Private and public school transportation is a potential niche market operators may consider since it can drive business and brand growth.
I took my first plunge in 1998 with a used 19-passenger 1993 Goshen party bus. Since then, I have bought various size buses including a 40-passenger, a 27-passenger, and a 55-passenger motorcoach.
I learned many lessons along the way still relevant to experienced motorcoach operators and newbies.
Running a fleet of buses almost mandates hiring your own mechanic and paying a flat salary instead of outsourcing repairs and maintenance. Outsource costs can be staggering for diesel buses. Typically, shop labor rates for diesel mechanics average $90 to $120 nationally, says Ramsey Mesvef, an independent ASE certified mechanic.
That doesn’t mean the mechanic gets all that money. In fact, you can hire an in-house mechanic for about $20 an hour. The national average is $19.56, according to payscale.com. I chose to partner with an oilfield service company with its own shop for a fleet of big rigs. It hired ASE certified mechanics to maintain its service trucks and could handle maintenance on our buses. The National Institute for Automotive Service Excellence (NASE) certifies professional mechanics and shops in the automotive repair industry. The independent group, created in 1972, distinguishes between potentially incompetent and competent mechanics.
Partnering was a win-win for both companies since the oil servicer often didn’t have enough work for its mechanics and sent them home early. I agreed to pay $45 per hour for labor plus the actual cost of the parts used in repairs. The cost of vehicle maintenance on a motorcoach is estimated at 39 cents per mile, according to Federal Highway Administration studies.
On a typical 300-mile charter, the first $117 charged to your client will be spent on future repairs and maintenance.
It may surprise you, but one of the parts needing regular replacement on a motorcoach is the front windshield. They are frequently cracked or chipped by objects flying up from the road surface. Windshields are highly susceptible to damage and easily break because they are flat. A windshield is comprised of two glass panels, with each one costing about $700 including installation.
I established an account with a mobile glass company and received discounts of about 20% by using the company regularly. Bus and motorcoach operators Jason Sharenow and Eric Devlin have been through all the growing pains of charter bus service (LCT file photos)
How Long Will A Bus Last?
The life expectancy of a motorcoach varies based on the type and frequency of trips, maintenance schedule, and major overhauls. Tim Calloway, a lead mechanic for Dallas-based Greyhound, says a heavily used motorcoach will last up to 20 years with a few major overhauls and a swap out of the engine and transmission.
Bus and motorcoach operators Jason Sharenow and Eric Devlin have been through all the growing pains of charter bus service (LCT file photos)
Jason Sharenow, owner of Broadway Elite Chauffeured Services Worldwide in East Hanover, N.J., expects to get 15 to 20 years from each of his motorcoaches. But Sharenow points out most operators plunging into the bus business don’t know what to expect since “they can’t wrap their heads around keeping a vehicle for more than five years.”
That’s true of limo operators like Eric Devlin, CEO of Premier Transportation in Dallas, who entered the bus business in 2014 expecting to run his buses for seven years before trading them in or selling them privately. He bases his decision mostly on his financing terms rather than concerns about wearing out one of his motorcoaches. Devlin said he recently traveled on a 27-year-old bus that was well cared for and he was fine with it. Devlin said his clientele would never accept a bus that old in the Dallas market, so he buys new to satisfy clients and cut costs.
New Or Used
The decision to buy new or used motorcoaches may be based on the size of the down payment, the ability to get financing, and where the bus is being sold. Devlin will only buy new vehicles because he doesn’t own a repair garage and relies on a local MCI dealership to service his vehicles. MCI offers a 60-month warranty on its new vehicles.
Older buses cost more to run than newer ones because something always needs to be serviced or replaced, Sharenow says. Devlin adds, “Buy new and don’t try to save $100,000. Unless you are experienced, you will create big headaches for yourself.”
However, well maintained motorcoaches can and do live on in infamy. A recent listing on busesforsale.com showed a 15 year-old MCI coach with 1.8 million miles selling for $70,000. With a major overhaul of about $60,000, the total investment would be about $130,000 to start a new life. The buses that shuttle guests around Disneyland parking lots spent their first life as city transit buses before being retired with more than a million miles. They are overhauled and placed back into service for years to come.
While you may be able to pop into a quick lube facility for your sedans, SUVs, and similar passenger vehicles, the same cannot be said for motorcoaches. You need an appointment and plenty of cash. You can imagine my surprise when I took my first bus to get an oil change and was quoted $600. That’s because buses use anywhere from six to eight gallons of oil during an oil change and may have four or more oil filters. Here’s where having your own mechanic can save a bundle. Sharenow estimates an oil change averages about $400 in-house. He saves a whopping $200 by doing this routine maintenance in-house rather than outsourcing.
You can buy bus tires in two ways: Outright or via a lease, as Sharenow does. Bus operators commonly lease tires instead of buying them. Sharenow leases his tires and pays about two cents per mile driven while Devlin and I buy tires averaging $700 each installed. We’ve noticed a life cycle of 60,000 miles for tires properly rotated.
