Operations

Operator Calls For A Cab Company In Tough Times

Posted on June 6, 2011
Orange Taxi will be using a mix of Toyota Scions and  Priuses for a suburban Washington, D.C. cab service starting this month.

Orange Taxi will be using a mix of Toyota Scions and Priuses for a suburban Washington, D.C. cab service starting this month.

Orange Taxi will be using a mix of Toyota Scions and  Priuses for a suburban Washington, D.C. cab service starting this month.
Orange Taxi will be using a mix of Toyota Scions and Priuses for a suburban Washington, D.C. cab service starting this month.

ROCKVILLE, Md. — Operator Robert Alexander is taking up taxis for the first time this month, proving how fluid the ground transportation sector has become in a more cost-driven business travel environment amid a rickety economic recovery.

Alexander’s RMA Worldwide Chauffeured Transportation recently acquired 14 PVL (private vehicle licenses) to create ORANGE TAXI, based in Montgomery County, Md. It will serve the same metro-Washington, D.C. region now traversed by RMA’s fleet of 120 luxury chauffeured black vehicles. [RMA is the 2011 LCT Operator Of The Year Award winner in the 51-plus vehicles category].

While a transportation company operating limo and cab divisions is nothing new, Alexander is a longtime, major national operator steeped in the luxury tradition who serves as a board director of the National Limousine Association.

Why Is That Nice Man ‘Goin Cab’ On Us?
Alexander recently told LCT that creating the cab division was an opportunity to diversify his transportation services and create a reliable and lucrative revenue stream in a more challenging economic and travel environment. “Most operators are saying it’s brilliant, that I’m hedging my bets,” Alexander told LCT. “The economics in cabs are better than limousines. You have a fixed revenue stream. You control the maintenance. You don’t have so many fluctuations in costs. Rates are metered.”

Alexander also is resigned to the realities of a far more budget-conscious post-recession environment. “People need to get where they need to go,” he said. “You have many more people who need a cab or a bus than a sedan service. Will they always need to use sedan service? I hope they do. At the end of the day, who knows?”

Orange Taxi will start out with a fleet of 14 Toyota Scions and Prius hybrids, fuel-efficient vehicles that average 28 mpg and 48 mpg respectively. According to license rules, the cabs must either pick up or drop off in Montgomery County, a densely-populated suburban county next to Washington, D.C. Each cab license is worth about $80,000 on the open market, and RMA becomes the fifth fleet company in Montgomery County to have PVLs, Alexander said. The new PVLs came about after the county government wanted to take measures to limit cab service monopolies.

“It’s easier for us, since we’re a high-end limo company, than for cab companies to go into the limo business,” Alexander said. “We’re going from high to low instead of low to high end. We can put standards in. It won’t be that difficult.”

Juicing The Business Model
Indeed, Orange Taxi can be selective in which cab drivers it hires, since it is offering economical, durable, fuel-saving vehicles along with insurance and training for drivers, Alexander said. RMA/Orange Taxi owns the vehicles and pays for insurance, maintenance and dispatching. The vehicles will be leased to independent contractor cab drivers who pay for gas and are then free to make a living, he said.

The markets for luxury chauffeured vehicles and taxis are distinctly different, with little or no overlap, Alexander said. In fact, a higher-quality taxi service can attract more customers from corporate clients who may want to use them for lower-level managers and employees not using chauffeured vehicles. That also could give RMA opportunities to upsell or “upmarket” chauffeured sedan service. Alexander doubts that existing corporate sedan clients — mostly upper level managers, executives, celebrities and VIPs — will downgrade to taxis.

“There might be some trade-down business, but Town Car clients stay the same,” Alexander said. “It may open up doors for people to use a Town Car for special occasions and use a cab otherwise, resulting in some cross-over business.”

Toot, toot. The Toyota Scion will serve as an economical but roomy cab for Orange Taxi in Montgomery County, Md.
Toot, toot. The Toyota Scion will serve as an economical but roomy cab for Orange Taxi in Montgomery County, Md.

Fresh Service With No Pulp Or Bits
Alexander emphasizes that his cab drivers will not be the stereotypically rude, impulsive, and marginally groomed cabbies associated with the taxi industry. Nor will his vehicles become smeared up rolling garbage bins.

“I was in five cabs today,” Alexander said. “I went in and, my gosh, I got into some of these cabs and you could see where people spilled sodas in the back or put feet on the headliner. It was just grubby.”

Orange Taxi will have a formal cab driver training program based on RMA’s in-house chauffeur training programs. Drivers will be required to wear uniforms that most likely include an orange golf shirt with the company’s logo. “We’re going to be very selective,” Alexander said. “We want the drivers to feel part of a new and great thing. If we give great service, we’ll get all the work. It will make us unique.”

RMA operates about 120 luxury chauffeured vehicles of all types. It recorded a first-quarter YOY revenue increase of 17%. The company, which bought a smaller operation in Maryland’s eastern Potomac region last year, specializes in transportation to and from the region’s major airports: Reagan National, Dulles International, and BWI.

-- Martin Romjue, LCT editor

Beep, beep. Orange Taxi will offer higher-end, specially trained cab

Related Topics: green vehicles, RMA, Robert Alexander, taxis, Toyota Prius

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