BY MADELEINE MACCAR
It’s no secret that buses and motorcoaches are steadily gaining traction in the luxury ground transportation space.
A cursory stroll through an industry trade show’s exhibit hall is packed with massive people-movers; a quick scroll through the Facebook limo groups yields scads of questions about when and what kind of group vehicle to buy, interspersed with advice from those who have dipped their toes in those waters before.
While TNCs do continue to make headway into territory that was once almost exclusively occupied by traditional, legally operating transportation outfits, those in livery’s luxury sphere need to start finding creative ways to stake their claims in so-called “Uber-proof” avenues to not only benefit from that untapped revenue potential, but also seize upon new offerings to better satisfy all of their clients’ needs. The solution may lie in specialty vehicles requiring a CDL that most TNC drivers don’t have the experience, desire, or funds to acquire—to say nothing of so-called technology companies’ inability to either bully or buy their way out of the Department of Transportation’s rules and regulations as they have with cities and entire states across the country.
You have to invest in either a consultant or a safety manager to make sure you are compliant with DOT regulations. You also have to beef up your HR department ..."
– Kristina Bouweiri, Owner of Reston Limousine
Before you balk at the idea of putting a party bus in your strictly corporate fleet, know that group work doesn’t necessarily mean you’re entrusting a sizeable investment to the whims and revelry of raucous retail clients who are known for leaving some extensive cleaning efforts in their wake. While school and university work may yield opportunities to transport children’s and youths’ sports teams, extracurricular clubs, field trips, and Greek organizations, there is just as much potential for moving corporate groups, tourists who are too busy snapping photos and asking about local favorites to be troublesome, and masses of other considerably calmer clientele, too.
We know there are a few holdouts left in the industry. Whether you’re on the cusp of buying your first motorcoach, still deciding if you can justify such a daunting purchase, or unsure of what your first step should even be—don’t worry, we’re here to ask the bus and motorcoach veterans how they forged their own path through wholly new territory while finding success (and learning how to look at inevitable miscalculations as opportunities for refining an idea) in business beyond sedans, SUVs, and limousines.
Tip #1:
Learn your ABCs regarding ELDs.
The Electronic Logging Device (ELD) rule is scheduled to go into effect on December 18, 2017, so if you are operating motorcoaches, then you likely will be required to adopt ELDs. Because of the extensive impact that this transition will have on your company—especially if you haven’t yet added ELDs to your fleet—associations like the United Motorcoach Association (UMA) and American Bus Association (ABA) recommend a six-month phase-in period, based on current ELD user feedback, which would be no later than June of this year. The review process also requires the selection and evaluation of the device, thorough staff and driver training, and contingency planning should there be any issues. In other words: There’s no time to waste.
The Federal Motor Carrier Safety Administration (FMCSA) has prepared an online FAQ guide for anyone who needs more information about ELDs. You can download the 21-page PDF here: goo.gl/UhYW0y.
Want to know if your device is registered with the FMCSA or if it meets those standards? This link (goo.gl/uhbBEZ) will tell you. Note that devices are self-certified by the manufacturer, NOT FMCSA, and it is still your responsibility to be compliant.
Taking the Plunge
So how do you even know if it’s time to stop relying on your affiliates’ group-movers and dole out the dollars for a massive fleet addition of your own? Do you buy a new or used motorcoach—or an entire company? What do these vehicles need to resolve, both for you and your clients? What kinds of compliance, regulations, staff, and education do you need to ensure that you’re giving this new venture all the advantages and tools it needs to flourish?
When Virginia’s Reston Limousine incorporated in 1990, the company already had a 25-passenger minibus. According to owner Kristina Bouweiri, the idea even back then was to diversify their clients’ transportation options to establish themselves as a versatile company poised to weather the recession of the time. Fast forward to 2005, when Reston purchased its first motorcoach to satisfy a newly acquired contract—which helped the company grow the large-vehicle fleet it had been focusing on and that today boasts 150 minibuses alone. Knowing they’d have to test the waters before committing to any major moves, the Reston team made calculated decisions by observing customer demand, keeping on top of the economic atmosphere, and only paying for metal they knew they could both afford and justify.
“We grew our minibus fleet by bidding on and winning government contracts in Washington, D.C.,” Bouweiri says. “We bought our first coach in 2005. We knew then that the one contract would cover the cost of the coach, so we bought it. We soon noticed that it was busy seven days a week, so one year later we bought another one. When we bought the second coach we noticed it, too, was busy seven days a week so we bought another one. We only stopped adding a coach per year in 2008 because the stock market crashed and we thought we should wait.”
Indeed, being aware of your own business trends and how the macrocosms of your local market and overall economy influence them is one of the first steps in identifying how crucial such an addition is. A little foresight and self-assessment goes a long way: Books, contracts, and demand all must be honestly examined in order to choose how many passengers and what kind of uses a motorcoach will provide.