We rotate tires by moving the front steering tires to the inside position of a dual axle at about 50,000 miles to squeeze 20,000 more miles out of them. The steering tires wear out the fastest. The inside dual tires move to the outside position, and the outside dual tires move to the back tag wheel position.
“Essentially, everything is moving back,” says Sharenow, who gets 12 tires at a time from the tire leasing company for inventory. He doesn’t start paying for them until they are mounted. Charges accrue monthly based on miles traveled. The cost of bus tire changing equipment runs about $15,000, Sharenow says.
With thousands of passengers occupying seats, spills, tears, and rips will happen. Devlin cleans his leather seats with a solvent each night. When the seat material starts to look grungy, it’s time for an interior refresh. That includes reupholstering the seats, ripping out the flooring if needed, and laying new vinyl or carpet. I did this with my first bus for $4,000.
When done, we removed a previously carpeted floor and replaced it with a faux marble floor made out of vinyl. If I didn’t know it was a 1993 model, I would have thought the bus was brand new in 2003 because it had a new interior smell. Many charter bus companies have strict policies that prohibit food or beverage while others encourage it. Many charge a deposit for passengers intending to bring food and beverages. The top requested items brought onto my buses were kegs and ice chests.
When a motorcoach approaches 600,000 — 700,000 miles of use, it’s time to perform a major overhaul if you want to keep it. By now, the motorcoach is probably owned free and clear. Sharenow generally replaces transmissions and engines at the same time because it’s cheaper. He says it takes two mechanics and four full days to perform a change-out. In his operation, it takes about 10 years for a bus to reach this point. Engines range from $24,000 to $35,000, depending on whether you buy new or rebuilt. Some people change out the engine brand such as a Caterpillar to a Volvo engine. Billy Jinks of Jet Limousine in Phoenix is considering a major bus overhaul. No matter which engine he chooses, it will cost him an estimated $6,000 to get it installed. That $30,000 investment will deliver another 10 years of service before the bus heads off to the graveyard or maybe another overhaul by a new owner.
How Much Is A Major Overhaul?
* Includes labor costs
Transmissions can be either rebuilt or replaced with remanufactured or third-party transmissions. They also might need to be replaced sooner than engines based on operating conditions and the terrain they are operated in. Those can range from $8,000 to $13,000, Sharenow says. Having his mechanics perform the swap-out saves an estimated $2,500 in labor cost.
Take Potty Breaks
One of the most dreaded tasks of operating a motorcoach is keeping the restroom clean. Failing to dump out the holding tank daily can generate a putrid miasma that permeates the entire bus, no matter how strong the stench-busters used.
“Our bathrooms are dumped every night,” says Devlin, who pays a disposal vendor about $30 per dump. Public draining facilities charge $25 to $40 per dump. To keep your restroom smelling fresh and sanitary, you should use a formaldehyde solution such as Safe-T-Fresh. It costs about $22 per gallon and should last for about 30 dumps of the holding tank. Devlin adds air-fresheners each day. On long charters with full buses, it’s sometimes necessary to do a midday tank dump. He warns to never scrimp on sanitation. “You have to dump the tank to avoid an unpleasant smell. Unpleasant smells are not good customer service and unacceptable.”
Any time your motorcoach breaks down, it will be an expensive event. Every bus operator has experienced a breakdown. Whether you have a motorcoach towed or a roadside mechanic respond to it, the cost of getting help is high. Devlin pays $60 to $75 per hour depending on the time of day, with charges billed from garage-to-garage. This doesn’t include the cost of parts. Fortunately, Devlin has only experienced a blowout on an inside dual tire to discover the price of roadside assistance.
Sharenow once had a transmission fail on a coach out on the road near Boston. In this case, he was forced to outsource the repairs, but even then, Sharenow, being resourceful, bought a remanufactured transmission for $8,800 and drove it to Boston himself. The tow and labor was another $4,000, but since Sharenow has a wholesale account for parts, he was able to slash the price of the transmission by at least $1,200.
SIDEBAR: Tips For Keeping Costs Down
Shared mechanics: You may be able to find someone else in your city who runs a fleet of vehicles and has a mechanic. You could ask them if they would be willing to perform work for you at their shop for a fee. Mechanics also advertise on Craig’s List or other websites that perform freelance work. Make sure you check references and ask for an ASE certificate. This might be an excellent way to contract someone for in-house work on a part-time basis. The average diesel mechanic pay is $20 per hour.
Shared facilities: Running a well-equipped shop requires a variety of tools and specialized equipment for HVAC, tires, oil disposal, and diagnostic tests. If you have a large fleet, you might consider splitting costs with another company. It cuts the expense for all tools and equipment in half for both companies.
Wholesale accounts: Open a wholesale or “commercial account” with parts houses and dealerships. You will be asked for credentials such as a seller’s permit, resale certificate, business license, or other documentation to open an account. Having an account with companies such as AutoZone, Napa, Pep Boys, or other parts houses can save you as much as 30%, with free delivery included. This can drastically cut your cost on such parts as windshield wiper blades, coolant, transmission fluid, oil, and similar products you use daily.
Private and public school transportation is a potential niche market operators may consider since it can drive business and brand growth.
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