Commentary: Jeff Rose, president of Limousine Association of New York, explains how the permit cap ignores vital for-hire differences.
METRO talked to motorcoach operators from around the nation to discuss recent challenges and their long-term growth plans. Identifying qualified drivers ranked high among issues, so the operators shared some of their recruitment strategies.
Having enough qualified motorcoach operators. You have to have folks who are really excellent, not only from a safety perspective, which is number one, but also from a customer service perspective. Those people are really hard to find, especially when you need as many people as we do. If you don’t focus on it and put up with some unsafe behaviors, or people who are delivering sub-par customer service because you need bodies, that affects everything.
The way people look for jobs now and make decisions on where they will work has changed with the advent of the internet and social media. We’ve had to change how we go about getting applicants. It’s a funnel. If you need 25 drivers, you probably need 300 or more applicants to find those 25 that are going to become the real stars. You have to generate a lot of applicants, and then, how you screen and bring them in into your organization has to be well thought-out and structured, so you do end up with the best people in the end. There are some interesting things you can do now with tech and social media to generate applicants, and we were getting a lot for a while, but we weren’t seeing the flow we had hoped for.
Recently, we streamlined our application process to limit the information we ask for to a phone number. We then have dedicated staff who calls every applicant back as quickly as they can, which has really worked well. People don’t want to have to put in too much effort; they would rather you did all the effort, and really, we have to make that effort. By calling, we were able to capture people on a greater scale and feed that funnel better than before. It was a real ‘a-ha’ moment.
The other thing we have done is increase pay. The industry has to do a better job of recognizing the need for a career wage for motorcoach operators. If you look at it, wages have been on the decline since the 80s when the industry was deregulated. It is a tough business. It is hard to make a profit, and driver wages are a huge expense for us, so we are always careful about how we manage that. On the flip side, if we want to have the best people and retain them, then you have to pay them something they can live off of. We have pushed very hard to be on the top end of the pay scale in the markets we serve. Drivers are the most important people in your company. They are the only people the customers see when they are on our coach, so that person has to be the best.
The culture of putting the driver first — that is really the culture I’m pushing. Also, it’s a 24/7 business and it can really be a grind sometimes, but we also like to have fun. We are respectful to each other and professional, but we also have a good time. Work doesn’t have to be drudgery. We have nine different locations, but we are pretty tight knit. We talk often, and during meetings we will recognize birthdays, anniversaries, and employees who provide excellent service. We really try to create a family atmosphere as much as possible. That has always worked for me. It’s a people business all the way through. You have to like people, enjoy being around them, and socialize and build relationships. It’s a very important part of a culture I have always tried to foster wherever I have worked.
We have grown fairly quickly in the last few years, mainly through acquisitions. We are still digesting and finishing our strategy for bringing those companies together under one brand, which is Silverado Stages, and everything that goes with that. We are pretty close to being finished doing that. Then we will have to see where we go next. There’s some consolidation going on, regionally, and we keep our eyes out for anything going on, but we are not aggressively looking to continue to grow.
We are an ESOP company, with the employees owning about 14% of the business right now. We need to continue to push that and move more of the ownership of the business to the employees to help our owners Jim and Sharon Galusha execute their strategy, which is to leave the business to employees since they don’t have any heirs. We are not on any self-imposed deadline and remain on a steady pace. So in the next five years, I anticipate we will be able to continue to grow. We might do some smaller acquisitions here or there, if that makes sense, and just continue to try to focus on trying to shift the ownership over to the employees over the next five years as best we can, which is based on profits we can generate through the business. In five years, hopefully, we will have more than half the company owned by the employees.
The employee/driver force is decaying every year. Having a varying schedule in lieu of a fixed schedule makes our ability to retain employees more challenging. The motorcoach industry workforce that used to be available to us as a second income, in which they would possibly receive a pension from an earlier career, is swiftly dwindling. The driver shortage is certainly impacting our operation, as well as many other operators across the country. I’d be surprised if any company could say they have a line of people at the door waiting to get hired.
