North Carolina’s H.A. Thompson who retired from his company last year at age 85 reminds industry fleet owners of time-tested strategies.
Chicago Limousine, operated by brothers Al and Harold Golub, is among the most successful privately owned livery services in the country. In business since 1968, Chicago limousine withstood the impact of a devastating garage fire in 1984 and has since rebounded to become a thriving 25-car service Limousine & Chauffeur contributor Rich Ramis recently talked with Al Golub about Chicago Limousine and the state of the industry in Chicago.
Ramis: What first made you want to go into the limousine business?
Golub: Originally, I was in the funeral end of the limousine business and I had an opportunity to get a job in what we in those days, in the late sixties, called a custom limousine company. In Chicago, they used the term custom limousine company instead of funeral livery. I had an opportunity to go to work for a company called Union Club Motor Livery. It had nothing to do with unions.
The company had been in business for something like 45 years. There were chauffeurs working there who had been working there for 35 and 40 years. I had about five or seven years experience through the funeral industry. And we had about 15 cars.
Ramis: I have a copy of an old newspaper column from ’67 with a picture of a Union Club Motor Livery Lehmann-Peterson, with a $9.00 an hour sign.
Golub: That’s exactly correct. As a matter of fact, talking about Lehmann-Peterson, we knew George very well I used to personally drive him. We were involved in some of the original ideas of what a chauffeur would need in a custom car. So, the gentleman that owned the company had other interests and Union Livery ended up folding in 1970.
On June 28, 1968, I started Chicago Limousine Service with my brother Harold and our partner Doc Savage who has since passed away.
Ramis: When you started in the business, what was the state of the limo industry in Chicago. What is the state of the limo industry now. And have you helped to shape it?
Golub: The history of licensing in Chicago has had an important influence on the limousine industry here. It’s very different than in other parts of the country. The licensing procedures in Chicago go back to 1947 when the fellows came home from the war and there were no jobs. The city of Chicago got major taxi companies to release 923 licenses. Taxi licenses. How they determined that number, I don’t know. After those licenses were issued, they created something called a livery license. They released 1,800 livery licenses. In the mid-50’s, the ordinance and the rules changed, and they said that in order to make your license saleable, you had to incorporate. In those days, perhaps fellows didn’t have the dollars to do that, or perhaps they didn’t understand, and as those fellows passed on, their licenses also died. Today there are only 326 city livery licenses.
Ramis: You are in one of the few cities in the country where growth is restricted. How do you feel and how do you work around that?
Golub: We are the second largest city in the country but, in limousine sales, we are number five. We have Washington above us. And LA above us, and South Florida above us, and we are just about even with Dallas-Ft. Worth. As the country’s second largest city, we should be able to use more limos on the street. You can’t develop the market without having them on the street.
Ramis: Would you like to add more cars and, if so, would you be able to?
Golub: Could we do that? Yes, we could do that if, in fact, we bought out another corporation.
Ramis: Well, that’s a fair amount of restriction then. Because you wouldn’t have to do that in New York City.
Golub: Well, the way the ordinance is today, and there are some modifications being presented to the city council in the near future, and I’d be more than happy to give you a copy of what we recommended to the city, but livery licenses are not, in fact, restricted. Contrary to what some people within the state feel, livery licenses within the city of Chicago are not restricted.
The ordinance reads that, after a public hearing for need and necessity, that the city could determine and issue more licenses. This is contrary to the taxicab ordinance which reads that there shall be 4,600 taxicabs, period. You are correct in pointing out that if I wanted to add more cars, I can’t. I would have to go in and buy somebody out.
Is that a restraint of trade? Is that restrictive? Obviously it is a regulation, but I don’t know if it is a restraint of trade. I believe it has been tested in court. The city says that they will issue new licenses if a hearing is held in which a public need was proven to exist but, to this date, I’ve not known that to happen.
Ramis: Would it be poor judgment for you as an operator to go to the board asking for ten more licenses knowing that it would probably open a can of worms and everyone else would get in on it?
Golub: I don’t want to make this interview into a legal issue because I’m not a lawyer, but I’ve had a lot of experience at this. The section relating to additional taxicab licenses is based on a percentage of what you have got already. Therefore any additional taxicab licenses that were issued today would go by percentage back to the people that already have them. My interpretation of the ordinance is that it also holds for the liveries. So therefore, if additional livery licenses were to be issued, our opinion is that we would end up with more licenses based on a percentage of what we have got now.
Ramis: How many cars does Chicago Limousine run now?
