SPEAKER_01 0:00

You know, somebody called me the other day who wanted to become a client of mine. We had a little bit of an esoteric conversation. And he says, You know, I don't buy into the fact that you can reduce accidents. Accidents are a fate of God. And I'm like, look, you're talking to somebody who reads the Bible every Sunday.

SPEAKER_03 0:15

I don't want to be on the same road as that guy.

SPEAKER_01 0:16

Okay. I said to him, Do you remember stuck Smoky the Bear? I said, Yeah. Do you think before Smoky the Bear came out there were more or less wildfires? He said, probably more. I said, How about four times more?

SPEAKER_00 0:35

You're listening to the Ground Transportation Podcast with Ken Lucci of Driving Transactions and James Blaine of PAX Training. Learn how you can build a thriving transportation business with real profits, repeat clients, and enterprise value. And now for your hosts, Ken and James.

SPEAKER_04 0:52

Hello, everybody, and welcome back to another exciting episode of the Ground Transportation Podcast. For you, it's probably Wednesday. For us, it's Friday. That is the best day of our week. I am super excited about today's topic. It's something we've been working on like crazy. And I got my partner in crime back. So this is another one of those episodes where it is Ken and I. Ken, how are you doing, buddy? Is it Ken and I or Ken and me? Oh, no, no, no, no, no. Ken always has to come first.

SPEAKER_01 1:16

No, but it's Ken Grammatically, it's Ken and me.

SPEAKER_04 1:19

Oh, jeez. Oh, jeez. It's already starting. It's going to be one of those things.

SPEAKER_01 1:23

Do you want to use A, do you want to use AI to figure out the grammar for you?

SPEAKER_04 1:27

Oh, jeez. You know, I think I think we just transitioned from James's inability to satisfy Ken to uh to what we're thinking.

SPEAKER_01 1:34

That's something you should talk to your wife about. Don't bring that up on the phone.

SPEAKER_04 1:36

Oh, I did not say, I didn't not say anything about Casey. I was very clear on that. Inability to satisfy you, my friend.

SPEAKER_01 1:42

Join the long, long list of people. It happens to be the problem of being an OCD perfectionist, and it's my issue, not your butt in your financial analyst, right?

SPEAKER_04 1:53

You want the guy that looks at the numbers and goes, is that perfect?

SPEAKER_01 1:57

No, and speaking of numbers, this whole partnership we have with chauffeur-driven and the surveys, I am convinced that the more, the deeper we go, the more value it is to the industry. And I'm pretty happy, you know, I gotta tell you, uh John, our producer, has spent he doesn't even want to tell me that the the number of hours he spent on this survey. Let's go through it. T up tee it up a little bit, and then let's go through.

SPEAKER_04 2:29

All right. So so for those that don't know, let's tee this up. So where's a partnership where chauffeur-driven, driving transactions, packs, the three of us all work together? We put together this survey, the survey went out, and then we've come back now. And one of the neat things that I think makes this survey different is in a lot of surveys, you get asked a bunch of questions, and then people come back and they're like, here's what everybody answered. I think what makes this survey special is we change that last step. So instead of just saying, here's a bunch of numbers you don't really care about, and hopefully they tell a story, we actually went in. Ken, you laid a ton of your expertise in. I don't even know how much time I put in. I know I went through every result, I looked at every angle on my side, and then we've got, you know, all kinds of other experts. But I think one of the other neat things, and this is a feather in John's cap, is John, our producer, went back through the podcast and was able to tie it back to previous guests in the area of expertise. So what you're seeing, it's almost gosh, it's all I feel like when I was going through it, I almost felt like it was a little bit of a like you ever take you ever seen those Rorschach tests where they're like, Do you see a butterfly? What do you see? I felt to a certain extent that this almost became a little bit like a Rorschach test. Yep. Because we got all of this data back, we had all these experts analyze it, and I think we've got an incredible picture of the industry how it is. Yep. But beyond just that, I was more impressed with how diverse the fleets that responded were. So, you know, I and I'm gonna be looking off screen a lot today because I've got the results over to the side, but we've got everything from sedan, SUV, Sprinter, Sprinter Limo, Transit Shuttle, Transit Limo, Mini Coach, Limo Bus, Motor Coach. We were spread across to where we had people in every single one of those areas and every single one of those fleets submitting. And frankly, it didn't feel like it was a little bit of this and and a ton of that. I felt like this was a really good sampling of the passenger ground transportation industry.

SPEAKER_01 4:36

No, no question. You know, the funny thing is, and I have to confess, I didn't realize John had sent it out to my email list until it we're we're in the middle of a transaction, so it's like stress-the stress levels through the roof. Um, you know, and I if there's ever a time I should go back to drinking, it's now, but I just want to make it clear I I don't drink anymore.

SPEAKER_04 4:59

And if you do start drinking, we're gonna make you do it on the podcast right now.

SPEAKER_01 5:01

Yeah, anymore. Anyway, um the way I found out was I want to say at least a half a dozen people that I consider to be in the top one percent of the industry from all walks of the industry. You know, president of insurance company, the the head of a software company, the head of MA for a few companies I deal with and investment banks, I couldn't get over it. And they were like, we are gonna use this in our planning. And the other piece of the puzzle is I reread it, and Jody hit it out of the park, you hit it out of the park. And what I loved about what we did, and we'll go through it, is we've gotten two or three people from the insurance space who are experts, and I actually made a comment to the guy that emailed me and said, geez, you know, a couple of your competitors are in there. He said, Ken, I don't care. The message is getting out. Yeah. So let's go through it.

SPEAKER_04 5:59

All right, we'll we'll skip past the table of contents, we'll go to the sample methodology. Because I think one of the things that is really unique here is we've got the location, but we've also got the company size. And one of the things that we know about the industry is you've got pockets, right? When I think about the transportation industry, I'm thinking about New York, Miami, Dallas, Chicago, LA, you know, maybe maybe you go into smaller markets, but I think we have these pockets, and I think having the region with the size for us was important. I would say, do you want to? I think that that to me was a big deal. What what's the reasoning behind that? Because that one I won't credit where credit is due. That wasn't something that came from me. I'm guessing, was that your contribution to this, Ken?

SPEAKER_01 6:47

Well, a lot of it is is, you know, my list, right? There, there are customers, there are companies we've done reviews for, there are companies we deal with all the time, there are companies that have bought our financial course. And what I loved about it is you've got 31% are the under million, and that that's the demographic of the industry, okay? But a large swath of them were really in the middle, the the top 10, 15, 20 percent, the three, five million dollar operators. And it was really the basis of the list. The list is the first list that went out was from from mine, and then the second was yours, and uh, and I know that chauffeur-driven sent it out a few times. You know, I'd like to get to this point where it's like 236 operators, but I'd like to get to the point of a thousand.

SPEAKER_04 7:38

It's sample size, right? And the I've done these with driving force for ABA, I've done them, you know, with other projects. The problem is always getting people to take the time and fill out.

SPEAKER_01 7:49

Let's talk about that for a second, okay? You know, I don't want to get to the point where we only make it available to the 238 people. This is available. There's a link on it, there's a there'll be a link in the podcast. There's there's a link it, there's an announcement that goes out to chauffeur-driven uh through chauffeur-driven. And there's this is thirty, thirty-six, thirty-eight pages. You can get something from every page. You know, the reason why this is important is it's not just the data, there's some actionable items and recommendations here that if you're not constantly improving your business, you're you're you're losing ground. And if you're not constantly learning as a business owner, what happens is you become your own toxic echo chamber.

SPEAKER_03 8:34

Oh, yeah.

SPEAKER_01 8:34

Okay. And to me, this is becoming the voice of the industry. You know, anybody who doesn't read CD is falling behind. Anybody who doesn't, this is the traditional, didn't go to the shows, falling behind. Or went to the shows for the booze and slept through the sessions. You've you've you're falling behind. But this is really the first time, I think, in the industry where it's a data-driven, it's a more diverse, and it's not just maybe a tabulation of fleet size, okay, because we've established that's not a measurement of success. All right, so let's move through.

