Last week I was in Christchurch. At the end of my visit I caught a cab from the city to the airport. Nothing unusual in that I hear you say. I caught a Gold Band taxi. I started using them a couple of years ago after I got ripped off by one of the blue bubble brigade.
So as we arrive at the airport, I note that the taxi meter shows my fare at $44.00. Now I’m used to the typical airport charge being added so was prepared for something in the order of $47.00. So, you can guess my surprise when my credit card was scanned and the total showed up at $52.00. Another $8.00 in charges? As I enquired of my driver, his broken English advised me that there was $5.50 in airport fees and a further $2.50 for the credit card fee. Really?
The airport charge was only $3 a few months back. And I have been on both sides of credit card transactions and I know what merchant rates can be negotiated to if you have any sort of volume. And it is nothing like the 5% I was just charged. More like 1.5 – 2%, and less if you have big volumes. So the cab companies, who will tell us that they prefer payments to be made by credit card, so as their drivers aren’t carrying bundles of cash around, are now going to gouge an additional margin out of us – another 3%. Of course we have always paid for our cabs by credit card. The merchant fee used to be included in the fare. The fares have all gone up too. But that’s not enough for these guys.
It all started with the hotels a few years ago. Another 3% is now typically added to your hotel bill if you choose to pay by credit card. How else are you going to pay? Think about it, if the greed continues you are better to pay in advance when you make the booking through the online agent (with no surcharge), and then eat and drink elsewhere. That is, unless the local restaurants and bars get greedy too, and start playing the same game. But if they value their customers, they won’t do it.
These tactics are all along the same lines as those implemented by our local bodies over recent years. Remember when your rates bill included rubbish collection and water? Gradually we have all received additional invoices for these services. Did the rates bill go down as a result? To the contrary my dear reader, our rates have doubled and in some cases tripled during the same period.
Speaking of local body largesse, a mate of mine is in the process of completing a small subdivision in Auckland. As part of the process he went to the Council to arrange an additional water meter. I’ve asked a few people what they would expect to pay for a water meter. The answers are all pretty consistent. Anything between $1,000 and $2,000 seems to be the expectation. So you will imagine my mate’s surprise when they quoted him $12,000. And that didn’t even include installation.
Of course our local bodies are hopelessly inefficient and wouldn’t recognise a cost reduction programme if McKinsey and Co themselves turned up at the front door to execute one.
But I digress …..
Meanwhile over at Air NZ, we hear that every time you go back online to check the availability or price of an Air NZ flight, the price automatically increases. The same company refuses to allow me to cancel a $600 flight to Brisbane, even though I want to replace it with a $4,500 flight to London at the same time. The result is that I walk away from the uncancellable $600 return flight, and book a return flight to London with Emirates for $3,200. I’ve never seen a company so out of sync that they would walk away from a $4,500 deal in order to preserve a $600 one.
In the meantime, Qatar, American, and China Air are all increasing their activity here and the competition is hotting up for Air NZ. I’m sure it’s no coincidence that Qantas’ latest campaign in NZ is entitled simply “generous”.
More than ever before, business today is about delivering what the customer wants on a basis that is innovative, flexible and fair. There has been more wealth created in the last five years by companies like Google, Facebook, Amazon and Apple than at any time in corporate history. These Companies are spectacularly good at dominating their markets by offering great value and innovative solutions that customers find impossible to ignore.
In business we need to take note of this thinking. Our highest priority must be to deliver great customer experiences by helping people to do the things they want to do, rather than getting in their way and making it difficult. Simple solutions to everyday needs, promptly delivered and on fair terms are what most people are looking for.
I find it interesting that the cabbies are complaining about Uber, and the hotels are frustrated by the antics of Airbnb and the like. Perhaps they should all take their greedy selves off to a mirror somewhere, to see if they can see why people are looking for alternative solutions. You’ll be surprised what you see in the mirror. Usually, if you look closely, the problem will be right there standing in front of you.
Have a great week.