You asked for it and we listened. In this column, we ask operators of all sizes and from all walks of the industry a question about their business and report their answers so you can assess how your own company compares to your peers. If you would like to participate, please email Rob Smentek at email@example.com for next issue’s question.
TOPIC: Do you offer a flat rate for airport pickups? What metrics do you use to determine that rate?
We offer a flat rate for all three New York City-area airports. These rates are based on mileage and time, with consideration paid toward rush-hour traffic, construction congestion, and weather delays. We never charge extra, even when it takes twice the usual travel time. Additionally, prices are set using the average rates of area companies in order to be a competitive player in our market.
Raman Bhardwaj, CEO
CarLux Limo in Bellerose, N.Y.
We compute our flat rate based on the time it takes to do the job. In our industry, I feel we need to be as up front as possible with clients. In our market specifically, there is no way we could get away with hourly rates for airport service because we offer service to Canada. For example, we do not charge clients for wait time at the bridges, unless they are at fault for some reason. We’d get poor reviews if we charged extra for wait time at the bridge or even for delayed baggage at the Toronto Pearson International Airport coming back to Buffalo.
Nick Boccio, General Manager
Buffalo Limousine in Buffalo, N.Y.
Our pricing includes any airport fees with consideration on the mileage from the airport to the drop-off; however, this is not based on each individual mile, but rather a range of mileage to lock in pricing for larger areas of coverage. This approach makes it easier for budgeting and planning when you have multiple transfers for one client, but it also covers many destinations in a downtown area.
Kristina Bouweri, President
Reston Limousine in Sterling, Va.
Airport pickups are very important to our business. We always provide a flat rate that is easy not only to understand but also to sell to potential clients; I personally hate any rate with a “plus” added on. The flat rate reflects the time of the trip and also the mileage radius and parking costs. Therefore, the rate is different for each airport.
Marina Brugnaro, President
The New International Limo in Venice, Italy
We currently offer all-inclusive flat-rate transfers to affiliates only. The flat rate is the same each way—to or from the airport—with parking fees built into the price. This makes it easier for the farm-out affiliate to sell transfers in New York City without any surprises to their clients. In New York, I believe the combination of time, bridge and tunnel fees, and traffic considerations make up the average rate.
Frank Castro, President
Alliance Limousine in Ardsley, N.Y.
We price our airport rate on the distance from the airport in zones. We only have a few zones, so it becomes an hourly rate if the transfer will take more than three hours to complete. We also have different rates for each vehicle-type: sedan, SUV, or minicoach.
Becky Laramee, President
All Points Limousine Service in Millbury, Mass.
We offer our flat rate with a maximum of two hours for each trip. If passengers are delayed by customs, we add an hourly charge after that two-hour period.
Our rate is largely determined by the high cost of transportation in the Santiago metropolitan region, which is the second most expensive area in South America for services and lodging. Arriving at the international gate at our local international airport involves more costs than one might assume, including fees for tolls, airport entrance, and parking.
High fuel costs in Chile are also considered, and although we are the only company currently using electric vehicles, our nation’s electricity is among the most expensive the world.
Juan Oehninger, Owner
Lujo Leasing in Santiago, Chile
We offer flat rates for all of the airports we serve. I believe customers want an exact cost for airport transportation, and don’t want to be charged extra for traffic and accident delays or even bad weather, so each of these potential problems need to be factored when determining a rate. Since we are located in a rural area, it can be tricky to structure pricing for our airport transportation. The closest international airport is 1.5 hours from our office, so each fixed rate is based on time, mileage, and estimated traffic flow between each airport and our local area. We also consider that the airports may be in a very congested area, which costs more in wages.
If you’re in a rural area like we are, you also need to be mindful of depreciation and replacing your equipment. We average approximately 10,000 miles per month on our sedans, and it’s mostly all highway miles—so maintenance, knowing your costs, and when to replace your equipment is key.
Chris Peifer, President
Susquehanna Valley Limousine in Northumberland, Pa.
We offer flat rates between our two airports—O’Hare and Midway International—and all of our zones and towns within 30 miles of the city. In fact, these rates and a central point in the downtown “Loop” area are the keystone numbers from which all of our rates are determined. We have 90 zones within the 250+ square miles that make up the city of Chicago. This allows us to create exact and fully correlated pricing to almost any location both within Chicago and in the 300 surrounding towns.
The reason for this was to provide pricing that made sense to the four parties involved:
Chauffeur: To obtain a rate commensurate with time and effort extended
Farm-in company: To provide an exact rate that remains stable and is defensible when discussing rates to different areas of Chicago with a client
Clients: To correlate rates with other travel locations within Chicago and thus circumvent any questions about pricing
SmartCars: To reflect an amount that, after paying all costs, allows for an acceptable profit margin while reflecting a value proposition consistent with the level of service being provided
The makeup of this pricing included many different inputs, including distance traveled between pickup and drop-off points, distance traveled to the pickup point or from the drop-off point and a hub, expected time of travel (including rush and non-rush hour times analyses), proximity to highways, proximity to a central “hub” (Loop, ORD, or MDW), and probability of usage and competitor pricing. All were incorporated into an algorithm created to optimize pricing and expected utilization.
Stuart Rothstein, President & CEO
SmartCars in Schiller Park, Ill.
We do offer a flat rate for airport transfers within a certain mileage range. This rate is based on the average amount of time the trip takes. Our research has shown that while we sometimes earn a lesser margin than what the hourly charge would be, we make up for it on the trips that take less time. For transfers beyond the mileage range, we charge hourly garage to garage.
Todd Szilagyi, COO, CTA
Best-VIP Chauffeured Worldwide in Santa Ana, Calif.
We’ve loved hearing your answers to our benchmarking questions—but we always welcome suggestions for future topics, too!
Send an email to firstname.lastname@example.org you just might see your query answered in an upcoming issue.