A growing number of limousine and livery companies are experiencing increased demand for larger vehicles, prompting many of them to add motorcoaches to their fleets of limos, vans and minibuses.
Limo industry officials predict that the trend will accelerate as ridesharing companies such as Uber and Lyft drain their pool of passengers.
They say that because their companies already are established, they have the experience, resources and customer base to expand into the motorcoach industry.
That, in turn, is helping fill a void in the charter and tour bus industry caused by barriers start-up companies face in entering the industry.
“There is a large demand for transportation but there are not that many new motorcoach entries opening up,” said Tom Holden, general manager and director of operations at Rose Chauffeured Transportation in Pineville, N.C.
With new motorcoaches costing half a million dollars and countless regulatory hoops facing a startup, it will become increasingly difficult for a motorcoach carrier to arise from scratch, agreed Kristina Bouweiri, president and CEO of Reston Limousine in Sterling, Va.
“It will be almost impossible to start a brand new coach company from zero and buy that equipment without a base of clients,” Bouweiri said.
The United Motorcoach Association supports the trend and has been working to help limousine companies make the transition.
“The trend of more and more limo operators expanding to offer their clients motorcoach transportation options creates an exciting new market both for coach sales and also for UMA as we help them make this transition,” said UMA President and CEO Stacy Tetschner.
“We are already looking at expanded online and in-person educational offerings in addition to expanding the offerings at UMA Motorcoach Expo to ensure those expanding into this space find relevant and valuable help from UMA,” Tetschner said.
Holden and Bouweiri are encouraging their peers in the uniformed transportation industry to fill the growing need for motorcoach operators.
Rose Transportation and Reston Limousine built thriving businesses and reputations while operating car and minibus services before pursuing opportunities with motorcoaches.
Rose, a 32-year-old company, acquired its first motorcoach nine years ago and now has 23 in its 60-vehicle fleet.
“We needed to move more people at one time than our minibuses were capable of moving. We were farming out about $250,000 of motorcoach business to local companies,” Holden said.
“The other reason was the destination management companies here were asking us what our industry was going to do about the motorcoach service. The quality of the service they were getting was not the same as the quality we were providing,” he said. “So we decided to buy a bus. A month and a half later we bought our second. It has been non-stop ever since.”
A thriving livery business, stocked with options including limousines, sedans, sport utility vehicles and minivans, offers a higher level of service than many motorcoach carriers, Holden said.
“The turnaround time, the quickness, the overall experience is much better with a company like us. Companies like us in our industry are traditionally open 24 hours a day, seven days a week. We all have breakdowns — if you have a breakdown at 5:05 on a Friday afternoon, good luck in trying to find a bus company that is open,” he said.
“Our industry is always open, so I can call my friends in the Washington market, say I have a little problem and need your help. They are right there.”
Limousine companies also are accustomed to flexibility and personal service, he continued.
“We know things change. If a customer says we don’t want to be picked up at 6 a.m., now we want to be picked up at 5:30 because of weather conditions or whatever, they can get a live dispatcher and he will make the change. At that hour you can’t get a traditional motorcoach company on the phone.”
Holden called his company’s chauffeurs the “secret recipe” for the limousine industry’s exceptional service.
“I am not meaning to damage anyone else’s reputation — I know an awful lot of companies in the motorcoach industry who do a fantastic job. But there are plenty that cannot match the level of customer service our industry is giving.”
Reston Limousine hit the road 26 years ago and bought its first motorcoach in 2005 when it won a contract for a weekly 50-passenger trip.
“When I saw how much work there was for that coach I decided to buy another one and then I bought another one,” Bouweiri said.
“In 2016, I sold the three old ones and bought six brand-new ones. Those buses are the busiest vehicles in our fleet. They are the most profitable. They run pretty much seven days a week.”
Reston’s fleet consists of 250 vehicles — about 25 sedans, six SUVs, the motorcoaches and a lot of minibuses and vans. That broad foundation can give a limo or car company a head start on building a motorcoach fleet, she said.
“The first advantage is that you can start the company small and grow organically. In my first 10 years of business I didn’t have a line of credit. I was able to self-fund everything I did,” Bouweiri said. “Obviously I financed my equipment but I didn’t need any capital for non-equipment expenses to grow my business.
“Also, it is not so easy to afford the maintenance or payments on a coach unless you have a steady clientele,” she said, recommending that carriers moving up to motorcoaches realize the budgetary implications. “I think people get blind-sided by the expense of repairs. I remember the first preventive maintenance on my coach cost $15,000. I almost passed out.”
Bouweiri said she often speaks at limousine conventions.
“Everyone tells me they are too scared to get into the motorcoach business,” she said. “I tell them to jump right in and buy one coach. A lot of the coach companies will give you a deal and offer to take it back if you don’t like it.
“You will see how busy it is and then you are going to want to buy another one. If I could have everything I want I would buy three more right now. I can’t do that because I don’t have enough drivers and financially it would be too much of a dead burden on the company,” she said.
Uber and Lyft services have cut the revenues of some car companies by 40 percent, Holden said.
“They are not sure what the future looks like for the traditional car company. A lot of them are trying to find another source of income. They already were in the minibus sector for their corporate clients and decided to get into larger buses and motorcoaches.
“Now they are finding the needs have grown. Some of them are growing quite quickly. Some have grown to 10 buses in a two-year period. That is shocking,” he said.
Holden refers to Rose Transportation’s limousine/motorcoach business model as a “hybrid” and believes it will be the future for many companies now operating smaller vehicles.
“I believe that so strongly I have told the motorcoach manufacturers that our industry is your future sales,” he said.
On the other hand, some companies are not meant to operate motorcoach fleets. Holden said when speaking at limousine industry events, “We go over a lot of the details our industry is not aware of — the cautions they have to look for before they buy a motorcoach. Not every livery company should buy a motorcoach.”
He delivers another caution about the difficulties of staffing a fleet.
“All of us are suffering from the need of finding drivers.”
Livery operators who have a steady portfolio of corporate work are well suited to support motorcoach operations, Holden said.
“The companies that are doing a lot of corporate work — say 80 percent of their general income — are going to end up being in a motorcoach. Maybe it will be one, maybe a whole fleet.”
Bouweiri agrees. “The people who are in business now will do very well if they start to focus on the coach buses,” she said. “I would venture to say that the motorcoach business is where I will mostly be 10 years from now.”
