Saturday, December 15, 2018

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 rob@chauffeurdriven.com for next issue’s question.

TOPIC: What is the current economy’s impact on your business? Are you optimistic about the growth of your business over the next year and how does it compare to last year? What factors are impacting it the most—positively and negatively?


Benchmark and Best Practices We are feeling the strength of our economy in several ways. We had record months in July and August, which we’ve never experienced. We will grow a modest 11 percent year over year; however, with this growth, coupled with the low unemployment numbers, we can’t find chauffeurs. Added to the growth in our economy, it is very expensive to live in Silicon Valley, which makes it even harder to find and keep chauffeurs. With California’s labor laws, we are forced to raise rates; remarkably, our clients haven’t pushed back because they, too, are paying more for gas, food, and services. In my strong opinion, we as an industry must consistently increase rates to cover our ever-increasing expenses. Keeping rates status quo means we all lose out on the bottom line.
Maurice Brewster, CEO & Founder
Mosaic Global Transportation in San Jose, Calif.
Benchmark and Best Practices With the uncertainty of Brexit looming in March 2019, many businesses are already experiencing changes in the labor market and currency. Cost and availability of certain supplies/goods may change substantially. Brexit is likely to result in lower levels of capital investment and growth, reduced access to external finance, and decreased innovative activity.
I do feel very positive and excited about the year ahead, as 2018 has been about educating and changing the way we do business through technology and empowering the team to make them better managers and leaders. In 2017, I introduced a new product within Reliance Group to maintain our growth strategies going into 2018, and it has worked out very well to date. My goal is to grow my people internally in the organization and equip them with the right tools to succeed in our journey.
For me, the key factor in my business is the people I surround myself with. As long as we serve each other and our clients with a clear view of our roadmap, this will be the greatest impact in my growth strategy.
Reza Choudhury, Global Partnership Director
Reliance Worldwide Logistic Solutions in London, U.K.
Benchmark and Best Practices This economic growth brings massive traffic to our base service area in Amsterdam: As a result, during rush hours, we need up to 50 percent more time (or about half an hour) to complete an airport transfer from AMS-Schiphol Airport to Amsterdam. All of our airport transfers to/from Amsterdam areas are flat rates. Effective Jan. 1, 2019, we will raise our rates because of costs leveling but also because of a VAT increase of 3 percent.
Beside traffic increases, we are also facing more traffic limitations that will affect our possibilities for pickups and drop-offs, so that is another situation to think about with our future rates.
Richard de Krijger, General Manager
DMC Limousines Worldwide in Amsterdam, Netherlands
Benchmark and Best Practices The economy is Texas is strong. While we all have a shortage of chauffeurs—especially CDL chauffeurs—with a state unemployment rate a few ticks lower than the national rate, workers in Texas are always trying to better their lot. We have plenty of applicants for all our open positions, so it’s really just being selective and waiting for the very best option to come along.
I seem to remember hearing that 1,000 people move to Texas every day. The fact that Texas does not have a state income tax and, on average, is a fairly moderate, albeit right-leaning state politically, new corporate headquarters are popping up on every corner. There are record number of cranes in downtown Dallas and the surrounding suburbs, and we are continually having to farm-out business to keep up with demand from our business travelers and corporate partners.
So goes oil, so goes Texas: Oil prices are off from their all-time highs about a decade ago, but the oil and gas (and wind) industry is making a comeback. Ask our friends in Houston how business is going—I would expect them to say resoundingly that it’s great.
We have continued to grow at a very healthy rate—growing too quickly is not good—and I attribute that growth to a strong national economy, a stronger Texas economy, and the best team in the business.
Eric Devlin, President/Owner
Premier Transportation Services in Dallas, Texas
Benchmark and Best Practices My business has dropped due to many of my customers choosing to take UberSelect rides at a lower cost. Much of the UberBlack fleet in Denver will take UberSelect rides, which is $2/mile, as opposed to the $3.20/mile on Black. This has caused me and my chauffeurs to start turning on Select more than we’d like. Thankfully, we recently picked up a contract with a company that transports air crews to and from Denver International Airport, and that has boosted business a bit.
Steve Felt, Owner
Colorado Black Car in Lakewood, Colo.
Benchmark and Best Practices The economy for the past two years has been strong, and we have seen an almost 30-percent growth in the past year. We are always optimistic with how long this will last because we follow the 10-year rule. The last dive in the economy was 2008, so we are being extremely careful on the purchase of new vehicles. However, our numbers continue to grow, and we are excited that we can still see growth in a very tough business.
