John Griffin: Addison Lee
The Addison Lee founder, and bus lane rebel, on how he’s kept Britain’s largest minicab firm thriving through the downturn
Addison Lee founder John Griffin on how he’s kept Britain’s largest minicab firm thriving through the downturn.
It doesn’t take long for John Griffin to start doling out advice on what makes a good journalist. I say advice but it’s more of a warning – don’t let yourself be bullshitted by bragging CEOs and their inflated turnover claims. “When you go on these missions you need to be careful,” he explains. “I would recommend you doubt everybody until you’ve checked their figures on Companies House. Some business owners would like their customers to think they’re bigger than they really are.”
Of course this gives Griffin the perfect excuse to pull up his latest P&L sheet and give me a detailed explanation of how, in the first 10 weeks of 2010, its account bookings are up by 24%, no mean feat in an industry that has receded by 20% during the recession. At this stage, about 40 minutes into the interview, I’ve given up trying to control it. In fact, I’ve probably managed to get all of three questions across. No matter though. Looking down at my notes I realise he’s already covered off, of his own accord, about 75% of what I’d planned to discuss (“You may ask me, ‘how’s the recession affected you?’. Good question. Well…”). Best just to let him carry on.
The business has come a long way since Griffin got his hands on a car and some second hand radio equipment back in 1975. With an annual turnover of £180m, the Addison Lee group encompasses pretty much any service on wheels. The bulk of revenue comes from its minicab service, but there’s also a chauffeur, coach and courier offering. The largest minicab fleet in Europe by some distance, Addison Lee boasts a size five times that of its closest competitors. What’s even more impressive is that it’s still growing at a phenomenal rate – 20 new cars are added to the fleet each week – something that’s only been made possible by a massive investment in the car and control room systems.
“About 15 years ago I decided to invest heavily in technology,” says Griffin. “At that time, minicab businesses all seemed to stop at about 250 cars and we were the same. We couldn’t get past that ceiling because the mechanics of taking the bookings took too long. Today we’re massively ahead of the competition because of the technology we’ve put in place. We spend £2m a year on it and none of that has come at the expense of profit. We spend what we spend because we have the cash to do it.”
It’s certainly an impressive set-up. When I make the observation that the call centre and control room looks more akin to the NASA command centre than a cab office, Griffin admits people are often surprised at the scale of the operation. Addison Lee takes 20,000 bookings a day. Every job is assigned to the nearest available driver, whose number is then texted directly to the customer with an ETA. Each job is meticulously documented with a thoroughness that borders on OCD. “If you told me you used an Addison Lee cab three years ago, I could go into the system, pull up your job and tell you what time you were picked up, the route we took and how much we charged you.”
The company employs 24 full time developers who are constantly honing and maintaining the system, enhancing the uses of the sophisticated GPS technology for both cost and environmental efficiency. But despite a trophy cabinet packed full of green awards, including the Diamond status awarded by co2 reduction scheme London Green500 in 2009, you won’t hear Griffin waxing lyrical on climate change. “We’re running a business. Our objective is to employ staff and be successful in the industry we’re in. It’s not my job to be concerned with anything other than the secure future of all these people here.”
Addison Lee has reduced its carbon emissions by nearly 40% since 2002 despite growing its fleet significantly. Not a single mile is wasted if it can be helped. At the end of a shift, drivers are found one last job along their route home so the car is not running empty of passengers. It may have given the company significant credibility among environmental groups but for Griffin, it all comes down to bottom line. “I’m not going to give you any bullshit. It’s a wonderful achievement, but what’s the motivating factor for me? Commercial. Costs have come down, profits have gone up.”
Art of attack
Two families have been in the driving seat at Addison Lee since its early years. Griffin ran into financial difficulties during his first year of business so had to sell half the company. The partnership was a match made in hell. “I sold to a guy I just could not get on with,” says Griffin. “I just sacked him – told him I wasn’t going to work with him.” The original buyer sold his shares to Lenny Foster, who worked with Griffin until his death in 1992. Foster’s son Daryl carried on at the firm however, and is the current CEO. The remainder of the senior management team is made up of Griffin’s sons Liam and Kieran.
“It’s not really a question of keeping it in the family,” insists Griffin. “All the company’s main growth is as a result of Liam who’s my MD. He’s extremely talented and has really pushed the business – he’s the only businessman I’ve met that I would place ahead of me. I’m just shit lucky I have a son that’s such a major talent.”
Much of the company’s success undoubtedly lies with its corporate accounts. At present Addison Lee has roughly 16,000 account customers accounting for 50% of overall revenue. The company’s marketing department likes to boast that it counts half of all FTSE 100 firms among its customers, but Griffin is loath to brag about the status of his clients. “We service everybody. I like to think that whoever you are, we have an obligation to supply you with the best service we can.
“In the past, I’ve had certain ‘big’ customers make demands from me because large companies think they can. I don’t play that game. I tell them to stuff it. I’ve done just that with ITN and Disney. I’ve given it to them, exactly these words: stick it up your arse. I’m that bloke.”
