Chinese Car Service Fends Off Uber

The dispatch room at Good Luck Car Service in New YOrk. (Photo by Yiqin Shen for Voices of NY)

The dispatch room at Good Luck Car Service in New York. (Photo by Yiqin Shen for Voices of NY)

In the cramped room that functions as the dispatch center of the Good Luck Car Service, phones ring in every corner. Three operators swiftly pick up the phones repeating in Cantonese, Mandarin and occasionally heavily-accented English the same questions they ask up to 600 times a day: “What’s your pickup address? And destination address?” Then there are the follow-up calls: “ Your driver is on the way.” “I’m sorry, he’s stuck in a traffic jam. Please wait another 10 minutes.”

Anxious clients have little choice but to wait, blasting the bad traffic and tardy drivers. But these days, to the operators’ surprise, an increasing number of customers simply call back to cancel their requests; they’ve opened an Uber app on their smartphones, searched for available rides nearby and placed their request, all with just a few taps on the keyboard.

Good Luck Car Service, based in Manhattan’s Lower East Side, is the largest dispatching car service company in the city, based on the 160 drivers and cars contracting with the company. Owned and operated by Chinese Americans since 2004, the company has been a successful model of a small business, serving a majority of clients from Chinese communities with Chinese-speaking drivers and low rates. However, with the surge of e-hailing apps like Uber, Good Luck is starting to lose business and some of its drivers.

“Uber is posing a great threat to our business, stealing a great number of customers, and also, some of our drivers; we need to find our own ways to fight back,” said Bing Ye, president of Good Luck Car Service (TLC #B01730).

So the company is doing just that, planning to introduce its own smartphone app that will improve the customer experience and save labor costs for Good Luck. But the app may be some months away.

Over the past decade, Good Luck Car Service has amassed a fleet of 160 vehicles, from black Lincoln sedans to silver Toyota minivans. Its competitive fares (compared with medallioned yellow cabs) and variety of types of cars have drawn 30 corporate clients, including ABC News, as well as hundreds of individual passengers.

Then, in January of 2010, Uber pioneered the e-hailing of car services, followed soon by competitors Hailo and Lyft, and a battle for survival in the car service industry now rages.

The pricing battle

As Ye remembers, the last jolt to the dispatching service was in 2008, when numerous financial companies in the city slashed their transportation budgets in response to the global financial crisis. That pushed a number of small car services into bankruptcy.

“It was lucky that our corporate clients at that time were mostly law firms; but still, that part of business went down,” explained Ye, who said that corporate clients make up 20 percent of his business.

Now the e-hailing companies are going after the remaining 80 percent of Good Luck’s customers – individuals, many of them in the burgeoning Chinese immigrant community – with aggressive pricing campaigns.

Iris Yanbin Chen was a loyal Good Luck customer of two years’ standing who recently shifted to Uber. After receiving a $30 promo code on her first Uber ride in July, she began to share the app with her friends; once one of them tried it, she got another $30 off. The coupons proved irresistible.

“I used to call Good Luck. It’s the best deal for getting from Manhattan to the airports. Uber’s base fare is higher; but, once adding on a coupon, it’s hard to say,” said Chen, who described herself as a penny pincher.

In her case, the ride from Manhattan to JFK International Airport was priced at $37 in cash at Good Luck Car Service, with an additional 20 percent if paid with a credit card; in comparison, UberX (the company’s low-cost option) charged her only $30 after applying the $30 coupon. A medallion yellow cab charges a flat rate of $52 (plus tolls) for the ride to JFK.

Commenting on pricing comparisons, Ye said that the average rate for a pre-arranged dispatch from Good Luck is lower than Uber, and more consistent.

During last year’s snowstorm season, a short Uber trip across town cost a staggering $132. Uber’s surge pricing means that its rates increase dramatically during rush hour, and even worse for passengers, the multiplier they are subject to is unpredictable.

New technology to go

To stop the loss of business, Good Luck is developing a mobile app of its own.

The work of dispatching rides is demanding. To organize a car service pickup via telephone, at least three calls must be made — one by the client to the dispatcher to confirm the time and address; one by the dispatcher to send the driver; and the third one by the dispatcher to the client again, to confirm and provide information about the dispatch.

Once the new technology is applied, the second and third steps can be executed directly through smartphones. Good Luck Car Service is investing $20,000 and has been in talks with four app development companies. The new product is set to be introduced in a couple of months.

“It not only means the adoption of the new technology, but also involves the updating of devices, training for 160 drivers, and a couple of rounds of advertisement on our app,” said Ye.

Each Good Luck vehicle is equipped with a BlackBerry to connect the driver with the operations center. The pending introduction of the smartphone application requires a replacement of current devices with Samsungs and iPhones.

In designing the mobile ordering app, Good Luck has no intention of copying Uber’s surge pricing, for the sake of clients.

“Surge pricing is not fair. There could be some time when passengers’ demands are very high; nonetheless, we will try to meet [those demands] by dispatching, rather than surcharging,” explained Ye.

Drivers behind the wheel

No matter how advanced a mobile app is, it’s the driver behind the wheel that counts.

As high-tech companies lure drivers to earn more money every shift through their mobile apps, traditional car service companies like Good Luck are facing the challenge of how to keep and manage their drivers.

“We can quickly figure out which drivers are taking extra jobs. They will not tell you, but the operations system will,” said Louisa Gao, the top dispatcher.

One recent rush hour, about 10 drivers continuously declined the dispatch from the operations center but kept swirling around Midtown. There’s a high probability they were carrying Uber users who paid surcharges – or, who may have been using coupons.

Good Luck can’t do anything about it, since the drivers own the cars and have FHV (for-hire vehicle) licenses. Each month, each driver pays a fee to the company for receiving dispatches and pockets the rest of the fares.

In light of the increasingly crowded landscape of e-hail and ride-on-demand smartphone applications, the NYC Taxi and Limousine Commission reminded its licensees and the public of the potential risks of unauthorized services.

An Uber driver was accused of kidnapping three passengers in D.C. in July, and several separate allegations of sexual assault has raised clients’ worries about the safety and quality of the e-hailing service. [Uber’s “terms and conditions” tell the user of the service that “you acknowledge that you may be exposed to situations involving third party providers that are potentially unsafe, offensive, harmful to minors, or otherwise objectionable.”]

Car services such as Good Luck point out that “our service is not a white-glove one, but at least, we interview every driver when hiring.” Good Luck’s Ye stressed: “Reliable drivers matter for the satisfaction of our clients.”

One Comment

  1. No doubt uber is better than Good luck Car service but there is another competitor in car service in NYC namely in the market which is providing the best service from Airport to your destination.

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