SPEAKER_04 9:10

So if we jump down, you know, skip past the fleet adjustment intro, and we go right into the benchmarks, you have the vehicle fleet mix. And what this does, and and again, it looks a little daunting when you look at it, but for me, this is what your fleet makeup is. It is a chart of in these, who's got what vehicle type. I would say for the average person, that's probably not gonna be the value. That's probably not the big thing. No, the value is the next page. Right. But I think it's important because the value here, this page, I feel like this was more for us. Because Jody weighed in on this, I weighed in on this, you weighed in on this, we've got other experts that weighed in on this. When we were reading the tea leaves, a lot of this was we had to know kind of the background. And so for us, that was a huge one. I would love for you to talk about the revenue per vehicle averages because I can tell you, I looked at this one and I went, oh, that's Ken's world.

SPEAKER_01 10:05

Yeah, and listen, you know, we've we cole and I did the did our tally last week and we've fully reviewed 327 companies thus far. The val about 80% of those in the chauffeur space, uh, maybe 75 in the chauffeur space, the rest are in Motor Coach and an EMT. But the chauffeur database of that we have, I don't believe has ever been compiled in the space. So when I look at when I look at the top 10 markets, the top 10 metropolitan statistical areas in the country, the first two being New York, New Jersey market, and then LA is the second. The top 10 cities in this country are where you know like 70% of the chauffeur work is. So if you're in that market, that these numbers, your average sedan, these are averages now. You you can have some outliers, but the low end of the of a production of a sedan is 120,000 a year. The higher end is 140. It's more and that's more, that specific vehicle is more because it's it's kind of it's kind of becoming secondary right back when you look at the Lincoln L car days, they were the staple of the industry. Well, SUVs are now the staple. So look at but they're the staple on the road, right? The whole the whole car market has moved to SUVs. No question. And our industry, this the you know, I'm I I have to call it out. It's it's the suburban and uh expedition class. But in a in a in a top 10 market, the SUVs are between 150,000 and 250 a year, 250 on the top end. So this is what we tell our clients if you're not constantly every one of your vehicles operating within 85% of the low, you're fleet, you're too fleet heavy. So, and when you go through here, you know, don't overreact if you have one or two vehicles in your fleet that are down a little bit. But our our retained clients, we always say, we want you in the 85 percentile, at least in the low, and then we will help you move towards the middle of the market, right? Uh in the high end. And you know, the the beauty of being in the low end is you have plenty of capacity of the assets that you have. You have plenty of revenue production left in those vehicles. If you get off, if you if you haven't maximized. If you get off your duff and start proactive marketing, the B markets, right, are you know the 11 through 20 largest cities and metropolitan statistical areas basically draw draw a signal uh a circle around those cities. You know, still you know, your your your SUV is between 100 and 150, the luxury uh 120 to 160. If your vehicles are not averaging in these, you know, you have one or two things you need to do. One is you need to figure out how to move them, work with affiliates, work with corporate, work, work with your marketing people. Well, you need to cull down your fleet. Culling down the fleet is not admitting defeat. It's proper asset utilization. Okay?

SPEAKER_04 13:11

If you say that again, because look, look, look, here's the thing. I've heard it all the time with people, I've heard it all the time with assets. You hear it all the time in business that when when it comes time to trim down and get leaner and meaner, people sometimes look at that as defeat. And I would actually say a lot of times. Look, so so say that again and give it to us from a financial perspective. It's very simple. So I don't think people get it.

SPEAKER_01 13:35

It's very simple. You have a very limited amount of capital to deploy for purchasing assets. And when you start getting higher and higher in debt on your balance sheet, and those assets aren't performing, it's it's not a good picture. So from a from a from a pure revenue production for capital deployment and pure revenue production by vehicle, judge your fleet by these averages. And if you're not in the 85 percentile of the low, examine how you can move that vehicle. If you don't, you should sell it and redeploy the capital in elsewhere in your fleet. For example, but Ken, I know what they're gonna tell you.

SPEAKER_04 14:21

They're gonna say, but Ken, Ken, Ken, wait, wait, wait. You know, I've got all this time, you know, it was a pain to acquire it. I had to do all this stuff. So move it. You know, you're you what about all the sucked costs, Ken?

SPEAKER_01 14:31

What about all the sunk costs? So move it. These are depreciating assets. You don't have you only have two choices. They're not museum pieces. You either need to maximize your return on investment because you could be literally upside down on that vehicle. Case in point, I've got a great client, though he drives me out of my mind. He's got a Mercedes uh S the 5 class. Yeah.

SPEAKER_04 14:55

Probably 550.

SPEAKER_01 14:56

550, 580, I forget. And I always joke with him. Look, this is absolutely a beautiful piece, but it's sitting in your private garage, okay? And it's way below where it should be. So having an S-class Mercedes is like having a souffle on your menu. People come in because you're classy enough to have a souffle, but it takes a lot to make a souffle. It takes a lot to buy a Mercedes 500. So move it. So I've said to him, we need to put together a plan to move to get that to at least 80% of the low average because you're losing money, okay? And and you're doing great on your standard SUVs, but we don't want to raise your debt. So let's move that vehicle. You have two choices. Either move the move the vehicle as in market it, increase revenue, maybe give some people some comp trips, meaning up comp upgrade, upgrade them, right? Let every affiliate network know that you have a Mercedes. And it's very simple. We service both the luxury executive and business class in that case. But when you have, stop looking at these as your personal vehicles, and they're not museum pieces. They're depreciating every day. So you first and foremost, you need to know what your break-even point is on every vehicle. And second of all, you need to get a decent return on investment, right? So you need to absolutely, because you have scarce capital, you need to push that vehicle. And there are many ways to do it. Partner with another local affiliate. If you want to get into minibus, right, for example, and we've done this with clients, and we put them in the minibus business, but we said, look, you farmed out only X amount last year, so you need to, your break-even is Y. You need to capture Z in revenue. Okay. That's the purpose of these averages, is to give you a benchmark, something to shoot for. All right, so let's go to the next page. What was telling to me on this page, James, is what does this page tell you? We sent this out early and said, what do you plan to add or remove in your current front?

SPEAKER_04 17:10

This for me is visual verification of something that I have seen happening in the industry for a long time. There's a couple things that one we already touched on, right? There are still sedans, but if you look and read this in this chart, for me, it took me a minute to figure it out. But if you look at this chart and read it, the sedans are the biggest ones that are reducing. So you have 11.9% of people are reducing. Yep. Everybody else is going to keep them the same. And out of all of the things getting added here, right, those those are the ones that that we see kind of on the lower end. As you would expect, right? People are keeping their SUVs. Yep. And then there's probably at least the the way I read it, it was the biggest increase was adding SUVs. But if you look, the ones that jumped out at me as is kind of the obvious ones were the mini coach, the sprinter shuttle, the transit shuttle. And interestingly enough, I love the retail market, but I don't see the growth being there in the retail market. Because if you look on the sprinter limo, you've only got a small increase. On the limo bus, there's only a small increase. But if you look at the motor coach, there's a 19% increase.

SPEAKER_01 18:25

So what we're seeing by the way, that's a double-edged sword, but keep going. It is. It is going.

SPEAKER_04 18:30

And and we'll we'll talk about that one. But for me, what I see is this is a big indicator of fleet diversification. I think we, and and I said it coming into when COVID happened, I'll keep saying it after. I think we are seeing transportation companies, not limo companies. And the more I'm involved with ABA, the more I'm involved with TTA, right? I mean, I'm I'm bouncing between the limo space, the non-emergency medical transportation space, right? You've got the school bus space, you've got the motor coach space, you have all of these different areas that transport passengers, and we are seeing companies that are doing all of those offerings. And to me, this is validation.

SPEAKER_01 20:16

I agree with that. The and I would call everybody's attention if you're not if you're if you're not looking at this. We're seeing people who said I 32% of the respondents said they're adding SUVs, only 19% said they're adding sedans, 33.8% of the respondents said they're going to add mini coaches, only 17.9 said they're going to add sprinter shuttles, 20% said transit shuttles, but at the end of the, and by the way, and 20% said motor coach. I look at it this way. If you're seeing double-digit increases in the in those fleets, that's pretty damn good. But I'm more concerned that I'm seeing a lot of yellow. I'm seeing a lot of staying the same. Okay, which tells me a couple of things. And I don't disagree with it for 2026. I think 2026 is proving out to be a little chaotic of a year. And I've said I got a little criticism for saying this is a need by year. This is not a year to speculate on buying vehicles. You know, I'd like to have a jet sprinter in my fleet. Great, terrific. A do you have the cash sitting around to do it, which is good because you know the accelerated depreciation is good. But it don't go out on a limb for anything this year.

