North Carolina’s H.A. Thompson who retired from his company last year at age 85 reminds industry fleet owners of time-tested strategies.
In the 1920s, J. P. Carey foundedCarey Limousine in New YorkCity to provide chauffeur driven Packard Touring Cars for sophisticated travelers. In the Thirties, Carey began to use Cadillac limousines which epitomized automotive excellence and style.
Over the years, Carey provided leadership for a developing livery industry and, in the late ‘Sixties, the company began expanding to other major cities across the country. Carey International is now the largest limousine service in the world, and provides chauffeur driven limousines, vans, sedans, and related services in over two hundred cities around the world.
Don Dailey, President of Carey International, guided the company in its growth from a network of just a dozen licensees when he joined in 1969. Dailey participated in the panel discussion at the limousine show in Atlantic City last December, and recently spoke with Limousine & Chauffeur about some of the things that make Carey unique in the livery industry.
Limousine & Chauffeur: What is your background prior to joining Carey International?
Dailey: I’m from the San Francisco Bay area. In 1966, I was involved in starting a limousine service called National Executive Services. We started from ground zero with the idea of creating a nationwide system but we had to get our feet wet in San Francisco and show that what we were doing was correct. In late 1968, after about two and a half years, we interested some investors in helping us move into a few other cities across the country.
When we first went out to expand into other areas, our mode was to purchase other companies. After being out in the field for a couple of months, we ran into a company called Carey which was doing a similar thing. They were buying some companies and franchising others. The result was that by the end of 1969, our company and Carey merged together and I moved from San Francisco to New York where Carey’s headquarters were at that time. We left the headquarters in New York a year later and moved to Washington, D.C. where our offices are now.
Limousine & Chauffeur: What is the background of the Carey Company prior to the time that your company merged with them?
Dailey: Carey was established by J.P. Carey in the 1920’s, and the business was strictly in New York City. They had three forms of business: A chauffeur-driven business, a bus business to all the airports, and a rent-a-car business. The founder had three sons and one was involved in each of the businesses. The rent-a-car business was eventually sold to Hertz and Edwin Carey became a Hertz officer. The bus business was sold to Greyhound, and the family retained its interest in the Carey New York operation. J.P. Carey’s grandson, Paul Jr., is Chairman of the Carey operation in New York. In ’68, Carey decided to reach out from New York, and started an expansion program.
Limousine & Chauffeur: What were some of the initial activities of the new company that resulted from the merger of National Executive Services and Carey?
Dailey: What we did was very much like what the rent-a-car business did twenty years ago. What they did was take the major cities in the United States under the wing of a single name with one standard of service. Then they brought in the next largest cities on a franchise basis, an owned basis, or a combination of equity-interest and franchise. After a solid base of service was established in the United States, they began to reach out internationally.
That’s the same pattern we have been following. We spent ten years building a solid U.S. base.
Limousine & Chauffeur: What are your selling points as you approach operators about membership in Carey?
Dailey Number one: we do not approach operators about joining our company. We are not in the business of selling franchises. Anyone who is a member of Carey has approached us first. Our first prerequisite is that they have been in business for at least eight years and that we have known and done business with them for at least a couple years. This way we know how they handle customers. The second requirement is that they are properly capitalized. Number three is that they have all of the proper operating permits for their local area. Number four is that they see the benefits of reaching outside of their local area.
We require that someone from our management team visit their city and consult with them, and they spend a couple days in our corporate office where they are introduced to our reservations center and operations area.
Limousine & Chauffeur: Is the basic reason for joining Carey to get referral business?
Dailey: No, that is only one reason. For example, why would anyone in Wichita buy a Hertz franchise instead of opening their own rent-a-car company at a gas station across the street from the airport? It’s because Hertz has already created a working system and a known name. The name represents a respected quality of service. Besides having a quality name and getting referral business, you also have the advantages of fleet purchasing, group insurance, a standard accounting system, computer services, management information, and contracts.
Limousine & Chauffeur: What does Carey do to promote the company’s name recognition?
Dailey Let me give you some samples. Last year we produced over a million pieces of collateral. That includes our international rate and information guide, rolodex cards, promotional brochures, and other materials. We advertised in eleven trade journals and fifteen consumer periodicals including the Wall Street Journal.
