Two corporate travel executives explain how providers can adjust to shifting demands and preferences.
NEW YORK CITY — A 60th-anniversary ranks as a rarity in the chauffeured luxury transportation market, a testament not only to longevity but very often a stable family business.
London Towncars, based in New York City, wraps up that anniversary marker this month, having been in business through all types of economic cycles, trends, disruptions, and regulations.
Now in the second generation hands of President & CEO Stephen Spencer Jr., London Towncars will forever be known for two firsts: The first limousine service in New York City to get the Taxi and Limousine Commission’s “License No. 1,” and the first winner of the LCT Operator of the Year Award in 1990, an awards program that next year will mark its 30th anniversary.
LCT obituary: Stephen Spencer Sr.
The company is keeping its anniversary low profile, with an acknowledgment during its annual holiday party this month and posts on social media. Spencer’s father, Stephen Spencer Sr., and two partners decided to drive black London-style taxicabs in 1959 as a way of taking riders to and from the airport.
“Ground transportation was a bit of a lark, so they thought this might be fun,” Spencer says. His father, who passed away in 2010, eventually bought the other two cars and created his own company.
Before the advent of today’s many regulatory layers, the senior Spencer was able to get license no. 1 from the New York Taxi and Limousine Commission. “He felt working with the government was better than working against the government,” Spencer Jr. says. “He figured there would be some regulation, minimal at the time, and he knew someone in the mayor’s office or TLC who could give him number one.”
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For 50 of the 60 years, London Towncars has been based in Long Island City just beyond the 59th Street Bridge. “It’s the same building owned by my family in an LLC,” Spencer says. The location is close to Manhattan but without the high commercial rents. It also lies within a 10 to 15-minute drive from LaGuardia Airport and 30 minutes from JFK International. “There are multiple ways for a chauffeur to get into Manhattan,” he says, mentioning the Midtown Tunnel and RFK Bridge as alternate routes. “The cost of being here has gone up and the taxes are up, but it’s still a better deal than if we were in Manhattan.”
Through the decades, London Towncars became a showcase of limousine history as it morphed into a high-end VIP-oriented luxury chauffeured service and phased through the luxury fleet vehicle brands that came to define an industry. Its fleet now consists of about 30 vehicles, down from 58 vehicles in 2010 and from 125 in 1990.
Far from being a sign of decline, the lower fleet count instead shows how luxury transportation prioritizes service more than scale as the niche evolves into a more diverse and competitive ground transportation market.
The fleet downsizing, as Spencer explains, has been strategic for the company so it could focus on and grow its core corporate and VIP clientele. The company no longer runs stretch limousines, since the model has yielded to vans and minibuses, while it chooses to farm out Sprinter van runs due to what Spencer describes as over-regulation by city, state, and federal agencies.
The fleet now includes a mix of Cadillac, BMW, and Mercedes-Benz sedans and Cadillac Escalade ESVs. A solid measure of success is if your fleet garage stands empty most days with vehicles out on the road on runs.
“When we did have vans, they were profitable, but sometimes the van sits there for two to three weeks and there’s not enough consistent work to justify having them in the fleet,” Spencer says.
While the company keeps a strong roster of VIP and individual clients, Spencer notices more challenges in the corporate sector where many companies have replaced in-house travel agents with accounting and procurement officers more focused on arranging lower rates.
“They’re looking at the bottom line. We consider ourselves a high-end service. You get what you pay for,” Spencer says. “Our overhead is higher because we own the vehicles, hire employees, own our garage and facilities, and have mechanics.”
Having direct control over employees and vehicles is more expensive, but enables an operator to deliver a higher caliber of service. “Corporations have tried to beat us up on price, and we’ll offer a discount, but not the ones they want. You can’t stay in business if you offer huge discounts.”
London Towncars has made up for any lost corporate business with more wealthy individual clients and affiliate work. “Now we do about 10% out of town work. It’s profitable to our bottom line. Affiliates and customers have a one-stop-shop.”
One of the keys to company longevity has been a willingness to shift and change fleet sizes over the decades. Fleet vehicles must be contributing to profitability, he says.
“When we had 100 cars, we probably had 20 or 30 more than needed. They were not going out a lot. By reducing the fleet, you are reducing your expenses and that helps profits. Make sure the vehicles you have are generating revenue, out on the road, and doing work. If you have a car sitting around a few weeks, you are losing money.”
In a ground transportation market saturated with Uber and Lyft, Spencer says luxury chauffeured transportation services must distinguish themselves through attentive and consistent quality service. Before transportation network companies (TNCs) entered the market, limousine services could handle ASAP requests depending on fleet availability. Now, even if you tell callers you can send a vehicle in 20 minutes, they will opt for the immediacy of Uber, Spencer says.
“We only have 30 cars and Uber can be there in a matter of minutes. Speed and convenience are their strong points and that won’t go away. We compete on service. We provide a chauffeur who is professional, speaks English, has no body odor, and drives a new vehicle. Customers have to be willing to pay a premium for that service. That means we must be on time every time and the chauffeur is on point, well-groomed, well-spoken, and knows what he’s doing. As long as we stick to that game, the customer willing to pay a premium won’t go away.”
As part of providing superior service, a company needs chauffeurs who make the difference, beyond just a clean, comfortable, late-model luxury car that is always on time.
“A good chauffeur knows how to read the customer, who knows they are in someone’s hands who is safe, reliable, competent, and won’t argue with them,” Spencer says. That also means helping with luggage, a wheelchair, or whatever they need. “Your extra service has to be consistent. You can’t be good nine out of 10 times, and mess up once, because some customers won’t let you forget that and disappear.”
The company has 70 employees, including 55 chauffeurs with an average tenure of 12+ years, and handles an average of 100 runs on a typical weekday.
As the industry heads into the fleet world of the 2020s, more automakers are eliminating or de-emphasizing sedan models. Spencer is looking toward the Cadillac XT5 crossover as a likely replacement for the Cadillac XTS, which is going out of production this year.
“The XT5 has a different look than a sedan,” he says. “I sat comfortably in the back and the rear area trunk is big enough for luggage going to the airport. It’s a good-looking car for a crossover, and the model without the sunroof allows for extra headspace. The world is changing, and you can’t just stand still.”
While the vehicle models and transportation modes may change, Spencer never compromises the principles of customer loyalty. He advises keeping in regular contact with your customers. With some clients, Spencer stops by for a visit and brings a token of appreciation, such as baked goods or doughnuts.
That human element in business will always endure and define true success. “You have to show your care,” he says. “That’s the extra glue that keeps the customer. You need a relationship with your customer for them to stick with you.”
Two corporate travel executives explain how providers can adjust to shifting demands and preferences.
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