History of SMARTCars Inc, Chicago Limo Company
SMARTCars was incorporated in March of 1994 and provided its first “sedan” service in July of that same year. Until this time, the majority of the livery plates in the Chicago market (750) had been owned by a few large “limousine” companies who utilized them strictly for stretched vehicles. It was a time when limousines were still considered the appropriate means of transportation for important businessmen, rock stars and specialty events such as weddings, proms and girls’ night out. The result was that transportation for the retail and corporate market in Chicago in 1994 was limited to only two choices; taxis or stretched vehicles (limousines).
In the fall of 1993, one of Smart’s founders, Stuart Rothstein, was looking into investing in taxicab medallions as an investment. During his due diligence, he met Mr. Winsberg who stated that there may be a better alternative for his investment. Mr. Winsberg, an owner of a small taxicab company at the time, explained that there had recently been a lawsuit between the City of Chicago and the taxicab industry. He explained that one of the outcomes of this suit was an increase in the number of livery licenses from 750 to 2,000. He suggested that instead of investing in taxi medallions, Mr. Rothstein assist him in starting the first “sedan” service in Chicago. Having recently relocated from his activities on Wall Street in New York where sedan/ ‘black car’ services were prevalent, Mr. Rothstein was familiar with this mode of transportation, its ubiquitous use on the East Coast and intrigued by the apparent opportunity since it did not exist in Chicago. Plans were drawn up, money raised and SMARTCars became a reality on March 1, 1994.
With limited capital and a Chicago market that had little if any idea of what a “car” service was, the partners bought and refurbished 3 Chevrolet Caprice police cars. The goal was to attract the mid to high end retail client by creating relationships with doormen located at high end apartment and condominium buildings near the center of downtown. The drivers would be the “cream of the crop’ taxicab drivers, hand selected by Mr. Winsberg. They would be better dressed, more service oriented and more professional than the usual “cabbie”. Pricing would be similar to that of a cab. The doormen were promised a commission and a service that would make them look good to clients that they saw on a daily basis.
Growth was slow in the beginning, but it did not take long before a high percentage of those that tried the service used it regularly. Not only were the clients using SMARTCars for transfers to and from their offices in the downtown area, they began using the company for transportation to the airports. By the end of the first year, SMARTCars had revenues of $135,000 and with the use of capital for large and widespread marketing campaigns; revenues grew to $1,500,000 by the end of 1997.
During the first three years, SMARTCars replaced Mr. Winsberg with two professors from the University of Chicago – one, a previous instructor of Mr. Rothstein’s when obtaining his MBA at the GSB program and the other a professor of Radiology from the same School. The addition of these partners and a successful campaign to raise additional funds resulted in continued growth over the next several years.
By the year 2000, SMARTCars grew to over 70 vehicles and was handling over 75,000 trips per year! During this period the philosophy of the business changed as the company moved from a service that competed with the Taxicab industry, to one that competed with the “higher end” Limousine industry.
As service became more ‘high-end’, many changes were made in all aspects of the organization. The directors understood that increased prices meant greater expectations on the part of the clientele, especially since there had been a shift from targeting the retail market to the corporate one. Newer vehicles, better trained and dressed Chauffeurs, higher levels of “on-time” performance, more accurate and accessible billing and invoicing capabilities and the use of professional customer service representatives were all prerequisites as the company moved from a “ma & pa’ organization to a proficient corporate organization. All of these required not only a ramping up of management personnel and qualifications, but investments in technology, training materials and professional legal and accounting assistance.
The tragedy of September 11, 2001 practically bankrupted SMARTCars. The volume of business was reduced from almost 200 orders per day down to 20. Mr. Rothstein concluded that there were only two rational choices; fold the business or try and augment it by buying other companies that were being forced to sell. He chose the latter, but was unsuccessful because the market rebounded fairy quickly.
Between 2001 and 2008 SMARTCars continued to improve its standards of service and concurrently started providing services to the “high-end, business class” traveler. Part of this growth was a strong networking effort both locally and nationally. Mr. Rothstein realized that the very nature of the business often had the consequence of having too many service requests for the number of vehicles available. Thus he made a concerted effort to meet and develop mutually beneficial relationships with the larger transportation companies in the Chicago area. The result of this was increased business for both sides of the relationship and the ability to market to larger organizations due to an enhanced fleet size. From 2002 until present, Mr. Rothstein has nurtured this local networking success by providing time to the Illinois Limousine Association (ILA) as its Vice President, Secretary and Treasurer.
