Industry Research

Luxury Vanpooling: How Profitable?

Posted on February 18, 2009 by LCT Staff - Also by this author - About the author

NORTH HOLLYWOOD, Calif. — After the gas price explosion of last summer and the worsening economic recession, is there a viable market for luxury-level commuter vanpooling? What are the actual costs?

Operators vary on this issue, citing that the costs to commuters would still be too prohibitive to generate any meaningful demand. So we asked Chris Hundley, a veteran Los Angeles area operator and owner of the 30-year-strong Limousine Connection, to crunch some numbers for the following commuter scenario:

An operator runs a weekday six-passenger commuter vanpool from city hall in Torrance, Calif., a suburb of Los Angeles, to the US Bank building, the tallest skyscraper in downtown L.A. (round trip 38 miles). Limousine Connection has a Tuscany-built 2008 GMC 2500 Extended Van equipped with six luxury leather captain’s chairs. What would be the rate per commuter need to be to sustain all the standard costs such as chauffeur’s wages, maintenance, gas, vehicle payment, and a standard profit margin?

Answer: Cost per passenger per day = $67.18; per week based on 5 days per passenger = $335.90

That’s still cheaper than a taking a cab every day for that distance, but definitely more expensive than a city bus, train, or driving your own car.

On the other hand, if clients value time as much as money (especially with onboard WiFi access), and a luxurious chauffeured ride exempts them from the hassles and stresses of traffic, could this be marketed as an overall quality of life value? And if a client’s luxury commuting costs are partially offset by less money spent on a personal car, i.e. gas, maintenance, insurance, daily parking fees in downtown L.A., wear and tear, then who is to say this can’t be a good deal?

Source: Martin Romjue, LCT Magazine

View comments or post a comment on this story. (0 Comments)

More News

5 Ways To Sell Into The Luxury Travel Market

It’s not your father’s high-end market any more. These lessons apply to chauffeured transportation as well.

Trump Travel Ban Could Deter Business-Related Trips

Tech firms and multinational corporations have lashed out at the move, and some recalled employees traveling overseas.

Half Of Companies Allow TNC Use For Business Travel

A GBTA survey finds an increasing number of traveling employees using companies like Uber and Lyft.

Study Shows Jobs Rose In Taxi Industry Despite Uber

The authors believe this is the first serious look at the effects of the gig economy platforms such as Uber on jobs.

What Trump Means For Fleet-Based Businesses

Fleet expert: "If Trump eventually rolls back regulations in the automotive sector, he would likely stimulate growth."

See More News

Facebook Comments ()

Comments (0)

Post a Comment

Submit

Blog

See More

LCT Store

LCT Magazine - March 2017 $12.95 INT'L LCT SHOW ISSUE COVER STORY: * Innovate or Die: Show To Be a Business "Disrupter" * *



Connect

Experience the three annual industry events for networking for business, showcasing vehicles and products, and getting the tools for success.

Read About Your Region

What’s Happening Near You?
Click on any state to see the latest industry news and events in that region.

More From The World's Largest Fleet Publisher

Automotive Fleet

The Car and truck fleet and leasing management magazine

Business Fleet

managing 10-50 company vehicles

Fleet Financials

Executive vehicle management

Government Fleet

managing public sector vehicles & equipment

TruckingInfo.com

THE COMMERCIAL TRUCK INDUSTRY’S MOST IN-DEPTH INFORMATION SOURCE

Work Truck Magazine

The number 1 resource for vocational truck fleets

Metro Magazine

Serving the bus and passenger rail industries for more than a century

Schoolbus Fleet

Serving school transportation professionals in the U.S. and Canada

Please sign in or register to .    Close