In a changing business climate, diversification means the difference between your business simply surviving or thriving. Some operators have found that adding a shuttle element to their traditional limousine business is a winning strategy, and allows them to reap financial rewards.
Taking the Plunge
After 13 years in the luxury limousine business, Nick Tropiano, owner of Tropiano Transportation in Ft. Washington, Pa., was hesitant to enter into the shuttle business. “I really didn’t want to,” Tropiano says. “It’s a tough business, and to run a quality shuttle, like we do, it’s an even tougher business.” Prompted by all the major hotels in the Delaware Valley outside of the city, and the fact that there wasn’t a shuttle service to Philadelphia airport, Tropiano started his shuttle business as a way of providing customers a less expensive method of transportation to and from the airport. Today, shuttle work accounts for approximately 40 percent of Tropiano’s transportation business. Although it’s profitable, he admits it’s difficult and more labor intense.
“We run to the hotels from 5:30 in the morning until midnight, seven days a week,” he says. “So it’s very time-consuming.”
He explains the need to add special staff for the shuttles. “Our shuttle drivers are different people than our luxury limousine drivers,” he says, adding that it’s a different level of professionalism between the two methods of transportation.
Another shuttle issue for Tropiano is on the occasion that a driver picks up two or three extra clients at a hotel, doesn’t radio the extra passengers into dispatch, unloads at the airport, and then pockets the extra fare. Since Tropiano’s shuttles run regularly on schedule, the hotel concierge will often mention to waiting customers to wait for an incoming shuttle, so it’s easy for a last-minute passenger to board a shuttle without a pre-arranged booking. As a precaution, every once in awhile Tropiano will send a “checker” either to the airport or to the last hotel dropoff, and the checker will count the passengers on the shuttle when the driver pulls in. Tropiano has also established a bonus compensation plan for his shuttle drivers. “We pay our drivers an hourly rate plus their tips, and we have a monthly bonus program set up after a driver has been here six months,” he says. “Based on the volume of business they carry, they can get anywhere from $600 to $900 a month in bonuses. Our drivers work and put their week in. It’s very seldom they don’t make some type of bonus,” Tropiano says.
A Thriving Business
In business for almost 17 years, Dana Kaplan, owner of Catalina Transportation in Tucson, Az., looked into shuttle service within her first two years. “I am geared towards volume, meaning groups, that come into the Tucson area,” Kaplan says.
Kaplan stresses that her version of a shuttle service is not driving to the airport, waiting at a shuttle stand and stopping at various stops along the way. “I do a different type of shuttle,” she says. “I do a dedicated transportation shuttle, not random shuttles where I have no clue as to who I’m picking up and dropping off.” Kaplan notes that she currently receives two or three calls per day from people requesting a shuttle scheduled to leave and depart at the same time every day, which is a service she is not interested in.
“I base it on the needs of my clients,” Kaplan says. “I establish transportation and shuttle them back and forth, maybe setting up a shuttle that goes to four or five different restaurants.”
The only “random” shuttle service that Catalina Transportation does is for groups who are staying at three or four different properties and need to go back and forth between the locations.
In this case, Kaplan will run a 24-hour shuttle and do three eight-hour shifts. Kaplan says that in her experience, “random, curbside cattle movers” is not quite as lucrative. “Your driver is sitting there for six or seven hours,” she says.
“You’re paying him, he’s going place to place, you’re spending the gas — but if you knew that nobody was going to be at those spots, you’d rather not do it,” she says. Kaplan points out the need for networking, mentioning your new business to meeting planners, conventioneers, and attendees. “The only way to keep your interests up and keep yourself going in this business is to have variety,” Kaplan says. “You have to be creative, you have to be telling your customer what their needs are.”
The Importance of Training
All Catalina Transportation drivers go through the same training program. “The chauffeur needs to be multi-trained, and we are at a point where, with having mini-coaches and motor coaches in our fleet, we are really only trying to hire CDLs,” Kaplan says.
She adds that when recruiting drivers who have a commercial driver’s license (CDL), in most instances the drivers are coming from a bus-driving situation on the road. Her most difficult challenge is getting these drivers to understand the different mentality involved in shuttle driving.
“You’re not going to acclimate and be best friends with the group,” Kaplan says. “You’re going to meet the group, pick them up, and shuttle them for the night.” Kaplan adds that her biggest challenge is to make drivers realize it’s a service. “It’s taking the bus mentality out of these drivers and putting them into a multi-task position with the focus of service.”
Kaplan says the service provided is an intangible object, and the service includes the driver’s appearance, attitude, and ability to make the passengers feel secure. “The item that we’re selling is the clean, comfortable space of the vehicle,” she says. “And the driver’s knowledge of the passengers’ needs and what the group is doing. The driver’s attitude can make or break a transfer. If you have drivers with bad attitudes, you do not have a transportation company.”
Kaplan stresses that it’s important to get drivers to “go with the flow” and accommodate whatever transportation needs come up. She explains to her drivers that Tucson is very seasonal and therefore work comes and goes in cycles. She points out that January, February and March are normally her best months for business. However, she admits that this year ‘s business was off a little, and she is doing everything she can to supplement her business — such as backing up other companies at the airport. In her opinion, too many shuttle companies don’t really care about the passengers, and too much emphasis is placed on the driver, the vans, and the vehicles being on time. “They don’t care who gets on board,” she says, adding that training drivers to care about their passengers along with regular, proper training is a priority. Successfully Coexisting Kaplan says that in her experience, there’s no doubt that luxury service and shuttle work can coexist and even thrive together.
“It depends on how you treat your employees,” Kaplan says. “Tell them from the beginning that you’re going to do whatever work comes in, and you want them to be team players. You’ve got to do this in order to survive in your market. You’ve got to make it happen. But I do recommend renting vans first, because it does take some thought — you’ve got to think of traffic, and traffic flows, and whether or not you can meet passengers’ needs. If you set up a shuttle, propose the times, and people aren’t getting back and forth in time, you’re going to make a lot of people miserable.”
Marketing is Key to Success
If you visit Catalina Transportation’s Web site, you’ll find links to almost every venue in Tucson.
“If they don’t use me for transportation, they’re going to use me for information,” Kaplan says. “And they’re going to remember me.”
Kaplan hopes that when that potential customer has the need for transportation, they will remember to go through CatalinaTransportation.com. “In this business, it’s so competitive that you have to be open to every idea to find people who need transportation,” she says. “You have to create that need, and give them the idea.”
Kaplan gears Catalina Transportation toward all types of business, pointing out that the economy can change overnight.
“You have to open yourself to every customer,” she says. “Right now, I’m doing whatever my customers want. You want to get as much as you can get. For us, it’s one-stop shopping — maybe they want a motorcoach, or minis, or maybe two minis and a van.” In the current economic times, she is grateful for diversification, as “the luxury business is off and nobody’s moving.”
“These are do-or-die times,” Kaplan says. “Only the companies that are willing to diversify and take whatever comes their way are going to succeed.”