Let us set up a scenario for you: You want to visit the big city but don’t want to deal with street parking or overpriced lots with limited space to stow your car. You are too far to use public transportation or your destination is too far from the train or bus stop. A taxi cab is too costly and too infrequent in the part of town you are headed. What is the solution? According to the company, Luxe, one word: valet. Recent startup company, Luxe, has created an on-demand valet service and have recently expanded their operation to 9 major cities (NYC, San Francisco, Washington DC, Philadelphia, Seattle, Boston, Austin, Chicago, and LA) past testing phases and is now fully available to the public.
Founder and CEO Curtis Lee, a former vice president of consumer products at Groupon, said he is familiar with the pains of driving in a typical busy city. The main market for Luxe are commuters and those who use the service during a night out on the town. The way this works is the driver requests a valet through the company’s ioS or Android app by dropping a virtual pin at the desired pickup location. The valet travels to the location on foot or scooter, timing his or her arrival by tracking the driver’s progress in the app using GPS. The valet parks the car in a secured lot for an average price of $5 an hour and a maximum of $15 per day in Chicago and returns it to the owner when summoned by the app. All payments, including optional tips, are made through the app or their website. Luxe does not own the lots where they park customers’ cars. Instead they lease underused spots from parking facilities monthly, and Lee said the company aims to park enough cars in those spots to make profit.
Like many city parking services, at times of high demand, peak pricing could go into effect. They seem to be following an approach similar to the policies of ride-hailing companies such as Uber and Lyft. What separates Luxe is that they have options for car-related services, including fueling for $7.99 plus the cost of fuel, and washing for $40. They work like contractors, and must complete a rigorous screening process not unlike the ride-hailing services as well.
There’s another service that separates Luxe from the competition as well. In case of a night of partying or hanging out where you find yourself too drunk to safely drive home Luxe has announced their “Drive Home.” This service provides customers a valet to drive them home, in their own car, if they are unable to. It’s a huge markup, however as it costs $25 plus an additional $3 per mile, with a 25 mile cap. Users can access the feature inside the Luxe app. Once a user requests the Drive Home service, the Luxe team contacts the customer for the destination and return time. Then a valet comes and drives you home, hands you your keys once you arrive, and leaves either via a scooter they packed in your trunk, public transportation, or from an Uber (with whom they formed a limited partnership).
To some customers weary about their cars, and even made aware of many of the horror stories involving traditional valet services might not feel comfortable with the service. Luxe’s solution is a standard $5 million insurance policy for valets, drivers and cars. That means they could potentially be liable for up to $5 million in damages should they breach what is stipulated in their contract. Also as a show of good faith, they are in a partnership with Mothers Against Drunk Driving and will donate $1 from every ride of their “Drive Home” service to the organization.
In a world where automated cars are on the horizon and the rise of ride-hailing services as well as valet services, the line between public and private transportation is being blurred. While there are certainly high risks involved in using these services, one can’t help but feel that these type of services have been a long time coming especially with the rise of mobile devices and interconnectivity opening up new avenues for businesses and business models.