As the local market expanded, so too did the development of the internet and social media marketing. These two technologies effectively shrank the size of the world and provided opportunities for SMARTCars outside of its geographical confines. Mr. Rothstein aligned himself with other limousine/sedan companies located throughout the U.S. for the sharing of best practices and financial benchmarking. Concurrently, he was elected as a Director of the National Limousine Association (NLA) and then chosen to be its Treasurer, a position which he held for 3 years. The combination of these networking activities and new technologies has led to the development of affiliates around the country and more recently throughout the world. These relationships have expanded the reach of SMARTCars’ service capabilities and revenues by allowing it to offer to its clients a one stop source for ground transportation in over 500 cities worldwide. In addition, SMARTCars now also handles the transportation needs of clients of its affiliate partners when they come to Chicago. Again, a symbiotic relationship that builds markets for all.
The chauffeured transportation industry was nearly devastated once again with the recession of 2008/2009. It is estimated that over 25% of chauffeured transportation sedan and limousine companies went out of business. Fortunately SMARTCars was able to weather the storm. It reduced the size of its fleet and all shared in reducing costs to keep the company afloat.
SMARTCars has effectively used this “down-sizing” time to start its plans for the next wave upward. SMARTCars has spent the last couple of years re-evaluating the way it does business and how it can improve the qualitative level of experiences of its customers. Much of the work has been divided into two areas of focus.
The first has to do with reassessing in detail each area of the company. How can SMARTCars be more efficient? How can it close the minor loopholes that raise the percentage probability of an incident? What other feedback mechanisms can be utilized to even further decrease issues and thus approach the 6 sigma level of service to which SMARTCars aspires? How can the company support Chauffeurs to assist them in minimizing the structural problems inherent in this industry (changes in traffic, vehicle breakdowns, communication failures…) through technology and training?
The second area, and one alluded to above is the development and acquisition of new technologies that improve the quality of the service level and experience of the client while reducing incident rates and increasing utilization of our assets. To this end we have already developed and have been using several since 2010.
One of these developments is the use of the Automatic Vehicle Arrival Notification (AVAN) system. This system acts as an automatic communication device between SMARTCars, the Chauffeur and the client to reduce anxiety and communicate important information. It is used in the following four ways:
- When a chauffeur sends a message back to the dispatcher that he has arrived at the pickup location, the system automatically sends either a text message or an email, whichever the client has chosen as the form of communication to which they will respond the quickest. This communication informs the client that their chauffeur has arrived, his name, the vehicle type and the vehicle’s plate number. This reduces any concern regarding the chauffeur’s arrival and improves the clients ability to recognize the vehicle quickly.
- A welcoming message and reminder to contact SMARTCars as the client exits the plane is another example of the AVAN system. When the wheels of the plane touch down, SMARTCars is notified and a text/email message automatically goes to the arriving client. They are welcomed to Chicago, reminded of the need to contact SMARTCars as they exit the plane and provided with the Smart 800 number. This call both helps to define the time for the rendezvous with their chauffeur and to reduce the waiting time until the car’s arrival.
- The second and integral communication of the AVAN communication at ORD and MDW is the 2 minute arrival notification. Here a message is texted or emailed indicating that the vehicle will be pulling up to the agreed upon location in 2 minutes. The obvious benefit for the client Is their ability to wait inside the terminal (unaffected by the weather) until just before the car arrives.
- Another great benefit of the AVAN system are the reminders that are automatically sent to the client 2 days and several hours prior to the scheduled pickup time. This reduces errors of mistaken day or time and provides the client a sense of security that SMARTCars is aware of the pickup, thus reducing any anxiety.
Moving forward and expected to arrive in the beginning of 2013 is the use of tablets in the vehicles and later in the year Smart smart-phone applications. The tablet will both improve the levels of service and offer a new and wider array of service in the car. We envision the tablet being used as:
- A sign with the client’s ID will make identifying the vehicle considerably easier.
- Access to up to the second routing and traffic conditions. This will reduce travel times by supporting optimal travel decisions and circumventing travel blockages.
- A GPS source for defining the vehicle’s geographic position. Ultimately, this information can be passed through to the client or their administrative assistant to determine the veracity of the information regarding the vehicles location and thus reducing anxiety.
- A final point of purchase. A full accounting of the fees and services rendered can be reviewed in the vehicle, a credit card swiped and an invoice received within seconds.
- Access to several newspapers via the internet.
- Access to a completely secure and confidential customer service questionnaire allowing for quicker feedback and improvement of services.
Smart phone applications will focus on ease of interactions with SMARTCars. This will include simplified reservation placement, quicker access to information such as vehicle location and the ability to communicate directly changes in needs such as “running X minutes late, “meet at the Northwest corner”, changed number of passengers to 3 from 2.
SMARTCars and its staff and Chauffeurs are proud of its history and are excited about the future and what it holds for both us and YOU.