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David Klein is the founder and President of Dav-El Livery. Klein started Dav-El Livery in New York City in 1971. From his beginning as a chauffeur, Klein has built the company into a network consisting of more than a hundred affiliate and associate member companies across the United States.
Linked by a computerized reservation system, Dav-El affiliates and associates represent one of the most sophisticated limousine networks in the country. While visiting the Los Angeles recently, David Klein discussed the limousine business with Limousine & Chauffeur.
Limousine & Chauffeur: How old is your company now?
Klein: Sixteen years.
Limousine & Chauffeur: So your perspective goes back a long way...
Klein: You bet it does. Back to the days of no stretches. When we put our first stretches on the road, I bought two ’69 Lehmann-Petersons. That was in ’71 so they were two years old. They were gorgeous but they broke down all the time.
Then we got Carlos Allen to build our stretches. I didn’t know that they were being built in Mexico. I bought them through a dealer in Dallas. His name was Roger Harris.
Then we discovered that Carlos was building them and so we bought four cars from him. That was the beginning of stretches in New York. Nobody had stretches except a couple of old black Lehmann-Petersons. There were no new stretches because there was nobody building them.
Limousine & Chauffeur: Did Moloney Coachbuilders have a stretch limousine on the market at that point?
Klein: Yes they did, but I liked the glitz that Carlos added to his cars - the woodwork and such. He was willing to build custom cars and Moloney was never willing to do that He would never customize a car for me the way I wanted it.
I said to Carlos...”Carlos, we have to do this to a car...” And he would do it. I’ll never forget - the arguments over the moon roof. I said, “I’ve got to have a moon roof in this car.” Of course in those days, it was a sunroof. He said, “It’s going to leak and you’ll have problems,” but he did it. Moloney would never do things like that for me. He would never customize a car.
Then, in 1976, Carlos got aggravated with me. He didn’t want to customize them the way I wanted him to because it caused him a lot of problems. I was so furious that I flew on a little plane from Laredo, TX to Dallas and connected into a flight right up to Armbruster in Ft. Smith. They’d just started building stretches. Tom Earnhart had just returned to the family business.
Tom was willing to listen while his father, Mill Earnhart, didn’t want to hear about stretch limousines and such flashy stuff Tom got excited and got right into it. Armbruster built their first car for me in ’77 and I’ve stayed with them through till right now. I still buy a lot of product from Armbruster.
They’re willing to listen. They’ll customize the car. They’ve worked with me when I’ve had trouble getting enough lines of credit to pay for the cars when they were ready. They were terrific and were really patient until I got my leasing companies in order. Sometimes you have problems with that kind of stuff and Armbruster’s been a terrific company to work with.
Limousine & Chauffeur: Your cars don’t look like Armbrusters...
Klein: I don’t buy stretches from Armbruster. I buy corporate limousines and sedans from Armbruster at this point. My stretches are coming from Executive at this point.
And now my stretches are also coming from Dillinger/Gaines. I have to go to Dillinger/Gaines. They offer me too much. Like the new service facility they’re putting up. It will be open 24 hours in Manhattan. Who else is going to offer me that? If I’ve got a car that breaks down at 11 pm, then they’re open.
I like my cars to be pretty much the same. I don’t want a whole lot of different coachbuilders in there, but Executive makes a beautiful car.
The problem with Executive is that he doesn’t offer the leasing that Gaines does. And Gaines will offer you the whole package with the insurance and such. It’s a great deal, especially with insurance being such a problem today.
Limousine & Chauffeur: What would be your sense of change in the industry in the recent past?
Klein: In the ’80s, I think we saw an enormous number of chauffeurs and independent people coming from other industries opening up their own limousine companies. Small operations are being backed by their customers or their uncles or whatever. It’s a very easy industry to enter, and there have been too many people who have done it. The industry is flooded with coachbuilders and limo companies.
Limousine & Chauffeur: You started noticing this five or six years ago?
Klein: Tremendously. It began five or six years ago and the number of companies has kept increasing. Now you’re starting to see it level off. A lot of these people went broke. A lot of people went into this business thinking it was an easy business to make money in.
Limousine & Chauffeur: Can you charge enough to cover your costs in such a crowded market?
Klein: I believe that $50 an hour is a very fair price for a stretch limo with a chauffeur when we’re going out and spending $35,000-$50,000 to buy a car. A lawyer charges you $150 an hour and all he’s got is an education. He’s not giving you a car.
A chauffeur has a right to a decent salary. The cost of maintaining these cars is high and $50 an hour isn’t a lot for what we provide. And yet you get all these little guys who open up these companies and charge $32 or $35 an hour. It kills the industry. And these are the guys who go broke.
Limousine & Chauffeur: When you said there are too many coachbuilders... Do you mean that there are too many small coachbuilders, or too many new coachbuilders, or just too many overall?
Klein: There are too many coachbuilders building cars on spec. There’s only one way for a coach builder to survive in the business and that’s to only build cars when they have orders for them. Don’t flood the market. If the market’s flooded, it will only hurt them.
So there could be 800 coachbuilders as long as they’re building for 800 orders. But if they keep going on like this and building on spec, it’s going to hurt them and, ultimately, hurt the operators. If the coachbuilders overbuild, these cars sit around waiting for somebody to buy them at a cheap price. The guy who buys them at a cheap price will probably rent them out at cheap rates. This is not a cheap industry. It’s a luxury industry, and everything shouldn’t be based on price. It should be based on quality of service.
I’ve had a lot of little companies call me up and say, “Buy me out, David. We’re going broke.” There are all kinds of reasons that these companies are going broke... like insurance problems and higher costs, and more competition. In spite of all of these things, though, our business has never been better. My business is just phenomenal here in Beverly Hills, and in Washington and New York. It’s the biggest year I’ve ever had.
Limousine & Chauffeur: Not to the point of adding cars though...?