When in doubt don’t.
You ever realize how good the electric company has it. Think about it. You apply for service. They check your credit, if you pass, they turn the juice on, and you are good to go. If you don’t pay your bill, they turn it off and you are out of luck. You can’t go to the other electric company because there are none. Now if it is bad weather and the power goes out you are once again out of luck, just like the 6 sirloins in your freezer. In effect, a power outage is like a no show except they owe you nothing.
Well as of late, there has been a lot of chatter in the Limoverse of the ground transportation dystopian dissertation of disturbing deadbeat drama. I have read some horrible stories of honest providers really taking it on the chin. One terrible comment was an operator who lost $43,000.00 when a major national network declared bankruptcy. Now this was a legal bankruptcy. This one operator was not the only creditor facing this fate. And prior to the bankruptcy they likely enjoyed years of prosperity working with them. Why did I mention “prosperity”?
When Bernie Madoff was interviewed after he was incarcerated he made a crack implying that many of his clients never showed their appreciation when they were making double digit interest now suddenly, their true colors come out:
NEW YORK (CNNMoney) — In his second jailhouse interview, Wall Street scammer Bernard Madoff told a reporter that his victims were “greedy” and the U.S. government is a “Ponzi scheme,” though he insisted that he’s a “good person.” “Everyone was greedy,” said Madoff, according to New York Magazine. “I just went along.” Feb 28, 2011
Well, ground transportation providers are a totally different animal. We are hardworking honest business people, but we must now face the facts. We have holes in our boat.
The first realization is the typical structure of an affiliate network of fellow operators. They have a front of the house and the back of the house. The front of the house operation sells, books and enters the orders. They then farmout, subcontract, and even likely cover in house. The affiliate or receiving sub-contractor approves the order and now phase one is complete. In a perfect world the order will be completed, the paperwork or correspondence sent and then payment would be transmitted post haste. The back of the house processes: bills the clients, pays the bills, and what not. There is laundry list of parts between booking and billing to tend to.
That brings us to a real problem. Much of this equation is based on the honor system. The honor system is not a solid economic instrument. Furthermore, there are no payment systems or services out there that are impervious to scams, cons, disputes, or kickbacks. I even know many operators as well as other businesses that have been victims of counterfeit cash and the old-school bounced checks.
Another unique twist on the farm out food chain is if the price quoted is what the client is really paying. If you charge 85.00 to the airport and a competitor, you work with offers you a a 85.00 transfer less commission you will take it if it fits. What if you discover he was charging 115.00 for the trip so he double dips. Is it legal, sure..Ethical, not my position to say. The real challenge of the affiliate business model is the lack of transparency. So many new affiliate players especially overseas have become the bed bugs of ground transportation.
One commenter mentions you should do a Yelp or Google search to investigate your potential new associate. Seriously! Show me a provider that has anything good to say about review platforms and now you want to make financial decisions based on their guidance. I don’t buy it. Speaking of which, there are many providers allegedly buying good reviews so that kills that theory.
Affiliate work is a major part of this industry. I must guess at least one quarter of the entire industry’s revenue is a combination of affiliate based or local/national B2B farmout work and it could only increase. Protecting your company from deadbeats is not a perfect science. It is unfortunate that we have no certification or other systems available to do this. References certainly help, but a smooth talker dangling dinosaur dollars breaks down one’s common sense and due diligence.
One of the recent debates on the Facebook deadbeat group was the decision to enforce the 45 day rule. In effect after using routine protocols if you can’t collect by the 45th day you can then post your debt. The group admin runs the show and his decision stands. He offered members the chance to suggest changes, but the consensus was stick with 45.
There is no statute of limitations for chronic debtors. It would be great to simply list them by name if they can be quantified but I also worry about the legal ramifications of putting people on blast.
Posting a photo of someone who may owe you money and asking others to DM you is an accusation of a crime and unless the police have the evidence and have prosecuted that person, you have slandered that person. They can sue you for defamation of character. Apr 25, 2023 Google
Until better safeguards or systems are put in place, we are in a conundrum. The best advice I can offer at this time is: When in doubt don’t.
