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Thread: Not price fixing, but...

  1. #1

    Default Not price fixing, but...

    So I came up with this great idea(more of a dream). All the reputable limo businesses get together and agree to stop matching prices. This will help to get rid of low balling and ruining it for the whole industry. I've noticed that since the economy has gone to hell, more and more owners are getting desperate and doing whatever it takes to get a job. This has turned into a domino effect which is destroying the industry.

    My example:
    Client: How much for an SUV limo on Saturday for 5 hours?
    Operator:That would be $150/hr all inclusive for a total of $750.
    Client: Oh, well The Limousine Scene says they'll do it for $700 all inclusive. Can you beat that.
    Operator: Oh, Limousine Scene is a good company and that's a good price.

    Like I said, a dream. But you get the gist of it. If we(I've done it and I'm sure you have too) stopped under cutting other companies, prices would stay good enough to actually make it worth staying in this business(for those of us really feeling this economy).

    The reason I thought of this was from a wine tour I booked earlier today. I had quoted a woman a wine tour for $625 and she did what many callers do and told me she'd get back to me. She called me back to book and told me that 2 of the other companies she called told me that that was a good price and that my company was known for it's top notch personal service. She asked the other company about his Hummer limo compared to my Excursion. He told her his limo was better, but that my service was unbeatable. She laughed and asked him why he would admit to that. He told her his chauffeur's were great, but that he couldn't compare them to me personally driving them and doing the unique things that I do(like limousine cuisine by chef Geoff Levine). So she told him better service was more important than a newer vehicle and booked with me.

    Instant karma for my friend, I sent him a Hummer wine tour and a 10 pack wine tour within an hour.

    In a perfect world, this would be easy to do. But obviously, there are a lot of obstacles. But please share your thoughts.
    Tough times don't last. Tough people do.

    Limo Kings Limousine Service
    www.limokings.net

  2. #2

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    Like you said: a dream.

    If you got all the company owners in your area together, you couldn't agree on where to eat lunch, let alone agree to coordinate rates.

    I'm sure some would go along, but there will always be someone willing to undercut.

    That's my thoughts.

    It is a nice dream though.

  3. #3
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    Yea, all it would take is one of those companies to say "ahh, I know what everyone is charging now, so I'll beat it by a few bucks... who will ever know that I did it?" It may work for a minute but greed will always win, especially if one of those companies is getting desperate and needs that job.

  4. #4

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    Sweet dreams Geoff ! In our area there are a few who would agree to do that, but with all the illegals and those who run just to trade $$ we still get undercut or it turns into a "price war."

    I quoted a wine tour for my sister's close friend. Gave her a very competitive quote and some added extras (cheese and cracker tray) They went with another company that sent them in a (homemade) party bus that was out till wee hours the same morning and thrown up in, so the stench was still there of alcohol and vomit, but they went anyway.....because they were $10 per hour less that I was.......My sister asked how their trip was and her friend told her they weren't impressed and about the smell...... but her friend said we were too expensive that's why they went with the other company; it was $60 less than we were !! Go figure!

    Personally if it were $600 less I wouldn't have gone with the smell of vomit and alcohol from the previous night's party! But maybe that's why I'm still working and not rocking in my rocking chair retired--I spend $$$ ....... you boys will appreciate that part of my womanhood!!! (for my forum funnies buddies)

    I hope you continue to have "sweet dreams", Geoff !!!

    Kathy
    City Heat Limousine

  5. #5
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    Cool rates

    Quote Originally Posted by Geoff Levine View Post
    So I came up with this great idea(more of a dream). All the reputable limo businesses get together and agree to stop matching prices. This will help to get rid of low balling and ruining it for the whole industry. I've noticed that since the economy has gone to hell, more and more owners are getting desperate and doing whatever it takes to get a job. This has turned into a domino effect which is destroying the industry.

    My example:
    Client: How much for an SUV limo on Saturday for 5 hours?
    Operator:That would be $150/hr all inclusive for a total of $750.
    Client: Oh, well The Limousine Scene says they'll do it for $700 all inclusive. Can you beat that.
    Operator: Oh, Limousine Scene is a good company and that's a good price.

    Like I said, a dream. But you get the gist of it. If we(I've done it and I'm sure you have too) stopped under cutting other companies, prices would stay good enough to actually make it worth staying in this business(for those of us really feeling this economy).

    The reason I thought of this was from a wine tour I booked earlier today. I had quoted a woman a wine tour for $625 and she did what many callers do and told me she'd get back to me. She called me back to book and told me that 2 of the other companies she called told me that that was a good price and that my company was known for it's top notch personal service. She asked the other company about his Hummer limo compared to my Excursion. He told her his limo was better, but that my service was unbeatable. She laughed and asked him why he would admit to that. He told her his chauffeur's were great, but that he couldn't compare them to me personally driving them and doing the unique things that I do(like limousine cuisine by chef Geoff Levine). So she told him better service was more important than a newer vehicle and booked with me.

    Instant karma for my friend, I sent him a Hummer wine tour and a 10 pack wine tour within an hour.

    In a perfect world, this would be easy to do. But obviously, there are a lot of obstacles. But please share your thoughts.
    GREAT IDEA! we shaoul do that in South Florida, in Broward County companies have transfer rates as low as $30 crazy cannot compete with that at least in Miami the rates are minimum $70 for a one way sedan transfer. It is very hard to stay in business these days in South Florida, God Bless everyone that stays.

  6. #6
    Senior Member LIMOJESS's Avatar
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    Good Dream Geoff, Your dream can come true, only during a certain period.

