LCT's 20th Annual Fact Book Introduction

Welcome to LCT’s 20th annual Fact Book, offering the most comprehensive and substantial industry statistics available. LCT is grateful for the opportunity to continue chronicling the livery industry’s growth and development.

As part of our 20th anniversary coverage, we’re presenting some “retro stats” from the very first Fact Book. You can see for yourself how things have changed during these past 20 years. For example, the industry no longer has “formal” limousines, a prominent part of the first Fact Book.

The Survey Results

Operators appear to be moving away from home-based operations and into offices. Last year, 52% were based in offices and this year 57% are now in offices. Another statistic feeding into this professionalism trend is that nearly 88% are full-time operators.

Revenue growth seems to be healthy for operators, judging by the following data: Of all the operators responding to the survey, 76.6% of them had increased their revenue in 2003-2004 compared to 71.1% in 2002-2003; while 6.4% of the operators surveyed in 2003-2004 reported decreased revenue compared to 16.4% in 2002-2003.

There’s a similar positive trend for revenue in the first six months of 2005. The greatest revenue increase rates are among operators with fleets of 11 or more vehicles.

Average hourly rates are doing better, in general, this year compared to 2004. In the highest volume categories, which include sedans and stretch limousines under 130 inches, rates are up about 2%-5%. Larger stretches and SUVs are down slightly, but motorcoach rates shot up 11.3% in 2005. Limousine buses are pulling in even higher hourly rates than motorcoaches.

Operators are deriving their business from similar market segments as last year. Nearly half comes from corporate clients and half from retail segments. However, among large companies with fleets of more than 21 vehicles, about two-thirds of their revenue comes from business/corporate transportation. For small fleets, only about one-third of their business comes from corporate accounts; these companies tend to be heavily focused on weddings and proms. SUVs are showing an increase as a revenue source.

Operators appear to be focusing more on growing their network business. Almost 60% of operators participate in networks, compared to about 53% last year. About 18% of revenue comes from network business, similar to the 2004 figure.

Insurance rates are still the top priority concern of U.S. operators. However, on the positive side, insurance premiums are coming down for more operators this year compared to last year. The increasing cost of workers’ compensation has pushed this concern higher on the list for 2005.

Regarding chauffeurs, some interesting trends stand out. For small- and medium-sized operators, there are a lot more part-time chauffeurs than full-time chauffeurs. This factor is reversed for fleets with 21 or more vehicles. They have a higher percentage of full-time drivers than part-timers. Another trend is that more companies are using independent contractors than last year. In 2004, 60% of chauffeurs were employees; this year, 51.6% are employees.

Over the years, the industry has moved away from company-issued uniforms and toward driver-provided suits. In 1985, 43% of respondents issued uniforms and 57% issued suits. Today, only 10.6% of those surveyed issue uniforms, while 89.4% require drivers to wear suits.

The number of reservations being made on operator Web sites grew substantially during the past year. Operators report 21.5% of reservations are now being made on their Web sites compared to 17% last year. Although we didn’t ask for this statistic last year, this year operators told us that they’re receiving 37.6% of all reservations through the Internet. This is a major development in the industry, signaling a shift away from phone reservations and toward the Internet.

In general, operators have less sedans and stretches over 85 inches and more SUVs in their fleets. There’s also a significant number of vintage and classic vehicles in fleets these days including Rolls Royce’s.

Yellow Page advertising is still considered the most effective advertising medium among operators. There is a question as to how long this will remain the case, as more and more consumers are using Internet searches for research previously done in print directories.

Methodology

Our survey this year once again comprised both mailed and online surveys. Surveys were sent via e-mail and traditional mail to 4,000 subscribers on June 13, 2005, and all responses received by July 15, 2005, were considered. In all, 596 responses were recorded. Of those responses, 93 were received online and 503 were returned in the mail.

Some data has been deleted from the results. If answers were way out of line or appeared to be mistakes, they were stricken. We also received 11 international e-mail replies, but our survey’s purpose is to analyze only U.S. statistics.

This survey has a statistical confidence level of 95% with a sampling error of 3.9%. This means if we were to conduct this survey 100 times in the exact same way, the answers would come out exactly the same, give or take 3.9%. Industry standards allow results to be published at a 90%, 95% and 99% confidence level. Typically results published in the mainstream media are published at a 95% confidence level.