Industry Research

Stirring Up Limo Business In A Shaken Economy

Posted on August 2, 2011 by - Also by this author

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For operators serving the corporate market exclusively, the recession was financially devastating. Many large companies that people never expected to fail died. From the collapse of financial institutions to big box stores, corporate travel seemed to grind to a halt. Even companies that had money stopped spending it lavishly out of embarrassment and criticism.

The Associated Press reported in February 2009 that Wells Fargo, a major consumer of chauffeured transportation, abruptly canceled a pricey Las Vegas casino junket for employees after receiving a $25 billion taxpayer bailout. Congress scolded AIG Inc. for spending $440,000 on spa treatments for executives. AIG is also a major consumer of chauffeured transportation, as is Morgan Stanley, which canceled an employee appreciation trip to Monte Carlo.

Who is serving corporate accounts?
While researching this article, LCT attempted to reach operators of all sizes by contacting more than 50 operators nationwide. It was not surprising to find that very few small operators are handling corporate transportation other than jobs given to them by large companies or networks on an occasional basis. There also appears to be a large, loosely knit network of medium-size operators who frequently network together at industry shows and events and tend use each other to deliver service worldwide, based on nothing more than a handshake agreement and perhaps a meal shared with mutual friends. Of the smaller companies with less than five cars, most operators focused on retail work such as weddings, proms and special-occasion charters. Most cited their fear of being unable to produce enough vehicles or react to the last-minute changes that are so common in corporate work.

Drug trips: Pharmaceutical industry
The “pharma” industry, as our industry calls it, has gone through changes that threatened to upset our apple cart. The effects weren’t nearly as powerful as we thought it would be.

“They haven’t slowed down a lick, although they have managed to beat down the rates considerably in the past three years,” says Jason Sharenow, COO of Broadway Elite Chauffeured Services in East Hanover, N.J. In July 2009, it became illegal for a pharma company to gift a doctor with a golf trip or dinner that in the past would have included limousine service. Today’s pharma business includes transportation of sales and marketing reps to various markets around the world and doctors to speaking engagements.

“It is simply more cost effective and productive to use a car service for traveling employees than pay for fuel, rental cars, airport parking and mileage on personal vehicles,” says Dr. Jamie Jolly, a marketing representative for Daiichi Sankyo.

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