Industry Research

First Ever Limousine Survey Benchmarks Industry

LCT staff
Posted on January 1, 1984

With the need for greater understanding of our readers' needs and attitudes, Limousine & Chauffeur embarked upon a nationwide survey of limousine operators. Surveys were mailed to a random sampling of our readers. By the cut-off date, we had received 147 responses.

Looking at fleet size, 49% of respondents had between one and five vehicles, 38% had between 6 and 15 vehicles, and 12% had fleets of 15 or more.

Most of our responses came from owners of limousine service companies -- 91%. Almost one out of 10 companies has begun service in the past year (8%), though the majority of companies have been in operation longer than three years. There appears to be many newcomers entering the limousine business.

The typical fleet consists of 8.8 vehicles. This breaks down to an average per fleet of 2.8 stretched limousines, 4.0 formal limousines, 1.6 vans, 0.4 "other” (station wagons, for example).

Assuming there are about 3,500 limousines operations, the livery fleet universe totals 30,800 vehicles. Of this, there are nearly 10,000 stretches in use and 14,000 formal limousines in use. Additionally, there are approximately 5,600 vans being used in livery operations.

Clearly, most vehicles are owned rather than leased, those figures being 86% and 14% respectively. Our editorial offices receive numerous calls concerning leasing. If the banking and savings and loan institutions become more involved in our field, we expect the leasing operations to grow in the near future. While only 14% of the vehicles are leased, 60% of our respondents indicate that they have considered leasing.

Over 10,000 vehicles are anticipated for purchase in 1984. Limousine fleet operators expect to purchase an average of 2.1 limousines per operation and 0.7 vans per company. Most limousine purchases per fleet are projected for the West, with 2.5 per fleet, with the Midwest following closely with 2.3 limousines per fleet.

With the average fleet consisting of 8.8 vehicles, the average operation employs 5.6 full-time chauffeurs and 7.0 part-time chauffeurs. Curiously noted is the substantially greater number of full-time chauffeurs in the Midwest (7.3) compared to those in the West (5.5) and the East (4.7). It may be that drivers work longer hours in the East as the average Eastern fleet utilized full- and part-time chauffeurs, compared to those in the remainder of the nation.

While the average fleet booked 5.2 charters per day, some regional differences prevail. The Western and Eastern Fleets average 3.0 and 3.9 charters per car per day, respectively, while most Midwestern fleets average 6.9 charters per car per day. This could indicate more airport runs or other short charters.

The average charter rate is $31.79 across the country, with regional differences too little to mention.

With computers becoming the watchword for nearly every industry, the survey found most operations without computers. Typically, the larger fleets indicated the use of computers.

The average cost per mile for operating varied from region to region. Those in the East showed an average of 62 cents per mile; the West averaged 71 cents per mile, and Midwestern operators indicated 80 cents per mile. The national average chalked up 69 cents per mile.

Looking at the maintenance aspects, most operators either self-maintained their vehicles (57%) or else have their work done at independent service centers (54%). Only 22% of the service work is done at automobile dealerships. As more dealers enter into the limousine marketer, we might expect this figure to rise.

Our respondents were asked to rate certain items on their importance to the overall scheme of operations. Those items were competitive charter rates, vehicle maintenance, used car disposal, driver morale/appearance, price of new limousines and quality of new limousine.

A clear majority indicated driver morale and appearance rated as their number-one concern. Vehicle maintenance rated number two, with new limousine quality following closely behind. Tied for fourth place were competitive charter rates and the price of new limousines. Undoubtedly the least important matter was used vehicle disposal.

According to region, maintenance rated second in the East and Midwest, probably due o the extreme weather and road conditions. Maintenance was rated third in the west with quality placing second. Competitive charter rates scored ahead of new unit price only in the Eastern sector possibly due to the competitive nature of the business in metropolitan New York.

Sixty-eight percent of our respondents indicated they have communication equipment in their vehicles, 32% indicated they lack these devices. Of those utilizing communication equipment, 58% use beepers, 26% have base station/two-way radios, and 16% use mobile telephones.

In regards to advertising, 78% of the service operators surveyed indicated the Yellow Pages as their number-one medium. This was followed by word of mouth for getting the message across, with 59% relying on their reputations. Newspapers received 8.3% of the operators’ primary advertising dollar, local magazines received 7.5% and 16% went to other media.

The survey indicates an established core of veteran limousine operators with new competition entering the field. It could be that many chauffeurs climb the ladder to begin their own businesses. Luckily, the marketing for limousine rentals has grown over the past several years, allowing new operators to enter the business. With our projection of 7,350 stretched and formal limousines to be purchased in 1984, coach-builders can anticipate a strong and healthy year.

As companies grow, so will their sophistication. We look for more equipment purchases for better vehicle utilization. Computers will play a major role in future business to handle accounting, reservations and more efficient use of equipment.

We thank our respondents for taking time to answer our questions.



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