SPEAKER_04 21:33

Take it back to what you said earlier, right? If if you'd like to have something in your fleet, I would say the biggest thing I've learned as a business owner myself is you have to separate a business need from a desire or want. Because if you'd like to have a jet sprinter and you commit to that and you put capital behind that, and you've locked yourself out of that money, that thing better be running and it better be making money.

SPEAKER_01 21:58

And there's very little, very little margin for error. And we actually have a cost calculator and we use it for motor coaches. I mean, one of my favorite people in the world, a mid-Atlantic client, you know, just killing it. He said, Can we I I need to get into Motor Coaching? My question was, why? And and and and and when an operator says to me, doesn't have a good reason for why, I walk them back. I say, okay, you really don't need to get into Motor Coach. You want to. And his answer to me was I farmed out $600,000 last year. The service was not good. Repeat I we had to make repeat phone calls to find mediocre buses. And I'm like, you've convinced me. So we built out a cost calculator and said, okay, here you go. This is your cost.

SPEAKER_03 22:44

That's a legitimate use case.

SPEAKER_01 22:46

Legitimate. These are all of the things it's going to cost you. And by the way, your break even is this number in revenue. Once you've achieved that number in revenue, you've covered your annual cost of that vehicle. I argue you should do the same thing when buying any piece of equipment. That is new to your fleet or any piece of equipment above 150,000. I used to say above 100, but the damn escalades now are 125. Yeah. But but all I'm always saying here is I think this is I think this is a bellwether for the year. We're seeing a lot of staying the same. We're seeing some reductions. And, you know, I I was surprised at a few things. I don't know you why you would reduce a sprinter truck uh shuttle or sprinter limo. You know, my argument is are you really marketing it or are you just reacting because the networks haven't ordered it from you lately?

SPEAKER_04 23:42

Well, so so I think there's a couple things worth pointing out here. And one of the things that this chart doesn't show you is what it takes to scale past. So if if I was do if I, you know, if you said, hey James, how do you think about this? I think about it a little differently. Because for me, it's SUV and sedan are kind of tier one, so to speak, in terms of safety and compliance. Your tier two starts getting into all of your sprinters, your transits, right? Transit limo, all that spraying up to your tier two level of compliance. Now those are commercial vehicles. You have to worry about med cards, you have to worry about some things that come into play there.

SPEAKER_01 24:21

You should. You're an idiot if you don't.

SPEAKER_04 24:24

You're illegal if you don't. Let's make that 100% clear. You're illegal if you don't. Yep. Um, and then you have kind of your bus tier. And when you get to your bus tier, now you're at full regulatory compliance, right? Everything is there, it's the highest level of compliance. So if I thought about it as a three-tier jump, one of the things that you've just hit on that's big that I don't think people think about is when you jump between tiers, it's a little bit like having your first kid. So when you have your first kid, you've got to buy the stroller, the car seat, all the babyproofing of that. You've got to do everything to prepare for kid number one. Now, as someone that's raised three kids, I can tell you kid number two is easier. You know what you need, you probably still have a lot left over. No, that's a real and you start getting economies of scale.

SPEAKER_01 25:10

That's a really good analogy. You have to set up your house, get your house in order.

SPEAKER_04 25:15

Yes. Yes. Yep. And I I think for me, what's telling here, and they're they're on different lines, but it's worth pointing out. Look at how many people are reducing transit shuttle and look at how many people are reducing motor coach. That for me is really telling.

SPEAKER_01 25:32

Oh, the right. No, no question. Listen, I I I have clients that, well, I shouldn't say they're clients. I have operators call me constantly who want to sell. Acquaintances. Acquaintances. Customers, excuse me, clo operators that have gotten into the motorcoach space that it's actually sunk their business because they didn't do what I said, which was examine the reasons why. I mean, I talked to an operator out of getting into the Motorcoach space, and I like him. He bought my finance course. He's not a retained client, and he called, yeah, listen, I have an opportunity to acquire a company. That was the first discussion. And I said to him, it's I said, Why do you want to get into Motorcoach? And his his he really was was not, it wasn't viable. He said, Well, this will get me into Motorcoach. I said, That's not what I asked. Why do you want to get into Motorcoach? How much did you try to farm last year? I don't know. How many leads came in that you couldn't fill? I don't know. I mean, we we walked through this methodically with the mid-Atlantic operator who says, can it's time? And I said, here are some basics. So the why you want to get into a new category better be based around data and not your gut. Not your gut.

SPEAKER_04 26:47

And not your ego, by the way. Well, but I think the other thing, and look, I think all of us have had business envy. And what I mean by business envy is I think of, you know, the cow sticking its head through the fence to eat the exact same grass on the other side of the fence, right? The grass is always greener on the other side. And I think a lot of times you get people that get business envy that think if I can just move into motor coach, that'll fix my business. If I can just move into motor coach, that'll triple my revenue. Let me ask you that. I can just do whatever. Look, I've been there. I've had that, and I've had to sit down and say, hey, uh, no, bud, fixing your current business or fixing what you're doing or working on your profits, that's gonna get you where you want to go.

SPEAKER_01 27:27

You just hit upon something where I was gonna take this. You if you feel that moving into a multi-hundred thousand dollar investment, because you can never just buy one of anything, yeah. It if you think that's gonna fix a company that has basic foundational flaws, you're wrong. Good luck. All you're doing is trying to put a second story or an addition on a house with a cracked foundation. Let's go to the next uh let's go to the next page.

SPEAKER_04 27:57

So this next one I think is one that we'll we'll leave it to you guys to read. There's there's a lot of data here. The big thing that I found interesting is kind of the way that the talent in recruiting dovetailed a little bit in the safety and training. And I know you just had a conversation recently with Jody. So I would love to get your take on this because I think the level of difficulty attracting and retaining key roles, to me, a lot of this is what do your processes look like? And I'm lucky I've been involved with the driving force at ABA, which was created for the sole purpose, right, of helping people hire and retain. So I have a different view on it. But I find that companies are either saying it's impossible or they've got processes and systems and they're doing things, and they say, yeah, it's not bad.

SPEAKER_01 29:49

Well, yeah, a couple things. Uh you know, Jody, first of all, she hit it out of the park with the article that she wrote for this. And I'm not going to go into a lot of detail on it, other than other than to, and and she just actually did a great job. We recorded a podcast. But, you know, first and foremost, when the process of hiring anyone for any position anywhere has changed since before the pandemic.

SPEAKER_03 30:16

Oh, yeah.

SPEAKER_01 30:17

And you have to nurture the you first of all, you have to have fast response on the candidate. Number number two, you have to nurture them to get through the door. It's not just setting the appointment. It is, listen, I'm really excited to see you, James, and having maybe a pre-call and learning a little bit about you, right? And you have to sell the job. I think that's I think that's the the biggest change. And don't be disappointed, you know, with the statistic that, you know, like 40% of people don't show up for the appointment. You just have to, you almost have to take that as a given.

SPEAKER_04 30:52

I'll take that as a favor. I'd rather they not show up and I don't waste my time than they show up and they're a time suck.

SPEAKER_01 30:58

Right. And that episode, I'm not going to spoil it because she just hit it out of the park. But I think the one thing I'm s I'm surprised about is I don't see a lot of marketing for chauffeurs with CDLs or chauffeurs without CDLs, touting the no tax on tips and the no tax on the first 10,000. I think it is an overtime. That's a gift. That's like giving somebody a 30% raise on a big portion of their income.

SPEAKER_04 31:28

I think you're giving these guys the idea right now, because we just got the clarification, what, a month ago?

SPEAKER_01 31:33

Yeah, Brett Brett Barentholes, the president of the NLA, sent sent me the clarification, but he also, it's it's pretty he's on the NLA working. You know, is is being a chauffeur or uh a CD a chauffeur with a CDL, is it for everybody? No. But I gotta tell you, it's a pretty damn good gig when you're working for a good company. What is your opinion So everybody said extremely difficult, 33.2% said extremely difficult to hire chauffeurs with CDLs. You know, you live in the space much more than I do.

