People

Operators Share Biggest Business Concerns And Hurdles

Lexi Tucker
Posted on June 12, 2018

Every year LCT asks a randomly chosen group of diverse operators about the industry issues that occupy or trouble them the most. This year the answers revolve less around regulations and politics and more about the day-to-day realities of running a 24/7 luxury ground transportation service.

Most noteworthy is how these operators are going beyond just stating the problem, and trying out solutions while staying determined in a disrupted business sector.

Zak Zakar, president, CMS Limo Inc., East Elmhurst, N.Y.

DISPATCHER HIRING: As a small operator in NYC, we are faced with many regular challenges. The most difficult thing for my partner and I is to trust someone to dispatch efficiently while minimizing expenses and maximizing revenue.

Zak Zakar, president, CMS Limo Inc., East Elmhurst, N.Y.
Zak Zakar, president, CMS Limo Inc., East Elmhurst, N.Y.
It’s challenging to find qualified dispatchers in our area. Many come in with experience and resumes, but after providing them with adequate training and getting the on-boarding process going, we realize they are not up to our expectations.

The New York market is a very competitive one. Clients as well as affiliates are becoming more price-sensitive. For us to retain and grow our business, we are constrained by a skinny budget for office staff. I spoke to a couple of friends and mentors about this situation, and their advice was to hire lower level office staff to help with the calls and emails while my partner and I focus on dispatch. However, in doing so, our attention would be diverted from the sales and growth of our business, which is crucial to our survival.

Year after year we find ourselves struggling with the same situation; it sometimes feels like we are going in circles.

Christina Nguyen, director of customer and affiliate relations, Concierge Limousine, Huntington Beach, Calif.

CLIENT PURSUITS: My biggest concern is many operators are not focusing on their own businesses. Rather, I notice a lot of operators are constantly worrying 

Christina Nguyen, director of customer and affiliate relations, Concierge Limousine, Huntington Beach, Calif.
Christina Nguyen, director of customer and affiliate relations, Concierge Limousine, Huntington Beach, Calif.
about/blaming Uber, Millennials, etc. I believe Uber has taken a toll on short distance rides out of convenience, but we’re also catering towards a different clientele. If you’re more worried about the Uber clientele, I believe you may be in the wrong business, as we are focusing on a high-end clientele. People are so worried about how Millennials are lazy and taking short cuts. As a Millennial running a successful business, I may take some shortcuts, but it’s not about working harder; it’s about working smarter and more efficient.

Sandi Dial, VP of operations, Your Personal Driver, Gilbert, Ariz.

BRAND IDENTITY: I think one of the biggest challenges facing luxury transportation operators is brand identity, and some of that stems from education about our industry. In my experience, many consumers are not able to articulate what makes chauffeured transportation unique, especially compared to TNCs.

To me, a logical next step is figuring out the answer to “how do we educate ground transportation consumers about what makes luxury transportation special?” It’s a balancing act to effectively communicate our value without sounding like we are grumbling about TNCs in the same breath.

Sandi Dial, VP of operations, Your Personal Driver, Gilbert, Ariz.
Sandi Dial, VP of operations, Your Personal Driver, Gilbert, Ariz.
First, we can make our own clients brand evangelists. Find ways to make our clients not just happy, but delight them to the point where they are telling everyone they know about our industry and “converting” TNC users. Create education campaigns for clients that speak to our value as luxury providers. Write the campaigns in such a way that they will hand existing clients the talking points to use when addressing objections to our services, such as price or on-demand availability.

Second, we can find groups where ground transportation is an element, but not the main focus, such as GBTA or MPI. Spend time getting to know those who send out communication to the membership. Ask to contribute copy for official newsletters or deliver presentations to bullet point the ways we go “above and beyond.” Address issues such as duty of care and safety, quality control, consistency of product, ease of process, etc.

Lastly, the success of all of this brand development, education, and brand evangelism places the burden back on us as operators to ensure we are meeting exceptional service standards and delivering with every single client, every time.

Barbara White, CFO and co-owner, VIP Transportation Group, Orlando, Fla.

Barbara White, CFO and co-owner, VIP
Barbara White, CFO and co-owner, VIP
TNC COMPETITION: One of the biggest challenges we and other companies face i  n Florida is working in a market where TNCs have taken a major role. TNCs are regulated by the state, and we are regulated by our local governments. TNCs are not subject to the same rules we are, and in some cases are getting preferential treatment due to a lack of a better solution by the city, airport, and seaports. This is because these jurisdictions were given such short notice to accommodate TNCs and had to abide by state laws.

Matt Shafik, managing partner, Genesis Corporate Transportation, Houston, Texas

TECHNOLOGY: I think a few challenges limousine operators are facing today include operational technology and on-demand requests. In 2018, technology will make or break a ground transportation company. This is my eighth year in the industry and I have been amazed at the improvements in the technology we use to run our business. In the beginning, we were a little resistant to the change thinking, “what happens if the server crashes?”

Matt Shafik, managing partner, Genesis Corporate Transportation, Houston, Texas
Matt Shafik, managing partner, Genesis Corporate Transportation, Houston, Texas
While issues like this still happen semi-often, the software companies understand just how important those fail-safe measures are so the operators don’t lose track of their reservations. One of the largest tech companies in our industry just recently went through a period of a few hours where its users couldn’t log in, and I can tell you, the operators really let the company have it.

A challenge I am personally facing in my market is how our clients are interacting with us. I am noticing a trend where current business and leisure travelers are requesting more rides at the time they need them and not so much in the future.

Johnny Donohoe, president, Sterling Limousine & Transportation Services, Wrightstown, Pa.

