Industry veterans Tom Holden and Jim Luff are ready to help motorcoach and limo companies grow and stay compliant.
CHICAGO — Operator George Jacobs can claim an industry legacy stretching to 1984, but old school is not a term to associate with him or his operations.
If anything, his experience going back to the founding era of LCT and its first trade shows makes him all the more seasoned in how he runs his company, Windy City Limousine & Bus of Chicago, and all the more generous in how he supports the luxury transportation industry.
A recent overview of his operations reveals how the owner and CEO, in confronting challenges, picks the right ideas and approaches, whether time-tested or full of potential.
It’s a growing trend, but Jacobs was among the first operators in the industry to head into the motorcoach market 10 years ago, which has proven more profitable than black vehicles. His fleet numbers 160 buses of all types and 200 chauffeured vehicles. More than half of his company revenue comes from bus and motorcoach clients.
While the company may get 500-560 sedan orders on a typical day, the 125 bus orders that day can bring revenues far greater, Jacobs said. “We are sold out of buses every day, and we sell out of cars often,” Jacobs said. “Every day we make sure we have enough vehicles ready and get them back on time for the next round of runs.”
Windy City does a lot of work for corporations, travel agencies, and groups going to special events. “The coach business has picked up like I’ve never seen it. It’s crazy.”
Motorcoaches are by far the most profitable moneymakers among fleet vehicles, due to high demand for them and the fact they will go out more days per month than any other type of bus. Windy City’s coach business divides about 65% in-state and 35% out of state, with sports teams and colleges often traveling beyond Illinois.
“People think nothing of taking multiple coaches,” he said. “Two nights ago we had nine motorcoaches shuttling people from a venue, to dinner, and to their hotel.”
Jacobs estimates if a coach is booked 23-25 days per month at $1,000 per day in revenue, it’s possible to clear a profit margin on the bus of 12-15%. One policy that works to Windy City’s benefit is a standing 10% fuel surcharge for coaches and a flexible one for black vehicles. “That’s a huge help because used coaches may only get four to five miles per gallon and new ones seven to nine miles per gallon,” Jacobs said.
Although he mostly buys new motorcoaches, he recommends starting with used buses, since the overhead costs are low enough to offset higher repair bills. “It’s a chance to get your feet wet in the market and get comfortable,” he said.
Many of the motorcoach manufacturers partner with industry operators, said Jacobs, a client of MCI, Van Hool, and Volvo/Prevost. “I’ve had huge success with them. They understand our business and work hard to figure the best fit for you.”
Jacobs finds added value in sharing buses with other operations with complementary off-seasons, especially among northern and southern climates. “If someone in Florida buys a new 39-pasenger bus, but has a dead season, I’ll take the bus and keep it through November and pay for the bus, insurance, and repairs for eight months.”
He also echoes advice limo-turned-coach operators often discover: “When you’re first getting into it, be real cautious. You must understand everything about D.O.T. rules and comply. There’s a lot to it, and you need someone at the office who’s qualified and well versed to do it right.”
To keep its book of business active, Windy City pursues events out of state, such as next month’s Super Bowl in Atlanta, where it has $1 million of business booked so far and 1,000 room nights reserved for employees and chauffeurs. The operation will have 150 chauffeurs and 30 support staff working the event.
While the bus business thrives, Jacobs admits he has to work harder on the black vehicle side, looking for large-scale clients while maintaining the bus clients. Reliable clients include first-class airline passengers, law firms, large banks, printing companies, insurers, and pharmaceutical companies, that cannot take a chance with inferior unsafe ridehail services.
“Most of the people who use buses also use car service,” Jacobs said. “If we do sports teams and buses, it’s logical to use us for car service.” For example, colleges that use Windy City for motorcoaches also will need chauffeured vehicles for recruits, visitors, professors, and speakers going to and from campus. “That’s the main reason to get into the bus business: Somebody who uses you for car service will also use you for bus service, and vice versa. People want to do one stop shopping. Many customers don’t know you have buses available.”