We are listed in over fifty travel reference directories which are used in travel agencies, corporate travel departments, and government travel offices. We have a public relations program which resulted in something being written about Carey every six days in 1985. We were represented in eighty-two travel-related conventions which covered over two hundred and fourteen days when Carey services were sold on a face-to-face basis.
We are also on all of the major airline’s computer systems. They lead directly into our reservations center and put us on-line with over 150,000 terminals in travel offices and departments, including a couple of terminals in the White House. It’s a hefty program.
Every licensee also does their own marketing. We give them the entire national and international overlay, and it is the responsibility of every licensee to do the advertising they would normally do because they know best what to do locally.
Limousine & Chauffeur: Do Carey services have a required number of cars?
Dailey: No. We’re not after size, we’re after quality. It turns out that the average age of all of our companies is in excess of twenty years. We have one company that is having its seventy-fifth anniversary this year. Obviously, we have good size operations in all of the major cities.
Limousine & Chauffeur: Do these established companies acquire your procedures when they join Carey or do they continue to operate the way they had previously?
Dailey: They acquire the procedures that standardize the service to the public. That includes things such as stationery, business cards, the greeting sign used at airports, and the Carey logo in their advertising. They want to use these things because it gives them the recognition they are paying for. It is what attracts a new customer who is familiar with the quality of service he receives from Carey.
Limousine & Chauffeur: What other things would a new Carey licensee adapt into their operation?
Dailey We have a full set of manuals with information in all areas including an operations manual, a reservations manual, a chauffeur manual, management information systems, and profit and loss systems which allow you to analyze profits on a monthly basis.
We also offer complete computerization where licensees can tie into our main computer here in Washington, D.C., in any one of seven areas including: reservations, credit records, accounts receivable, accounts payable, payroll and general ledger. They can take any part of it, or all of it. The package uses standard IBM computer equipment which we can obtain for them at a discount.
Limousine & Chauffeur: Are certain things expected from a Carey chauffeur?
Dailey: Yes. Our chauffeur manual is fifty or sixty pages long and runs through the whole gamut in each area.
Limousine & Chauffeur When did Carey’s overseas efforts begin?
Dailey: We formalized the international aspect in 1979 and, prior to that, we had worked three or four years to develop a relationship with companies in several major cities such as London, Paris, Rome, and Germany. In the spring of 1979, we brought together about thirty companies in London to meet for a week. Collectively, everyone who was brought to London had been working together for a number of years. The bulk of those people were from Europe, and our next major expansion was in the Far East.
Limousine & Chauffeur: What did you learn from these foreign operators?
Dailey: They are very traditional, very business-minded, and very serious about their businesses. While service is their number one concern, we find that they also have very good accounting methods. They know when they’re making money and when they’re not making money. Many limousine companies in the United States operate on a cash flow basis. As long as more money comes in than goes out, they’re okay. They don’t think about factors such as the resale of their cars, figuring depreciation properly, and generally accepted accounting procedures.
Limousine & Chauffeur: How attractive is your insurance program?
Dailey It is very attractive because our companies have an excellent loss record. Our insurance program has developed over the years and has become even more significant in the last couple of years. It is only available to Carey companies. If we acquire a special program, such as group insurance, it is passed on to all of our licensees as well as to our corporate stores.
Limousine & Chauffeur What other special programs are available to Carey licensees?
Dailey: We have a couple of programs to purchase limousines from manufacturers at a discount, and we have a leasing program for licensees. There are also a number of other programs. The companies offering these programs explain them to our licensees at our annual system meetings. We also have a program for buying incidental things such as stationery, business cards and promotional items which are listed in a catalog.
Limousine & Chauffeur: Do you see continued growth in the limousine business or is the market becoming saturated with limousine operators?
Dailey: Continued growth at the rate we have seen in the past few years will certainly depend on the economy. Much of the new business, I feel, has come from people who had never used limousines before. It’s hard to tell whether there are many of these people left. I am personally amazed at the growth we have seen recently from the non-business sector.
One interesting thing is that the seniors who are using limousines to go to the prom will be in college next year. If they continue using limousines for special occasions in college, maybe they will do the same in business and for the rest of their lives. If that is true, it’s an area where we have created a new real growth factor in the business.
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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