Was the reaction too harsh? Or an important part of what is supposed to set luxury transportation providers apart from TNC drivers?
Vince Wolfington and his management team are arguably the most successful limousine operators in the world. When Wolfington became chief executive officer of Carey Limousine in 1973, the company owned limousine operations in nine cities and was loosely affiliated with limousine services in several others. Since then, Carey Limousine has expanded to over 300 cities in 60 countries.
Carey’s growth is a triumphant success story. Wolfington and his management team have pioneered in the development of large scale management and marketing systems. Today, Carey’s volume of worldwide business is unequaled in the industry.
Despite war and recession, Wolfington considers today’s market for chauffcured transportation to be as strong as ever. He feels, however, that the demand for conventional stretch limousines is weakening while corporate travelers search for less costly and conspicuous alternatives.
Part of Wolfington’s answer to this changing market is a new 28-inch formal limousine that is currently being manufactured for Carey by National Coach Engineering in Port Sanilac, Ml. Another important theme for Wolfington is the need for limousine operators and industry associations to anticipate industry changes and respond to them more effectively.
Limousine & Chauffeur: What is your background in the limousine business?
Wolfington: I originally got involved in the limousine business in 1969 when I invested in a company called National Executive Services which was founded by Don Dailey who is now the president of Carey Limousine. Carey of New York acquired National Executive Services in 1971. At that time, I went from being an investor in National Executive Services to being an investor in Carey.
I got involved with Carey on a fulltime basis in 1973 and have worked primarily on the operational and financing side. I’ve been involved in the creation and acquisition of our subsidiaries.
L&C: How did you get your operational knowledge?
Wolfington: The Careys were very knowledgeable, and they had people who were very knowledgeable. In 1973, Carey New York was going through some difficult times, I got involved as CEO and Don Dailey became president. His responsibility was to oversee development of the licensing system and also the marketing of our services. I took on the responsibility of overseeing the operations that we owned as well as the financial direction of the company.
Carey had operations in Boston, New York, Washington, Denver Detroit, Chicago, San Francisco, Seattle, and Los Angeles. I first learned about the industry by going into each of those cities and visiting all of Carey’s competitors to find out what the business was all about and what they were up against. What you really had in each city was a bunch of small operators competing for the local market which included weddings, funerals, business, and leisure travel.
There has been a lot of turnover among these companies because many enter it thinking that all that glitters is gold. This is an easy entry business, but it’s a very difficult business. The operation of a limousine business is labor-intensive, it’s capital intensive, and it’s quality intensive. They are three of the toughest things to manage in business.
L&C: How would you describe the growth of the industry?
Wolfington: Since 1973, the industry has grown tremendously, and I think there’s been continued growth in the demand for car and driver service right through 1990. But, in the past few years, there’s been a dramatic shift away from the limousine to sedans and vans. It’s been happening in New York for years and now you’re seeing it across the country. We think the demand for stretch limousines will continue to decline, but we think they will always be a part of the market.
L&C: Is the term “limousine industry” still appropriate?
Wolfington: The word “limousine” is really a misnomer. This really is the “chauffeured car for-hire industry.” “Livery” is a good word for it. We’re really more in the service business than the transportation business.
Before, when people used a limousine, they were hiring a luxury car and a professional driver. Today, what they’re hiring is a package that consists of a reservation capability and all the information that goes with it about the customer and their preferences. They’re hiring the coordination of many cars and drivers, and they’re hiring a billing service. So, the whole basis of the business has been broadened.
This is not different from most travel businesses in that you start out providing a specific service and, as people get accustomed to using it, their needs trigger different kinds of demands that you have to respond to. I think our industry has been very service sensitive and many people have responded to demands in the marketplace.
As a matter of fact, I think a characteristic of the industry is that it’s more passive and responsive than it is active. I think one of the changes I’ve seen in the past five years is that it’s starting to think as an industry and not just as a bunch of individual businesses, and it’s starting to anticipate changes and problems.
I think that change has been threefold... Number one, I think that the members of the industry have seen the need to act like an industry and not just act like individual companies. I think the National Limousine Association, for instance, is a good example of that. The NLA is the first group that seems to have really taken a businesslike approach to dealing with issues. I think that’s a sign of maturity.
The second thing that’s happened in the industry is that, during the years since Cadillac stopped making its limousine, the industry has been in limbo from an equipment point of view. We have relied upon coachbuilders to provide equipment that they wanted to sell rather than demanding what our customers were looking for. What happened was that the customers reacted over time and, by their actions, showed they wouldn’t buy a service if it did not give them what they were looking for.
