BLACKLANE CASE STUDY Innovation Management TERM PAPER SoSe 2018 Prof

BLACKLANE CASE STUDY
Innovation Management
TERM PAPER SoSe 2018
Prof. Dr. Oliver Serfling
Ahmad Ghasir
Mtr No: 20929
About the company: Blacklane (on demand transportation startup) was The company was co-founded by Jens Wohltorf, an ex-Principal at the Boston Consulting Group and Frank Steuer, former managing director of SemperLink GmBH and founder of telephony startup Firstfon in 2011 and its based in Berlin, Germany. Currently, Blacklane’s footprint covers 500 airports globally in 250 cities, and more than 50 countries and with another recent $10 million-plus investment from strategic partner Daimler, the expansion will continue. The company provides professional ground transportation services, covering the first and last miles of travellers’ journeys: Rides to and from the airport. The company offers business class, business van/SUV, first class, and economy class services. Its services include airport transfer, chauffeur services and limousine. The company provides its services to individuals and corporate customers. It allows customers to schedule and book their rides over the Website and a phone application (Noah-conference, 2018).

Blacklane went from one city to over 250 cities in the world:
Geography Berlin Germany Europe Word Word(especially the Middle East)
Year 2011 2012 2013 2014/15 2016-17
Countries 1 1 10 50 55
cities 1 15 40 190 250
Figure 1: Blacklane going global
Blacklane Financials and Metrics
(Craft.co, 2018)the following table shows the general overview of the platform financial position:
Type Private
HQ Berin
Founded 2011
Size (employees) +275 team member globally
Blacklane total Funding $82.5 m
Blacklane latest funding size $40 m
Blacklane investors b-to-v Partners AG, Daimler, Recruit Strategic Partners, car4you.ch, btov Partners, Al Fahim Group, RI Digital Ventures, 88 Investments, ALSTIN
Blacklane’s latest funding round in J 2018 was reported to be about $40 m. In total, Blacklane total funding has raised to $82.5 m.

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Here, the graph shows the exponential quarterly high revenue growth accelerating of Blacklane.

Figure 2: Blacklane revenue growth (Noah-conference, 2018).

Now, let analyze the innovation strategy Behind The Rapid Growth of German-based Startup- Blacklane
The Innovation Process
The idea of creating this platform was in response to the chief executive and co-founder own experience as a heavy business traveller. He said: “While flights and hotels were pretty easy to organize and manage, the ground transportation piece was always painful: receipts, multiple currencies, fragmented car service companies and taxis around the world with wildly differing quality standards. This made me hate Monday mornings and Friday evenings” so the travel frustrations lead to produce the idea for Blacklane (Coleman, 2015).

Constructive disruption
Blacklane’s co-founder & CEO Jens Wohltorf argues that there are two ways of disrupting the market, one is the destructive way and the other, constructive. Destructive means risking the existing infrastructure and shaking everything upside down. The constructive way is by leveraging the infrastructure, working with existing companies and providing a new service experience to all companies involved (Hamdi, 2018).

Blacklane has been criticized as a constructive innovation because they contracting with local professional limousine drivers and using their unscheduled time to provide rides in other word Blacklane doesn’t interfere with the established business of a driver, but instead cooperative with them by optimizing their time and connecting them to blacklane global customers and rides they wouldn’t normally have access to (Coleman, 2015). The innovation of blacklane is from need pull. Need Pull refers to the need for a new product or a solution, coming from the marketplace. A product or service is developed to solve the original need. By bringing those existing company’s on to blackline platform to many legacy players, who was only used 20-30% of the time Blacklane’s dispatching technology now allows drivers to fill that empty capacity the platform can ramp up their utilization rate from 20 per cent to 80-90 per cent, and reduce prices as a result because, For a 20 per cent utilisation rate, they have to ask for high prices, but now that they have so much more business, they can accept lower prices(Ground transportation, 2016).

Business Model of the platform
Travelling by air looks comfortable but reaching the airport on time was always the matter of pain for a lot of people because of the cost of rides like Airport Tolls Tipping customs and the Local fee which is usually undefined and On-ground transportation, people could not find out an ideal transportation solution because of the problems like paying in multiple currencies, receipts, and the taxis came with different quality standards.