Ramis: What is-the breakdown of your vehicles?
Golub: We have 24 Cadillac stretches. And one Lincoln stretch. Also the ordinance in Chicago, as you may or may not be aware, states that you cannot use anything but a black or blue-black car.
Ramis: Well, that’s been ten years.
Golub: No, the ordinance still reads today that the cars can only be blue-black or black. However, the commissioner’s discretionary powers allow him certain latitudes within the rules. The Commissioner’s rules also state that you cannot use a foreign vehicle. We have recommended that foreign vehicles be allowed, as liveries. We have also recommended that any color be allowed within the city of Chicago.
Ramis: Let’s go back to the previous question. When you started in the business, what was the state of the industry here in Chicago, and what is the state of the industry now.
Golub: The difference between then and now, is very simply that there is more money around today. The cars cost more now, but everything being relative, there is more. There is more entrepreneurism today than there was then. I think that people were satisfied to sit back and work for somebody. In the late ’60’s the livery industry, I believe, was a very unique tight, small industry. Only people with money rode in limousines. Today, the average guy could ride to the airport in a limousine for not much more than a taxicab ride. And certainly much more comfortably than in a taxicab. The limousine industry has grown tremendously within the seven county area. There are probably 2,000 cars within a seven county area of Chicago and I would guess that there were not more than eight hundred cars, if that, in the late sixties doing what we called custom livery service. I am not really referring to people who do airport transfers that are really glorified taxicabs. I’m talking about people that do “as directed” runs.
Ramis: Have you ever lowered your rates in response to more competition from suburban operators and others? Have you been sticking to your guns or do you find that you are sort of joining the crowd out of necessity?
Golub: Oh, no. We’ve always stuck to our guns. We’ve never lowered our rates. Through the years we have continued to raise our rates. We have never group loaded, we’ve never share-rided. We’ve never done any of those things. If we have seven people coming in off a flight at O’Hare, going to the same designated area, there are seven cars there. We have recently started a shuttle in the downtown area picking up people in a prearranged order to take them to their office. We find that, even though we are charging a reduced rate, they do not want to share the car. That is the only promotional thing that we have ever done. We tried it last winter and we are trying it again this winter. We’ve maintained quality vehicles and we have maintained quality in our chauffeurs. If our chauffeurs do not come to work in a black suit and a white shirt, black tie, black shoes, and in the winter a black top coat, and a chauffeur’s cap (which today we buy and sell to the driver), then they don’t work.
Ramis: Chicago has always been the cream of the crop of the limousine industry in Northern Illinois, but it seems like a lot of Chicago companies have taken a “If you can’t beat ’em, join ’em” attitude toward the suburban companies. There seems to be more rate-cutting, use of older cars, and things like that. Very few companies have held onto their standards. Is it that tough?
Golub: Well, there is no question that when somebody calls us and we quote fifty dollars to the airport, and somebody in the suburbs, who may be a dual operator and have a city license, quotes $35, it definitely has an effect on us. We have decided, however, not to try and compete with those kinds of companies. This gets into something that we have not touched on — I am totally against using driver-owners. I am totally a company man. One of the reasons the city liveries have had to maintain the rate structures that they do is because, according to the ordinance, we cannot lease a vehicle. It must be owned by the company and therefore to the best of my knowledge, most of the city livery companies, and there’s really only five or six of us in the downtown area, own our equipment and all of the drivers are on commission. However taxes and workman’s compensation are paid on the drivers. If the question is whether I’m happy having to pay all of those taxes and workman’s comp...No I’m not.
I don’t want to be an attorney once again but if, in fact, the driver is under your control and he is supposedly signing a document saying that he is a sub-contracted chauffeur, and he works for X-company, and Y-company calls him or sees him on the street and asks him to make an order for them, we know he is not supposed to do that. Therefore, the way I understand the law, he is in fact an employee and, in our opinion, if something happens to that driver on the road, you are responsible for that driver, whether or not he has signed a document saying that he is a sub-contractor. If he cannot be a real subcontractor, as we know a subcontractor to be in the construction industry who may work for four or five general contractors, then he is not a genuine subcontractor. The point is that we cannot compete with somebody who owns his own car, and we cannot compete with somebody who is paying a dispatch service a percentage. Obviously they can operate at a lesser rate because they are getting a percentage. They are definitely a force to be reckoned with.
Ramis: They’ve brought companies down to their knees. They have sprouted a whole new industry. Yet you have been able to maintain your standards haven’t you?