SPEAKER_04 32:07

I can tell you why. Yeah I can tell you why right now. So this to me, this chart makes sense, and I'll walk you through my opinions on it really quick. Chauphers with CDLs, this is an issue of the world that we've created, right? And I don't mean like we as in collectively, the industry, it's just the current environment. You have ELDT now. ELDT is entry-level driver training. Uh-huh. It is a required curriculum that the government forces you to put them through to get their license. Now, I hear a lot of people that will, no offense, they'll piss and moan about this all day and they'll complain about it. It's a it's a good idea. And the idea of it is if I'm gonna go get a CDL to drive a bus, I'm legally allowed to now drive a straight truck. Or if I get a license for a straight truck, and then the only difference is adding the passenger endorsement, they want to standardize kind of what they're learning, okay? Because in our world, typically when we're hiring people, we're looking for someone with either a class B or an A and a passenger endorsement. If you got a school bus company, stack a school bus one right on top of that, right? They need the pass the one there, and then we need to make sure they don't have an air brake restriction. Now, the air brake restriction isn't an issue, that's not covered by ELDT. But what ELDT says is there's a fixed curriculum you have to take them through to get them a class B, and there's a fixed curriculum you have to take them through to get a pastor endorsement. Yep. Now, a lot of people throw shade at that. Believe it or not, I don't think that's the problem. Um, I have a program at PAX. We turn companies into schools and we basically allow them to give their chauffeurs a career path. You work for us for six to twelve months, we send you into the insurance company, the insurance company approves us to put you through the program, we put you through a program, we get you a CDL, we make it a career path. Smartest way you can do that, in my opinion.

SPEAKER_01 34:02

Okay, and I'm just gonna stop you there for one second. Okay. For for all of the people who are driving T T for TNCs for Uber, I want you to listen carefully to what he just said. It's a career path.

SPEAKER_04 34:18

It's a career path.

SPEAKER_01 34:19

Now, we don't ask for much. We ask for a nice personality, someone who who likes to to serve people, which does take a certain type of personality, and then it does. And then you need to be drug drug-free and you need to have a good driving record. But we're giving you a career path. And and one of the most important things to me is we do have an almost unlimited pool. We can skim all of the best off of the Uber app and give them a career path. And I I think we're missing the boat on that. I think some operators just say, I'm never gonna hire an Uber driver. What's your is a wrong? What do you think about that?

SPEAKER_04 35:01

With that idea of a career path, with us being able to turn someone into a CDL school, you have to have the full faith of your insurance company that you are taking the time and training, that you are doing it right, that you are not rushing to get a button seat, that you're not trying to just rush them through the test. The other side effect of that that makes hiring chauffeurs with CDLs harder is if you are bringing someone in from outside the company that already has the CDL and already has the passenger endorsement, they typically want to see two to three years experience driving a similar vehicle before you can hire them in. So that makes that tough. Now, to your point about bringing them in from TNCs, because that's going to dovetail right into chauffeurs with non-CDLs, I think that there's a lot of things there, and we've talked about it before. I don't think there's a right answer on, hey, you go there, you don't. I've always told people the question for me becomes with that pool, with what you're doing, are you making it attractive enough and are you making it to where it makes sense for someone? I I'll tell you right now, I've said it once, I'll say it a thousand times. I ride with guys sometimes on the rideshare side of things, and I I don't know how to shut up. I talk to all of them. So I ask them, what's your cost per mile? What do you make in a day? And they always don't know the cost per mile, they have no idea, and they only know total revenue per day. Well, my take home every day is X amount of dollars. So what's it cost you to run the car? They have no clue. I think for for people that you know, you don't have to worry about buying the vehicle, you don't have to do that. I think there are people that are on the rideshare side, frankly, because they like being able to turn on and off the app.

SPEAKER_01 36:51

I don't disagree with that. I don't disagree with that, but there's there's certain demographic on that that you know, if we both will agree that 80% of the chauffeur's job is reliability.

SPEAKER_04 37:03

Okay, like 90, I think 95% is reliability. I can I can boil down everything I teach to reliability because everything you have to do, you have to do reliably and consistently. And and looking good in a black suit. You know, I I will tell you what, I don't think it's looking good in a black suit. I teach my kid when it whether it's hockey, whether it's baseball, whatever it is, you take care of your gear, your gear will take care of you. I teach them the same thing with everything. So if you get a nice suit and you take care of it, the way you take care of your vehicle, the way you take care of your plants, the way you take care of everything, it's gonna look good on you if you wear it right and you wear it as a.

SPEAKER_01 37:39

And I just I I honestly think that there's a never-ending pool of Uber drivers that need to be marketed to. And almost like you have to do almost a litmus test on, you know, they're obviously, you know, do they want to get into a suit jacket and tie? Do they are they personable? Do they understand it's a completely different level of service? And you know, I can teach anything, but you and so can you, better than me. You can teach anything, but you can't teach reliability.

SPEAKER_04 38:11

Well, and I'll and I'll tell you another overlook portion that to me is huge. I would also be looking at delivery drivers. And the reason I'd be looking at delivery drivers.

SPEAKER_01 38:22

Say it again, delivery delivery.

SPEAKER_04 38:23

Delivery drivers, right? The reason I'd be looking at delivery drivers is Walmart's trying to replace them with drones. You've got guys that literally, like it's a running joke now that they have to pee in bottles because they don't get bathroom breaks, right? They're already driving around town. It's a quality of life issue. And and not only that, when you think about it, right, you think about the Amazon guy, and you're like, I just toss some packages. You think about it, they've got an app that's telling them where to go. They've got to take a look, I got a delivery today. The guy's got to go up, he's got to take a picture of it, he's got to run back to the car, he's got to queue up the next one. You've got people that logistically are already doing a job that is 0.8. I agree with you. I agree with you. Monotonous repetitive. Yep.

SPEAKER_01 39:05

Those and they want to replace them all anyway. Those pull no uh uh James, James, that's a naive statement. It's a naive statement. It's a naive statement to think that AVs are gonna catch on. It's naive. I just want you to know that nobody will catch. I don't by the way, nobody will catch it. Wait a minute, nobody will catch that reference except me. Oh, yeah, okay.

SPEAKER_04 39:23

No, 100%. I 100% caught it, right? And I love that you put that in. But think about it. But it's a different game because look, Walmart's gonna start literally, and you had a guy, I want to say it was either Texas or Florida, you had an old man that tried to shoot one down. Walmart's literally got drones now they send from your nearest Walmart that hovers over your house and drops your package.

SPEAKER_01 39:42

Yeah, I saw it looks like the package is being pooped out of the drone. Let's not go down that road. I think part of this is don't you think part of this is if you always recruit the same way, you're gonna get the same crappy results, even worse results.

SPEAKER_04 39:56

Look, I spent when when we started the driving force at ABA, Aaron Sullivan, who was just a guest of ours, that was kind of her brainchild, her baby, and it's now become a full-blown council within ABA, right? And I was lucky enough she invited me when it was founded, and I've been involved all the way through. Those are some of my closest friends in the industry. I love that council. But one of the things that we figured out very quickly was when we started surveying and we started digging in over six six years ago now, right? What were you doing coming out of COVID? What did you change? How are you recruiting different? Most people are doing the same thing now that they have for the past X years, and they're not seeing the result. One of my favorite stories that Mike from SOCOM, Mike McDonald, tells, who we'll have to have as a guest. He tells a story of one of his drivers was a school principal, and he's at a school event, and the guy's wearing an MCI jacket. And he goes, You drive uh you drive a bus. You must really like MCIs. He said, Oh, I used to drive, blah, blah. You know, I just I'd love to get back behind the wheel. But he said, Great, let me get you behind the wheel. And I'll tell you what, I'll make sure it's an MCI. One of the easiest recruits he ever made, because for him, always be closing turned into always be recruiting. I think a lot of this is how you do it. And I think this for me, this chart, right, with chauffeurs with CDLs, that's going to be the hardest, in my opinion. That's why it makes sense to make it a career path. Because if it's harder to recruit with CDLs, you can go in and do the non-CDL side. Now, I'll tell you, a lot of times you need speed, you need someone like Jody, you need someone that can help you fill the gap in the meantime, but you build multiple streams. No question. Multiple revenue streams, if you want a diversified portfolio that's going to weather the storm. Yeah. You want multiple recruiting streams.

SPEAKER_01 41:45

I don't want to spoil her episode because she absolutely killed it and hit it out of the park. First of all, let's just talk about this. Get it off my chest. She's got a face for movies. She's gorgeous, right? Right. And she she I she is literally the whole package. She is so intelligent, but the smile, the disposition, the presence about her, that that lady knows more about recruiting than I would say some of the biggest recruiting companies in the country. And one of the things she emphasized to me was you have to sell the job and you have to have a constant stream of recruits. You may not need them now, but you may need them for special events. Keep a roster of firemen, off-duty firemen, off-duty cops that that go through training, et cetera. But try to do it.

