Big City Charter Bus Company Adopted Luxury Model Early

Martin Romjue
Posted on February 9, 2019
Paul Eshaghi got an early start on a concept that has gained momentum in today’s industry: Motorcoach transportation as a luxury service. (LCT photos by Martin Romjue)

Paul Eshaghi got an early start on a concept that has gained momentum in today’s industry: Motorcoach transportation as a luxury service. (LCT photos by Martin Romjue)

LOS ANGELES — Operator Paul Eshaghi was well ahead of industry trends in 1990 when he went from owning a traditional limousine company to starting a corporate-centered motorcoach service.

Eshaghi, owner of Los Angeles-based Corporate Coach Charter & Tours (CCC), upgraded the traditional set-in-ways charter bus model with a service and quality standard that resonates today, as more chauffeured transportation companies widen their reach into luxury coaches.

With 29 years of coach and bus experience, his company sets a standard with some valuable lessons for operators either getting into coaches or running coaches and limousines.

“We had targeted the corporate groups and brought some extra things the bus industry at that time especially didn’t really offer, and applied it to our vans and minibuses,” Eshaghi says. To distinguish itself, CCC focused on safety and service, providing those amenities and attentions charter business services typically lacked. That would include a driver in a shirt and tie, bottled water, and now Wi-Fi service. He realized success in motorcoach operations goes well beyond getting a group from point A to point B. He now runs mostly black-on-black, high-end coaches and minibuses.

Limo Industry Origins

Paul Eshaghi stared in the industry 35 years ago as a college student at Cal State Northridge. He ran a small limousine service from his house in Westchester near LAX from 1983 to 1985, and then merged it with his brother’s company to form Pacific Limousine which they ran for five years. After gaining experience with limousines, he wanted to expand into group transportation, and began Corporate Coach Charter & Tours in 1990. He first ran vans, then minibuses, and bigger coaches.

“I was coming from the limo industry and was a lot younger back then, but I was very excited about the bus business,” he says. “It seemed like I wanted to have or touch that elegance associated with it.”

One reason Eshaghi prefers the coach business over the limousine business is it’s easier to plan trips. “In the bus industry, you can organize your time, schedules, and drivers. The limo business is demanding every moment. Every minute that job comes in, you have to be able to provide. Of course, you adjust for that. Then you have chauffeurs sitting on a standby and just send them out as needed.”

Eshaghi operates with fleet turnover that minimizes long-term maintenance and ensure best resale values on vehicles, while running the lateset lexury models.

Eshaghi operates with fleet turnover that minimizes long-term maintenance and ensure best resale values on vehicles, while running the lateset lexury models.

Evolving Operations

As he gained experience, Eshaghi acquired property in a central location, put all major functions in-house, priced for quality, and paid drivers above average. Backing up that service is 24/7 call access and dispatch, a full maintenance staff, and a cleaning crew.

“Unfortunate things do happen and there’s no advanced notice,” he says. “We try to make sure the customer at the end is happy, and make it easy and more comfortable for them so they prefer us to another company.”

CCC enjoys a major advantage in a congested metro area: It operates out of its facility in Inglewood, which is close to the 405 freeway, LAX, the rising new Los Angeles Rams and Chargers stadium, and the LA Forum, and is within an easy shot to downtown Los Angeles and the Westside. The company bought its one-acre tract in 2011 and added a contiguous .5 acre tract last year. It has a 3,000 square foot headquarters building, a row of garages, and a 7,000 sq. ft. warehouse at the front of its property that it leases out short term for now.

“There’s hardly anybody with a bus company in this area,” he says. “We have room to grow and go forward, and we have a really great relationship with the city of Inglewood. Our biggest advantage has been purchasing a property and staying in the area, so nobody can really either increase the rent on us or make us move. We are here to stay and it’s a great future for us.”

CCC enjoys the conveniences of a company-owned urban lot with all operational functions in-house.

CCC enjoys the conveniences of a company-owned urban lot with all operational functions in-house.

Growing Group Clients

Building on its corporate group clientele, CCC in the last six years has branched into tour groups that visit western states such as Arizona, Utah, and Nevada, sometimes on 12-13 day excursions. It also provides regional Southern California tours for European groups, and in 2018 handled its first Los Angeles to New York cross-country charters. CCC previously did about 80% of its bus transportation in the areas between San Francisco to San Diego and out to Las Vegas.

Groups traveling together for long periods become almost like a small family bonding with the driver and tour guide. “Often we get good feedback from those clients coming back to us and saying, ‘You know what? This guy was excellent; he was great.’ For me, as the owner it makes me say most of what we are doing is right. That’s what we are trying to accomplish.”

CCC also has its School Pupil Activity Bus (SPAB) certification in California, which enables it to carry school and athletic groups. A SPAB certificate is required for a driver to transport students to and from school-related events.

Four-fifths of CCC drivers and 90% of its motorcoaches are SPAB certified as well as certified in several Los Angeles area school districts. “When the kids or the students get into these buses and see what we offer, their eyes open up. We use the same coaches and minibuses as for corporate and out of town groups.”

About 5% of CCC’s business comes from farm-in runs and trips from Southern California affiliates of all fleet sizes that need buses, Eshaghi says.

“Every time we buy buses and get positive feedback from a client, I become very excited even after 28 years. To me it’s very important to never relax and say, ‘Okay. We are at the top of our industry.’ No, this transportation business has many different things you must constantly monitor or manage and be on top of.”

New Vehicles, High Turnover. . .

CCC follows a turnover policy on motorcoaches of about six years, whereas with other companies, it’s usually about eight to nine years, Eshaghi says. For minibuses, Eshaghi finances them for three years and keeps them up to four before selling. He always buys new, whether motorcoaches or minibuses.

