Chauffeur Driven NLA Vegas Show
Tuesday, February 18, 2020

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: Are you planning a rate increase for 2020? If so, what influenced the decision and how did you determine the amount/percent?


Benchmark and Best Practices I am increasing rates for the new year. The U.S. economy is great, and our costs are rising. It’s becoming harder to secure employees, especially CDL drivers, which means we will have to boost salaries to attract and retain staff. Our rate increase will average 5 percent, but this may vary per vehicle type. This economy will not last forever, so we need to strike while the iron’s hot.
Gary Arndt, President
A Limousine Service in Pittsburgh, Pa.
Benchmark and Best PracticesAt the end of every year, I face the same questions: What do I do with rates for the next year? Will I lose business if I increase prices? But, if I don’t, how will my finances change?
Costs are always increasing but you still need to invest in training staff, implementing security, updating the fleet, improving technology, and developing sales. So, what I have decided for next year is to only adjust rates for regular vehicles (0 to 3 percent) but apply the right increase to the luxury S-Class Mercedes sedan (0 to 12 percent) where the requests are limited but running costs are very high.
Marina Brugnaro, President
New International Limo in Venice, Italy
Benchmark and Best PracticesWe determine our price increases based on inflation and current trends in the market, such as supplier price index changes and increased transportation costs. Investments in efficient equipment and improved technology will enable us to keep rate increases at a minimum, today and in the future. Generally, our price-increases vary from 5 to 10 percent year over year.
Our goal is to provide our clients with an exceptionally high level of service. It is our hope that, over the years, we have proved our capabilities in providing such services. In 2020, we will be releasing some new services along with our new online booking platform, which will give our clients value-added benefits to the services they currently receive.
Reza Choudhury, CEO
HYRYDE by Reliance in London, U.K.
Benchmark and Best PracticesWe have no plans to increase our rates for 2020. Also, we have not increased any of our rates since 2016, and generally do not raise prices unless there is a huge change in gasoline, insurance, or other costs in our market. And, unless there is a major change in these factors, we have no plans to change any of our rates in the years to come. We want our clients, affiliates, and friends to work with us and use our services comfortably and confidently.
Cathleen Lamprecht, CEO
BCD Limo in Shanghai, China
Benchmark and Best PracticesIn Oregon, the minimum wage in 2020 increases from $12.50 to $13.25—a 6-percent increase. That tide increase raises all the boats in our harbor. Fuel prices are again reaching toward $4 per gallon with the increased city tax. Those two factors alone are costs we cannot stop. Add Portland traffic congestion on top of these two issues and our dilemma just gets more difficult to navigate. An hour run in the past now takes up to two hours. So yes, we are increasing our rates, but only between 4 to 5 percent. Searching for efficiencies and cost savings never ends. We attempt to be market-current with our clients and employees, but the balance is not always easy.
Julie Meserve, Client & Employee Relations Manager/Affiliate Director
Lucky Transportation in Portland, Ore.
Benchmark and Best PracticesWe are raising rates between 5 and 10 percent, based on rising automobile insurance costs and minimum wage increases in our Northeast market.
Jeff Nykios, President
Leros Point to Point/Royal Coachman Worldwide in Valhalla, N.Y.
Benchmark and Best PracticesAfter careful consideration, the rising costs of doing business have led us to increase our rates for 2020. One of the effects of refreshing your fleet is higher overall operational overhead and with that comes a higher price of doing business. We looked at a variety of factors—including the increases in minimum wages, fuel prices, insurance rates, etc.—and determined that in order to keep our profit margins where they need to be, we had no choice but to raise our rates across the board. We feel that our quality of service will far supersede the increased cost.
Jason Ramsey, President
Prestige Worldwide Transportation in Denver, Colo.
Benchmark and Best PracticesWe increase rates on an annual basis, unless otherwise prevented by contract. The premise of the increase falls in line with the cost of living increase for our region. We also use a variable rate fuel surcharge to assist in stabilizing our business.
Jeff Shanker, Chief Strategy Officer
Black Tie Transportation in Winston-Salem, N.C.
Benchmark and Best PracticesThis is the year! Operating costs have exceeded our comfort level based on our last increase, so up they go. It’s a tricky calculation though. The biggest increase in expense the past few years is our labor cost. State mandated sick/PTO time, as well as the rapid escalations in the minimum wage, are the driving forces. The costs of health care, workers’ comp, and vehicle insurance are other items to contemplate. Our 5-10 percent increases are based on vehicle types, trip classifications, and hours vs. mileage-based trips.
Jason Sharenow, COO
Broadway Elite Worldwide in East Hanover, N.J.
Benchmark and Best PracticesWe will increase our rates by a few percent points in 2020 because of the rising cost of gasoline and other expenses. We have not increased our rates during the past four years, but now it’s become necessary. It’s also because of the extra luxury tax we have to pay on top if we buy a new vehicle.
Bart van Leijden, CEO
ETS Luxury Driving in Amsterdam, Netherlands

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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