The amount is a fraction of what could have been required and its business model of independent contractors stays intact.
Benefits, incentives, fines/penalties, and selective hiring boost driver performance and morale.
The 1980s...Now that was a decade. Ronald Reagan was leading the country into a false sense of security. America was at its peak, we were invincible and it seemed as if the money would never stop rolling in.
The livery industry was in full swing. Yet, from an image standpoint, the decade was a disaster. Newspaper headlines screamed about narcotics being peddled out of the backs of limousines, drug dealers laundering their money by entering the business, and prom goers being left high-and-dry by unscrupulous operators. Company turnover often topped 30 percent. But there was always another livery company to take over and another customer willing to pay to be driven in style.
Then we crashed into the reality of the 1990s. Suddenly, the industry faced corporate cutbacks, a slowdown in conspicuous consumption, and an increased demand for more professional service. Livery companies that couldn’t provide this type of service fell by the way side. Those that survive learned how to turn their drivers into the chauffeurs clients expect.
Survival in the 1990s means companies must present a professional chauffeur, who is often the only contact with the company for most clients. This means more than just providing someone who knows how to operate a vehicle. Today’s chauffeur must possess top-notch people skills and present a positive image of the company. This is accomplished through training and offering benefits to keep employees happy and motivated. To help maintain clients, operators might also consider starting programs to offer VIP clients special services.
INCENTIVES PAY DIVIDENDS
Many companies in many different industries have come to realize that by offering their employees incentives and benefits, they are more likely to retain quality people. The same phenomenon has occurred in the livery industry.
Basic benefits, such as health insurance and paid sick and vacation days, are often necessary these days to retain quality chauffeurs. “Today, health insurance has to be considered,” says Alan Fisher of London Livery Ltd. in New Orleans, LA, which has been in business for the past 14 years. “If livery companies don’t institute incentive programs, they won’t be around at the turn of the century. The key to this industry is professional service. People expect more for their money and they have a right to expect that.”
London Livery pays for a progressive amount of its chauffeurs’ health insurance. The company pays 25 percent the first year and an additional 15 percent each year up to 100 percent of the premium. “We’ve been doing this for the past 10 years,” Fisher adds.
Similarly, Bob Verdi of 52-year- old Bermuda Motor Car Company, Inc. in Manhattan, NY, pays for a portion of his employees health insurance. The company used to pay 20 percent of the premium each year up to 100 percent after five years of service, but with the increasing cost of insurance, it has changed to paying a flat rate. “Right now we are paying 40 percent of the premiums. The chauffeur pays the other 60 percent. We also offer paid vacation and sick days. Everyone starts off with one week of vacation and gets three weeks after seven years. We believe the men are the key to the operation—I never see the customers, the drivers do. Since they are the key, we do everything we can for them,” he explains. Also, Verdi had been offering his chauffeurs a profit-sharing pension plan, but recently upgraded that to a 401k program.
In addition to these benefits, some operators have come up with creative incentive programs to keep morale up and maintain professionalism. Fisher, who employs up to 20 full-time and 20 part-time chauffeurs, was looking for a way to reduce his accident rate. “We always had the chauffeur pay the deductible if he was in an accident. Six years ago we started a program where if a chauffeur can go a full year without an accident, we give him a trip for two. This year, we are sending them on a seven-day Mediterranean cruise. In the past, we gave trips to Hawaii, Puerto Vallarta, Cancun, the Dominican Republic, and Acapulco. We’ve given anywhere from one to eight trips per year. The chauffeur still pays the first $1,000 of the deductible if he gets into an accident and if he gets in two accidents in a year, he gets fired,” Fisher explains.
In order to maintain quality for his almost 90 chauffeurs, Verdi created a quarterly motivation bonus program. Bermuda drivers work a 40-hour work week with 10 hours of guaranteed overtime, which pays time-and-a-half. “Depending on seniority, the bonus is between 50 cents and $1 per hour. They get $1 per hour after working for us for 10 years. That comes out to a $540 bonus with no overtime for the highest seniority levels and $270 for the lowest. The chauffeurs are penalized against this bonus. The most severe penalty is about $25,” explains Verdi.