SPEAKER_04 42:37

Try by the firehouses.

SPEAKER_01 42:38

Exactly.

SPEAKER_04 42:39

I I will tell you, there's one other lesson I think you can take from Jody, and I'm sure she didn't talk about it because this is just who she is. One of the things about Jody is that Jody is genuine. I'm lucky enough to call her a personal friend. Oh God, you can't. And I can tell you the Jody that you see on stage, I mean, don't get me wrong. We all step on stage, we up our energy, right? The energy level goes up. But she is the same person on the stage, off the stage, that you would call for advice. Like, look, I I can't say enough about how important that is, because I've worked for people that pretend to care. I've dealt with people that pretend to care.

SPEAKER_01 43:13

No, she she she loves what she does. She's got a passion for you.

SPEAKER_04 43:17

That's another huge lesson there.

SPEAKER_01 43:19

So everybody get if you're gonna if you're gonna download this report for any reason, do it because if you read through Jody's articles, the article she has, okay, and and she really does she really broke it down. Old method, new method.

SPEAKER_04 43:37

New method.

SPEAKER_01 43:37

100%. Um, yep, and there it is on the screen. The bottom line is the old chauffeurs are not coming back. It talks about the way you treat and how you would operate, okay? And you know, she had a uh again, the episode just it would it blew me away.

SPEAKER_04 43:53

So uh it's always a good time with Jody.

SPEAKER_01 43:56

I mean, she and she just knows recruiting. And you know, for to people that view hiring a recruiter for for that matter, for hiring PACs, for hiring driving transactions, if you look at us as an expense versus an investment, I I don't want to say, but that's just column, I'm pissed because I'm making your money. Yeah, but I I had I had a uh uh someone speak out because you know we our retained clients, you know, we're less expensive than a monthly fee on an SUV, okay? And the person said, well, not by much. I said, Listen, all we have to do is help you save the amount of money you pass every year as a minimum. And we can we do that in our tax prep reports. But anyway, so the recruiting, I hear this all the time. Well, I don't want the expensive recruiter. Okay, well, guess what? You should be recruiting as a full-time job. Okay, it's a constant in your business.

SPEAKER_04 44:53

I think there's a point of scale. I think for anybody that is on the smaller side, you need to be paying attention to people like Jody. You need to be paying attention to groups like the driving force, you need to be learning everything you can. If you want to build a business, you will get to the point you need a recruiter. And here's the other thing is you know, we didn't talk much about those other areas, but if you need to bring in a safety and compliance person, or if you need to bring in someone that is going to be an ops manager, you might only hire that role once, but working with someone that knows what they're looking for, that's gonna be able to help you do that the right way and find the right person is going to save you a lot of time and headache down the road.

SPEAKER_01 45:32

Hey, I I look I know a company that uh that that I recommended making an acquisition to acquire the entire management team, and the guy didn't want to pay the multiple. Okay, and he's he's already gone through his senior leadership, it has turned over twice since he bought the company. But anyway, listen, I want to get to this. When it's been the last 15 minutes on safety and training, and I have to tell you, I'm a little disappointed at the results in this thing.

SPEAKER_04 45:58

I would love to tell you I was surprised by the results. I was saddened by the results, but not surprised. Look, I could have written a whole book based on these results. So take me through the results. The last time. The respondents updated their chauffeur manual, right? Out of this, you've got roughly a little over half that updated it in the past year. Here's my problem with this, and here's what we see. Most people now are using AI to update it, and then they're sending out a copy to everybody. If you actually think your staff is going to read your employee manual and not use it as a reference for things they want, like PTO or benefits and things like that, you're kidding yourself. The other massive problem that we're seeing right now is everybody and their brother is writing it with AI. It's all it's all ChatGBT. ChatGBT is writing all the chauffeur manuals, it's doing all the updates, it's doing all that. And the biggest issue that we're seeing, and this is something I've talked a lot about with my insurance friends, you're teeing yourself up for a negligence claim. Because all you have to do is put in the chauffeur manual that if I ever catch you texting and driving, you will be fired immediately on the spot, and you are ineligible for rehire. And then what happens? Your absolute best driver, the one you can't afford to lose, the one that takes every trip, the one everybody adores gets caught texting and driving. And you don't fire them. You don't fire them. And then six months later, they get in an accident and you're negligent. And guess what?

SPEAKER_01 47:25

The accident was caused because he was texting while driving. I want to ask you a question before we get too deep. In your mind, is the chauffeur manual and the safety manual the same thing?

SPEAKER_04 47:36

No. In our world, we can we still have this old school thought of a chauffeur manual that is the book. It's like our Bible. Everything's in that one Bible. That doesn't scale and that doesn't work when you get to Motor Coach anything else. And frankly, in my opinion, it's not the wet best way to do it. I don't think it gets you.

SPEAKER_01 47:57

I don't think it gets you anytime you add a new class of vehicle, you're screwed. You're screwed. Look at look at the number that, and before you go too much further, because I know where you're going to go, 27.7% of the respondents, the last time you updated your chauffeur manual was 23 or older.

SPEAKER_04 48:16

Well, but let's let me let me go down a road. I I wasn't able to because I didn't have the room. In my opinion, you shouldn't have a chauffeur manual. I'm gonna get really strung up for this one. It doesn't make sense to me, and it never has. Because you should really have an employee manual that is all your HR type stuff.

SPEAKER_01 48:35

Yeah.

SPEAKER_04 48:35

And then you have your safety policies and your service policies and your other items. Because here's the thing: if I want you to operate an MCI or a Prevo or you know a Van Huhl, right? Anything I'm handing you the manual, it's not gonna end well. We have an incredible partnership with ABC, where ABC has given us the operating videos, right? The actual training videos from ABC that were built by Danny Landry live inside of PAX training. So why am I gonna put a bunch of operating stuff in a chauffeur manual when I can have them take that on training? What you want in your policies, your policies need to be your larger guiding stars, your how the nitty-gritty works should be training. It shouldn't be one massive book, right? Because here's the thing if you look at time off, benefits, hiring, EEOC, all that stuff, shoving that all into one massive book means you now have all of your actual employer legal relatory regulatory compliance sitting in the same book as all your other policies. So, in my opinion, you have an employee manual, then you have your different policies for your different areas, and then your policies are not your how do you do it. It's what are the guiding principles. My policies keep me thinking and applying the right overall rules. My training keeps people doing what they're supposed to be doing. Say that again. My policies are my rules and my guidance that make sure that everything's there, that everything I get how I'm doing it. Your training is how you actually get it all applied and making sure everyone's doing what they're supposed to be doing.

SPEAKER_01 50:19

And to your point, you scroll up a little bit, John. There you go. I don't know how you turn anything from a service and hospitality or safety aspect. I don't know how you turn anything in those realms into muscle memory if if you if if if you haven't updated your shit since 23 or 24. It's a constant, constant push. And that's really where I was really disappointed. Now, look at look at the chauffeur manual updates, okay, in terms of rev in terms of of revenue. The bigger companies, the higher the revenue, okay, the the the more recently they were updated. 20 to 20 million, 55.6% of them updated them in 25, 22.2% updated in 26. So I don't even need coal for these numbers. 77.8% of the larger, largest operators are updating them within 12 months. Okay, so you know it it bothers me tremendously because you know, I think entrepreneurs in general fall into the, well, I've always done it this way. Guess what? The entire safety world has changed around you. If you're not smart enough to continue every single day and do training, bec what happens is, and this is simplistic, even if you're a one-car operator, you got a house? You got any equity? Do you want to keep it? You get you have a bodily injury claim, and you're the only driver, the SUV driver, and you know what they're gonna say, the lawyer's gonna get you on the side, hey, you're you're a single company owner, right? Uh uh you know, so you're answering the phone as well as driving? Yeah, I'm doing it all. Uh-huh. Okay. By the way, you have telematics? No. Do you have a camera? No. By the way, when was the last time you took a defensive driving course? Oh no, I'm too busy for that.

SPEAKER_04 52:16

Ken, Ken, why are you still asking questions? He already lost.

SPEAKER_01 52:19

He already lost. He's already totally screwed. Right. And and, you know, at the end of the day, there's a direct correlation between the increases in commercial auto insurance and answers to this shit. Okay? Yeah. Safety is safety, every to me, any it goes hand in hand on the customer service and hospitality side, but we're not talking about that right now. But if you want safety to be a muscle memory, okay, it has to be a constant push within your company. And honestly, I'm disappointed for our industry in these results.