Within a period of three years, we turned a $460K company into a $980K one by rebranding it, bringing in more vehicles to meet the requests and demand ..."
– Jeff Canady, Owner of CLT Express
For Jeff Canady of North Carolina’s CLT Express, he and his wife Laura were simply tired of relinquishing both quality control and direct involvement by farming out their group moves to other companies that may not have upheld standards on par with theirs. For a company working to establish itself as a luxury outfit—to justify the higher costs of service in an industry that bears notoriously thin profit margins—it was imperative to the owners that any vehicle running a CLT job be immaculate and punctual. Canady says he knew it was time to get into the bus and motorcoach game after a frustrating lack of communication with an affiliate over a group who wished to have their buses arrive at staggered times on a Monday morning. Canady received their request for the schedule change that Friday afternoon but found himself unable to fulfill it; despite giving more than 48-hours’ notice to the company providing the vehicles, an entire organization that fell incommunicado during non-business hours meant an unchanged itinerary.
Rather than gradually introducing group-move vehicles into their fleet, the CLT team decided to add an entirely autonomous motorcoach and bus division by purchasing South Carolina companies already in the bus and motorcoach game. They first purchased Aiken Limo (now SC Express) to expand their reach. They later added Busy Bee, rebranded as SC Coach, which had the bonus of bringing a mechanic and garage into the CLT family. SC Coach has been seamlessly satisfying clients’ group moves for a few years now: CLT clients requesting a bus or motorcoach are immediately passed along to SC Coach thanks to compatible software that makes toggling among divisions a breeze. Canady is pleased that separating high-ticket vehicles from their fleet of smaller corporate cars keeps insurance costs to a minimum—while successful rebranding efforts justify the increased costs of repairing current fleet vehicles and purchasing new ones.
“Within a period of three years, we turned a $460K company into a $980K one by rebranding it, bringing in more vehicles to meet the requests and demand, and adding a three-shift customer service department,” Canady says, adding that the 24-hour customer service component put an end to clients facing his same frustration over an inability to reach a real person before a simple request becomes an emergency. “We applied that same philosophy to Busy Bee, also keeping their book of business—and increasing it to buy more coaches.”
If you’re thinking more about branding than rebranding, look no further than the aerial photos of George Jacobs’ highly visible Windy City Limousine buses filing in and out of sporting events or taking to the road in a neat line that have become a familiar sight. With easily more than 150 buses to his company’s name these days, Jacobs has been running big-move metal for decades, and says there are pros and cons to purchasing new and used buses: It all depends on what purpose, market, and clientele they’re serving.
But branding, he agrees, is huge. By letting your vehicles speak for themselves by being out and about, you’re establishing your presence; by putting your roving logo on some impressive people-movers covering an ever-expanding swath of operational territory, you’re reaching a whole new audience.
“As soon as we get a new bus, our detailer goes right to work putting the Windy City name and logo on it,” says Jacobs. “It is the best free publicity you can get. Our buses go from coast to coast, so everyone can see for themselves that we’re everywhere.”
Of course, there’s something to be said for locating a service void in your market—a tactic that the team at Maryland’s RMA Worldwide has been employing to much success since first entering the bus and motorcoach game to better capitalize on the needs of the nation’s capital and surrounding areas.
“We stay away from sightseeing tours in D.C.—there’s already an oversaturation in that line of work—but we do serve corporate clients who need a group moved around the capital,” says RMA owner Robert Alexander. “It was all about finding our niche, and our niche is catering to the corporate market here.”
Tip #2:
Run emergency bus drills twice a year.
If you operate buses now, you hopefully already do this. However, here’s a smart tip that we learned from a speaker at a recent ABA event. Typical evacuation training includes instructing drivers on how to secure passengers, but best-laid plans seldom translate to real-world emergency situations. After training drivers on the proper steps, load them up on the bus and simulate a mock emergency. But here’s the kicker: Have them exit through emergency windows and doors. Yes, that means opening emergency windows and having staff climb down to safety (exercise good judgment, of course). It’s one thing to have a plan but a very different thing to actually execute it. In the event of an actual emergency, this drill will help staff have peace of mind when helping real-life passengers—like a group of seniors or wheelchair-using clients—to safety. We’re not advocating that you kick out windshields or break glass, but this visceral exercise will go a long way with your drivers. Who knows, maybe you’ll brainstorm some better solutions to your current evac plan.
Stay Moving and Keep Adapting
Congratulations: You’ve decided to add some massive metal to your fleet! Whether you’ve landed a government contract, are getting more into group moves, or are diversifying your fleet, you still have some big decisions to make.