Solution: Blacklane comes up with the fixed ride fare for the customer, with a strategy like 60-minutes of free wait time, especially if it is airport pickups, which is not provided by any other ride-hailing services(Spaceotechnologies, 2018).

Blacklane’s platform is focused on travel to and from airports. With more time that passenger spent in the car, business travellers seek the quality and level of comfort a service such as Blacklane provides. The firms also want to provide transportation for both the first and last mile of a business traveller’s journey — starting at a traveller’s doorstep and ending at a destination abroad. In that sense, Blacklane differs from other modes of transportation, such as rideshares, taxis and public transportation: It offers a global solution. Once a passenger reaches the airport in another country, Blacklane connects the traveller with a company in their network and dispatches a driver, who drives the customer to their final destination. When it’s time for the traveller to return home, a Blacklane partner will drive the customer to depart airport — and then to go home from the arriving airport. Also, Blacklane can replace the plane as well: Blacklane could transport travellers between two cities so they don’t have to take a short-haul flight(Pymnts, 2018).

Type of market in focus:

Figure 3: Blacklane focus on a niche market (travel market with medium-length journeys and provide high-quality service) (Noah-conference, 2018).

How is value created and captured?
Blacklane calculates the fare on a kilometre basis: the longer the distance, the more to pay. And when costumers have multiple meetings in the city and have luggage with them, they want to leave it in the trunk and they want to have a driver with them the entire day they can book Blacklane by hours or for a day.
Blacklane’s pricing model entails a set fixed rate depending on the day, time and date. Then, Blacklane makes the ride available to the driver to accept, first offering a lower rate which increases over time. The price will increase until a driver accepts the trip. Thus, the company profits based on the difference between the accepted rate and charged rate, minus any applicable taxes(Agrawal, n.d.).

The role of Big Data
All online providers track user activity on their sites and collect data from their users. The collection of user data is conducted by firms of all sizes, online providers also collect data in order to improve the quality of their services, and to improve those services effectively.

An example of big data is the use of passenger name record (PNR) data of GDS Amadeus into Blacklane’s system. “The outcome of this time-consuming piece of work is that black can now pull all the data necessary – such as flight, hotel and other personals details – to pick people up at their doorsteps and when there is delayed the booking will be adjusted automatically. So if a flight is cancelled or meeting time changes that will automatically update the system, and the driver will just be there at the right time (Ground transportation, 2016).

Also, Blacklane monitors customer reviews and conducts audits to ensure its partners meet its standards.

What makes Blacklane different from its competitors?
What makes Blackline unique from the ones of other start-ups are firstly blacklane providing Unique ‘Professional Drivers’ that is Not Yet Available on Other On-demand Transportation Services. Unlike platforms such as Uber, Blacklane doesn’t contract with individual drivers; it only works with professional, licensed and registered companies and secondly, Blacklane has also covered all those areas in which people had been waiting for so long. Talking about the charges of pricey hotel cars or travelling to the airport, which usually requires a lot of formalities before getting the flight(Spaceotechnologies, 2018).

In short, we can say that blacklane are not just an on-demand-service in the sense of car-sharing and ride-hailing services. They are part of the travel chain. Blacklane is strong in the long distance that the customer can enjoy in their trip without stress is a right choice for business travellers with fair pricing, unlike other start-ups, it also offers Free cancellation and Free wait time up to 15 minutes, and 60 minutes at airports for the customer.
Effect on Industry and Economy
Blacklane doesn’t seek to compete with taxis based on price since it competes on quality and comfort. Yet Blacklane can be less expensive than legacy limo services, which can run 200 per cent more than the average Blacklane ride (Pymnts, 2018).

