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United Limousines AG CEO Michael Oldenburg, who serves on the NLA board of directors, pictured on Oct. 20, 2014 in front of the Atlantic City (N.J.) Convention Center during LCT-NLA Show East.
What if a government regulator visited your limousine operation and laid down the following new rules and market demands?
Doubling of gas prices, a ban on J-seat stretch limousines, costlier labor and overtime rules, fewer short-term limo licenses for special events, majority Mercedes-Benz fleets, and any chauffeured vehicle with more than nine passengers and a driver must be classified as a bus.
No doubt this would incur rebellion in American chauffeured ranks, yet such rules and market demands are reality for limousine operators in Germany. German and most other European limousine operators deserve a special status in the chauffeured transportation world, since they must make a profit amid obstacles that American operators are spared.
Lead German operator Michael Oldenburg, owner and CEO of United Limousines AG of Frankfurt, and a board director of the National Limousine Association, spoke on this with LCT while attending LCT-NLA Show East in Atlantic City, N.J. He runs one of the largest limousine services in Germany, with 50 vehicles spread among operations in Berlin, Hamburg, Dusseldorf, Frankfurt, Munich and Darmstadt. It has a long client resume of multi-national firms and global corporations.
And it can relate to many of its clients in one other way, considered rare among limousine companies: United Limousines AG is publicly traded on a German stock index. Oldenburg started his company in 1986 with two partners and three vehicles. He took over as sole owner in 1996, and went public in 2000. The capital boost from going public enabled the firm to evolve from a local service to a large national chauffeured transportation company. It has 141 employees and staffs its offices 24/7.
Overall, the German chauffeured transportation market has recovered from the global recession five years ago, with the market split between one and two-car operators who try to get local customers and larger limousine fleet companies that derive most of their business from international clients and global affiliate networks. The smaller operations have lower prices but few commercial offices or 24/7 dispatch. Larger operators have both, but must charge higher rates. Trying to get an accurate total on the number of limousine companies and chauffeured vehicles in Germany is difficult, since governments are not allowed to give out such lists, Oldenburg says.
“If you need many cars, you can’t do it with local small companies. Most limousine services you only find around the large airports and cities,” he says. United Limousines is headquartered near the Frankfurt International Airport. “Except for the British, who are used to car service, other Europeans use public transportation systems or go by car and drive themselves. There are large parking areas for long-term parked cars near airports with low rates.”
German operations are adapting to technological changes such as real-time GPS tracking and SMS communication for clients, electronic name boards, navigation systems and real-time traffic information. As in U.S. cities, the primary drivers of chauffeured business include the finance, capital and banking sectors, consulting, DMCs, and energy firms.
Chauffeured vehicle preferences in Germany remain more traditional and hierarchal than in the U.S. market now splintered among the highest number of OEMs since the retirement of the No. 1 Lincoln Town Car sedan.
In Germany and across much of Europe, the Mercedes-Benz S- and E-Class are by far the dominant chauffeured sedans, with the larger S-Class leading the premium chauffeured segment and E-Class the standard business segment. Volkswagen has made inroads with its luxury Phaeton model, due to low lease rates for operators such as Oldenburg. A Phaeton will lease for about 500-700 Euros per month, whereas the lease payment on a S-Class can reach 1,200 Euros per month. But with plans for a new sedan next year, Oldenburg is unsure if Volkswagen will keep its limousine fleet program.
BMW, which shares the top limelight in the retail vehicle market with Mercedes-Benz, is more of a boutique chauffeured fleet offering, with some German operators running them for corporate clients who prefer the brand. Oldenburg keeps one 7-series sedan in his fleet along with an Audi A-8, used primarily by a Qatari-based client.
Limos Vs. Buses
German regulations deem a nine passenger plus driver (10) vehicle a bus. Therefore, the Mercedes-Benz Viano, which in the U.S. would be considered a mini-van, along with the VM Multivan, are the mainchauffeured fleet vehicles for groups, since they have 8 + 1 or fewer seating configurations. A few German limousine companies use luxury versions of the Mercedes-Benz Sprinter.
“Most of the limo companies do not operate buses or coaches,” Oldenburg says. “If they get demand, they farm it out. Very few run one or two coaches on their own. Limousine service and coach demands are different. When we get requests for coaches, we organize that. Our advantage is we know about the quality of coach (companies)around. Limo companies know the needs of customers better than the coach companies.”
In the leisure market, limousine companies are available for weddings and nights out, but due to regulations, J-seat configured stretch limousines are prohibited by German law. The only exceptions are 14-15-year-old models that were grandfathered. Stretched limousine vehicles in Germany also must have rows of forward-facing seats for safety and seatbelt use.
“They think it’s too dangerous for people to sit next to each other side by side,” Oldenburg says. “Germans usually choose a designated driver and just go out on their own. The middle class is not willing to spend a few hundred bucks on transportation. The taxi system is quite good.”