2019 LCT Video Education Series: Wendy Kleefisch has a heart for others, and it shows in every aspect of her business.
PETALUMA, Calif. — When Gary Buffo was elected President of the National Limousine Association in February 2013, the Northern California operator summed up the prevailing atmosphere: “This industry is always being attacked.”
He was of course referring to the onslaught of taxes, fees, rules and regulations — federal, state and local — that have buffeted the industry for years, and defined the toughest battles for chauffeured transportation operators. In fact, the NLA exists to monitor and combat troublesome rules on behalf of operators nationwide.
Now, as Buffo wraps up his second one-year term next month, his oft-repeated quote seems like an understatement. The last two years have brought the most formidable, constant attacks, if not outright war, for the NLA since its founding 30 years ago: The growth of Transportation Network Companies, such as Uber, that enjoy unfair advantages from not being subject to all those regulations cited by Buffo. The spread of TNCs and their relentless undercutting of limousine, black car and taxi services ranks as the biggest challenge in limousine industry history, exceeding those of the Great Recession, the retirement of the Lincoln Town Car sedan, aggressive federal labor actions, and even the fallout from the fatal San Mateo, Calif., stretch limousine fire of May 2013.
It is in this tough environment — rules for me but not for thee — that the experienced California operator and former police officer leads the chauffeured transportation industry in trying to restore a saner regulatory regime while adapting to the technological changes brought by mobile, on-demand technology. As the NLA plans to elect its officers and install some new board directors on March 15, just before the International LCT Show in Las Vegas, Buffo sat down with LCT in December in his second-floor office at Pure Luxury Transportation, which overlooks a garage that maintains the company’s growing fleet. Buffo co-owns the Petaluma-based, 148-vehicle charter bus and limousine company with his wife, COO Jennifer Buffo.
Before the interview, Buffo walked through the central downtown area of Petaluma, pointing to the spot where he once had to grapple with a violent criminal suspect in a public courtyard surrounded by shops. He called for back-up from his fellow Petaluma police officers to finally subdue and arrest the attacker. Serving as a full-time officer from 2002 to 2008 while running a growing local business taught Buffo a lot about perseverance, unfairness and street sense. His role now as a national industry leader requires that same strategic skill set — of knowing how to outsmart an unruly combatant while rallying for back-up.
That became apparent in selecting a public relations firm to represent the NLA and the limousine industry. The contract was announced on Oct. 19, 2014, finalized on Dec. 8, and took effect as of Jan. 1, 2015, with the first planning meetings underwayJan. 8-9 as this article went to press.
Q: How did the NLA’s idea and plan for a public relations contract come about?
A: When the Global Business Travel Association announced the Concur-Uber deal, that changed the focus on them from being just pursuers of local taxi markets. When they entered our space, we decided we had to do something. In 2013, the board approved $30,000 per year to spend on public relations related to the fatal San Mateo (Calif.) stretch limousine fire. When we did our research, no one would do anything for us for $30,000. It was not enough money to hire enough talent to get our safety story across to the industry. It was never spent, but it stayed on the budget. We have been looking for a public relations firm since then.
When the Uber/Concur deal came about, I said, “We can’t do anything with $30,000. Can you give me authorization to search out public relations firms?” They said yes. We had two candidates we vetted but we didn’t like their direction or feel comfortable with them getting us to where we needed to be. NLA board director Scott Solombrino then said he knew of a firm we could call. NLA executive director Philip Jagiela called the firm, and Philip and I vetted that firm. It was a lengthy conference call. I told Philip this is the company for us because they understand the direction and channels we need to use to get us to where we need to be. They came back with a proposal for $400,000 for the first 12 months. I went back to the board meeting in Atlantic City, N.J., on Oct. 18, 2014. We did the due diligence, vetted the firm, and now
Evins is the best firm to get us where we need to be. The actual cost is really $370,000 when you factor in the original $30,000 we had budgeted. After the initial approval and a complete presentation by Evins to the board, they unanimously approved the contract. Evins has not and will never work with any company that is connected to the NLA or competing with the NLA or its members in any way. They have an ethics clause in their agreement. It is solely the NLA’s P.R. firm.
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Q: What will be initial efforts and projects under the contract?
A: To plan our year-long strategy to re-energize our brand, improve our media communication channels, while developing an image that promotes our member companies with a powerful and professional voice. The meetings with Evins include the NLA Public Relations Committee, Cornerstone Government Affairs, and Manesh Rath, the NLA’s attorney. It is critical for us to protect the NLA and its membership and its board throughout this process. It is our ultimate goal to positively promote our industry, while increasing business for our membership worldwide. We expect to see meaningful results in the coming months. We have spoken about working in many areas of the media to maximize our public reach. We also want to set up NLA education portions of the International LCT Show to teach companies how to coordinate safety service training for their chauffeurs. All of us in this industry run structured companies; that’s a saving grace for us. In the long run, when consumers make decisions, we want them to go with NLA-member companies. Everyone in this industry knows we are much better, more professional, and the safest and best form of transportation. We must live up to that daily. If we don’t, then it defeats the purpose of what we are doing. We have to play our cards in an ethical way, and stay on the ethical track.
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Q: How will the public relations contract play out long-term?