SPEAKER_04 52:53

Well, no, let's let's let's tee it up even further. John, jump to page 22 for me for driver training frequency, if we can pull that up. All right. Here's this one, this one kills me. I can tell you right now, the blue ones are my customers. I know because we've been pushing weekly training since we started the company. Yep. Monthly training, I can tell you right now, when you look at quarterly to annually, the fact there is none on a driver training question scares the hell out of me. I know. And and and I'm more I'm more impressed that someone would admit it because usually they lie to you. Usually they don't. I know. You know, it's kind of one of those, well, you know, we um I take them out. Uh but here's my thing the annual is scary to me, although I think that's kind of a weird one. Quarterly means you're doing your quarterly safety meetings. These are probably companies that are doing it for DOT compliance reasons. The monthly and the weekly is where you should be. And if you look, and I don't want to spend a ton of time on it, I kind of break down what your weekly, your quarterly, and your annually look like. Because you should be hitting all three of those. Now, what I find really interesting is John, if you jump to page 24, if you look at training frequency by revenue size, okay, the more money a company makes, the more often they do weekly training. At 20 million plus, 33%, right, are doing weekly, and then you've got monthly and quarterly. They just get bigger. So at less than a million, they're trying to do the least amount of training, and it literally scales with the more money you make, the more often you train. Now, I'd love to get your opinion on this because we've talked about it before. You've said over and over and over the companies that have a training budget that put the time, that put the effort are more profitable. Do you think this is a factor of they are training more, they're more profitable, and that's where they are because of that? Do you think they're able to scale because of that?

SPEAKER_01 54:48

It becomes a flywheel effect. The more you train, the safer you are, the safer you are, the more you train. And and and I hate to tell you, the next piece of that flywheel is the more in check your insurance costs are, they're never going to go down. Okay. For the operators that are out there who th who blame the insurance companies for their rate increases, look in the mirror. Look in the mirror. If you're still running the same nonsense lack of safety training program as you were before the pandemic, no offense. You're putting your entire livelihood at risk. You know, somebody called me the other day who wanted to become a client of mine. We had a little bit of an esoteric conversation. And he says, you know, I don't buy into the fact that you can reduce accidents by safety, by becoming you can't become more safety. Accidents are a fate of God. And I'm like, look, you're talking to somebody who reads the Bible every Sunday.

SPEAKER_03 55:40

I don't want to be on the same road as that guy.

SPEAKER_01 55:42

Okay. I said to him, Do you remember Smokey the Bear? I said, Yeah. Do you remember, you know, do you do do you think before Smokey the Bear came out there were more or less wildfires? He said, probably more. I said, how about four times more?

SPEAKER_04 55:58

Does he think that teams that don't practice play as well as teams that actually schedule practice? Does he think guys just show up to the Super Bowl with no practice?

SPEAKER_01 56:06

He didn't get he didn't get the Derek Cheeter uh analogy. But but my my whole point is the concept of a flywheel, if you want to make it a priority, you just don't hang a poster. But it's the combination of the posters, it's the combination of the daily reminders, it's the combination of constant management of the telematics. It's the constant training, and you use that training to build your culture, and it becomes a flywheel. Whereas that training budget now becomes peanuts because your company is performing better. And and I just, it's difficult for me. And look, I we want the we want the honest feedback, but you're telling me that you're doing a company that's three to five million dollars, only 20 they're doing training 20%, whereas 40% of the time they're doing training quarterly. I like that. I think doing it monthly, frankly, is an opportunity to build the camaraderie and culture in your company, to reward good behavior, not to embarrass bad behavior, but to use those mistakes as teachable moments for the whole team. But as I said, you know, every you can't go anywhere in this industry without number one, uh, you know, a bar within 10 feet, or second, but more importantly, you can't go to any industry event without people screaming and yelling about insurance. It is, you know, this won't be, and what I loved about what we did here is we waited, John waited on the report to get weigh-ins from three insurance professionals. Yeah, okay. And the articles they wrote are worth the price of admission. By the way, we should be charging for this report, okay, and we're not.

SPEAKER_04 57:56

I I I a hundred percent agree. Because look, if you pull up page 26, I would say the the biggest so a couple pieces. The way that we've built PAX is that we are hitting them weekly because if you don't have consistency over time, people are gonna forget things. So I bounce it between customer service and I bounce it between safety at PAX. That's what we do. We've always done it that way. What we found though is that that virtual piece, using PAX as a tool, is one of the pieces of your plan. And so when we get hired by companies to come out and actually build out their entire training programs, we're looking at what is the behind the wheel? What is the ride-along? What are you doing in the classroom? How are you following up to the on-demand? And what what you see, and this is probably one of the more complex and harder charts to read, but if you look here, the bigger the operator, the more likely they are to stack their methods.

SPEAKER_01 58:56

I love by the way, I say that again because I actually read the words, and I well, I'm like, wow, that's pretty cool. But please explain what stack means.

SPEAKER_04 59:07

So so what we mean by stacking this is you're using the different levers you can pull. So, for example, with a very small startup company, it's usually the owner. And the owner has all the training in his head, and he started the company, and when you go and you get trained, he's gonna take you out for a day, he's gonna show you some things, he can tell you stuff, and that's training. That's kind of your in-person. But as companies grow, and the sooner you can stack them, the better, they start using things like they start bringing in on demand, they're doing parking lot skills, they're doing mentorship programs, they're doing weekly meetings, they're doing role playing, they're doing ride-alongs, they're taking different ways or different angles, and they're trying to do two things. And this is where I don't have a slide or a page or anything that brings 24 and 26 together, but I wish I did because what you were seeing is as company growth increases, not only does the size increase, but the number of methods they're using increase. So they're hitting it from more angles and they're hitting it more often. What happens, and I can tell you it doesn't matter the company size, and we've worked with insurance companies, we're working on case studies right now, as you raise both of those up, guess what goes down? Not only your accidents and your incidents, but your service failures, your customer complaints, yeah, your reviews start going down. It's the whole flywheel effect. It comes down to we talked about practice, right? If you're going to I'll give you a great example. If you have someone, and I and I'm sure this will tie in somehow to your background, if you have someone in baseball and the only thing they practice is batting, God help them when they go to catch or run the bases or use any of the other skills. Every great four, even though they're coming in early, even though they're putting in the extra time, they are making sure they're well rounded in all of the proficiencies of that sport. You look at what we've got laid out here, you kind of see that your parking lot training, your on-demand virtual, your role-playing, your mentor, all of these are designed to hone different areas to well round that person and bring all of the service and safety up while reducing the accidents, instance, problems, service failures that you deal with.

SPEAKER_01 1:01:35

And it there's no question that the more you stack on for training, the other piece of that is people learn differently. Some people learn better in the classroom, others learn better from quiet time reading on their own. So I I mean, everybody download this report to look at the data, but also to get the feedback. We have three, three of the best insurance professionals in the industry who commented here in this report, and they give actionable, executable items. And, you know, uh by the way, we didn't we didn't pick up that we didn't pick up that client because, you know, I I just I can't relate to someone who's that myopic, right? And I just don't like bloviating and wasting my time. If he's not gonna listen to us on where the you know the the basic stuff like this, they're not gonna listen to us in finance.

SPEAKER_04 1:02:30

So let's let's scoot to uh airport, which is um from the standpoint of everything we've hit, I think everything in this report is equally important, and I want to make sure you have the time to go over it. So tee us up on the airport service revenue because you know I will tell you out of the gate, I've heard a lot of people like, man, I don't understand why Ken's so obsessed with the airport, but there's a darn good reason you are, and I want you to tee us up with why the airport's so important, and we need to give this the time it deserves.

SPEAKER_01 1:02:58

Oh, what I mean, how much time do we have, right? It's okay, we're gonna go long. Much as we need. We're gonna go long on this because it's worthwhile. That number one, the most important reason is it's because it's the entry-level service that that our clients use us for. 67% of corporate America uses us to and from the airport. And if we if we do not increase our market share in airport and we continue just to shift the existing market share from one operator to another, we're gonna be in big trouble. The second reason is every single company to every single company we've reviewed, and we're up to 327, who has cut down and said, nope, we don't do airport anymore, has lost revenue and they've lost market share and they've lost profitability.