Blacklane doesn’t disrupt or interfere with the established business of a driver, but instead by contracting with local professional limousine drivers and organizing their unscheduled time to provide rides and connecting them to customers that they normally would not have access to and tour operators can partner and benefit from blacklane. Blacklane building partnerships across the global travel chain including with online travel agencies, metasearch, global distribution systems (GDSs) and travel management companies and more. Blacklane partners include booking.com, Expedia, Lufthansa, Sabre’s TripCase and TripAdvisor’s Viator playing a crucial role in integrating these travel companies in order to reach travellers wherever they want to book a Blacklane ride (Coleman, 2015).

Blacklane global partnerships are the followings global mobility and travel brands:

Figure 4 (Noah- conference, 2018)
In essence, For many traditional limousine and chauffeur, cars are only used 20-30% of the time but Blacklane dispatching technology allows drivers to fill that empty capacity by adding Blacklane’s global customers to their local business all professional driver companies can grow their revenues without new costs(Ground transportation, 2016).

On the other hand, the customer is also a winner because the blacklane price is sometimes 10-20 per cent cheaper than a taxi in some markets. But often its 10-20 per cent more expensive than a taxi, but still is it cheaper than what the used to pay for an airport pick-up from a hotel or traditional limousine and arranging a Blacklane car is easier than arranging a hotel car. And also Blacklane has several partners that allow the customer to earn miles bonus points which is great to get a discount on future rides (Lucky, 2018).Future opportunities
In the future though, Blacklane will be even more and take an important step in closing the travel chain. By introducing the new product called Blacklane PASS(Gerlach, 2018).

With the Blacklane Pass(premium airport service and solutions)the Platform will Provide airport concierge service like the following to the passenger:
arrival
Fast –track immigration and customs
Baggage porter service
Escort to the booked car
Connection
Terminal connection assistance
Baggage recheck
Fast track security
Departures
Fast track security
escort to gate
Assist with baggage and check-in
Blacklane Pass will make the travelling experience at the airport more enjoyable and without stress and will save a lot of time for the customer.
Bibliography
Agrawal, A. (n.d.). How These Companies Are Disrupting the Ride-Sharing Industry. online Inc. Available at: https://www.inc.com/aj-agrawal/how-these-companies-are-disrupting-the-ridesharing-industry.html Accessed 22 Jun. 2018.

Coleman, A. (2015). German Startup Blacklane Gives Uber An Airport Run For Its Money. online Forbes. Available at: https://www.forbes.com/sites/alisoncoleman/2015/06/14/german-startup-blacklane-gives-uber-an-airport-run-for-its-money/#1d7910a92381 Accessed 8 Jun. 2018.

Craft.co. (2018). Blacklane. online Available at: https://craft.co/blacklane Accessed 13 Jul. 2018.

Gerlach, M. (2018). Blacklane: An Interview With CEO Jens Wohltorf. online Seats2meet. Available at: https://magazine.seats2meet.com/blacklane/ Accessed 5 Jul. 2018.

Ground transportation & the connected travel fast lane. (2016). Blog eyefortrave. Available at: https://www.eyefortravel.com/distribution-strategies/ground-transportation-connected-travel-fast-lane Accessed 22 Jun. 2018.

Hamdi, R. (2018). Constructive disruption. online ttgasia. Available at: https://www.ttgasia.com/2018/03/02/constructive-disruption/ Accessed 6 Jul. 2018.

Lucky (2018). Why I’ve Started Using Blacklane For Airport Pick-Ups. Blog onemileatatime. Available at: https://onemileatatime.boardingarea.com/2018/05/25/blacklane-airport-pick-up/ Accessed 22 Jun. 2018.

Noah-conference. (2018). Blacklane Your Professional Driver. online Available at: https://www.noah-conference.com/company/blacklane/ Accessed 22 Jun. 2018.

Pymnts. (2018). The Matchmaker Is In: Blacklane, A Platform That Fills Empty Limos. online Available at: https://www.pymnts.com/matchmakers/2018/blacklane-limos-business-travel/ Accessed 22 Jun. 2018.

Spaceotechnologies. (2018). Check Out These 3 Strategies Before Building an App Like Blacklane. online Available at: https://www.spaceotechnologies.com/build-an-app-like-blacklane-strategies-for-on-demand-limo-booking-solution/ Accessed 22 Jun. 2018.

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