Now that so much ground transportation derives from apps and on-demand, Windy City uses Zipwhip, a mobile phone operator and texting service company which enables chauffeurs, employees, and customers to text and communicate without phones. Customers get auto-texts and updates about their rides. The technology has revolutionized how ground transportation companies communicate and help them meet the expectations of a mobile-first generation.
“It cuts back on phone calls from chauffeurs in the field; you don’t have any more phone holds, and you get more timely information,” Jacobs said. “Customers don’t have to talk to anyone.” The company offers online chat 24/7.
Geo-fencing enables auto-communication, so chauffeurs no longer have to make a call when they are 10 minutes out.
The company also uses Rate-my-Ride which sends every client a texted survey after each ride asking them to rate the service and comment.
Windy City belongs to GRiDD Technologies’ G-Net, which brings in reservations from other luxury operations. “It simplifies the manner in which you get the business and saves money by not having reservationists to put in the order. It’s direct to computer and there’s much less cost to that and less likely to produce an error.
“We honor all online booking platforms,” said Jacobs, whose company uses Hudson Group software. “Large corporations only want to book using a platform. We’ve adapted to all of them.”
Jacob warns operators to avoid signing up for platforms where you bid for business, especially those where you have to give away business for a low price or risk paying a fee. “Go on user groups and ask people for recommendations before you sign up. People are honest about that.” He also advises against using sellers of potential client lists.
“Put yourself first,” he advises. “It’s great to have tools and access to business. Don’t take business for the sake of taking it. If you’re not making money, churning is useless and all you’re doing is putting miles on the car. You have to be profitable.”
George Jacobs is astute enough to mention AM radio and social media in the same marketing breath.
He has seen success with trade out deals with radio and TV stations, swapping service for publicity. “Call up and say ‘I’ll give you a car for free to take people to concerts if you put me on the promotions.’ It just costs you your chauffeur for an evening and you get 50 mentions on the radio.” He’s cautious about social media, advising operators to use it sparingly: “I think you can overdo it. It’s the same people who see it every day and it can get annoying. I see posts I now consider spam.”
Windy City also invests in logos for its buses, including on the roof. “People send me emails and photos all the time. They get excited when they see our buses in cities. Google Earth has a picture of our bus that shows the top of our bus with WindyCitylimos.com.”
While many operators lament the lack of qualified drivers and chauffeurs, Jacobs said his operation has avoided the crunch. “We run classes all year. We don’t use anyone without experience. People like the feeling of this being a family. We give nice benefits such as health insurance and 401k with company match. That’s a huge incentive to people who come here. You’ve had jobs before, but we want this to be your career. We also talk to employees about our mentality: We started as a chauffeur company and don’t allow them to think of themselves as bus drivers. As a point of pride, it’s much better for clients if they have a bus chauffeur.”
Related LCT article: Why Giving Away Pays Off The Most
With an industry career spanning four decades, Jacobs has seen his share of financial ups and downs. His 35 years of profit and loss at American Limousine, Carey International, and Windy City yields this advice for running a luxury ground transportation operation:
• Review all your costs and make sure they are in line with where they should be. Look at expenses all the time; make sure they are justified.
• Service pricing should be fair and reflect the higher quality of your service compared to TNCs, who he refers to as “uninsured, undocumented, low-level taxicabs.”
• Do not try to compete with TNCs; show your customers how good you are and what you do best. Tell them horror stories about TNCs, which you don’t hear about in our industry.
• Do some ads, promotions, and sponsorships that might not be cost-effective, but are an investment in your company’s future. “I know I may not make money in the end, but the prestige of having the Cubs as a customer is worth its weight in gold.”
• Look for ways to save money with cross-training: “See if someone in the accounting department can be trained to take reservations.”
• Sit down and do budgeting; plan purchases. Plan what you will buy during the year.
Industry veterans Tom Holden and Jim Luff are ready to help motorcoach and limo companies grow and stay compliant.
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