The prevailing opinion (and insistence, in some cases) is that you need a dedicated motorcoach staff, and STAT. You now have things like hours of service to keep track of, you’ll need drivers who have their CDLs, and you’ll have to brush up on your DOT education to make sure each vehicle is in regulatory compliance. Plus, buses and motorcoaches demand more specialized service and repairs than more standard fleet vehicles do, which might not be in your go-to mechanic’s wheelhouse.
Bouweiri also cautions that the kind of work you’re doing may dictate the kind of repair help you’ll need, so doing your research is especially imperative here.
“The biggest growing pain in owning buses is that you have to set up a shop and hire mechanics,” she advises. “You cannot do government contracts without a mechanic because they only give you 30 minutes to resolve a problem. You need backup vehicles and you need to be able to fix that bus in the middle of the road. You cannot wait two to three weeks to send it to the dealer to be fixed.”
As soon as we get a new bus, our detailer goes right to work putting the Windy City name and logo on it. It is the best free publicity you can get."
– George Jacobs, Owner of Windy City Limousines
Additionally, to avoid any DOT missteps that may sideline that six-figure people-mover you were counting on paying for itself over a specific amount of time, having well-trained experts on your team will help minimize the potential for finding yourself in a sticky situation that could have been otherwise avoided.
“You have to invest in either a consultant or a safety manager to make sure you are compliant with DOT regulations,” Bouweiri says. “You also have to beef up your HR department to ensure that it will do background checks and offer proper training to drivers.”
There will always be those “coulda-woulda-shoulda” moments in any business; however, some operators’ frustrations are others’ cautionary tales.
“If I could do it all over again, I would,” Canady says. “But when I bought Busy Bee, I renamed the company and got a new DOT number, which I never should have done. In the DOT’s mind, it’s like the company never existed before because there’s zero identification with insurance companies. With the new name and new DOT number, it took me about a year to get everything settled with insurance and the DOT.”
It should go without saying, but remember that just because a marketing campaign, business idea, or even vehicle model thrives—or bombs—for one company doesn’t mean that you’ll see the same results. Sometimes a good idea has the misfortune of bad timing or being hatched in an ill-fitting market; sometimes, even the most successful companies take a wrong turn and have to recoup that lost ground.
“We tried many things that did not work!” Bouwieri says. “We failed at airline crew transportation, we failed at hotel airport shuttle business. But what we found was that you have to focus on what you do best and stay with that niche.”
But once you’ve carved out a comfortable space for yourself, there’s nothing stopping you from pushing the boundaries of your place in your market and testing out new avenues of business, new trends to capitalize on for as long as the craze lasts, and even getting creative with your metal. Keep your ear to the ground, partner with local organizations, and stay current with what’s flourishing both locally and nationally. You won’t know what untapped revenue source is waiting to be your breakout niche if you don’t try.
For Jacobs, the secret to keeping his bus fleet constantly on the go—and, consequently, making money—is versatility and bringing something unusual to the table.
“We are always doing weddings, tours, nights on the town, sporting events, concerts—Chicago is a major hub, but we don’t dismiss the potential in the rest of the state,” he says. “And if someone sees one of our convertible buses on the job—forget it: They want THAT bus for their next big event!”
Tip #3:
Know the clearance of your buses.
It’s a no-brainer that you need to know the height of your bus if you want to operate it on the road because you can’t escape overpasses and low clearance entrances. But here’s something you should also consider: the ground clearance of your larger vehicles. In early March, a Texas tour bus was struck by a train after the coach got caught on the tracks. Several people died, marking the 17th deadly accident at this same crossing over a few decades. While the investigation was still ongoing at press time, passengers reported that the bus got stuck on the humped crossing, and the driver was thought to have veered off of directions provided by the tour company. There are plenty of other places where a coach, limobus, or even a stretch can bottom out, so it’s imperative that you instruct drivers to heed the warning signs. If not, those emergency bus drills will become a reality.
Looking Ahead
As Canady emphasizes, it’s all about padding a notoriously thin profit margin. He has noticed that the sedan market in his area isn’t what it used to be—in fact, he says it’s stagnating. And changing times call for changing strategies.
“I think if you want to stay in this industry, you should have a couple coaches,” he says. “In this business, it’s not about how much money you make: It’s how much you save, especially now. You have to save money now more than ever before because the sedan business isn’t where it should be. How do I save money? I sold CLT’s one coach bus and minicoach over to SC Coach to lower insurance costs.”
Jacobs agrees that the future of the industry—and many of its companies—depends on a thriving bus and motorcoach component.
“I think you definitely have to get into it if you want to stay in the business,” he confirms.
No one could have predicted the rise of TNCs, just as no one can pinpoint the next time corporate purses will tighten their strings again. But a diversified fleet can help you weather the storm by being all things to those who have been loyal to your services.
“Your corporate clients still have kids getting married, and they’re active in local organizations that depend on transportation for their events,” Alexander says. “These clients will always have a need for retail transportation." [CD0417]