Attending last weeks “flagship” limousine industry event in Las Vegas gave me the opportunity to talk to other national limo operators about issues of concern to me as chief operating officer of O’Hare-Midway Limousine Service. There are many such issues, but the one that seemed to be the most common among my peers is the proliferation of cut rate services that keep springing up across the country. Out of every crack, another limo company seems to be forming, each one offering lower and lower rates. The question is…how do you deal with this type of competition?
Low cost competition exists in every segment of the economy, from knock-off Rolex watches to counterfeit jeans. But a cut-rate limo service isn’t just money poorly spent, it can be downright dangerous.
There have been articles written recently about incidents involving drivers from companies with little or no history, thefts and violent crimes against passengers, that may seem surprising to readers. However, this is precisely why reputable companies like O’Hare-Midway have instituted policies and procedures that include background checks and drug screening to try and root out possible “bad apples” before they ever reach the road. While no effort is 100% fool proof, these procedures cost money, as does adequate insurance, proper care and maintenance of the vehicles, gas, and driver pay. Most companies take these costs, add a minimal amount for profit, and build their rate structures accordingly. So how can we possibly compete with a company that seemingly operates for NO PROFIT? The simple answer is…we can’t, and frankly we don’t want to.
In discussions with partner companies from New York to California and everywhere in between, we all agreed on this fact…there is no reason to fight that battle. It’s probably why Rolex doesn’t worry about $20.00 department store watches. It comes down to quality versus price, safety against savings. We could easily declare war on these so called limo services in Chicago, bringing to light the substandard or non-existent insurance coverages, but cut-rate shoppers aren’t looking for quality. They are looking for the best deal. Unfortunately, that may come with an unlicensed driver, an uninsured car, or…it may not come at all.
A word of advice to anyone looking for limo service in Chicago, New York, San Francisco, or any major city, do a little homework. Ask questions…and run away as fast as you can from any company that answers their phones “limo service”. If they don’t give you a company name when they answer the phone, you should expect the worst. Could you imagine calling a steak house to make reservations and having the phone answered “restaurant”? You would hang up without uttering a word.
Like I said, this is not a Chicago limo issue, or a Dallas or Atlanta limo issue. This is an issue that effects our entire industry. Our only defense is to educate the public about the necessity to investigate the company they plan to use. Once people realize the dangers in cut rate services, they will stop using them.
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