If you have recently purchased or started a limousine business or are considering purchasing or starting one, then one of your primary concerns is probably how to determine your company’s rates. Finding a balance between making enough profit to sustain your business (and yourself) and keeping your customers happy with fair rates can be quite difficult, but it is possible. By keeping in mind the following considerations, you can help to establish the best rates for your business:
Although some companies choose to charge a “per person per hour” rate, most limousine companies charge by the hour and choose to disregard mileage and passenger numbers. Usually, companies set an hourly rate depending on the vehicle ($125 dollars per hour for a regular limo and $210 per hour for a party bus, for example). Mileage is usually not an issue, because it is generally assumed that passengers will stay within a reasonable distance of their rental location, and the division of the final bill is usually left up to the passengers to handle independently.
Most limousine companies add a gratuity base onto the hourly rate. This amount usually does not exceed 15-20%, but it serves an important purpose. This gratuity ensures that your drivers receive a reasonable tip for their services, as many customers are unaware of limousine etiquette and could fail to tip your driver if gratuity is not already included in their bill. Be sure to make clients aware of the fact that gratuity has already been charged, however. Many customers will still choose to tip your drivers beyond this amount, but if you withhold this information, they could feel cheated.
In addition to gratuity and hourly rate, some limousine companies choose to add surcharges into the bill. These surcharges could be a flat rate across all vehicles and clients, or they could be applied only to certain situations. Stretch Hummers, for example, probably use much more fuel than smaller limousines, and as such, you might choose to include a separate surcharge for the use of this vehicle. Similarly, limousines require more interior maintenance than smaller luxury rental vehicles, so that could also be cause for a surcharge. Maintenance, fuel, and workers’ compensation are all examples of possible causes for surcharges.
There are a number of other fees that could be added to your clients’ bills that are not covered by surcharges, the normal hourly rate, or gratuity. Mini bars, frequent stops, toll roads, and time or mileage overage fees are all examples of additional fees that could be assessed depending on the specifics of the situation.
When you have chosen the rates you’ll charge, be sure to be completely upfront with your customers before your services are booked. List the fees on your website with a brief description for each fee. When a customer books your services via phone, be sure to inform them regarding the different fees they will see on their final bill so that there are no unpleasant “surprises” which may result in the customer giving you a poor rating online.