Golub: That’s correct. It is not that some of these companies don’t have big fancy stretches because, today, most everybody does. We have been able to maintain those standards because of the control that we feel we have over our drivers. The ability to pick chauffeurs that are personable. There is no question in our mind that the chauffeurs are the key. The number one contact is, obviously, the dispatcher. With the customer, the dispatcher is the first one. Second comes the chauffeur. We have not felt any decrease in business through the years. We have done nothing but increase the volume of business that we do. However, there’s no question that it is a little difficult to explain to somebody who wants a ride to the airport that we charge $50 and while other companies charge $30 or $35. What’s the difference? It is a pretty hard thing to sell. The only answer we have is that our equipment is as good or better, and we will be on time. We have tried to do the little amenities — every car that goes out in the morning has got the Wall Street Journal and the New York Times. We do not charge for tolls unless the tolls exceed what the tip would be, or it is an out-of-town trip. Those are some of the things that we have tried to maintain. One of the other things is obviously where you are located. We’re located in the downtown area of Chicago. Most of our business emanates from either the airport or downtown Chicago. We are 20 minutes from the airport and five minutes from the downtown area or the Gold Coast area. So, bearing that in mind, state license or suburban livery vehicles are out in the suburbs. Their basic business is taking people back to the airport. There is a need for that. However, the key to our business, and I don’t want to sound arrogant, but the fact of the matter is that this is still basically a small business and my brother Harold and I are here every day. He handles the books and the numbers, and I handle the drivers and the cars and the dispatchers. Knowing your customers and their quirks and needs is also a very important part of our business.
Ramis: You’ve never lost touch with that in spite of your growth?
Golub: I really don’t feel we have. First of all, my brother and I don’t sit in here all day and not answer the phone. We’re on the phone and we do have a personal rapport with the major accounts. I wouldn’t want be forced to say that we know every account, however, when somebody who has been riding with us for 18 years calls and wants something special or wants something in another city, they ask for myself or my brother and they know that it will be done correctly.
Ramis: Let me regress one moment, when we were talking about the shuttle taking people to and from their offices, did you get that idea from New York City or is that a new twist to Chicago?
Golub: No, we felt that it was a new twist here that nobody was taking advantage of.
Ramis: How do you feel about networks, such as LTD, Dav-EI, Carey, or Limousine Operator’s International? It seems to be a new trend now.
Golub: Well, I believe that the LTD concept is a great concept. We were instrumental about 12 or 14 years ago, in starting LOI, but the problem with an association is getting it off the ground. People taking the time, besides the initial investment, to get it started. The LOI concept was good because an operator’s individuality was not taken away.
Ramis: I agree, although it is hard enough farming out an order in your own town, and keeping your identity, let alone doing it nationwide.
Golub: We tried hard to promote LOI. We put literature together and, to the best of my knowledge, we are the only organization in the country who has a credit card. On the back of the credit card is a list of the companies that we operate with. LOI has more or less fallen by the wayside because of the lack of time available from the people who put it together. However, we have a loose, kind of a loose network of basically the same people we have always operated with.
One of the problems with associations is that you lose control of the kind of service given to the customer. When you go to a builder to build a house, you don’t want to know who is doing the heating and air conditioning. You want a finished house and, with limousines, you want good service. One of the reasons that we have been able to excel in the industry is that we have been able to service the people.
We do a tremendous amount of farm-outs a year. All over the country. Tremendous. And we do not have a formal network. I have some reservations about national networks. When somebody sits down somewhere at a computer and decides to come up with numbers and tells an operator, without consulting them, that this is the rate they will charge for a trip, well, it is not going to work. You need to make a profit, whatever business you are in, and the limousine business has a very narrow profit margin.
Ramis: The last two and a half years have really been something else for the limo industry — a new magazine, forty new coach builders, a thousand new limo services and a slew of associations, as well as plenty of positive publicity. How have you benefitted from this new wave?
Golub: I feel that the National Limousine Association that is being developed is the association that is going to shine. The industry really needs an association like that. It makes sense to have representation from across the board, whether people are new or experienced in the business, and whether they have two cars or ten cars. There is a lot that needs to be done.
Every industry in the world has got an association. As you said, it is a growing industry and it is growing by leaps and bounds. And there are coachbuilders all over the place. As far as I am concerned, the coachbuilders are basically more or less the same. They all build a good car. The key to this is who is going to service the car for you, because if you don’t have the service, if the coachbuilders don’t have the backup by the dealership to distribute their cars, none of them are worth anything. You need to have the back-up.
