For those of you smart enough to keep track through fuel card reports, etc:

Excluding gratuity and taxes, what percentage of your typical airport trip is the cost of fuel?

Note, I am not asking what your fuel surcharge is.

quote:

Originally posted by TxLimoGuy:
[QUOTE]Originally posted by Wade Randolph:
Wade, based on those numbers your vehicles must drive on average around 30 miles or less in the average hour.

That would imply a heavy slant towards limo work versus airport work. Am I correct?

Yes alot of runs are funerals which are averaging us 19 miles roundtrip. Our airport work is also way up and the average miles roundtrip is 25 miles total. Our sales are up 71% this month over last March.

[QUOTE]Originally posted by Wade Randolph:
Wade, based on those numbers your vehicles must drive on average around 30 miles or less in the average hour.

That would imply a heavy slant towards limo work versus airport work. Am I correct?

HOT OFF THE PRESS:

JAN-MARCH: FUEL 4% OF SALES
FUEL SURCHARGE 5%
NET PROFIT OF 1% OF FUEL SURCHARGE

Excel Fuel Charge calculator is done.

Email me if you want a copy.

tony.franzetti@marritonlimo.com

When I see people making poor (ie money losing) pricing decisions the first thought in my mind is NOT that they are doing it in the interest of the public.

Usually I believe it is 1) desperation (ie who cares about making money, I have a car note to pay), 2) ignorance (market study? what does that mean?), or 3) a conscious decision to gain market share which is usually a short lived campaign.

Tony: Actually he owns a Taxi operation and his Taxi fare based on meter rate is more than his luxury sedan price. I agree it is lunacy but some times you just have to do what you have to do in the interest of public relations when you live in a small town. But the same thing goes on in Detroit area. Metro Cars sets the bench mark for the Airport rates based on the fact that they run both ways. In the interst of public service the Limo companies try to match this rate based on one way hauls. It just don't work. As I said, be a 10% agent for the Guy set up to do the two way work and you will ahve a lot more money left in the Bank.

Dave,

I think the simple fact is that some airports simply do not have the volume of business to support true chauffeured transportation.

Why should your buddy lose his shirt driving people around to lose money? It is lunacy!

Let the taxis take them, or ask the customer to pay the right price to run an operation which does not go in the red. If they don't want to pay $200 then guess what? The Market has Spoken.

We charge about $500 for a sedan from Austin to Dallas. If someone doesn't want to pay my price, do you think I should lower it in order to lose money but get the trip?

Operators choose to dig their own grave by trying to match taxi prices in a low volume airport. That type of comparison is the wrong way to set a price in low volume.

Lets take this one step further, what percentage of an airport run would be labor (Chauffeur) cost (not counting tip) assuming that all of the labor laws are followed with regards to paying Chauffeurs. By this I mean base hourly wage for all time worked and not just a flat $10.00 or $15.00 that a lot of companies pay regardless of how much time it takes the Chauffeur.

So from what I see here, to bring myself in line to have my fuel cost equal 12% of the fare, (seems to be the consenous here) I would need to bump my price to $214.00 per run. That would be nice but the Guys based at the curb at airport only charge $90.00 to come to West Branch last time I checked.

I feel sorry for my Colleague who runs in southeastern michigan who only charges $75.00 for his airport runs (he, like I, is in an economicly depressed area) for a 150 mile round trip. His fuel percentage is 36%. Even if he was to bill the Client direct for the fuel ($27.50) this would only lower his percentage to 27% He, like I would have to bump his rate to $229.00 to come in line with the 12% number which would in fact put him out of business altogether base on the current economic conditions in Mich. (which will probably get worse if Delphi ask the bankruptcy judge to throw out the UAW contract and the UAW goes on strike as seems to be what is going to happen)

This points up what I have been saying in previous post, there just aint no money in airports unless you are set up to do backhauls like, as I have mentioned here several times Metro Cars is at DTW. There would be more net profit in just being a 10% agent for the Guys like Metro Cars than trying to operate your own Airport business.

Two words,

Fuel Surcharge!


This year to Date
Fuel Cost 7.2%
Income from STC 5.7%
Actual out of pocket: 1.5%

February
Fuel Cost 9.3%
Income from STC 6.1%
Actual out of pocket 3.2%

March
Fuel Cost 6.6%
Income from STC 5.4%
Actual out of pocket 1.2%

The majority of our airport trips are between Toledo and Detroit Metro ,although we do alot of local airport transfers , especially FBO's.

Our fuel cost in DTW runs is 12 - 13% of charge.

This seems to be the average amongst us here.

I have two answers. I do LAX trips far and above local airport service in Bakersfield. I do about 30 airport trips per week to LAX and about 10 local so I broke down both.

Typical LOCAL airport trip mileage (garage to airport to customer to garage) = 25.67 miles

Typical LAX airport trip mileage (garage to airport to customer to garage) = 248.25 miles

Total average gallons per LOCAL sedan trip = 2.81 gallons
Total average gallons per LAX sedan trip = 15.69 gallons

Total average LOCAL fuel cost = $7.37 @ $2.62 per gallon
Total average LAX fuel cost = $41.11 @ $2.62 per gallon

Average LOCAL airport rate we charge(base)= $45(does not include gratuity)
Average LAX airport rate we charge(base+ FUEL chg) = $337.00 (does not include gratuity)

Percentage of LOCAL cost of fuel versus total trip revenue = about 16.38%
Percentage of LAX cost of fuel versus total trip revenue = about 12.20%

I too will respond later in the week. I'll have a fresh income statement soon and will have to adjust the numbers to your formula.

Jim, best wishes to the wife and a speedy recovery.

I am working on an Excel tool that I will be willing to share with all once it is complete.

Tony,
I got your private e-mail re: this subject. I need to crunch some numbers. Unfortunately I have been sidelined for a few days as the Mrs. is scheduled for surgery today that will require a few days of hand and foot service and then about 4 weeks of recovery. I will have plenty of time later and will respond here so others can see where you are going with this.

one thing I would like to add to the above. I use a credit card for all of my fuel purchases that gives me a 5% rebate on fuel purchases. As long as i pay my bill on time each month, there is no interest charge. In Michigan we enjoy the benifit of having our state fuel tax refunded because we are part of the transportation infrastructure. (this will probably go away soon with all of the money problems Michigan is having but for now we will take full advantage of it.)

That being said, take away 5% of $2.759 price is now $2.622, take away $0.19 per gallon fuel tax final price $2.432 times 9.3 gallons = $22.62 divided by $120.00 = .18848 or 18.8%

Still like the the non airport deal (weddings or nights out) a lot better when you collect $300.00 and only spend about $8.00 to $10.00 on fuel, much more profitable.

Tony: For the very few airport runs I do, my fuel

cost percentage is about 21.4% based on the following:

West Branch Mi. to MBS airport in Freeland Mi. 140 miles round trip when you consider dead head to and from the garage. I charge $120.00 for this service based on three hours @ $40.00 per hour. Fuel economy is 15 MPG on my car I use for the service. the current price of mid Grade here in northern Michigan is $2.759 per gallon. 140 miles divided by 15 MPG = 9.3 gallons of fuel at $2.759 = $25.75 divided by $120.00 fare = .21458

My Driver gets paid for 4 hours minimum at $10.00 per hour when you factor in FICA, FUTA, Workers comp. ect. So $40.00 divided by $120.00 = 33.3% So as you can see between Driver and fuel Airport runs do not exactly make me a lot of money.