SPEAKER_04 1:03:51

I've always said the superpower of the limo company is that you got the CEO in the back. And if you want is group transportation, if you want all the time.

SPEAKER_01 1:03:59

There's no question about it.

SPEAKER_04 1:04:00

There's no question about it. So talk a little bit more about why that's so important and and what that key is. So so I get there's outliers, but run those numbers back again.

SPEAKER_01 1:04:11

67% of the reason why corporate America uses us is to and from the airports. It's the airport transfers. And every time we've reviewed a company who has either jacked their rates through the roof, right, because they or they have totally cut down on their airport service, they have lost market share for the reason that you've said, you know, you can't call yourself a grocery store if you're not going to sell milk and bread, and you and you you you basically become a specialty butcher shop, which is which is good, but you know, it's a different business model. It's a completely different business model. The reason why I harp so much on the airport is number one, it's the entry-level point to to how corporate America uses us. It's 67% of the reason they do use us. And if we don't have airport, we cannot get the groups, the meetings, et cetera, et cetera. You know, I'll give you a perfect example. I have a a party, a party bus guy called me in a you know, just in the mid-Atlantic, and he's like, well, you know, I want to sell my company. I'm like, you know, they're a little bit difficult to sell because people are afraid of party bus. And on top of that, you know, people want recurring corporate accounts. Well, I have corporate accounts that use me every single year, okay. But you don't provide airport service to them. No. Okay. So basically what you you're saying is you share corporate accounts with other providers who also could very easily farm out a party bus. So it's more, it's also a protectionary thing where you you don't want to lose that that piece of the business. And more than anything, it is a growing segment of travel. Passenger transportation growth is incredible. Internationally, it's growing at 5% compounded annual growth rate a year. Domestically, about 4%. And if you want to talk about the easiest way to grow your business, it's not buying another vehicle type. It's by capturing the round trip at the very least, instead of the one-way transfer. And it's also by capturing the out-of-town, you know, Mr. Mr. Blaine, you're landing in Chicago. May I provide you with service in Chicago? We have a partner network. And this way you don't have to give your credit card to a strange company that you might find on Google, but you also don't have to wait in Chicago midway at the TNC line, and it's going to be one secured transaction for you. And I'm going to track this across every single trip. I'm going to track every leg of your trip. It's especially important done to international as well. So airport is extremely attractive. What worries me is when I see people saying 41% of the people think it's going to stay the same, and 13% of the people who were surveyed say it's going to go down. Their market share is going to go down.

SPEAKER_04 1:07:15

Have you looked at GBTA reports or anything else? Because that I don't know that that lines up with what we're hearing from the business travel system. It doesn't.

SPEAKER_01 1:07:23

Business travel is growing. The GBTA is going to hit a $2.2 trillion mark within three years. And yeah, we are a World Business Travel Association, by the way, is super. At 4 o'clock in the morning, we can guarantee you're going to have a vehicle and a qualified chauffeur there. So it was I was a little bit take me down a little bit on this, John. I was a little bit concerned when I see people saying staying the same or lower. But I but I want you to again look at the bigger companies. Okay. Forty three forty-eight percent of the companies, three million to four point nine, say they're gonna be more. The large twenty million dollar companies, fifty-five point six percent are gonna do more. Okay. So let's let's talk about the market, the market share. For anybody who has this report, and it's difficult to see on this page, but we have outlined that the top 20 metropolitan statistical areas in this country, the chauffeur business is about 5.48 billion. When you extrapolate, John, were you able to bring up the uh email I sent you a little bit earlier? This is telling the top 10 busiest airports in the United States service 330 million passengers a year. If we just capture the top 3% of the travelers with a $300 average, it's a $2.98 billion market. But if we tr if we capture all of corporate travel, 16% of the plane, it's $10.58 billion. The top 10 airports are bigger. The possibility, what they call the TAM, the total available market, is bigger than our entire chauffeured industry. So what does that tell you?

SPEAKER_04 1:09:38

We we couldn't handle it if they gave it to us. We could come here and we couldn't. If they just decided tomorrow we're only using chauffeur transportation, literally the capacity is probably not there to handle it.

SPEAKER_01 1:09:48

Right. And this is just the United States. The top 25 airports service 600 million people. The top 3% travelers who are sitting in first class are 17.9 million people. That's a $5.4 billion market. If you capture the regular business traveler, the 16% in total, it's 95 million passengers. It's a almost $19 billion market. So more than anything, airport is the is the low-hanging fruit to grow your business. Oh, but they're all Uber clients. No, they are not. Your suburban wealthy families are not at four or five in the morning when they're going to on their vacations, by the way, and the wealthy, the wealthy one or two percent control 50% of the discretionary travel budgets. They're not using Uber to go to the airport. Your job is to proactively sell in the wealthiest towns your value, which is guaranteed performance, you're going to handle their luggage door-to-door. You're going to give them a better rate if they give you a round trip. I was working with an operator this morning, and we we basically showed that he's spending over $25 taking every airport reservation. So what do we say? If somebody books a round trip on your corporate portal or your app, yeah, it's a little more cumbersome than Uber. Why don't you give them a discount? Well, I don't want to give, I don't want to discount my margin. You're not. You're actually saving money. You're making money. Okay. So at the end of the day, I harp on it because we are a sell and do industry. You sell the trip and you do the trip. And the best client we have is the client where we bring them in the door, we wow them on what we do, and we sell them more stuff. But we we do a shitty job as an industry, a two-thing, proactively marketing why we're a better value. No, uh, listen, you don't have to wait in the line at the airport. That's why you want to do a round trip with me. There's no such thing as surge pricing with me. And I'm gonna give you a great deal. If you book me well in advance, you're gonna get my best price if you book me when you book your airline uh uh uh airplane ticket. And the market is so easy and solid to grow. And now my job is to sell you other things, to sell other people.

SPEAKER_04 1:12:30

But this is restaurant week, right? Correct. And I we've we've told this story before. One of my one of my previously favorite restaurants I used to go to for every major event, my wife and I would go eat there. We went during restaurant week, and it was utter garbage. Yep. They totally blew it. I asked them, I said, What's with the presentation? What why are we, you know, what has happened? They said, Oh, well, it's restaurant week, and we tone everything down. So instead of making restaurant week their time to show off, they literally said, Hey, we're gonna half-ass it. Yep. And as a result, that was the last time I ever ate there. I said, Well, if we're gonna if we're gonna do that during restaurant week, what are you gonna do the rest of the time? So I think I think what you're getting at is that same idea that you have to wow them and blow their socks off on these types of things so that you can get to the other portions of it, so that you can get into the other ones. And I think that for me is probably the biggest takeaway here. And I also I know we didn't talk about it in report, but I also think this is one of the reasons that the chauffeur services industry has to fight like hell for placement. Because I can tell you absolutely there's no I know cities where if I am in a hurry, I cannot book a black car because I know that I'm either gonna have to walk an absolute mile to get to the parking lot they've stuck them in, whether the guy's with me or not, and you've got taxi or ride share or whatever that is right on the curb and you walk out the door, get in the car.

SPEAKER_01 1:14:02

I don't disagree with that. I I will tell you, I I won't wait in line at the airport and I won't fight the is that license plate my car, etc., etc. I I made the mistake. I went to Savannah for the weekend and I booked one of my clients on the way in, and by the way, I wouldn't let them comp me. I didn't tell them who I was. And the mistake I made was going from the airport going from the hotel back to the airport, the the Uber app was acting up. It it kept wanting to send me the pickup point, you know, a mile away or half a mile away, and I couldn't figure out. It caused me so much anxiety. I said, You're an idiot. You should have absolutely booked the round trip when you were on the phone with them. And, you know, I'm just gonna dispel the myth. You know, if it was all about price, five-star white tablecloth businesses would not exist. Restaurants would not exist. If it was all about the price, every hotel would be Motel 6 with a clean, comfortable room. I stayed at the JW Marriott, okay? And I'll tell you what, they were they rewarded me from being uh uh uh whatever level I am by you know by giving me uh meal vouchers all weekend. So do I look upon it that they discount it? No, they gave me better value. So if you the first thing I would do as an operator is get out of your mind that you cannot compete in airport. You can if you're if you're going after the urban rider, urban to urban, urban city to urban airport, you you're gonna lose. But every single bedroom community, 45 minutes or an hour out, is a good client for you. And you have to become more agile. You have to say, listen, I can give you my best price if you book me at least seven days in advance, right? Because you're gonna get a right, that's number one. So you condition your your client. And number two, help them set up the portal so that they can book online and create an account. I can give you my best price if you have an account with me, an established account with me, and if you book the round trip, this is what I can do for you. And you know, guy pushed back on me this morning and I said, we've already discussed the fact it costs you $25 to make a single reservation. Why don't you you save that, you have that money to play with from a promotional perspective? And by the way, you're only doing 4% of your annual revenue is outbound work to the other airports uh around the country. You're not asking the question, can I provide you with service in Chicago? Well, why would I want to do that? One single secure transaction, you're not gonna give a stranger your credit card, you're not gonna wait in line. The the Uber the Build value, build value, build value, build value, build value. You know, and and people will pay for it. And the other piece of it, first time that Uber driver doesn't show up at four o'clock in the morning, they're gonna think twice and they're gonna say, you know what, I should have booked a round trip. But you got to stay in front of them.