I think the positive effect of the current economy is that we have increased our customer awareness and our internal quality control. Local regulations are always tough in California, and we have seen what the state has done with new limousine regulations: I surmise that it has put many small companies out of business. We have always purchased new vehicles and have set a policy of not keeping cars for more than 3-6 years. We would like to see regulations apply equally to the rideshare companies so that it would level some of the playing fields, but, on the whole, we’re happy to see that our legislation is waking up to some of their tactics of skating around regulations.
Kevin Illingworth, President
Classique Worldwide Transportation in Orange, Calif.
Benchmark and Best Practices Generally speaking, the economy is good. With that said, Massachusetts is one of the harshest regulated states in the country. This increases our costs across the board. We are also dealing with strong pricing pressure. In addition, our unemployment rate is a full 1-percent lower than the national rate.
Hiring staff and chauffeurs is a common pain point for most operations in Boston. We pay really well, but that has not been enough to attract new candidates. The 24/7 nature of the business deters many new potential hires.
The Fed is raising rates and wants to actually slow down the economy before it overheats. TNCs have continued to disrupt the market especially on the retail end, and new disruptors are entering the market weekly. It is hard to keep up with all the moving pieces that are constantly changing.
Mark Kini, President
Boston Chauffeur in Beverly, Mass.
Benchmark and Best Practices The economy is very strong in my area of Boston. I am expecting to see larger numbers, but it is hard to get there with no employees. We are just like all the other companies out there that are struggling to get good staff in the quantity we need. This is a good problem to have—but still a problem.
Becky Laramee, CEO
All Points Limousine in Millbury, Mass.
Benchmark and Best Practices With greater disposable income, digitalization, and penetration of smartphones in the country, M-commerce and travel business is on a sharp rise. Due to inadequate public transportation infrastructure, managed ground transportation has also seen a steady increase in demand year on year and thousands of corporations depend on safe and reliable service providers to transfer their employees within the city and within the country day in and day out.
We are fully prepared to take on this opportunity and have a wide presence across India and Asia to service our customer needs. Our investments in our own technology and the latest fleet along with our focus on retaining and grooming the best chauffeurs and team are the key differentiators that keep us ahead of our competition.
Our government is about to finish its term and the country will go into elections in 2019; as the performance of the current government has been meeting public expectations, the opinion polls suggest the current government may continue for the next term as well, adding to a stable political environment in India, which will be good for business.
Aditya Loomba, CEO
ECO Limousine in New Delhi, India
Benchmark and Best Practices As we’re based in a rural market, there is only so much work available for luxury transportation companies in our area. We have had steady growth over the past five years, but this year has been mostly even. I do think the economy has had some effect on our business, as we are seeing more of our corporate accounts questioning price and looking for volume discounts since they are saddled with increased wages and other employee expenses.
We’ve decided to get more creative and customize our rides to help with cost, but also decided to never cut prices, as that would jeopardize the service we provide. We continue to remain optimistic as we approach the new year, and have increased advertising for more retail work, which I believe is on the upside in our area. Also, we are currently researching the addition of a 40-passenger motorcoach to our fleet.
Chris Peifer, President
Susquehanna Valley Limousine in Northumberland, Pa.
Benchmark and Best Practices As the national and global economies are on a steady climb, we have seen consistent growth in all aspects of the business. Business clients are traveling more frequently as they grow their respective business. We have also seen a healthy increase on the retail side. Recently, we have identified that “events” are now focusing on safety; no one wants a guest to incur an issue with driving while impaired after the festivities. While there is certainly still impact from the TNCs, overall we are seeing steady growth as people are becoming very accustomed to chauffeured transportation. In our area, we truly have not seen a significant impact with respect to the travel ban. With our fleet diversity, we are able to identify clear overall growth in all market segments.
Jeff Shanker, Chief Strategist
Black Tie Transportation in Winston-Salem, N.C.

We’ve loved hearing your answers to our ­benchmarking questions—but we always welcome suggestions for future topics, too!

Send an email to rob@chauffeurdriven.com you just might see your query answered in an ­upcoming issue.

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