Survivors of the Past 10 Years Reflect on Industry Changes

LCT Interview
Posted on March 1, 1993

Change is one of the great constants in life. And the limousine industry has had its fair share.

Operators have witnessed what was once a boom in business turn into a trickle. They have seen the demand for their limousines taper off while clients clamor to get into sedans, vans, and minibuses. And, most importantly, they have seen an industry in its infancy turn into a respected profession.

The past 10 years have seen many companies come and go. Those operators who survived have come out much wiser with much healthier businesses. To co­incide with its 10-year anniversary, L&C polled a group of industry vet­erans to get their views on what the past 10 years had to offer and this is what they had to say...

George Jacobs, American Limousine

Our industry has changed dra­matically. We are no longer looked at as either “fat cats” with mega- bucks or as “gypsies” who are out to gouge and cheat. Instead, our industry has become known as a solid, essential ingredient in every­ day business. We are not only reg­ulated in most places, but self-reg­ulated as well.

The future looks terrific! We have trimmed the fat from many aspects of our industry, educated the pub­lic, adjusted to the changing needs of our clients, and consolidated our forces to give individuals a much better chance of survival than ever before. My biggest concern is gov­ernment regulations which can be strangling. Let’s fight hard to re­ move the onerous ones and work within the good ones.

Rick Anderson, Carey Limousine New York

I have to believe that the most noticeable and significant change in our industry in the past 10 years has been a marked increase in the level of professionalism. Limousine companies are now seen as busi­nesses run by professionals who are in the industry for the long term. The “seat-of-the pants” operation has been replaced with a comput­erized system that starts with an automated reservation and re­ mains in the system, in many cases, right through to the general ledger. Hand-written trip tickets have been replaced by automated communication systems between dispatch and the vehicle. As a re­sult of this change, our Industry has attracted a more professional work force from management right through the chauffeur’s ranks. In the eyes of the public, our industry has come of age.

Bruce Cirlin, Gaines Service Leasing Corp.

It hardly seems like 10 years. There have been so many changes, yet to me the big story is the rise and fall and rebirth of the limousine industry. Ten years ago, we were all on a rocket ride. Growth seemed to have no limit. Then, the economy flattened out and our industry bottomed out. We lost many coachbuilders, livery operators, and customers. But, what strikes me is the resilient attitude of the survivors. Our industry-wide struggle of the past several years has ended. Growth and optimism have shown their faces. Yes, we have been through a lot, and ail of the problems have not totally abated, but the roller coaster we call the limousine industry is most definitely on an upswing as we enter 1993. Best wishes to L&C on its 10th year.

John & Camille Patti, Buffalo Limousine Service

Having been in the limousine in­dustry for nearly 35 years, we have experienced many changes. One of the more significant changes came in the mid- 1970s with the in­troduction of the stretch limousine. In many cases, the stretch became a problem becauseof its higher cost versus the factory formal limousine, the many variations, center bar, side bar, and different lengths. This caused greater ex­pense in marketing and confusion as to what type could produce the most return for us. Yet, on the other side of the coin, it expanded our market to include almost every segment of the general public.

We predict the industry will con­tinue to evolve. Small one- and two- car operations will find it more diffi­cult to compete and be profitable. Our industry as a whole will be­ come involved in many legal en­ counters with the taxi industry. This will be due to the fact that most of our newly acquired point-to-point business is coming from clients who can no longer depend on cabs to deliver them the service they require.

We wish L&C a very happy 10th anniversary and thank the maga­zine for the commitment it has made to our industry over the past 10 years.

Richard Guberti, Excel Limousine Service

First off, I cannot believe it has been 10 years already. Time surely flies even when you are not having fun. This industry expanded great­ly with the extravagant life styleofthe early 1980s. That extrava­gance led the way to the popularity of the stretch limousine. The stock market crash, 60-month leases, poorly built limousines, and oper­ators with cut-rate prices and no knowledge of their bottom line all contributed to the reduction in members our industry saw in the latter part of the 1980s.

The past two years, 1991 and 1992, will be remembered as sur­vival years for our industry. Travel was affected by a poor economy and the closing of many airlines. The Gulf War showed many corpo­rations that they could cut travel, save money, and still get the job done. All these factors meant less business for the limousine indus­try. The amount of coachbuilders building cars was reduced by over 50 percent. Our industry saw many companies close, merge, or reorganize. Companies saw the all need to cut operating costs at every opportunity.

