Industry veterans Tom Holden and Jim Luff are ready to help motorcoach and limo companies grow and stay compliant.
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.”
Oldenburg cautions U.S. operators to research German limousine operations before affiliating. He advises that operators who only farm-out a few reservations to Germany per year should use a major chauffeured transportation network. Otherwise, operators should ask around. Two resources are the NLA (www.limo.org), which has 27 German operator members and 161 European members total, and the German limousine trade group called BCD, Bundesverband der Chauffeure Deutschland/Federal Association of Chauffeurs in Germany (www.bcd-ev.de), which has about 20 members.
“Farming out is always a risk,” he says. “If you don’t know who you are dealing with, you might be lucky, or it could go wrong. Websites are difficult because all companies look bigger than they are. For you, that ride could be a $1 million account, but for a [small] operator it’s just one ride.”
Unlike the U.S., German chauffeured transportation companies do not face as much of a threat from on-demand services such as Uber and Blacklane thanks to strict regulations. “On-demand services are not performing very well in Germany,” Oldenburg says.
Although Uber has been banned in Berlin and Hamburg, and a Frankfurt federal court banned it nationwide, the taxi association that brought the initial request to stop Uber made a procedural mistake, thereby invalidating the injunction. Uber is still illegal, but authorities cannot enforce the rules until the injunction request is reintroduced and deliberated again, Oldenburg says.
German limo service regulations make it impossible for TNCs to operate legally. Laws require that jobs come from the office or the home of the limo company owner directly into the car, and from the customer into the car. Uber can’t meet such rules. If a limousine vehicle does not have another reservation, it must go back to the garage. You cannot cruise around.
“If I calculate on a mileage rate, I have to tell the customer in advance how much the ride or cost per hour will be,” Oldenburg says. “If I want an extra kilometer, I have to have a meter. The TNC way of setting prices is not in accordance with regulations in Germany.”
Special Event Fleets
One regulatory hurdle for German operators is handling demand for major events that demand large numbers of fleet vehicles. Farm-out options are constrained, due to a highly regulated limousine industry, limited number of total licensed chauffeured vehicles, and varying procedures for getting short-term licenses in individual German cities.
“When you have to get short-term licenses, some cities can give them easily, while others refuse to do it,” Oldenburg says. “If you need many chauffeurs, it is difficult to get them short term to fulfill all the quality demands. You need a good logistics team to organize that. We are the Avis licensee and work closely with Eurocar. If we know a big event is coming up, then we inform them.”
Gasoline in Germany costs much more per gallon than in the U.S. As a result, German operators run mostly diesel vehicles, which get more kilometers per gallon. Oldenburg has been trying out five all-electric Tesla Model S sedans in his fleet since February 2014.
“They are quite expensive, and you have to pay for being a start-up,” Oldenburg says. “People love them, but rear bench size is not ideal, and the headroom in back is not very good. In traffic jams, you have zero emissions, but that is not yet valued by enough clients that we get a lot of bookings. Tesla is the same rate as the S-Class. It’s good public relations, but the Teslas are not paying for themselves. If a passenger demands an S-Class, he gets one. Electricity is cheaper than gas, but the lease rate on the Telsa is higher. We decided to lease because we didn’t want to risk [buying].”
FASTFACTS: United Limousines AG
Location: Frankfurt, Germany
Ownership: CEO Michael Oldenburg, one-third owner; board members, one-third owners; and publicly traded shareholders, one third owners.
Fleet vehicles: 50
Vehicle types: Mercedes-Benz S-Class and E-Class sedans; BMW 7-Series sedans; Audi A8, A-6 sedans and Q7 crossover; VW Phaeton sedans; Tesla Model S sedans; Mercedes-Benz Viano minivans; VW Multivans.
Annual revenues: about U.S. $6.4 million (5 million euros)
Corporate client sample: Merck, GazProm (Russian energy company), Tommy Hilfiger, PricewaterhouseCoopers, conference and touring DMCs.
Contact: +49 69 299 22 99 0
Industry veterans Tom Holden and Jim Luff are ready to help motorcoach and limo companies grow and stay compliant.
Prosecutors had sought the sample to compare with a peeled-off DOT out-of-service sticker found in his car.
2019 LCT Video Educational Series: You may treat all clients the same, but nothing teaches you customer service better than chauffeuring VIPs.
2019 LCT Video Educational Series: Robert Gaskill of MOTEV has learned all about VIP service from the school of celebrity knocks.
eNews Exclusive: Mark Luxe has grown his business by simply asking customers about their experiences.
eNews Exclusive: Deanna Ballard isn’t afraid to make moves to better herself and her business.
2019 LCT Video Education Series: Eric Devlin understands the importance of treating staff well and pursuing new avenues of revenue.
Eric Devlin of Premier Transporation of Dallas talks about how his new office space has helped his staff serve clients better.
Operator Mike Campbell will carry on Mark Mollica's company's established legacy.
The 23-year-old is partnering with his childhood friend to start Sprinter runs among lower Manhattan, Brooklyn, and the Hamptons.
Dan Goff, a motorcoach dealer and company owner in Virginia, sits with LCT editor Martin Romjue for a LCT educational video from the International LCT Show.
2019 LCT Video Education Series: Dan Goff has ventured into every aspect of the charter and coach bus business.
Operators Tiffany Hinton and Tammy Carlisle are bringing diverse perspectives to LCT's annual trade shows.
eNews Exclusive: Operators Mark and Zach Forester have developed a course that has helped them train quality employees who abide by company values.
Nick Kokas and Anuj Patel will be formulating education to help operators continue to adapt to change.
The world's No. 1 online marketplace and trader for professional chauffeured and chartered vehicles, including all types of motorcoaches, buses, vans, stretch limousines, sedans, SUVs, exotics, and classics. New and used vehicles are available from sellers across the nation.
The best online networker to find quality affiliates worldwide and market your company.
Click on any state to see the latest industry news and events in that region.