The penalties in Verdi’s system act as quality control mechanisms. For instance, if a chauffeur misses a customer and it is determined to be the driver’s fault, there is a $25 penalty There are three conditions that will result in the loss of the entire bonus—if there is a serious complaint from a client regarding the chauffeurs attitude; if the driver is involved in a front- end accident; and if the driver is not wearing his hat on the job. “Wearing a hat is a quirk of mine. If a driver receives three penalties or more each quarter, then it’s possible that we’ll let him go. We don’t need a guy lousing up three customers in three months,” he adds.
Bermuda also developed a year- end bonus program that rewards employees between 25 cents and 75 cents per hour, depending on the prosperity of the year. “You need to keep the men happy,” says Verdi. “You can’t send disgruntled employees out and expect them to be nice to your clients.”
As a stop-gap measure to ensure that quality concerns are not over looked, Verdi has worked out a barter agreement with a quality control company. “As part of this arrangement, we take their people to the airport and they evaluate our operation on an on-going basis. They call anonymously and check on the service of our chauffeurs, dispatchers, and reservationists; then they send us a report” he explains.
Fisher believes in showing appreciation for a job well done. He gives out Chauffeur of the Month awards and holds an annual appreciation dinner for his drivers. “We throw a big awards dinner at Arnaud’s every year for the chauffeurs and their wives. We give different awards, such as Chauffeur of the Year, Rookie of the Year, and Most Improved. We had lapel pins with diamonds in them made up recognizing years of service that we also give out. While that may be expensive, it’s cheaper than hiring a new person and training him for 10 years. That would cost 10- times more than a pin,” he admits.
A new benefit that Fisher plans to incorporate is supplying the chauffeurs with monogrammed shirts. He explains, “These cost under $30 each. It cuts down on them having to buy their own shirts. We also plan to give extras out as awards.”
London Livery also gives bonuses to its full-time drivers that are based on merit. “We usually give these bonuses after a big event because that is when we have the money in our pockets. Bonuses are given to those who go beyond their job description. For instance, if they help the dispatchers move the cars in the garage or sweep up—just do the little things that we don’t ask them to do,” he adds. There is a fine/penalty system for the London Livery chauffeurs as well. The fines come out of the person’s tips and are given for such things as being late for a job, driving without a hat on, or not cleaning the vehicle.
One way Fisher has found to keep tabs on his chauffeur’s performance is through a “mystery driver” program. “You have to monitor your chauffeurs. The only way to do that is by having someone in the back of the vehicle. You can’t depend on the client to tell you if there is a problem—if there is, they just stop using you. It doesn’t matter how much you train, you will have problems,” he says.
Instead of giving away free limousine service to hotel employees, Fisher asks these people to participate in the mystery driver program. The employee gets a free limousine ride in exchange for filling out a two-page checklist that lists over 100 items. “We do this for every chauffeur on an average of once per week. Some of the problems we have found include drivers who talk too much and those who are overly friendly. We like our chauffeurs to not speak unless spoken to. We also have people who will test the chauffeur’s integrity to see if they will be dishonest with our company. A dishonest chauffeur will steal from you no matter how good your safeguards are,” he explains.
TREAT CLIENTS RIGHT
Operators might find that it isn’t enough to invest time and resources in only their chauffeurs—often extra effort is required when it comes to handling key clients. Rick Anderson of Carey of New York started a VIP program at the end of 1991.
Because his company, which has been operating since 1921, uses mainly independent contractors, there isn’t as much control over the drivers as a company that uses employees. Anderson began this program to ensure that his top clients received the best service possible.
“The program has helped us to focus better on our VIPs and make sure they are being taken care of to the best of our ability,” he says. “A side benefit of the program is that chauffeur morale has gone up as well.
“In a service business, management is required. If you let things slide, not everyone is as professional as you would like them to be. To address that, we have devised a VIP chauffeur program that includes a series of criteria that the driver has to meet or exceed in order to qualify for the program.”
