Luxury Coach & Transportation

September 2018

Magazine for the professional limousine, charter and tour industry.

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LUXURY COACH & TRANSPORTATION SEPTEMBER 2018 23 driver, and 20% for Rose. Since 2016, the company has been seeing 300-400 fewer transfers and chauffeured rides per month due to competition from Uber. TNC drivers often circle hotels and frequent places for riders who once took taxicabs and sedans. ompson dispels the view inde- pendent operators don't make a decent living or that the business model is inferior to that of company-owned vehicles with employees. One chauffeur who is contracted with Rose grossed $104,000 in 2017 working seven days a week. He also gets $20, $50, and $100 cash tips from clients. "If you are willing to look beyond the old business model, you will find ways for your employees to make more money than before," Holden adds. e Ride Rose app averages about 100 rides per month, versus 50 per month last year, and draws about $1,300 in revenue per week. Rose uses a white label app designed by Dashride and charges $2.50 per mile for a sedan plus an $8 pickup fee and $3.50 per mile for an SUV plus an $8 pickup fee. While the app can perform on-demand, the lo- and usage decisions. Drivers log all per- formance and maintenance problems as they occur, enabling the company to track and recall each vehicle's repair and cost history. Adjusting To Market Realities Rose benefits from serving the sec- ond largest city in the South behind Atlanta. Metro Charlotte's diversified economic base, comparatively lower costs of living and taxes, and active de- velopment have spurred a population growth rate up 14% since 2010 to 2.5 million residents. e next few years will raise the area's profile with major events such as the NBA All-Star Games in February 2019 and the Republican National Convention in 2020. In 2016, with Uber pummeling the local ground transportation market, Rose made a strategic decision to convert its chauffeurs into indepen- dent contractor operators who own their vehicles. I/O drivers earn 72% of a reservation-based ride fare, with the rest going to Rose. For indepen- dent drivers taking rides via the Rose app, the breakdown is 80% for the coaches, if you could point to the core of Rose's success it would be a hyper- focus on real-time P&L for each vehicle. By breaking out each vehicle as its own P&L unit, an operator can accurately track each vehicle's costs and revenue in detail month by month. Money los- ers can be sold off quickly.. Most com- panies opt to look at overall fleet profits or broken down by fleet categories, such as sedans, SUVs, minibuses, etc. "I'd rather make 10% of $5 million than 5% of $10 million," ompson says, emphasizing the principle of earn- ing a healthier profit on efficient work effort. "You need an accurate P&L up front." Too often, newer operators will fail to research the dynamics of their local transportation markets and end up lowballing their rates and prices in their eagerness to land new business, he says. Any limousine or motorcoach operation needs an accurate list of all costs and then should add a 10% profit margin beyond that break even amount, ompson advises. "Most operators only settle for 5% margins." General manager Tom Holden, who is also a contributing writer and advisory board member for LCT Magazine, says the success of any operation stems from how it analyzes and applies numbers to maximize profit. "If you don't focus on numbers, you are spinning your wheels," says Holden, who participates in peer-to-peer 20 Groups hosted by financial consultants. "You have to run your business with your eyes wide open today. If you run like 10 years ago, you won't realize you are losing money and then you're standing still. "Mapping out every vehicle makes all the difference in seeing what leads to profitability. We know to a penny if costs are too high in each line item and department. Most companies don't." Complementing its P&L data, Rose runs a parts department and purchas- es all parts directly from suppliers at discounts, thereby saving 25% overall, Holden says. e company keeps a parts inventory with each part grouped and shelved by category and labeled with its own barcode. A full-time employee tracks and an- alyzes all inventory, factoring in costs, labor, acquisition, work orders and processes, repair time frames, mechan- ics' input, and demand for each specific part type and brand. Such layered data can help inform smarter purchasing ROSE VEHICLES TIMELINE These dates sum up how Rose Chauffeured Transportation kept pace with the permanent shifts in luxury fleets over more than three decades. 1985: Company started doing weekend weddings with Rolls Royces 1987: Bought first stretch limousine 1988: Bought first Lincoln Town Car sedan for airport runs 1995: Bought first small minibus 2008: Bought first motorcoach, a used Van Hool 2012: Sold the last of its six stretch limousines 2016: Due to market pressure from TNCs, started transitioning its sedan and SUV ser- vice to the independent operator model (14 sedans, 16 SUVs) 2018: Owns and operates three vans, 12 minibuses, 23 motorcoaches H.A. Thompson (center) has been the driving force behind the company philosophy of adhering to P&L benchmarks. General manager Tom Holden (L) and VP of sales Andy Thompson (R) look at financial accountability across all aspects of operations.

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