“I take the lowest financing,” he says. “Fortunately, we have great relationships with the finance and insurance companies, and different vendors we work with. So while seven years is usually the standard financing on the buses, we make it six years and sometimes five-and-a-half years. As soon as it gets paid off, we start looking to sell those buses and use them maybe another five or six months.”

Eshaghi cites a strong secondary market for used motorcoaches inside and outside the U.S. “The first factor is for the customer. Every year, these buses, like any technology-driven industry, have new items added on. I could buy a bus this year, and next year they come up with something new that basically would be advantageous for the customer.

“Number two is, if you sell the bus at about 300,000 miles versus a lot of companies that use their buses up to 500,000 or 600,000 miles, you save money on your maintenance because the older the bus gets, the more you have repairs and breakdowns.” As a result, you get your money back faster and buy new buses, he says.

. . . But Low Driver Turnover

CCC boasts a low turnover rate at a time when motorcoach and chauffeured operations have trouble finding qualified drivers and chauffeurs. One incentive the company has borrowed from the limousine industry is charging clients a 10% gratuity and passing it through to the driver. “Nobody ever did that when I started it. A gratuity was unheard of to pay.” The company also pays its drivers for overtime, even for interstate trips which are exempted from federal overtime laws.

“A lot of operators who see me at the shows and call me ask why I’m paying all that extra money when I don’t have to. I say, ‘You have to keep the driver happy one way or another.’ We want to find the cream of the crop and get them to work for us long-term.” He estimates average driver turnover at his company is about 12-15 years.

Finding drivers for long, over the road tours is a challenge because you have to hire someone willing to be away from home 12-14 days and who has the right personality and demeanor to bond with the tour group.

“The driver has to make money to survive, and the Los Angeles market is fairly expensive to live in,” Eshaghi says. “If your driver at the end of the day is happy with what he’s making, that’s all I can ask for from that part. I have to make sure he has the right bus, the right fleet. I have to make sure the support, whether it’s insurance, maintenance, reservations, information, is there. Everything has to be in place for it all to click and work together.”

Drivers willing to do regular long day tours can make up to $75,000 per year. “If they cannot afford the living, guess what? They will jump ship and go somewhere else. So if they’re good, you might as well work to keep them.” The company offers medical, dental, and life insurance as well.

Stay With Real Coaches

Eshaghi advises against buying cutaway chassis minibuses beyond 35-38 feet in length, preferring mid- and full-size motorcoaches for carrying 40 or more passengers, such as Van Hool CX35 or MCI J3500. Extended minibuses with underbelly storage that mimic motorcoaches are not suitable for 10-12 day long road trips because the engine, durability, and turning radius are not as strong as on a unified or monocoque chassis coach, he says.

“Yes, it’s a lot more expensive to get a coach. You're looking at least at a $500,000 investment. But in those extended chassis buses, things will go wrong. Even for local jobs, when the bus and the chassis gets that long, the driver will have problems as far turning around and getting in and out of places. I'm not a fan of those extended buses and very long chassis.”

Big On Safety & Insurance

Like many motorcoach operations, Eshaghi devotes one person to compliance to keep up with all the federal and state rules and track electronic logging devices (ELDs) on all the buses.

He also carries extra insurance at $10 million liability per bus per incident which is well beyond the $5 million requirement for vehicles carrying more than 15 passengers. Some large corporate and educational contract customers require the $10 million liability.

“You get an extra edge versus a smaller company that cannot afford having a $10 million liability on their buses,” says Eshaghi, whose company is a client of Lancer Insurance. “When you have $10 million, you are making customers feel comfortable to get to that level.”

CCC also uses an in-house trainer who holds classes and advises drivers, which helps the company maintain its SPAB requirements. Drivers must attend at least one training session per month in a classroom at the company’s headquarters.

Financial Balance

None of these operational practices can succeed without books that balance and churn a profit while offering competitive pricing that underscores quality. Financially, Eshaghi tracks his P&L in two categories: Motorcoaches and minibuses and vans.

Eshaghi says he charges rates that fall in between those of a limousine operation and those of a traditional motorcoach service. CCC adds a standard driver gratuity on a five-hour minimum. It also offers day rates. A longer tour gets a slightly discounted day rate plus the driver tip, per contract.

While CCC has not acquired any operations, it is looking to partner with a motorcoach operation in another area of the U.S. that would complement its Los Angeles service region and allow for referring mutual clients. It also is available to handle farm-ins from chauffeured operations that need coaches, but don’t want to buy them.

“Our slogan is our MO: ‘Transportation with elegance,’” he says. “We’ve kept that from the inception of the company to provide that extra touch, extra service, and the extra points customers will remember compared to other companies. And that’s been our key to growth.”

FASTFACTS: Corporate Coach Charter & Tours
Location: Inglewood, Calif. (Los Angeles)
Founded: 1990
Owner: Paul Eshaghi
Total fleet: 33; 16 50-56 passenger motorcoaches (Van Hool, MCI, Prevost); three mid-sized coaches; 12 mini-coaches (Grech Motors and Executive Coach Builders); two Sprinter vans.
Client categories: 30% corporate / 30% tours / 20% local leisure / 20% schools
Drivers: 25 full-time, seven part-time
Office/maintenance staff: 13
Annual revenue: N/A
Website: www.ccctours.com
Information: (310) 216-1171 / (800) 452-2622

Related Topics: California operators, client markets, group transportation, How To, Los Angeles operators, motorcoach operators, motorcoaches, operator profiles

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