North Carolina’s H.A. Thompson who retired from his company last year at age 85 reminds industry fleet owners of time-tested strategies.
Most telling is the average profit margin at Rose’s motorcoach and minibus division, most recently at 18% before depreciation. The Rose team sees motorcoaches as the future of the limousine industry, combining high-end luxury-touch service with the economics of group transportation. Rose Chauffeured Transportation and Rose Charters operate as separate divisions, with distinct employee teams and P&Ls. The large coaches bear much lower depreciation, retain longer lifecycles and mileage ranges, and command higher profit margins given the economies of scale with more seats per bus.
Of the 23 motorcoaches, Rose bought three new and 20 used and refurbished. It varies its minibus fleet, from basic, cloth-seated forward-facing shuttles to luxurious high-end Grech Motors and Executive Coach Builders minicoaches. Rose believes in matching the right vehicle with the right client or contract, recognizing that some clients simply want a clean, functional shuttle going from point A to point B.
For its motorcoaches, Rose dispenses with the term bus driver, and opts instead for bus captain, reflecting its high-touch limousine roots. Bus captains wear short-sleeved shirts with striped epaulets similar to those of airline pilots, making them look professional and comfortable.
The company employs a separate three-person motorcoach/minibus reservations team that handles contract services. Its biggest clients are tours for school age kids, with 60+ motorcoach runs per year being dispatched for field trips to Washington, D.C.
In addition to embracing motorcoaches, if you could point to the core of Rose’s success it would be a hyper-focus on real-time P&L for each vehicle. By breaking out each vehicle as its own P&L unit, an operator can accurately track each vehicle’s costs and revenue in detail month by month. Money losers can be sold off quickly.. Most companies opt to look at overall fleet profits or broken down by fleet categories, such as sedans, SUVs, minibuses, etc.
“I’d rather make 10% of $5 million than 5% of $10 million,” Thompson says, emphasizing the principle of earning a healthier profit on efficient work effort. “You need an accurate P&L up front.” Too often, newer operators will fail to research the dynamics of their local transportation markets and end up lowballing their rates and prices in their eagerness to land new business, he says. Any limousine or motorcoach operation needs an accurate list of all costs and then should add a 10% profit margin beyond that break even amount, Thompson advises. “Most operators only settle for 5% margins.”
General manager Tom Holden, who is also a contributing writer and advisory board member for LCT Magazine, says the success of any operation stems from how it analyzes and applies numbers to maximize profit. “If you don’t focus on numbers, you are spinning your wheels,” says Holden, who participates in peer-to-peer 20 Groups hosted by financial consultants. “You have to run your business with your eyes wide open today. If you run like 10 years ago, you won’t realize you are losing money and then you’re standing still.
“Mapping out every vehicle makes all the difference in seeing what leads to profitability. We know to a penny if costs are too high in each line item and department. Most companies don’t.”
Complementing its P&L data, Rose runs a parts department and purchases all parts directly from suppliers at discounts, thereby saving 25% overall, Holden says. The company keeps a parts inventory with each part grouped and shelved by category and labeled with its own barcode.
A full-time employee tracks and analyzes all inventory, factoring in costs, labor, acquisition, work orders and processes, repair time frames, mechanics’ input, and demand for each specific part type and brand. Such layered data can help inform smarter purchasing and usage decisions. Drivers log all performance and maintenance problems as they occur, enabling the company to track and recall each vehicle’s repair and cost history.
Location: Charlotte, N.C.
Owner: H.A. Thompson, president and founder
Fleet vehicles: 23 motorcoaches, 12 minibuses, three vans, 28 independent operator sedans and SUVs
Staff: 75 employed chauffeurs/drivers, 25 offices staff, 28 I/O chauffeurs.
Key managers: Andy Thompson, VP of sales; Tom Holden, director of operations and affiliate relations
Annual revenues: About $10.2 million
Key client groups: Schools, universities, churches, and sports teams, including Charlotte Panthers, Hornets, and Hounds
Website: www.riderose.com; Ride Rose app
Awards: 2008 LCT Operator of the Year Award (11-30 vehicles category); 2015 LCT Motorcoach Operator of the Year Award; TSX Approved (Transportation Safety Exchange Best-In-Class Safety Standards).
Rose benefits from serving the second largest city in the South behind Atlanta. Metro Charlotte’s diversified economic base, comparatively lower costs of living and taxes, and active development have spurred a population growth rate up 14% since 2010 to 2.5 million residents. The next few years will raise the area’s profile with major events such as the NBA All-Star Games in February 2019 and the Republican National Convention in 2020. Chauffeured and bus companies also will benefit from the 2019 Super Bowl being held in Atlanta.
“The people and business are coming,” Thompson says. “Charlotte has everything Atlanta does, but a smaller version of it.”
Rose provides transportation for the Carolina Panthers team and management, and runs downtown shuttles on game days between the official fan club gathering spot at the Dilworth Neighborhood Pub and the Bank of America stadium.
In 2016, with Uber pummeling the local ground transportation market, Rose made a strategic decision to convert its chauffeurs into independent contractor operators who own their vehicles. I/O drivers earn 72% of a reservation-based ride fare, with the rest going to Rose. For independent drivers taking rides via the Rose app, the breakdown is 80% for the driver, and 20% for Rose. Since 2016, the company has been seeing 300-400 fewer transfers and chauffeured rides per month due to competition from Uber. TNC drivers often circle hotels and frequent places for riders who once took taxicabs and sedans.
