September 25, 2008 - Rearden Commerce this week announced the July acquisition of Ground Travel Technology Team, or GT3, with which it was already integrated for the automation of limousine bookings. Terms of the deal were not disclosed.
In a separate development in Europe,
Hogg Robinson Group partnered with GroundScope to build a taxi, chauffeured car and limousine booking service which is "fully integrated with global distribution systems, so ground transportation bookings are automatically updated if any amendments are made to other aspects of the travel arrangements, saving both time and money. The solution will initially roll-out across the United Kingdom with other European markets following later this year."
In being acquired by Rearden, GT3 took on a new name: Global Ground Automation. It will operate as a standalone Rearden subsidiary and continue to be managed by president and CEO Gregg Tuccillo (former GT3 travel services division president), who founded a precursor to GT3 and has received Rearden stock options as part of the deal.
The company also provides back-office software to limo companies, and Tuccillo said 40 of the 100 largest use it. He said GGA expects to tap Rearden for capital investments to expand into Asia and Europe, as well as the meetings and leisure markets, and develop such enhancements as "asynchronous data transfer--not just a one-way pipe." This would allow "things like trip alerts," said Tuccillo. "When a driver is assigned to the ride, we will be able to do things like--as the passenger is able to use a cell phone when the plane hits the ground--message back to them the driver's cell number or car number."
For Rearden, "It's about generating lots of transactions," said vice president of product marketing Dan Ford. According to a company statement, "Rearden Commerce and GGA are positioned to become the de facto reservation system for the ground transportation industry."
Dav El president and CEO Scott Solombrino said he supported the move because GT3 has been "anything but stable," since it was a combination of "startup companies in a small" and fragmented sector. "There are lots of ways to book," he said, noting some black car services' own booking tools, the global distribution systems, RideCharge, GroundRez and "two or three additional booking tools coming into the market." Solombrino said Dav El would continue to be available in GGA.
Tuccillo said GGA has not been as badly affected by contraction in financial services as one might expect: "It's probably pure luck. In terms of the black car service that would service the Lehman's and Merrill's--we really weren't as invested in those companies. But it is unfortunate for the industry, because you're looking at some black car companies today in New York that are off 30 percent or 35 percent. That's not sustainable. Something drastic will happen for many of those companies; they will have to reorganize. Our primary focus has been advance schedule, so we didn't have a big risk, thankfully. We have relationships with the survivors.
"We have seen a downturn in terms of total volume," Tuccillo added. "We had been experiencing dramatic year-over-year growth of 40 percent, but this year it's only 22 percent in terms of revenues. We attribute that to contraction in the travel space. Pharmaceuticals, motion picture, accounting--it's across-the-board shrinkage. But as the economy gets tougher, people are more 'incetivized' to find ways to control expense, so there's more interest in the product. In May and June, we put on 65 corporate accounts, almost double what is normal in that same period. We now have 80 corporate implementations in our queue. So our existing clients are buying fewer limo rides, but our new clients are outpacing that."
GGA said it provides ground-booking services to one-third of the
Fortune 500 and processes "millions" of reservations annually. The customer base is in the United States, but Tuccillo said GGA has "capacity in 83 countries with more than 33,500" transportation providers.
GT3 had been owned by a venture partnership including Key Capital, 1to1 Ventures and Cedar Street Group, but those investors began "looking for an exit" in January, said Tuccillo. "There were a number of people who were interested. My board gave me the choice of where I wanted to end up. I chose Rearden."
