Of all the fares Jalopnik examined, Uber kept 35% of the revenue, while Lyft kept 38%.
LAS VEGAS, Nev. — In this competitive, fluid ground transportation market, success arises out of breaking old patterns. Traditional limousine service, airport transfers, and angling for big affiliate work no longer serves as the best route to strong revenues.
A seminar held at the International LCT Show in March centered on rethinking traditional ways to generate revenue and find newer markets and ventures that can grow the pie for chauffeured service.
Titled “Increase Your Market Share by Creating New Streams of Revenue,” the seminar tapped the expertise of Charlie Grimm, owner of BAC Transportation in Anchorage, Alaska; Stacy Glazier, co-owner of Fleet Transportation in Alexandria, Va., serving the Washington DC metro area and Stowe, Vermont; and Sam Rubin, owner of Four Seasons Concierge Transportation of Salt Lake City, Utah.
The trio started out with an overview of their transportation services which are built on the newer business model of diverse client segments.
For Glazier, building relationships with apartment complex property managers leads to more contact with the residents, who use their services on weekdays between 5 a.m. and 8 a.m. and 3 p.m. and 7 p.m. to get to and from Metro stations. “The apartment complex is actually partnering with us to offer offsite things to do on the weekends, like a football game, a baseball game, or winery tour, and the residents are using us now to book their own weddings or airport transfers,” Glazier said.
Fleet Transportation has offset a slower period with the Vermont arm of its business. Business has been so strong the company is buying fleet vehicles dedicated to their Vermont operation instead of just driving up vehicles as needed from their Washington-area base.
Glazier recounted how her company is trying to break into the local Vermont market by building relationships with hotels and airlines at the small airport in Burlington, which now use a provider with rundown vehicles and non-CDL drivers. It may take time to connect with clients who will appreciate your quality and safety, she advised.
One advantage for luxury transportation services is their high standards and practices, Grimm said. “It's amazing when you go and look at crew transportation and see other companies pick up your crews 15 minutes late, or they'll have a car that looks horrible, or the driver will have a marijuana symbol on the back of his jacket. We have such a great advantage in picking up some of this work because of our ethics and how we are and how we do the work.”
One way Grimm’s company takes on additional services to fill in the downtime is delivering lost luggage for airlines and cruise lines. Often, chauffeurs can double up a lost bag drop with a client run if they are in the same vicinity. Of course, the client gets dropped off first. Chauffeurs can also pick up a bag run in between client runs.
“Sometimes we're going up five miles away, or one mile away, or we're going 237 miles one-way to deliver a bag,” Grimm said. “These are great fillers for you and your company to do. Last year we were over $400,000 in revenue in delivering bags. The bag doesn't complain. The bag doesn't care what temperature you have in the car, the bag doesn't write a bad review.”
Additional revenue streams also act as a buffer against slow seasonal cycles, Rubin said. “If you have these other alternative sources of either of income or marketing tools, then it minimizes that downturn,” Rubin added.
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Rubin’s company once grew its business by doing bulk deliveries of gourmet cookies from a local shop.
“We're talking about the four or five, six dozen, $300, $400 cookie deliveries. And we give 100% of [the rate] to the chauffeurs. The company doesn't necessarily make any money on it, but when you have these big orders, the cookie shop, the cake shop, the gourmet place, whatever that business is, they have that duty of care.
They know that this is how we take care of our clients. This is how we'll take care of their product.”
The service works especially in the company’s favor when delivering at corporations, banks, or high-end business locations, Rubin said. As he told the story:
“You can't just walk in and say, ‘I want to go to the CEO's office,’ or ‘I want to go to the 15th floor.’ They won't let you. But I guarantee you when you walk in with a box of cookies or cake or flowers, watch how quickly that gate opens. Watch how quickly you get up to the top floor. And when you see the gatekeeper at the front, and you say, ‘Hey, I've got something for Bob, do you mind if I bring it in?’ They will open the door to the CEO's office. You might be able to give them a [business] card with the gourmet cookies. We've got a postcard that a brand helped us design, so it met their standards. So, now when you open up this giant box, and you're seeing these giant cookies and eating them, you will look ahead at a postcard that says, ‘If we got these cookies here like this, imagine how we would get you and your employees.’ We've gotten calls, and we've gotten business. And by the way, the cookie place pays us to do that. It literally does not cost us anything. We don't pay for that type of advertising and what it gets us in return is huge. That's something that regardless if you have one car or 50 cars, you can do.”
Grimm’s company does NEMET (non-emergency medical transportation) for all three major hospitals in Anchorage, including non-critical and wheelchair patients.
“We do 24-hour emergency care for any patient who comes into the hospital from a wheelchair or an ambulance. They have to make sure they have door-to-door service. Taxicabs don't work anymore because taxis let them off at the curb, don't have a wheelchair, won't wheel them up to their door and make sure they get in safe. Our second biggest client is wheelchair service. We have bought three used ambulances, and we're taking them and declassifying them from ambulance service.”
