Booking.com climbs into ground transportation

There is huge growth potential in ground mobility that is being driven in part by issues of congestion and sustainability. Pamela Whitby reports

Tackling ground transportation is the next big thing in travel tech. If there is any proof needed, Booking.com is building £100 million ground transport HQ in Manchester, which is set for completion in 2021. Earlier this year, Manchester Evening News reported that this “will be the global hub for the company’s ground transport products, which operates the Rentalcars.com, and will be Booking.com’s largest office outside of Amsterdam”.

Marc Hofmann, CEO of venture capital backed CheckMyBus, a platform for bus travel that currently stops in 70 countries with 10 million daily departures, is not surprised. He says: “Ground mobility is surely the segment in the wider travel area which has largest growth potential and efficiency to gain through digitisation.”

However, there is some way to go and speaking at the EyeforTravel Digital Strategy Summit in London in May, David Adamczyk – Director of Strategy, Transport Division, Booking.com, acknowledged the challenge: “Transport is the glue which brings the connected trip together. It should be invisible and it should be frictionless but today we are a long way away from that.”

Transport is the glue which brings the connected trip together. It should be invisible and it should be frictionless but today we are a long way away from that

David Adamczyk – Director of Strategy, Transport Division, Booking.com

This will no doubt be top of Glenn Fogel’s agenda as the new CEO of booking.com. In late June, in a sudden shake up, the group announced that Gillian Tans would be handing the Booking.com reins to Fogel, president and CEO of parent company Booking Holdings. Since 2017, Fogel has been focused on driving great collaboration between the group’s brands that include Booking.com, Kayak, OpenTable, Agoda and Rentalcars.com. In a press statement, Fogel said that he would be identifying “ways to drive more collaboration and integration to strengthen the company's positioning for long-term success." In other words, he will be looking for new and innovative ways to control the end-to-end traveller journey, and the move into ground transportation is already well underway. Booking Holdings has already invested $500 million in Chinese ride-hailing firm DiDi Chuxing, and the Booking.com app now comes pre-installed on Huawei phones. Last year, it also invested $200 million in south-east Asia's Grab and is working with London start-up Splyt, a global ground transport aggregator, to integrate ride-booking into its own app. 

Shifting up a gear

Adamczyk outlined in London that today Booking.com has rental cars in around 5,000 locations and taxis in 500. And, in two to three months, he added, Booking.com will have a taxi experience within the app that mirrors the experience of Uber.

It is easy to see why this would work for consumers. Take the city of London for example, where Uber has, until recently, had no direct rivals. In June all that changed with the arrival of fast-growing Estonian born Bolt, formerly Taxify which last year raised $175 million from funders that have included Daimler, Transferwise and Chinese ride-hailing app Didi Chuxing. According to Sam Raciti, Bolt’s UK Expansion Manager the company doesn’t disclose customer numbers but, he says, “given that Londoners have been waiting for more competition in ride-hailing for a long time we’re very happy with the level of interest” and more than 20,000 drivers had already signed up to the platform at launch. 

In two to three months, Booking.com will have a taxi experience within the app that mirrors the experience of Uber

If Bolt, as it claims, plans to undercut Uber, then price-driven consumers may switch allegiance. However, the big question is: do they really want another app clogging up space on their phone? Probably not, and Booking.com could be onto something here. After all, if the number of Google searches for ‘is an Uber available in X or Y’ is as huge as Adamczyk claims, then for Booking.com to add a service that compares the cost of all rides in a city like London seems a no-brainer.

Travellers need ground transport. Every single leisure or business trip includes transportation, and not just one trip, at least ten to 15 - getting from home to the airport, from the airport to the hotel and then travelling around destination, getting back to the airport and home again. “Even if you are sitting in a resort, there are still fundamental journeys to take,” says Adamczyk. And while the mantra within booking.com is that travel should feel ‘frictionless’ the reality is that “for travellers navigating transportation it is a mess”. To win customers over, will require true customer understanding but he acknowledges too that there is still a dichotomy between when we need to help customers and build their knowledge about transportation versus when we need to help them take action.

Adamczyk was also keen to stress that “travellers are not locals – they have different challenges and needs which we need to solve as an industry”.

Bus travel can play a role here too. After all, last year Germany’s FlixMobility which runs FlixBus, and is 35.9% owned by private equity firm General Atlantic (which recently invested in Kiwi.com), expanded into the US to take on rivals Greyhound and Megabus. As over 80% of tickets worldwide are still sold offline, Hofmann argues that much of the growth in transport will come from “various forms of shared mobility where bus will take a relevant portion”.  Indeed, a major plus for bus travel is its ability to reduce congestion and pollution that is, Hofmann adds, “haunting the major cities of the world”. 

If you missed the London show, why not join us later in the year for the Amsterdam EyeforTravel Revenue and Optimisation Summit (Nov 27-28) 

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