REGULATORY COSTS: One of the biggest concerns I have is the continually increasing operational/regulatory costs, specifically insurance overall. To be fully

Johnny Donohoe, president, Sterling Limousine & Transportation Services, Wrightstown, Pa.
Johnny Donohoe, president, Sterling Limousine & Transportation Services, Wrightstown, Pa.
compliant in our industry, you need to carry all types of insurance. The biggest one is auto liability. For any operators running buses, the minimum is $5 million in coverage. This coverage continues to become more expensive due to the increase in all of these tragic accidents we see making national headlines almost daily at this point. Next in line is worker’s compensation insurance, followed by medical insurance (if you offer it), and that’s just a few. We work diligently with our insurance carriers on each and every claim, which helps keep some of the premiums in check, but overall there is a steady increase year in and year out.

Nick Boccio, fleet manager, Buffalo Limousine, Buffalo, N.Y.

COMPETITION: The main challenges on the horizon are evolving technology and

Nick Boccio, fleet manager, Buffalo Limousine, Buffalo, N.Y.
Nick Boccio, fleet manager, Buffalo Limousine, Buffalo, N.Y.
competition. Our business is service oriented, and if you throw too much technology in and take away the service portion, we’re almost like a TNC with nicer vehicles.  Finding the middle ground between advancing our technology on an operations level and maintaining the added service of being a chauffeured transportation company seems to be what I am working on the most at Buffalo Limousine. Also, there’s more competition popping up. Be it for sedan/SUV service or buses, a travel planner has options. We need to make it a no-brainer for them to decide to give us their business.

Anton Kirichenko, owner, Motor City Limousine, Detroit, Mich.

DRIVERLESS CARS: I think the industry’s biggest challenge will be autonomous vehicles. If you think this technology is years away, think again. It’s here and ready,

Anton Kirichenko, owner, Motor City Limousine, Detroit, Mich.
Anton Kirichenko, owner, Motor City Limousine, Detroit, Mich.
and will start taking over much sooner than expected. Unfortunately, there is “no country for old men” in the coming world. Companies like Waymo that have this technology are not interested in sharing it with our industry so we can use it for commercial purposes. Don’t forget, the ONLY reason we exist as an industry is because we have chauffeurs and the service that comes with them. Once we lose this advantage, I don’t see what we can offer as a competitive advantage.

Bigger buses are also going to be under attack, as it is even easier to create geo-fenced routes for this type of vehicle.

The only thing that has a good chance of lasting is the traditional stretch limousine and limo bus, as the chauffeur is just too big a part of the service. The industry is so tiny that tech companies may not be interested in helping us overcome all the coming challenges.

In the end, nobody knows how it will play out, but we definitely have to be ready. We can’t worry ourselves with fleet size; when changes come, they will be rapid and we have to be ready to downsize and adapt in a short time.

Scott Simkus, VP of operations, West Suburban Limousine, Chicago

EDUCATING CLIENTS: The biggest challenge facing West Suburban Limousine (WSL) is the continued integration of new technology with our professional service. I don’t necessarily mean challenges from a technical standpoint (although this is certainly part of it), but more so communicating the features and benefits of new technology to new and existing clients.

Scott Simkus, VP of operations, and Danielle Slamans, VP of client services, West Suburban Limousine, Chicago
Scott Simkus, VP of operations, and Danielle Slamans, VP of client services, West Suburban Limousine, Chicago
As an example, many of our longtime clients are happy with the traditional manner in which we’ve operated for decades, and it’s our job to showcase how our direct texts (just to focus on one new feature) can make their lives easier at the airport, improving their overall customer experience. Then we have new clients who might be more tech savvy, but need to be educated about the differences between WSL and TNCs. We focus on the value-adds we provide, like full-time professional chauffeurs, industry-leading insurance levels and safety track records, customized billing to accommodate client needs, on-site dispatching at large events, and personal service (of course!), and that typically wins them over.

Chris Peifer, president, Susquehanna Valley Limousine, Northumberland, Pa.

BALANCING EMPLOYEE COSTS: Fifteen years ago when I entered this industry, word of mouth brought us plenty of talented associates, with a willingness to be flexible, whereas now we have to budget for continuous recruitment and employment ads. It makes growth difficult because we cannot attract enough qualified people on a budget that continues to shrink in a world with a “work less” mentality.

Chris Peifer, president, Susquehanna Valley Limousine, Northumberland, Pa.
Chris Peifer, president, Susquehanna Valley Limousine, Northumberland, Pa.
Anywhere I look, I see banners, rolling advertisements, and continuous “now hiring” ads with everyone competing for talent. In our industry, we all are faced with the fact we have to adapt to change. TNCs affect us all individually. The tech world is much larger than just Uber and Lyft, and it has created a different kind of consumer as well as a different worker mentality. Tech companies like Google, Apple, and all other app based online businesses have been creating a laid-back life and work style that has made it more difficult than ever to find people who are willing to work. The war for talent is here, not just on the horizon, and will be a continued challenge with no end in sight. What we all need to be mindful of is how do we as an industry keep attracting talented associates to match the 24/7 demands of our clients? how do we change our model to keep attracting good chauffeurs and dispatchers to work these undesirable hours and still be competitive? Our company is in a rural area and we offer our clients and affiliates’ clients the same great service you would find in any large city, but because of our low population and large geographical area, we must still remain cost effective.

Related Topics: autonomous vehicles, customer service, driverless cars, LCTFast40, Lyft, Millennials, self-driving vehicles, technology, TNCs, Uber

Lexi Tucker Associate Editor
Comments ( 0 )
More Stories