We have all the things like pension plans, medical insurance, bonus plans, uniforms, flexible schedules — these are the things most companies are providing these days. We are either a leader or equal to in this industry as far as pay goes. Over the last several years, we have had to elevate our beginning pay to try to attract more people, which also required us to increase our pay across the board to all current drivers. I don’t know if pay is the actual issue for all people as much as it is scheduling times, though.
It is very important to network with fellow operators in your areas, as well as across the country. You never know when you may need to reach out for assistance and/or provide assistance to a good operator. Also, while each operator has some similarities, each of them also has something unique to share with one another; whether it’s how to deal with a maintenance-related issue, safety/insurance, purchasing, marketing, technology, or sales, the knowledge shared is invaluable.
Our growth has primarily been through increase in rate and volume at low utilization times. Our rate increase, I believe, is a direct correlation to doing the best job you can, which results in your customers not minding paying a little more to get a better quality of service. We have customers that are a good distance away from us that could use other operators, but they continue to want to use us. We are OK with that because we get our full rates.
Honestly, we don’t get a lot of pushback from people on rates. We do a little bit, but it is so insignificant it’s not where we feel like we have to sell ourselves on our service or safety rating compared to company X, Y, or Z.
One of the big things is the traffic conditions in the areas we serve, including New York City and Washington, D.C., have gotten really tough. It’s wreaking havoc on our driver’s hours of service. It’s something that, obviously, the customer or our operation can’t control, and it makes it really difficult to plan out our days. You want to take out a group for a nice day, everything seems to be perfect, and you are doing it in less than 400 miles, yet you are three-quarters of the way through the trip and the driver can’t complete it because of traffic. That is both difficult and very frustrating. Where before it was a once in a while issue, it is now becoming a daily issue. So, I think that’s one of the biggest things we are contending with because it’s out of our hands and affects everything.
I would love to say it is just temporary, but this escalation has been going on and on, since before the Amtrak thing happened, so it leads me to believe there is more to this than just an anomaly.
For us, not so much. The only reason I can say that is because we have a pretty consistent flow of drivers coming in, and I am never in a position where I feel like I am hijacked to keep an underperforming driver on staff. I don’t know if it’s a pay and benefits thing, which is certainly very possible. We do pay very well and provide benefits a lot of companies around us can’t provide, such as medical benefits and 401Ks, and we are able to do that for our drivers. So, perhaps that may have something to do with it.
We did raise our pay scale, and we are also working on some additional benefits not necessarily monetary, such as life insurance for our drivers. Also, one of the big things with charter drivers, more so than line-run drivers, is the ability to manage their money. When it’s really busy, their paychecks are very large, but in the winter, or when business dips, their paychecks are so low they have a problem supporting themselves. Beginning this spring, we will start working with a financial manager so drivers can learn how to better manage their money and save throughout the year for when business is a little slower.
We get very creative with our drivers during the downtimes. We will bring them into the shop and teach them some maintenance stuff, have them clean, and we do a lot of training in the winter time when it’s slow, so we get creative with ways for them to earn money. That being said, business still dips in the winter. I recently had a driver in my office, and this was probably the seventh time this has happened over a period of months, and they were talking to me about how great business was, but how worried they were for November when business dipped. So, I thought to myself “we need to find a way to fix this for them.” When you look at what they make annually, they do well, it’s just a matter of that management piece they just can’t seem to grasp, so that’s where the idea was generated. Like I said, we are going to launch the program this spring, so our drivers can really take advantage of it.
That is a good question, and it is something we have analyzed and re-analyzed like 18 times in the last six months, because we have had so much change and experienced a lot of growth over the last year. I would say I need to stabilize a bit before my next round of growth, so that is my plan moving into next year. As we know, plans don’t always play out, but I would like to pick up a little bit more in the contract line work area. Amtrak is not able to do it all. New Jersey Transit is not able to do it all. And, I think that, perhaps, if we can get a little more resourceful and come up with some out-of-the-box ideas, maybe we can find a way to get some of these cars off the road and be able to move these people a little more efficiently to their destinations. So, maybe a line-run business, but not the typical kind. I would really like to come up with something a little more beneficial and not as overplayed.
This article first appeared in the Sept./Oct. 2018 issue of METRO.
Commentary: Jeff Rose, president of Limousine Association of New York, explains how the permit cap ignores vital for-hire differences.
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