iCars Buys Limos.com in Crowded Corporate Travel Ground Transport Market

Competition in the U.S. market for limousine pick-ups has shifted up a gear with the acquisition of Limos.com by iCars, a startup in San Francsico that aims to be the typical corporate travel manager’s go-to service for arranging ground transportation.

ICars is going up against Blacklane (which has raised $42 million), Groundlink (which has raised $20 million and was acquired this week by Marcou Transportation Group), and Deem (which has raised hundreds of millions for its various incarnations).

On the supply side, each of these companies affiliate with some of the 8,000 limousine providers in the U.S., sending referrals to run trips for corporate travelers whenever the drivers aren’t otherwise booked with local, direct reservations.

On the demand side, travel managers tend to distrust services like Uber because of uncertainty about the quality of the drivers and vehicles. They tend to prefer chauffeur services that vet driver and vehicle quality, who have software that syncs with corporate reporting systems, and who are willing to negotiate discounted rates.

The merger between Limos.com and iCars is bittersweet. Limos.com began as a San Francisco startup that ran a consumer booking website for limousine rentals. A half-dozen years ago, it raised $5 million from Canal Partners and then $15 million from Austin Ventures.

Limos.com aimed to be the world’s largest consumer marketplace for black cars. At its height, it could summon 41,000 affiliated vehicles as needed.

But the company took a wrong detour. Limos.com doubled-down on becoming a call center for consumers who want to reserve black town cars. Yet sales tanked as consumers prefered to hail rides via the on-demand, GPS-powered mobile apps of Uber and Lyft.

The startup’s assets were taken over by a bank. In September 2015, private equity group The Stage Fund bought the distressed assets and parachuted in its turnaround artist, Dan Tamkin, who retooled operations.

Meanwhile, a year ago the boostsrapped iCars launched in the San Francsico area with a similar model. But it focused on signing up corporate clients, developing a mobile app, and keeping costs down.

Its inventory of affiliated vehicles is less impressive. It has some in San Francisco, and just recently added scattered service in Houston, Dallas, Austin, and Las Vegas. The Limos.com affiliated operators will add to its bulk.

The most intimidating rival for iCars may be Blacklane, which began in Germany and has global ambitions driven by one of its key investors, Daimler. Blacklane has scaled up to have the most locations of any chauffeur service, with availability in more than 270 locations worldwide.

Yet the combined iCars/Limos.com venture can thrive, argues president Ed Silver, because Blacklane still hasn’t dominated the U.S. and there is room to grow. He expects his venture to make a profit by year-end, generating at least $65 million in earnings for the year.

The iCars brand will stay for interactions with corporate travel managers, while the Limos.com brand will remain for marketing affiliation to limo companies, says Silver.

Looking ahead, car service use is on the rise, in general, after losing ground to ridesharing services from 2012 to 2015.