Traditional Service Faces Market DisruptBy Alejandro Salas | Fri, 03/29/2019 - 05:00
Ride-hailing services and shared mobility solutions have changed Mexico City’s urban landscape, providing more options for daily commutes but also putting pressure on traditional services such as chauffeurs. However, Manolo Artigas, Commercial Director of executive mobility company Arguba, says treating the latter as a similar service to taxis or ride-hailing solutions like Uber or Didi Chuxing is incorrect due to differences in the service.
“Under Mexico City’s Mobility Law, all private transportation companies are car-sharing service providers, which has caused an exponential increase in Arguba’s insurance costs,” says Artigas. In some cases, Arguba’s insurance premiums have more than doubled despite the differences between ride-hailing and executive mobility services. “Arguba offers the possibility of scheduling trips in advance backed by well-trained, constantly evaluated chauffeurs,” he says. “With ride-hailing apps, clients are normally constrained by vehicle availability and are in danger of facing security issues.”
During business trips, executives must focus on getting their work done rather than on having to drive around the city and Arguba’s drivers’ reliability has helped the company differentiate its service from car-sharing and ride-hailing companies. “When customers hire our mobility services, they can rest assured the car will be waiting for them properly and on time,” says Artigas. The company started operations 25 years ago as a small car-rental provider based in Mexico City. It eventually offered chauffer services when world-class car rental players, such as Europcar and Hertz, moved into the country. It later developed a mixed service that includes both car and driver. “Our executive mobility service can consist of simple trips, such as picking up and dropping off a person once, or becoming their personal driver for a defined period,” he says.
Artigas has positive expectations for Arguba and expects to grow its operations by at least 7 percent. However, this will depend on the company maintaining a steady client portfolio. Quality is a key element in Arguba’s strategy to compete against new players in the mobility scene. However, a growing vehicle park and the traffic bottlenecks that go with it have also challenged the company to up its game. “If drivers need to pick up someone from the airport, they sometimes need up to four hours to complete the trip and be ready for another service, which means we can only take so many trips,” says Artigas. “The company needs a larger staff and fleet to complete the same number of trips than five years ago.”
Arguba relies on realistic logistics that consider traffic conditions drivers will face when the company programs the trips that a chauffeur can offer. “We only book trips that we know we can offer without compromising our quality,” he says. The company’s fleet management strategy has also played a key role in ensuring sustained quality. “Cars are our work tools, so we pay close attention to vehicle wear to schedule timely maintenance and repairs,” says Artigas. “We also renew our fleet every two to three years.”