In addition, cities, states, and municipalities all jockeyed for the chance to regulate our industry. The federal government refuses to exempt us from severe Gas Guzzler penalties that further restricted our opportunity to buy stretch limousines. Despite this, I believe the fu­ture for our industry looks bright. Those of us left in the industry have received an education on how to run a business in tough times. Many have found that they could do more with less people, thus cutting down on their expenses. In addition, com­panies are diversifying their fleets with an eye toward supplying total transportation.

Business travel and specifically sedan business seem to be on the upswing. So called “executive transporters” are gaining popularity among corporate clientele seeking comfort and luxury while wishing to avoid the unfortunate negative per­ception stretch limousines have with the general public—including many of their stockholders.

In defence of the stretch limou­sine, let me add that they are being better built by the remaining quali­ty-conscious coachbuilders. One need only walk around the show floor at the recent L&C Show to see that the quality has already im­proved. While we all realize proms, weddings, and night-on-the-town work will always be in vogue, those operators relying solely on the leisure business would be extreme­ly wise to make sure not to buy too many vehicles, work together with other operators in their area, and above all make sure they charge enough on these types of runs.

Cut your cost, set your price, get your money quickly without compromising your high standards of quality, keep you employees and clients happy, and the future will be rosy indeed!

Thomas Mulligan, Metropolitan Limousine

One of the most important changes to occur within our industry is the formation and gradual maturity of the National Limousine Association (NLA) into what it is today. The NLA has done much to legitimize the industry over the years to not only limousine operators themselves, but to government regulatory bodies and, very importantly, to the insurance industry.

As far as time future is concerned, there is a great potential for success fir those limousine operators who understand customer service. There will always be a demand for service.

We wish L&C continued success. We have always appreciated its efforts over the past 10 years and have found many informative articles to both expand our knowledge of the industry and familiarize us with both coachbuilders and products.

Harold Berkman, Music Express

As a company that caters to the corporate traveler, I would say the biggest change in our business over the past 10 years has been the conversion from the limousine to the sedan. While originally the purpose was to be low profile, it seems to me the ultimate reason was to cut travel costs. In addition to this transition, the custom van has also increased in demand. Practicability seems to have arrived in our business.

Larry Willwerth, Carey Limousine Boston

Upon looking over the past 10 years in the limousine industry, one consistent factor stands out from years past-change. The most successful livery businesses have done the best job in identifying and dealing with changes in the 1980s. The most noted changes in the limousine industry over the past 10 years that I see are:

  • Ascendancy of “black cars” in the marketplace. Although these vehicles have increased completion and increased the number of available sedans at lower prices, they have increased the private livery customer base by exposing more customers to private transportation in a declining limousine market.
  • Change in vehicles. Ten years ago, less than 25 percent of the private livery limousine business was in sedans. Now, less than 50 percent of the private livery business is in limousines. Corporate customers prefer a low-key vehicle and travel with less fanfare. Limousine services now offer a more complete range of vehicles besides sedans and limousines. Vans and minibuses provide a cost-effective alternative, have opened new markets to us, and are an integral part of our industry.
  • Impact of technology. Cellular phones and automatic data processing have revolutionized communication, responsiveness, and standardization of chauffeured transpiration. Customers demand any new technology as soon as it becomes available.
  • Increased local competition. The prosperity of the 1980s, the ready availability of financing, the proliferation of coachbuilders as well as increased public use of limousines has significantly increased the number of limousine companies. This places a strain on the local competition. Many of these businesses are not around in today’s economy because they did not follow-through on consistent service and practice good business techniques.
  • Networking. The growth of limousine networks, like Carey Limousine and Dav El, have ensured a standard of service for the corporate traveler worldwide and have increased the proficiency, responsiveness, and professionalism of the limousine industry.

These changes will continue into the 1990s. I am optimistic about the future as the lessons of the past 10 years have made us a more professional, proficient, and efficient industry. If we listen to our customers more, give them what they need, and learn from our mistakes, we will be ready for the changes to come and will prosper.

Al Golub, Chicago Limousine Service

As an industry veteran of 25 years, I believe there are several changes in the past decade that have redirected the limousine market.

The most important change the industry saw was when operators converted 10 years ago from treating chauffeurs as employees to treating them as independent contractors. However, in the past two years, the industry has been slowly reversing from using independent contractors back to working with employees. This has benefited us with control of our chauffeurs and accountability to our clients. Another important issue has been the change from leasing versus buying because of the increased cost of vehicles.

Marsha Tortora, Empire Coach

The economics of our industry is a reflection of the overall financial condition affecting our nation over the past years. The surviving coachbuilders are those who built a good product at a fair price, did not get trapped by extreme debt, and built only what they needed so as not to further flood the market. Fortunately, those of us who survived are now the cohesive force behind a stronger industry that is more concerned with quality, safety, and improvement.