A: After taking effect January 1, 2015, it will be $400,000 plus $50,000 in expenses the first year, and then the opportunity to re-up in the $100,000 range each year thereafter. Our membership has to adapt and buy into the direction we are going. If they don’t buy in, then the board may not renew the contract for next year. This first year is more expensive because it’s all about set up and a lot of back office stuff. After that, it will be less to maintain all we’ve put together the first year.
One issue is the taxi overtime exemption. Federal and local governments have created and allowed this uncompetitive advantage. I think we can have an open discussion with TLPA and see if we can work in that direction. That’s going to be a huge fight and battle for us. It’s something the NLA board could potentially look at. We’re always looking at ways to improve our industry’s competitive advantages.
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Q: From a regulatory standpoint, what are the specific vulnerabilities of TNCs?
A: Unfortunately, the way government works today, lives have to be taken away from us for government to do anything. The way TNCs can operate at the highest level of revenue is to ignore all the regulations and rules in passenger transportation that have been set up for the last 100 years. You can never afford to operate their way if you have to pay drivers overtime, handle payroll, supply benefits, and offer double-time. They could not afford to run their way with our rules.
It becomes challenging for TNCs when their drivers realize what it costs to operate their vehicles, with fuel, repairs and maintenance. They put heavy miles on those vehicles. When drivers figure out how much of a living they are eking out, that will hit the TNCs hard. Drivers will realize all the liability they put on themselves in an accident, including the possibility of losing a home. Insurance issues that pop up will be huge. Somebody eventually will have to pay for the deaths and injuries that have occurred. We’re not seeing anything in the media that indicates any insurance claim is being paid for any TNC vehicles involved in an accident. People are complaining they are not being covered.
In the media, we’ve heard about work compensation horror stories. Other areas of concern or stumbling blocks include whether these independent contract drivers are filing 1099 tax returns. That can be a huge hit for federal and local governments if drivers are not filing tax returns. There are 26 items you have to abide by to qualify as an independent contractor. I don’t think TNC drivers would pass the fitness test for IC status.
Rules and regulations are set up for the safety and duty-of-care for passengers. Many governments are ignoring any and all these rules because TNCs are infused with so much money that their influence becomes a money game. This should not take place in an industry where you have to protect lives. When politicians change their mindsets is when TNCs will have a problem. Our government is so naïve about what’s going on.
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Q: What are the realistic prospects and feasibility of an NLA-supplied ground transportation app?
A: We’ve had NLAride.com which is a booking tool for connecting the public with member limo companies. It is rarely used and cost the NLA a lot of money to develop. More important, the NLA is a non-profit business association which is the voice of the industry. This is a proprietary industry filled with businesspeople, and we are the arm that helps fight the regulatory threats put forth by the federal government. That’s what we are there to do in addition to connecting members to do business with each other and increase their revenue through the programs we have in place and reduce the costs to operate through our regulatory agenda. It would cost millions of dollars which we do not have to develop a tool that member companies could sell to their customers, in addition to a staffing problem to manage such an app. It just doesn’t make sense for us. It is not our job. Our job is to make sure this industry prospers through reducing all the regulatory requirements and challenges we face each day. And could you imagine the liability? That would put undue liability on the hands of the NLA.
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Q: What can operators do in the service and technology areas to be more competitive with TNCs?
A: We all have to up our games. We need to provide the best training money can buy. That means training our drivers to be chauffeurs. And we have to train exponentially on safety. It all boils down to details; how to accelerate and brake a vehicle, the way you sit in the car and talk to customers. You are always developing business relationships with your clients in the back. That’s why they use our companies. We provide the safest, most customer service-oriented transportation in the business.
The technology is out there. People will need to figure out what’s best for their companies and go with it. If you are not happy with the way you are operating, make changes that will let you succeed further. We need to keep putting pressure on all the software providers in this industry to help us be unique in the marketplace. We should be angry with ourselves for not providing what we had no idea our customers wanted. You have to do something. Operators no longer can just sit on their hands and think it will get better. Let’s keep going. We’re all busier than we’ve ever been and it’s hard to think about the future. But I am confident that with the right approaches, there are many rewards ahead.
SIDEBAR: About Pure Luxury Transportation
Pure Luxury Transportation owners Gary and Jennifer Buffo gradually transitioned their limousine company, founded in 1991, into a majority-fleet luxury bus service, including all types of mini-buses and Prevost motorcoaches ideal for commuting, business runs, retail/pleasure excursions and destination weddings throughout the San Francisco Bay Area and northern wine valley regions. The company runs 20 Prevost H3-45 motorcoaches bought over a 26-month period, at about $650,000 each. Most buses are kept in Foster City for shuttle and commuting contracts related to Silicon Valley companies. The buses are on seven-year payment plans and can run 15 years or longer if well maintained.
The Prevost H3-45 charter bus is considered the most luxurious and highest rated motorcoach on the market. The soft-textured but lumbar-firm reclining leather seats with footrests are equipped with electronic outlets for all types of tablets, smartphones and laptop computers. The 57-passenger cabin has airline-style overhead bins, woodgrain floors and more passenger legroom than economy class seats on an airplane.
2019 LCT Video Education Series: Wendy Kleefisch has a heart for others, and it shows in every aspect of her business.
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