Operations

To Add or Not To Add, That is the Burning Question for Operators

Posted on May 1, 1995 by Sara Eastwood

The correct mix of vehicles in your fleet can have a positive impact on your bottom line.  However, if there is a lack of sound rationale behind your decision to invest in different types of vehicles, there could be financial hardship in your company’s future.

It takes strategic planning to successfully operate vans, sedans, and motor coaches.  Operators often tell me they can’t seem to get maximum utilization out of all of the vehicles in their fleet.  Their decision to diversify was not really a carefully thought out process, but just an impulse reaction to buy another vehicle.

Throwing spaghetti at the wall to see what sticks is an extremely costly way to conduct market research.  You must know your market and you must listen to the demand of your clients.  For example, if you are in a seasonal area, your fleet demands will differ greatly from operators who work in metropolitan areas and cities.

Take the time to outline the types of clients you have and the calls you get most frequently.  Assess your location.  If you are located near an airport, passenger vans and small buses might be right for your business.  If you are involved with the corporate market, adding sedans and a custom motorcoach should give you a sales advantage over your competition.

To ensure all of your vehicles are profitable, be careful to analyze the vehicle’s operating costs and set pricing accordingly.  For example, most operators are charging about the same hourly rate for motorcoaches as they do stretches, roughly $55 per hour.  Therefore, the only way to make money on these vehicles is to set minimum times.  A two-hour rental should not be considered on a $150,000 bus.  Target corporations and private VIPs that are looking for an all-day or multiple day rental.

Sedans work the same way.  They rent for about $50 per hour, but are not as expensive to purchase or maintain.  These vehicles are exceptional money-makers for operators.  Sedans seem to work best for operators needing “short run” vehicles for only one or two passengers.

Many operators are unaware of the laws and regulations that govern the larger capacity vehicles.  I can’t stress enough the importance of doing your homework.  There is a different driver’s license classification on buses, the maintenance is different, and you have to consider storage.

To remain healthy and competitive you must capitalize on each and every new profit center.  If that means providing more selection to your clients by diversifying your fleet, then it is in your own best interests to know all of the positives and negatives before you make the investment.

 

 

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

More News

Go Riteway Celebrates 60 Years In Bus Business

The Wisconsin company started with just four school buses and now has 1,000 vehicles serving several ground transportation sectors.

Colorado Operator Buys Affiliate To Widen Service Region

eNews Exclusive: B-Line Express in Vail will now cover even more ground in the retail-heavy state.

Why Uber Can't Be Fixed And Must Be Shut Down

Analysis: The TNC's lower costs brought lower prices, with resulting popularity and growth. But its use of noncommercial cars was unlawful from the start.

Empire CLS Featured In Meetings + Events Magazine

The article describes the chauffeured transportation provider's newest additions to its fleet: 56-passenger motorcoaches.

Unique II Brings Its Luxury Service To Florida FBO

The New Jersey company expands its chauffeured experience to  private charter jet clientele at Opa-locka.

See More News

Facebook Comments ()

Comments (0)

Post a Comment

Submit

Blog

See More

LCT Store

LCT Magazine - July 2017 $12.95 COVER STORY: * Why These Titans Work So Hard to Give it Away * *



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