The consequence of repossessing equipment was a market recovery that took five years when it should have recovered in two. This is why it is so critical for us to avoid the mistakes of the past. We need to have a meeting of the minds with our financial institutions on this matter. Non-voluntary repossessions of vehicles are disastrous for both owners of transportation companies and their financial organizations and must be avoided at all costs.
The GCLA hand delivered a letter to Congressman Kevin McCarthy early this month to ask that the federal government place a moratorium on for-hire transportation vehicles repos (much like the Covid-19 Eviction Defense Project) backed by evidence that anything short of doing so is prolonging the recovery of not just luxury, but all transportation vertical markets AND gravely impacting new vehicle sales and the health of major corporations for years to come. We also asked every operator in the state of California to share a version of the letter with their local legislators. But this is just not enough. You need to do your part. You must meet under friendly terms and then re-negotiate your loans with your financial institute from a point of logic, not emotion. If this industry can revise loans to add to the backend with a longer frontend reprieve – and base that on history and a “case-for” (that means you have to have a plan of action for your business) we could avoid a lengthy recovery.
We have the historical data. We all can agree that a speedy recovery is in EVERYONE’S BEST INTEREST, with the financial institutions at the top of the list. A massive siege of equipment will force us into a very dark hole that will add many more years to restoring our livelihoods.
“Those who cannot remember the past are condemned to repeat it.”
-George Santayana, philosopher,1863 –1952
Stay Safe and Stay Strong,
Sara Eastwood-Richardson
Getting Back to Normal
When Will Things Get Back To Normal?
I’m Tired
That is the $3.8 trillion dollar travel question and one I am going to answer with the best data I could find. As I’ve said before, our industry moves when travel moves. We need to make our plans for our future based on sound facts. On July 16, the USTA released their U.S travel forecast report which spans the next three years. The USTA worked in cooperation with the Tourism Economics, Department of Labor and the Department of Commerce to compile this information. It’s the best insight for our future that’s available.
The burning questions:
Where were we before the pandemic? Total travel spending in 2019 was up 3.5% from 2018. There were 462 million business trips and 1.86 billion leisure trips taken last year.
Where are we now? Total travel spending this year fell by almost 45%. The total number of business trips is expected to be 300 million and leisure trips to land at 1.33 billion by the end of this year, a massive drop year over year as we all know.
How about next year? Total travel spending in the U.S. for 2021 is expected to increase by 37.5%. That a BIG recovery but it’s still 7.5% short of breaking even with pre-pandemic figures. Business trips are expected to come in close to 400 million, a substantial gain year over year. Leisure trips in 2021 are projected at nearly 1.7 billion.
And beyond? 2022 travel revenue is forecasted to increase by more than 14% from 2021, which will mean a 7% gain in revenues compared to pre-pandemic levels (2019). The number of business trips is expected to grow to 387 million and leisure trips will increase year over year by 173 million personal trips.
More helpful information:
Overnight trips make a full recovery by next year.
Day trips recover by 23% next year.
Air travel, down 57% this year, will make a full recovery in 2021.
Total international visitors to the US this year fell by 63% but will fully rebound in 2021 +6%.
Next week on GCLA – TV I invite you to watch a 15-minute interview with Neil Hammond, partner at GoldSpring Consulting, a premiere data-driven firm specializing in business travel strategy. Neil’s insights are worthwhile and very helpful to planning for your business recovery.
I know you’re tired but just look in the rearview mirror and you will see that you have survived 5 months. You can do cross this finish line! As our expert will tell you next week, the worst is over. We are inching forward and the GCLA leadership team is doing everything in its power to pave the way of recovery for you. If you have not yet joined our GCLA community, please go to www.gcla.org and support us. The cost of membership is less than a Dunkin Donut snack and a coffee! We depend totally on donations, sponsorships and membership revenue and need YOU to help us continue to help YOU.
Stay Safe and Strong,
Sara Eastwood-Richardson
Standing By Your California Business Clients
WHY ITS TIME WE STAND BY OUR CLIENTS
IS CALIFORNIA AT IT WITS END?
The counties surrounding San Francisco were the very first in the country to enact the stay-at-home orders. That was March 16, what seems like a million years ago. At that time, the bay area set itself apart as being the model of coordinated action against the spread of Covid-19. Soon the entire state of California followed suit. We did everything we were told to do by our county supervisors and our Governor. This was all supposed to be temporary. In late June we finally began to feel the ease of tensions as slowly we were able to resume some semblance of normalcy.
This week, things spiraled downward as the Governor reinstated shut down orders amid mixed messages. My phones have rung off the hook by demoralized operators wanting to know what is going on! I mean that literally. Conflicting rules from county to county and city to city are leaving business owners outraged. For example, as reported by the Mercury News just yesterday, “Outdoor dining, for weeks allowed in all of the Bay Area, is now banned in Alameda County, while indoor dining can continue in San Mateo County. In Contra Costa County, which has allowed hair salons since mid-June, outdoor diners will have to wear a mask at all times except when they have a fork or spoon in their mouths. Santa Clara County, which last week had to temporarily stop outdoor dining, is now poised to open gyms and barbershops. And in San Francisco, the zoo is reopening next week while the Oakland Zoo less than 30 miles away stays closed, teetering on bankruptcy. For Union City Mayor Carol Dutra-Vernaci, the inconsistency in rules county to county is a reflection of the unequal response nationwide, where some states have refused to issue mask ordinances that have been commonplace in California for weeks. That poses a challenge for city officials in the Bay Area, where people regularly cross county lines to work, shop and visit friends and relatives. I can’t help feeling sometimes that our residents wonder what in the world we’re doing.”
What we can do is this. We can ban together. There are nearly 6,000 transportation operators in California and only a sliver of them are members of the GCLA (which is terrible). If we do not have the consensus of the entire group, we do not have the influence we need to be heard. All of you reading this should make sure you are a current member and if you are, you should be evangelizing our great organization that is trying to fight for you. We are supporting the efforts of YOUR key clients – the meeting planners, the hotels, the travel management industry, California’s tourism industry and more! If you chose to sit this one out, the GCLA just lost a critical voice in a locale that needs a VOTE. If you are not part of our solution, you are part of the problem and the big one facing us is the health of the industries that BUY transportation.
We must stand behind our clients. We must help them recover and resume operations so we in mobility can resume ours. We do that by supporting the GCLA who in turn backs organizations like Visit California!
The icing on the cake is that by the end of August, the GCLA will have developed a promotional video to distribute to all state organizations that book travel – members will get a free copy. And, we will have completed our all-new OPERATOR DIRECTORY (in digital and mobile formats) that we intend to push out to the world of travel, tourism and affiliates.
Stay Tuned, Stay Strong and Stay Safe,
Sara Eastwood-Richardson