Ride sharing apps seem to have taken over the world. With so many people taking advantage of the services for every day experiences like getting to work, or enjoying a night out on the town, it’s hard to remember a time when these services didn’t exist.
To keep up with the times and remain competitive, some more traditional transportation companies have had to revamp their way of doing business. SuperShuttle, for instance, has turned their focus more toward an application platform, rather than the old ways of securing rides to and from the airport.
SuperShuttle is a van service that is used primarily for transporting passengers to and from airports. In recent years, they have moved to the web-based platform to stay relevant and give ride sharing apps more competition. They are seeking additional franchisees to add to their fleet of drivers.
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A Super Concept
Back before ride sharing apps were so popular and easy to access, people had to find different ways to get to and from the airport if they didn’t want to drive and pay for parking. With several different options out there, it was easy to choose the ride that suited their needs best.
For over 30 years, SuperShuttle has been a force in the airport transportation game. Their vans are easily recognizable, and their flexibility in scheduling made them a favorite among passengers.
In today’s society, they found themselves struggling to keep up with ride sharing apps. They reconstructed their processes to make it easier for customers to book their services. With large vans and the ability to share rides with other passengers, customers don’t have to worry about squeezing everyone and their luggage into a small sedan just to make a flight on time.
They also offer flexibility in their scheduling because they know that things happen and sometimes flights get delayed. They are sure to amend their schedules to ensure each passenger that booked a ride has a vehicle waiting for them when they land.
Becoming a Super Franchisee
Partnering with SuperShuttle as a franchisee is unlike most other franchise opportunities. Instead of running an entire business, the franchisee simply drives a van.
This makes for a much smaller start up cost than other opportunities, but it does not offer the same business ownership experience, either. Franchisees pay a license fee of $500 to drive under the SuperShuttle name, and they must lease an approved SuperShuttle van from the franchisor. They will use this van, and the franchisors web-based application to conduct their business.
To become a franchise partner with SuperShuttle, the candidate must pass the application process. This process includes verification or proper operating licenses, depending on the requirements of the applicant’s state, proof of funds and ability to pay start up costs, and personality and background checks to ensure the applicant is a good fit for the SuperShuttle culture.
Those who pass this process will be invited to sign the agreement. At that time, they will need to pay the $500 license fee, as well as the associated costs with leasing the vehicle from SuperShuttle.
After all of the paperwork has been signed and the appropriate fees have been paid, the new franchisee will be able to start accepting business in their new SuperShuttle vehicle.
The Ongoing Relationship with SuperShuttle
While the franchisee is under contract with SuperShuttle, they will be expected to adhere to strict standards set forth by the franchisor. Failure to do so may result in disciplinary action, up to and including, termination of the contract.
One of the main standards that SuperShuttle expects the franchisee to meet is service. They expect that all passengers will experience a highly satisfactory ride while in the SuperShuttle vehicle, and that all drivers will conduct themselves professionally and courteously. SuperShuttle relies on their reputation to keep customers using their services, and rude franchisees will quickly turn passengers toward the competition.
Besides providing the highest level of service, the franchisee must stay current on all fees owed to the franchisor. This includes the cost of leasing the vehicle, as well as the royalty fees that SuperShuttle charges each franchisee. Most franchise opportunities keep their royalty rates around the 6 percent mark. Not SuperShuttle. They charge an exorbitant royalty fee to the tune of 25 percent of gross sales.
That’s right. A full quarter of all money generated by the franchisee goes straight to SuperShuttle.
In addition to the high royalty rates, SuperShuttle only offers one year contracts to their franchisees. This means that if a franchisee wishes to remain a franchisee for longer than one year, they will have to pay a renewal fee of an undisclosed amount every time the license expires.
SuperShuttle is shaping up to be a very costly investment.
Franchise Performance Review
When deciding on a franchise to invest with, it’s important to analyze the performance of each franchise. This will speak volumes about the potential for success with that particular brand.
With SuperShuttle, some surprising facts were found when analyzing their performance. For starters, their total franchise count is actually fairly large. This is surprising because of the structure of their franchise system, and their insanely high fees.
As of 2014, they had over 1,000 franchisees in the United States. Though that may seem impressive, their numbers have actually been declining since 2010. This is probably due, in large part, to the growing popularity of rideshare apps that began surfacing around that time. They lost over 100 franchisees in that four year period, and it can be assumed that that number has continued to fall.
When analyzing their turnover rate, it is unsurprisingly high. Because turnover rates include the number of contracts that are not renewed after they expire, it stands to reason that their rate would be nearly 25 percent. With contract periods of only one year, it gives franchisees an easier out when they realize that the franchise opportunity is not nearly as lucrative as they were hoping it would be.
Both the falling number of total locations and the high turnover rate point to a franchise system that is failing. With fees that are off the charts expensive, it’s hard for franchisees to justify the cost, especially when rideshare apps are taking most of their business.
An Easy Decision to Make
Let’s be blunt: SuperShuttle is not a good franchise investment.
It’s hard to even call the partnership with them a franchise ownership. The franchisee acts as more of a contract worker than anything.
Essentially, for a ridiculously high price, the franchisee is a rideshare driver. They can get the same experience for no start up costs, assuming they already have a vehicle that meets the requirements. SuperShuttle charges $500 to become a driver, while the rideshare apps charge nothing, or even sometimes offer sign on bonuses.
Rideshare apps often offer the choice to lease a vehicle through them, but it is not required. The drivers may choose to drive their own vehicles. With SuperShuttle, they are required to lease a van with the SuperShuttle logo on the side.
It’s difficult to determine the amount of money that can actually be made with a SuperShuttle franchise, because there is very little information regarding their rates and demand. If they stayed busy and charged a decent amount, a franchisee may be able to make enough to make a decent wage, but the fees that SuperShuttle charges would eat right into that.
When considering that the franchisee has to pay their 25 percent royalty fee, on top of all fuel, insurance, and maintenance charges for the leased vehicle, the money they actually get to keep starts disappearing. Add in the yearly franchise fee and it’s hard not to wonder how these franchisees are even able to sustain themselves.
For a traditional franchisee who is seeking to own and operate a successful business, this opportunity does not fit the bill. There’s no real business, it’s more like a job. For those looking for a job that can be flexible and semi-lucrative, this may work, but only if SuperShuttle has a high demand in their area. In most parts of the country, rideshare apps have taken over and nearly killed off companies like SuperShuttle.
It’s advisable that no one pursue a franchise agreement with SuperShuttle. It’s not a viable option for those seeking to own a business, and for those looking to drive for a living, there are cheaper, better solutions out there. This just isn’t a good fit, no matter the circumstance the potential franchisee is in.