There’s a real need for a limousine for business and practical purposes. What we did this year was design a limousine which is really a smaller limousine or an extended sedan. What we were trying to do was come up with a car where you feel you’ve got plenty of room without getting a car that looks like a big, ostentatious stretch. It’s a 28-inch stretch, but it is not going to look much bigger than a Town Car. We’re introducing it in our operations this month and we think it’s going to meet a need in the marketplace.
The second key thing in our industry is the Lincoln/Mercury QVM Program which has set quality standards for the coach-makers to adhere to. I think this has made the most important contribution to our industry since Cadillac stopped building its limousine.
It’s important because it means that the person buying the car is buying more value which is ultimately going to improve the car’s resale value. The limousine industry has paid too much for too little in the cars the coachbuilders have provided to them. Anyone who pays more than $43,000 for a stretch limousine of any type is overpaying.
The reason the coachbuilders are in trouble today is because they overpriced the cars, the industry bought them on that basis, and they can’t sell them and get their money out of them. They’re forced to hang onto them for a longer period of time and this has slowed down the purchasing cycle.
The third key thing that’s happened in the industry is that there are now many companies focusing on what customers are looking for instead of just grabbing whatever business they can with the equipment they have. I think you have more people willing to adapt for the customer and I think that’s going to improve overall quality in the business.
Many of the players in the industry are maturing. When they get to the point of building a business, and not just surviving in it, they start thinking of ways to do things better.
L&C: Do you see more companies networking with people in other cities?
Wolfington: I think that’s a double- edged sword. There is benefit in referring business to one another. The original Carey system was put together through a loose affiliation of businesses, and I think there has always been a recognition that if you can reach out to your customer and promise to take care of him in another city, it’s good business to try and do that.
What’s happened is that, today, people are traveling in and out of more cities, so it’s more worthwhile to think about doing that. The risk is...promising it and not delivering it.
If a company gets referral business on a day when they are busy, and farms it out, and it’s not handled properly...It ends up hurling both companies, but especially the original company referring the business who could lose a good customer. So I think there’s a need out there but meeting that need is easier said than done. You’ve got to meet it consistently, and the incentive of each of the players is not always the same to do it.
When I got involved with the company, one of the decisions we made was to concentrate on serving companies that were national and international in scope, and we were not necessarily going to concentrate on competing with all of our local competition. We service local customers, but we didn’t want to have to depend on the growth of the local market. We felt that we ought to be selling the system and not just selling any one company within the system.
The benefit that gave us was that, when companies are competing against each other locally, the thing they try and sell most is price. When you get into selling price rather than service, you’re working a formula which is tailored to failure and I think this has retarded the growth of the industry in general.
I think the companies that have grown have been competitive on price, but they have really put their emphasis on giving more service and belter service. When I say more service, I mean reaching out and providing more than just a car and driver.
L&C: But isn’t exchanging business with other cities a logical step for someone who’s reached a certain point?
Wolfington: If you’re asking me if it’s the logical step, I say yes. If you’re asking me if there’s a lot more of it, I don’t know.
L&C: Isn’t it good for the industry since it expands the scope of service available?
Wolfington: Yes, it expands the industry and gives a sense of this being a national market served by national companies rather than regional ones. I think a good analogy is the rent-a-car industry. For years, there were a lot of independent rent-a-car companies who developed loose affiliations before consolidating. In fact, that’s what Hertz and Avis were originally.
People are beginning to think about our business as an industry because it is international in scope and it has credibility. When the Ford Motor Company says they think it’s important to come out with some quality standards for the use of our product by coachbuilders, what they’re doing is giving their seal of approval to the industry. Otherwise, why would they waste their time bothering with it? I think that’s sort of a testimony that something’s different today than it was a few years ago.
L&C: What is your outlook for the industry this year?
Wolfington: My outlook is that 1991’s going to be a good year. It’s going to be a tough year, but there’s business there and it’s going to be a fundamentally sound year.
In 1990, every one of our company-owned operations did as much as, or better than, the previous year. I think our licensees in major cities had the same experience. 1990 was a recession year, but we didn’t get hit. It may hit us in 1991, but we hope not. The question is, why not?I have the answer to that but I don’t want to discuss that in an interview.
L&C: What specific comments would you have for operators?
Wolfington: I think you’ve got to think about fundamentals such as the quality of your equipment and service to your customer. I think the way you see your way through difficult times is by going back to fundamentals and making sure you take care of the business that you have, When you are offering a guy a stretch limousine when that’s not what he’s looking for...that can be the catalyst that triggers him to leave. Each time you lose business, the industry’s going to decline.
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