Thompson dispels the view independent operators don’t make a decent living or that the business model is inferior to that of company-owned vehicles with employees. One chauffeur who is contracted with Rose grossed $104,000 in 2017 working seven days a week. He also gets $20, $50, and $100 cash tips from clients.
“If you are willing to look beyond the old business model, you will find ways for your employees to make more money than before,” Holden adds.
The Ride Rose app averages about 100 rides per month, versus 50 per month last year, and draws about $1,300 in revenue per week. Rose uses a white label app designed by Dashride and charges $2.50 per mile for a sedan plus an $8 pickup fee and $3.50 per mile for an SUV plus an $8 pickup fee. While the app can perform on-demand, the logistics fit better with near-demand, says Andy Thompson, VP of sales and son of H.A. Thompson. Riders can call and text directly with the driver and track their vehicle as it arrives.
“Hopefully Uber will make people limo riders who were not before after they have had a bad experience with it,” Andy Thompson says. “What our app is about is no surcharges, better service, and no worries about safety. People are starting to get educated about Uber and maybe realize it’s not as safe as they thought it was.”
Andy Thompson, 50, unlike his father, started in the industry already as a teenager, washing vehicles and driving as a chauffeur in the late 1980s. After balancing school and work, he joined the company full-time in 1990. He learned payroll, dispatch, scheduling, answering phones, and mastered the manual recordkeeping until the company computerized in 2000. As VP, he focuses on sales, marketing, and networking while designing tour and contract packages and RFPs for client groups.
Of course, no P&L performance or motorcoach success would have been possible without the vision of founder H.A. Thompson. At age 84, Thompson demonstrates a sharpness and agility common to men half his age. The widower, now an affable and single gentleman caller, works in his office daily and drives a Cadillac XTS about town. While hosting a visitor in July, he insisted on taking a checked suitcase and lifting it into the trunk. If he wanted to, he could chauffeur airport runs with the best of them.
Thompson was a familiar voice on WBT-AM 1110 in Charlotte from 1971-1991, where he worked as a D.J. and talk show host, often manning listener call-in phone lines.
For station promotions, he would host events, such as a Dolly Parton lookalike contest and swimsuit/sun tanning contests. He was inducted into WBT’s Hall of Fame in 2012. Thompson applies his showman’s sense of humor to his work. During the infamous trial of disgraced televangelists Jim and Tammy Bakker in 1987, Thompson and his wife wore Jim and Tammy masks while showing up at the courthouse in a tricked out “PTL Limo,” named after the Bakkers’ mammon-grubbing cable network.
When AM radio stations trended toward all news-formats in the 1980s, Thompson said he “had to reinvent myself and do something different.” He was drawn to the limousine business by a friend who suggested they start a service for weddings. That friend was a mechanic who repaired Rolls-Royces. They did their first wedding run on March 23, 1985. They parked the vehicles in their backyards and eventually bought their first used black Cadillac sedan to do airport runs. Thompson bought out his partner a few years later and got rid of the Rolls Royces in 1988. From there, he took the company into stretch limousine and corporate black vehicle service.
His outgoing demeanor, knack for showbiz charm, and booming, bass radio voice all enable him to be company motivator in chief. Thompson has defined its culture on customer experiences. A wall of fame in the Rose lobby bears framed customer thank-you letters, media coverage, and awards, including 2008 LCT Operator of the Year (11-30 vehicles) and 2015 Motorcoach Operator of the Year.
Good customer service boils down to a pleasant and helpful attitude, Thompson says. His past radio experience has helped him master the art of listening to his audience, reading it, and playing to the crowd.
He admits luxury transportation work involves “a little bit of showbiz,” adding P.T. Barnum is one of the figures he admires. “If you give them razzmatazz, they’ll come back for more. You have to make your customers happy and make them enjoy where they are in the moment.”
Top customer service is supported with extensive training in all aspects of company operations. Monthly driver meetings include video training. “You have to get your people working together on the same goals,” he says.
That especially applies to motorcoach service. “Too many traditional coach companies have acted like truck drivers in how they treat customers,” he says. “Our bus captains load and unload the luggage. So what if they get sweaty.”
Buses are assigned to specific drivers who are held responsible for their condition and cleanliness. Nightly porter crews clean the buses. Rose’s employee drivers earn on average $18.50 per hour.
Thompson believes in treating employees well so they provide superior service. “You show respect by using their names. It’s very important to value them. They have to trust you, and trust is fragile. You want people to say you’re a nice guy or gal.”
These dates sum up how Rose Chauffeured Transportation kept pace with the permanent shifts in luxury fleets over more than three decades.
1985: Company started doing weekend weddings with Rolls Royces
1987: Bought first stretch limousine
1988: Bought first Lincoln Town Car sedan for airport runs
1995: Bought first small minibus
2008: Bought first motorcoach, a used Van Hool
2012: Sold the last of its six stretch limousines
2016: Due to market pressure from TNCs, started transitioning its sedan and SUV service to the independent operator model (14 sedans, 16 SUVs)
2018: Owns and operates three vans, 12 minibuses, 23 motorcoaches
Related Topics: business management, cost savings, customer service, finance, financial planning, fleet management, H.A. Thompson, How To, maintenance, motorcoach operators, motorcoaches, North Carolina operators, operator profiles, Rose Chauffeured Transportation, Tom Holden
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