Pete Corelli, Lakeview Custom Coach

In the past 10 years, the industry changes have been enormous and all of the changes very important for the growth of the limousine industry. In 1985 L&C asked me what I though would be the maximum length of limousines. I said 60 inches would be the perfect size. Boy, was I mistaken on that prediction.

The NLA was ineffective in the mid-1980s. Now, it has grown into a reorganized, powerful voice of the industry from Washington, DC all the way down to the local level. It has made major strides with the IRS for operators who use independent contractors. It has spent many hours trying to teach this industry how to do business, and the NLA is still growing.

The coachbuilders have also come light-years in the past decade in regard to the safety of their coaches and production efficiency. The Limousine Industry Manufacturers Organization has tried very hard to make sure its members comply with all Federal Motor Vehicle Safety Standards. It also worked very hard with Cadillac and Lincoln to try to put the best product on the market for operators. Cadillac and Lincoln have also helped with their Master Coachbuilder and QVM programs, respectively.

I think the biggest change I have seen is that we deal with more educated buyers now on both sides of the industry-from the customer who rents a limousine to the operator who buys a new stretch. The educated buyer is where the integrity of the industry is maintained.

It is the efforts of the NLA, local associations, major coachbuilders, Cadillac, Lincoln, LIMO, L & C, and the L&C Show and the operators who have made the biggest change in the industry. I believe the change in the next 10 years will not be as influential in changing the industry as the past 10 years were.

Stephen Spencer, London Towncars, Inc.

The most important change in the limousine industry, at least in New York City, occurred after the stock market crash of 1987. At that time, it became important for corporate accounts to avoid ostentatious displays and the demand for chauffeured sedans exceeded the demand for limousines.

Although limousines are still in demand for weddings, theaters, and out-of-town visitors, the corporate customer uses a limousine only when it is the most practical vehicle for the occasion. This trend may change under the Clinton administration if the inaugural celebrations are any indication of the Clinton style.

However, there is a strong trend towards down-sizing large corporations-and with it a reduction in some of the luxuries provided to top management. Stretch limousines are an obvious target for elimination. The busy executive and frequent flier still expects and deserves top service and a safe, comfortable ride which can be provided using a sedan.

The most alarming development for the immediate future is the trend toward local licensing ordinances passed in retaliation for regulations passed by other localities.

Scott Solombrino, Dav-El Chauffeured Transportation Network

There are three areas of our industry that have gone through dramatic changes throughout the past 10 years. The first area is the car itself. We have seen a change in which company supplies the majority of base units to the industry. Keep in mind, the most valuable tool for any successful livery operation is a vehicle that is easily maintained and consumes the least amount of unbuildable down-time.

The second area of change is in the technical advances that have been made in both communications and computer equipment. As long as people in the industry can use these technological advances in such a way as to not create impersonal levels of service, then our industry will be able to reach the same heights as that of the car rental, hotel, and airline industries.

The third and most important change in the past 10 years has been the shrinking of the entire world. The importance of worldwide networking organizations, such as Dav-El and Carey International, have greatly enhanced the overall usage of chauffeured vehicles throughout the world. The world wants centralization and the next 10 years (as well as the past 10 years) will be very important for the development of worldwide networking organizations.

The question is: “Will our industry follow the pattern of the car rental industry, where 10 major players have dominated the entire market. Or will the individualism that has made so many of us so successful over the years be able to carry the smaller operators through the next 10 years?” I believe we are in a personal service industry and for that reason the individual small operator will always survive and dominate this very personal industry. I hope for the sake of all of us that I am correct.

Kit Dickman, L.A. Limousine Repair

Ten years ago, the limousine industry was in its infancy. Builders were few and very inexperienced. Today, quality is much better-in some builders, almost factory quality. Lincoln and Cadillac have helped this greatly with their QVM and MCB programs.

Harder economic times have forced many businesses to quit. The owners today are very dedicated to this industry and are more professional than just a few years ago. I believe 1993 will be a good growth year for the limousine industry.

Related Topics: Bruce Cirlin, Buffalo Limousine Service, Carey Limousine Boston, Chicago Limousine Service, Dav El Chauffeured Transportation, Empire Coach, Excel Limousine Service, George Jacobs, history of the limo industry, John Patti, Lakeview Custom Coach, Larry Willwerth, London Towncars, Marsha Tortora, Metropolitan Limousine, Music Express, Pete Corelli, Richard Guberti, Rick Anderson, Scott Solombrino, Stephen Spencer

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