These vehicles become ideal for reclined transportation, such as gurneys. “That’s a new service we'll be opening this summer, and there's a huge demand for it. Transport rates in town could be up to $600-$800 for a one and a half hour transfer.”
That’s well below the typical rates to rent paramedics and EMTs who can cost $2,200 to $2,600 for an hour and a half transfer. “We can come in with no paramedics. We can have AED certified, First-Aid certified, and CPR-certified people to do a transport.”
“Hospital work is one of the leading industries that is picking up more and more,” Grimm said. “They cannot get enough nurses, they can't get enough doctors. There are not enough people in that industry, and they are constantly looking for help. It's pretty astounding when you can't get a person out of the bed because they can't get them transported home. They're more than willing to pay you $125 or $150 to take them up in whatever vehicles to get them home.”
Regular medical appointment transportation is also a growing market, said Grimm, who along with his wife, have firefighter EMT experience. “There are so many different avenues of this. It's massive, and we have people who are unhealthy than they are healthy these days.”
Business referrals can come from attorneys, doctors’ offices, medical facilities, kidney dialysis services, for example, Grimm said. “All of these people need to get from point A to point B. A kidney dialysis appointment can cost $2,700. If that person shows up late or doesn't meet that time slot, it's a three and a half hour slot. If that person doesn't it make it, they don't get their appointment. These people have to have it to survive and live.” The TNC drivers do not provided the added service of making sure patients safety get in and out of the vehicle and to and from the front doors. “This is a market you can have total access to and we just need to go out there and knock on the doors.”
Operators can also work with country clubs, gated communities, restaurants, and hotels, all of which can involve events or trips that include alcohol beverages, Rubin said. Many of these potential clients need to be education on safety and regulations, and how your company complies.
One client segment with potential again are nights out to restaurants and bars, especially in states or areas where the legal blood-alcohol driving limits have been lowered to .05 or .08.
“If you have a few sips of wine, you’re now drunk,” Rubin said. “Even if it's a loss leader and you're breaking even on the runs, the hotels and the restaurants will love you because now someone can have that extra bottle of wine or cocktail. They will spend more money within those four walls and then when they need to go to the airport, or for prom, or for a wedding, they will think about you as well. There's plenty of low little fruit that can reap great rewards for you.”
Glazier shared how her company increased its revenue by 63% on airport, hotel, and restaurant transfers in Vermont from January to March simply by offering a branded app. Called stowerides.com, the app uses Fleet Transportation’s drivers and vehicles only, and doesn’t compete with local TNCs.
“You can actually physically book all your transportation live-time on an app like an Uber or a Lyft except it's safer. That's our competitive advantage. We've gone into all the restaurants and hotels and we’re incentivizing the front of the house, the concierge, the bartenders and hostesses.”
To set apart your service, Rubin advised be on time, allow the chauffeurs to be the “parents” of your vehicles, and emphasize you are creating an experience, not just delivering a service.
“You're giving an experience to each one of these people,” Rubin says. “And if the experience is good, the will want to continue it. If you're just showing up and doing the door to door service, it's not enough anymore. We already have Uber and Lyft. They are not our competitors. That is a total different service. They are competing with taxicabs and other people. Let's sell the experience to these customers. Give them what they're looking for. Give them the same thing every time. Compliment the person who's walking up. Tell him how nice their shoes look. Tell the people how thrilled you are to see them again. They all want to hear that. It’s the same thing when you walk into your favorite restaurant and they come and greet you by name. You feel good about these experiences. So, I don't mind spending $60 on that steak when I go inside if I know that I'm getting the service I'm looking for.”
Personalized service is critical, Glazier added. “Put a face with a name and make sure you know your audience, not only the end user but the event planners, the people at the hotels, the front end of the house, the concierge etc. Just personalize your service all the way around.”
For any new or current client meeting, always bring food and coffee, Grimm advised.
“You will get 15 extra minutes while they are eating the food and enjoying what they're bringing. And watch your audiences. We must probably be spending at least $600 to $800 in doughnuts a month.”
“In the last three years, we have grown almost 33%, and it was relationship-driven,” Grimm said. “We worked with our partners, going out there and talking to them about what they need. If you're not visiting your customers once a week or month, or you're not sitting down and finding out about their needs, you're losing out on huge opportunities.”
Grimm suggested mining contacts by serving on any local board of directors, such as volunteer groups, youth athletic associations, tourism agencies, hospitality groups, non-profit associations, business clubs, advisory panels, etc.
“Start volunteering, start giving those guys some airport transfers. Start getting on those guys. They will bring you business. They are the decision makers.”
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Related Topics: airport contracts, building your clientele, business development, client markets, finance, ILCT 2019, industry education, medical transportation, retail markets, revenue growth, revenues
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