To qualify as a VIP chauffeur, a candidate must pass a 10-page qualification test, a 100-question geography test, and view a training video and pass a test relating to that. Letters from clients and incident reports are reviewed, the condition of the vehicle and the equipment in it are also reviewed at an unannounced visit.
“The chauffeurs seem to be very eager to get qualified. We issue lapel pins to those who pass. Most of our VIP chauffeurs wear their pins which shows me they have pride in the program. Our goal for 1993 is to have 100 percent of our VIP clients driven by VIP chauffeurs. So far, out of the almost 130 chauffeurs who work for us, around 80 have been through the testing program and about 40 have been qualified,” Anderson adds.
The program also incorporates a VIP desk which handles client reservations. This is staffed 24 hours a day by the best reservationist at the company. It has a separate phone number that is always the first phone to be answered. “The program forces us to work better internally to make sure the VIPs get the best possible service. We have better tracking in this-patch, the chauffeur has a better understanding of the trip, etc. I believe this program has increased our level of professionalism— which was one of our goals,” he admits.
START WITH HIRING
One way to help ensure a chauffeur will act professionally is to thoroughly evaluate the candidate during the hiring stage. “My philosophy for hiring is that I don’t necessarily look for career chauffeurs—I look for guys who will be good while they are doing the work,” says Fisher. “It’s all a numbers game. The last time we were hiring, I started with around 150 applicants. I did a brief phone interview with those people and selected nine candidates. Only three graduated from our training program.”
Verdi suggests looking for a “nice” person. “They have to have a clean driving record, beyond that we look at the personality. They must be a gentleman and have a modicum of intelligence. If someone has those two qualities, you can make them into a good chauffeur. It’s a matter of being a good person. Anyone can drive good. A chauffeur must always be considerate and polite to everyone—not just the client,” Verdi remarks. Bermuda has chauffeurs who have been with the company since the late 1960s and. early 1970s. The company’s average chauffeur tenure is approximately five years.
Willy Spencer, a chauffeur who has been with Bermuda for almost 20 years, suggests that a potential chauffeur candidate must know the city. “A chauffeur has to have patience. He must know how to handle people—that is very key. Knowing how to get around the city is also very important,” he says. Likewise, Henry Sklarsky, a chauffeur for Hy’s Livery Service in West Haven, CT, for the past 31 years, advises operators to look for people who are courteous and like servicing people.
Fisher adds that he looks for someone who is dedicated to the profession. “This means they must do all the things necessary to be a true professional. This includes being willing to clean the cars and treat your clients well. They must also be masters of public relations. In this profession, chauffeurs are dealing with many different personalities—from kings of countries to prom queens.”
To initially find qualified applicants, Fisher runs newspaper classified ads under hotel/restaurant/hospitality listings. Verdi takes a different approach. He offers a bounty system. “If one of my drivers brings in a good chauffeur who stays with the company at least six months, we give a finder’s fee of $300. Because of this we don’t have to advertise,” says Verdi.
Fisher, who has had chauffeurs stay with his company for as long as 11 years, with an average tenure of four-and-a-half years, has an extensive training program for new hirees. After being hired, the individual is expected to attend a two week training class during which he is not paid. “In order to recoup our training costs, each person needs to work at least a year. We have them sign an agreement that says if they don’t work for the company for at least six months, they will reimburse us for training costs,” he explains.
The course itself covers how to drive like a professional, how to clean the vehicle, how to treat the clients, and reviews the different types of jobs. Soon-to-be chauffeurs are also given a variety of actual situations and are shown how to handle them. “Some of the situations we cover include what to do if it is a credit card job and the client says he doesn’t have the card on him, or if the client wants to do something illegal in the back of the vehicle. We teach them to handle these situations the way the company wants them to be handled,” Fisher adds.
Bermuda uses a less formal training approach. The new chauffeur attends an indoctrination where company officials explain what the company expects of him and what he can expect from the company. For the first two days to one week, the freshman goes out with a trainer to ascertain his knowledge of the city. New hirees are on a six-month probation, during which time they are not allowed to handle any key accounts. “We teach new guys to be nice, to open doors, and help with baggage—generally, to do the same things you would do for your mother,” Verdi explains.
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