SPEAKER_04 1:17:14

I don't I don't know that there's a better use case that you could bring up. And I will say, you know, we are seeing, and it's it's very interesting because you know, for a long time, what I was seeing was the chauffeur community only going up into the motor coach. But I'm now starting to see it the other way around. I'm now starting to see what we're considered to be purely motor coach companies. Oh, they're yep, are now getting SUVs, yep, are now getting sprinters, yep, are now and and I truly do believe, right? And it's it's funny because I think of the logo, and I think of the the logo of our podcast, right? You've got the SUV, the sprinter, the motor coach. But I think we are getting to the point where we're seeing that companies are gonna be all the way across the board transportation companies, and I think part of this is a lot of this is also business strategy. A lot of this is also understanding where to do what, how to move. I mean, for God's sake, I think about the Costco hot dog. The Costco hot dog has stayed $1.50 since its inception. Right. And you would look at that and say, oh my god, you would lose money.

SPEAKER_01 1:18:24

But the average the average Costco spend, the average Costco member spend has quadrupled during that time frame.

SPEAKER_04 1:18:31

Absolutely.

SPEAKER_01 1:18:32

And so and they've made they now make a an absolute killing on prepared foods that and uh the chicken and the rest of it. So at the end of the day, it is business strategy, but it's more fundamental than that. Right. Let the TNCs focus on the transaction. We need to drive relationships. And if you're not finding out how many times James travels, because you're on the road constantly, how many times a year does James travel? And how if James is a frequent flyer, I want to work much harder to get James in the door as a chauffeured customer. And I would say, James, what did you do before today? Well, you know, I I took Uber until the guy left me, you know, I couldn't get a car at four o'clock. Tell you what we're gonna do. If you book me when you book your airport travel, I can give you a better price. If you book me online with my portal, I will give you the best price that I can. But we're always gonna be more expensive because we have real commercial insurance, real safety train drivers for your protection, et cetera, et cetera. It's about selling value. If you're just associated, if you're just looking at the lowest cost possible price transaction, you're not gonna succeed. You need to pick and choose who your clients are and what is your definition of good business. I want James Bland, if he's if he's flying out 20 times a year, guess what? I want him as a client.

SPEAKER_04 1:20:01

Well, and let me let me give some real world perspective to that because I would I I don't know where it I would sit compared to other business travelers, but you're absolutely right. I'm getting ready to book four or five flights in the next two days. Um and I'm already planning out, I think I'm I think I'm out the entire month of August. I'm at shows and for me, I care about a couple things. I want to know that there's consistency, I want to know there's reliability, I want to know there's convenience, and most importantly, I want support. So my biggest thing, and and and this is a good lesson for anyone, is no matter how good everything goes, something will eventually go wrong as a business traveler. Storm, meeting runs long, something's canceled, something is going to go wrong somewhere in the chain. For me, one of the biggest things, and I talked about Southwest when I was at the the chauffeur-driven show in Las Vegas, and I said I wasn't sure if I'd I'd stay with Southwest or not. One of the smartest things Southwest did, and I don't know if they they found out about this, if they're smart, they did it with all their business travelers, is they reached out and they said, Hey, we want to make sure that with all the changes going on, you know all of your options. And because you are a dedicated business traveler that travels a lot with us, we are giving you a special phone number. This is a business only priority phone number. And not only that, when you call this number, we know your caller ID. We know it's you. We're gonna bump you to the front of the queue. So just like when you show up at the airport, you have your priority line that you love going through. Yeah, we're doing the same thing on the phone. So if something does go wrong, you can call us. I would say uh a lot of it though is not even I I don't use it. I think I've used it two or three times. The two or three times I have, it was awesome, right? Phone rings, none of this, excuse my language, none of this AI bullshit. Yeah, none of this, thank you for calling. Tell us your reason, nothing. It was thanks for calling Southwest. This is Jenny, how can I help? This is Tony, what can I do for you? And they immediately took care of it, solved it, rerouted whatever it is I needed, they took care of. I can tell you right now, we've talked about sludge, we've talked about all these other friction-causing things that are coming in the future. If you are prioritizing the relationship and you want business travelers or high net worth travelers, the really high net worth people always have a guy, right? I always joke. I think of my, you know, I think of my Italian father-in-law who's done really well for himself. He's got a successful business, had the condo in Florida, he's very well off. Uh, but he's always got his guy. And he loves having the guy. I call the guy, it gets taken care of.

SPEAKER_01 1:22:53

And how many times does he how many times does he haggle with them overprice?

SPEAKER_04 1:22:57

Well, and look, even when he does haggle with them overpriced, it's hey, no, Ralph, we get it. We we could what what do you want me to take away or what's not important to you so I can well no, I really need all that.

SPEAKER_01 1:23:09

The more value you provide, the less important prices in the mix. It's it's 100% proven. The reason why we've we were ending here on this slide is the entire sedan and SUV market in the United States for Schauferred is about a $7 billion market today, including any city-to-city transfers, any charter work, and all airport. Airport's about 67, 70% of it, right? What we're displaying here is the true market for the frequent business travelers and the frequent travelers, the top travelers, is a $24.91 billion market. And they're not all Uber and Lyft drivers. If that's what you think, then you must eat every meal at a fast food restaurant. And you may never you must never you must never go out as a family to a four or five-star dining establishment. You may never must never stay at a Marriott, you must stay always at Motel 6. And I think I've made my point. So it's all to me about proactivity, and it's about it's about constantly telling the story as to why we're more value. I think we did a good job on this. I think it's tough to talk about a survey that's 32 pages in a podcast. But go read the survey. Go read the go read the survey, go read the report. John's going to put put the link in. It's 36 pages. What I love the most about it is the articles that you wrote, the articles that Jody wrote, the insurance professionals that wrote that collaborated on this. So if you don't take the time to download it and read it, um, we've only been able to really kick hit about maybe 30 to 35% of its content. Um, you're really missing out. And I also would encourage you the next time the survey comes out, is to take the time to fill it out. One of the largest operators in the country called and said, Can I want to make sure that I'm filling this out the right way. I got the link from chauffeur driven and I filled yours out, the link you sent me out. Is this the same thing? And I'm like, yes, it is. It's we're just sending it out to everybody, but thank you so much. So um this has been an I know we've run long. This was a this is a 90 minutes. I know John are shortening it down a little bit, but John, thank you so much for the work that you've done uh on our behalf on the survey. And he's not coming up on the screen. He's so bashful. This has been another exciting episode of the Ground Transportation Podcast. We're gonna ask you to subscribe. It's not just enough that you listen. Please take the time to subscribe.

SPEAKER_04 1:25:49

Drop us a comment too. We want to hear from you guys.

SPEAKER_01 1:25:52

We want the comments. We I I'm not on YouTube enough, but I've got to get I've answered a few, but we absolutely have to do. We want your comments. We want you to email us with suggestions on what you want us to talk about. And um just uh have a great weekend, and we'll see you again next Friday.

SPEAKER_04 1:26:11

On another exciting episode of the Ground Transportation Podcast.

SPEAKER_00 1:26:14

Thank you for listening to the Ground Transportation Podcast. If you enjoyed this episode, please remember to subscribe to the show on Apple, Spotify, YouTube, or wherever you get your podcasts. For more information about PAX Training and to contact James, go to PaxTraining.com. And for more information about driving transactions and to contact Ken, go to driving transactions.com. We'll see you next time on the Ground Transportation Podcast.