The issue of bullies is one that Griffin can’t seem to take his mind off. There’s an equal amount of distaste for the local authority officials who won’t let his cabs use the bus lanes. Taking a stand against the unfair trading advantage he believes the black cabbies have, he’s instructed his drivers to use the much maligned M4 bus lane. “What I’ve learned in my business career is that attack is the best form of defence. People that join local government get turned on by the abuse of power and they like to target people like me. When I was a penniless minicab driver I wasn’t a threat but now I’m successful I’ve become a target.”
The campaign seems to be working so far. In the week we meet, Griffin has received 10 court summonses which he’s welcomed as an opportunity to air his views. He’s certainly spoiling for a fight, insisting he’ll take it to the European Court if necessary. As one can imagine, there’s not much love at Addison Lee HQ for the lowly Hackney Carriage driver either.
“Get in a black cab tomorrow and you’ll share your seat with your suitcase. Nobody will open the door for you or help you with your luggage. Customer service is a big secret of our success and it’s really not hard.” It’s all about attention to detail according to Griffin. Drivers wear a shirt and tie, keep the radio turned off and don’t speak unless spoken to.
“That’s the thing that’s been lacking in Britain for some time,” argues Griffin. “People here are ashamed to be a waiter or a barman. They’re only doing a service job because they’re ‘between careers’. It’s not like that in other countries. People have a sense of pride in their work.”
With the exception of the early equity deal, Griffin has remained resistant to outside investment over the past thirty years. Addison Lee is a business that “pays its bills”. If Griffin can’t afford it, it doesn’t get bought. “Everything you see, from the desk to the carpet, is all paid for. We even own the building outright, which is why when the recession came we were prepared.” That’s no mean feat considering the company occupies the best part of a whole street in Euston, complete with its own garage where all the vehicles are serviced in-house, and space for the company’s 600 office staff. Addison Lee even owns its own sales lot where it sells the cabs after running them for three years.
He prides himself on the company’s aversion to “squandering”. Griffin’s distaste for credit even extends outside the office – he lives in the same house he paid for in cash back in 1979. “My biggest ambition in life was always to own a house without a mortgage, and I’ve had that for thirty years. People ask why we’ve not taken credit to reinvest in faster growth but this is not an overnight business. You can’t suddenly double your turnover in a day. You need drivers, then more jobs. It’s a slow process. For the foreseeable future this is us. I don’t want to float and have to deal with all the board meetings. We make decisions here. Things get done.”
As far as Addison Lee is concerned, Griffin simply won’t put up with any back seat drivers. He has however developed a new-found passion for angel investing. The ventures range from a site offering virtual tours of the world’s famous monuments and landmarks to a disposable pay-as-you-go phone that doubles as a contactless payment and Oyster card.
“I enjoy trying new things and at the moment I’m finding this mobile phone exciting. I’ve come from a zero tech background but I recognise it’s where the future lies. Money may be the traditional measure of success but it’s not really why I’m attracted to these businesses.” Griffin takes a more personal approach to his investments, ploughing money behind entrepreneurs he takes a liking to and writing all deals off as losses from the outset to enhance the excitement when he reels in a good one.
What’s evident is that this is a man comfortable with his surroundings and satisfied with his achievements. There’s nothing left to prove – something he makes quite clear after the company’s press officer tells us Griffin won’t want to pose against a tower of tyres during the photo shoot. “He underestimates me,” he says. “It’s all part of the fun. Don’t ask me what’s easier. You just tell me what to do and I’ll do it.”
It’s hard not be charmed by Griffin. I don’t even take offence when he reveals half way through the interview he doesn’t remember what publication I’m from. Outspoken and candid but without the slightest hint of aggression, he manages to make even the tackiest of jokes entertaining. “I’m having dinner with the Mayor of Brent tonight,” he declares out of the blue. “He’s Irish so I’ve put on a green tie.” I leave Addison Lee while Griffin heads off to find out why the lift isn’t working. Sometimes the couriers put an out of order sign up just to reserve it, he informs me and he wants to find out what’s going on this time. The first thing I do when I get back is take his advice; with a sense of relief I discover he was telling the truth about his numbers.
In his own words
On the recession
“The present climate is colonic irrigation for the economy. We’ve washed out all the crap and the people who were doing it right all along have risen to the top. I welcomed the recession. I predicted it would be good for us and the numbers show it has”
On electric cars
“Boris said to me, “John, electric cars, tell me”. I said, “Don’t go there. It ain’t going to happen. All this rhetoric about electric cars is nonsense.” Most people in London think it’s a result if they can park within 50 yards of their front door. How do you expect them to charge cars every night, and where is all this extra power going to come from?”
On weekly vs. monthly sales figures
“I’m a weekly person. That’s how we were paid when I was young and it allowed you to budget better. I’ve brought that back to my business life. Our financial year may run from August but to me that’s company history. I like to know what’s happening this week”
On becoming an angel investor
“I’m getting more entrepreneurial as I get older. I find myself becoming surprisingly comfortable in the higher echelons of the investment scene. There’s a lot of mystic surrounding it but it’s really not that complicated”
On the British weather
“I don’t worry too much about the rain. It brings in a bit of business”