A magazine is another good thing that has happened to the industry. Limousine operators are businessmen. We have to pay taxes, and we have rules and regulations to follow. We need a source of information and communication. I really feel that the magazine and the people involved in the National Limousine Association are going to be front-runners for the limousine industry.
Ramis: A lot of these new operations that are opening up, whether they be coachbuilders or limousine networks or magazines or associations, rely on support from people such as yourself. Are you doing your part? Are you actively supporting the efforts that you think are right?
Golub: Oh, absolutely. We did not go to the first convention because of the timing. We had a fire in our business. But we got some vibes, and we felt it worthwhile, and yes we do subscribe, and yes we are very involved with the rules and regulations of City of Chicago. We are on the rules and regulations committee. We are on the ordinance review committee, we are on the task force at O’Hare. And all of these things are being done to better serve the public because, without the public, we don’t exist.
One thing we are particularly concerned about is airport access. At most airports around the country, the limousines have always been pushed aside and taxicabs have prevailed. When airport planning takes place, they always know where the taxis are going to be in four or five years when the plan is completed, but where are the limousines going to be? We don’t know.
We’re also attempting to get some legislation passed in the state of Illinois whereby the vehicles would be tested and the drivers would be regulated by the state. In the state of Illinois, anybody can get a state plate, and anybody can say that they are a chauffeur. Without any regulation, without any rules. I don’t want to get rule crazy and I don’t want to be pushed to a point of having rules that we can’t live with. But rules need to be made for the safety of the public.
Ramis: Are you doing this as Chicago Limousine or are you doing this with a local association.
Golub: The legislation that we are trying to get passed from the statewide level we started ourselves.
Ramis: Do you belong to a local association?
Golub: To the best of my knowledge there are no local associations. There is one that is trying to get started but I don’t know how far it has gotten. If there were a local association, we would join it.
Ramis: Have you fully recovered from when your garage burned down a year ago?
Golub: We have fully recovered in relation to the number of vehicles we had, and we built a new garage. Unfortunately, two fellows got killed who were very close to us. However, sometimes out of tragedies, you have to look forward and continue.
One of the keys that kept us alive during that period was that I have a base station in my house. And I’m not saying that everyone who has a limousine business should have a secondary base station in their house but, without that base station in my house it would have been very difficult for us to continue operating. We lost 11 cars, two men, the entire building our entire accounts receivable, and every document in our lives through the last 20 years in business. On the better side of it, we had about ten or 15 cars out on the street. We were all in a state of shock at the time but, amazingly, we were not out of business for more than two hours, and it happened at midnight. At 7 o’clock that morning, we were still rolling. Once again, I believe that the savior of the whole problem was having the secondary base station at my house. I really believe that was one of the key reasons we are here today. Plus the fact, without sounding arrogant or bragging about it, my brother and I basically killed ourselves to keep the whole thing together. That’s what it takes sometimes to be successful in this business and that’s why we feel that we are, and always have been, number one in Chicago.
Ramis: Most limousine services, when appearing in a magazine, go into great detail describing their chauffeur training, and maintenance programs. What criteria does Chicago Limousine use for their smooth operations.
Golub: Basically we do not have a tremendous maintenance program. We simply change the oil every 3,000 to 5,000 miles. We do it in-house. The major problems that happen to the cars go to Cadillac or Lincoln dealers. And my manager does check the cars weekly. We do, in fact, get into every car and drive them for 15 or 20 minutes around the block and out on the expressway to make sure that everything is okay. Every complaint from a driver is put in writing and every complaint, as minor as it may be, is checked out immediately.
Ramis: My personal belief is that a service can either be small-to-medium and provide super service or be big and ugly but make serious money. What theory do you believe in?
Golub: I believe that we make serious money. I believe that we are probably one of the top bookers in the country, per vehicle. Obviously, not gross. I believe that we book more money per vehicle, than, anyone in the country. However, the key to it is the management. If you are there all the time, and you have the cooperation and respect of the people who work for you, that’s where it is at.
Ramis: You’ve got 5,000 limo services that will be reading this. Do you want to make a closing statement?
Golub: I feel that the limousine industry has grown throughout the country because of the airports, the ability of the corporations to utilize services like us, and people like us who care about what they are doing. A company’s management, chauffeurs, and dispatchers are all important. Without the dispatcher answering that phone, and without the chauffeurs going out there with a good attitude, and without the cooperation of your secretaries and everybody involved in your operation, you won’t have an operation.
North Carolina’s H.A. Thompson who retired from his company last year at age 85 reminds industry fleet owners of time-tested strategies.
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