    Prom Season is arriving in two months, that is the only time your dream will come true.

  7. #7
    Senior Member Brian K's Avatar
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    Quote Originally Posted by Geoff Levine View Post
    All the reputable limo businesses get together and agree to stop matching prices.

    In a perfect world, this would be easy to do. But obviously, there are a lot of obstacles. But please share your thoughts.
    DANGER, DANGER, DANGER!!! You might not consider this price fixing because one company's prices are not the same as another company's, but this topic comes awfully close to violating the Sherman Act. When firms that sell the same service agree on any type of pricing they are forming a conspiracy that violates antitrust laws. Having this conversation casually, spoken between two competitors is bad enough. To have this in print is very questionable. There is no way thinking along these lines should be promoted or endorsed.
    Who dares wins.

  8. #8

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    Quote Originally Posted by City Heat View Post
    Sweet dreams Geoff ! In our area there are a few who would agree to do that, but with all the illegals and those who run just to trade $$ we still get undercut or it turns into a "price war."

    I quoted a wine tour for my sister's close friend. Gave her a very competitive quote and some added extras (cheese and cracker tray) They went with another company that sent them in a (homemade) party bus that was out till wee hours the same morning and thrown up in, so the stench was still there of alcohol and vomit, but they went anyway.....because they were $10 per hour less that I was.......My sister asked how their trip was and her friend told her they weren't impressed and about the smell...... but her friend said we were too expensive that's why they went with the other company; it was $60 less than we were !! Go figure!

    Personally if it were $600 less I wouldn't have gone with the smell of vomit and alcohol from the previous night's party! But maybe that's why I'm still working and not rocking in my rocking chair retired--I spend $$$ ....... you boys will appreciate that part of my womanhood!!! (for my forum funnies buddies)

    I hope you continue to have "sweet dreams", Geoff !!!


    Kathy
    City Heat Limousine
    Kathy,
    That just shows that you get what you pay for. Vomit, nasty.

    Thanks for all the feedback, everyone.

    Vegas rules really suck. What about after the recession hit? Do you have to petition permission to lower your rates?

    As far as some companies not wanting to partner up in agreement to not low ball, they would not be included in our circle of good companies that we recommend. So when someone asks us to price match a random company we don't work with, we either price match or we honestly tell them what we think of that company and how we don't work with them(and maybe even offer up a few other reputable companies they should try calling). Still just a dream, but I'm getting closer.

    An easy way to keep an eye on things would be to make random calls for price quotes and ask them about matching so and so company prices. A lot of companies do this already and think their sneaky, but some forget about caller I.D. The biggest company in San Diego(no need to mention names, just a dumb dispatcher/res guy)did this to me and I gave him a quote that was almost double regular price. When he said it was kinda high, I told him you get what you pay for and any company that was lower than me was probably unlicensed and uninsured. I called him back a little later and told him to block his number next time.
    Tough times don't last. Tough people do.

    Limo Kings Limousine Service
    www.limokings.net

  9. #9

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    Quote Originally Posted by Brian K View Post
    DANGER, DANGER, DANGER!!! You might not consider this price fixing because one company's prices are not the same as another company's, but this topic comes awfully close to violating the Sherman Act. When firms that sell the same service agree on any type of pricing they are forming a conspiracy that violates antitrust laws. Having this conversation casually, spoken between two competitors is bad enough. To have this in print is very questionable. There is no way thinking along these lines should be promoted or endorsed.
    I totally agree that it is dangerously close, but I am in no way talking about specific "prices". I'm just talking about low ballers that are ruining the industry. I want every legal company to charge exactly what is fair and proper to make a fair profit after everything is said and done. Each company will have different prices and not share those prices. That being said, I don't think I have written anything to incriminate me whatsoever. Besides, it's just a dream(MLK jr did get shot over a dream, but I'll take my chances).
    Tough times don't last. Tough people do.

    Limo Kings Limousine Service
    www.limokings.net

  10. #10
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    The only way to control rates and expose the "lowballers" is the Las Vegas way. It is called a regulated monopoly. Very common in the Taxi industry. This about the only way you could make your dream come true. If a licensesing authority controled the rates and enforced it, there would be no worry of anti trust or price fixing. The playing field would be completly level price wise and the only thing that would determine who is the best is the level of service you provide. Lets say your competition has an old 1969 Cadillac Limo and you have a 2011 escalade. The regulated price is set at $100.00 per hour. Which one would you chose? My guess would be the latter. Need I say more?

  11. #11

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    Quote Originally Posted by Earl Metcalf View Post
    The only way to control rates and expose the "lowballers" is the Las Vegas way. It is called a regulated monopoly. Very common in the Taxi industry. This about the only way you could make your dream come true. If a licensesing authority controled the rates and enforced it, there would be no worry of anti trust or price fixing. The playing field would be completly level price wise and the only thing that would determine who is the best is the level of service you provide. Lets say your competition has an old 1969 Cadillac Limo and you have a 2011 escalade. The regulated price is set at $100.00 per hour. Which one would you chose? My guess would be the latter. Need I say more?
    Dave, I respect your many years of experience in the industry, but this belongs in the forum funnies. Vegas is the most corrupt system around(except maybe Tampa's gestapo BS that Gunny has to deal with). But in theory I get what you're saying.

    But once again, I have no problem with companies having low prices. I'm just sick of the price matching. We're battling each other and it's destroying the industry. Set your own fair prices and educate the client on what they are getting for that price. When they ask you to price match, explain the different variables of what is being offered(level of service, reliability, quality of vehicle, Ritz Carlton vs. Motel 6, etc...)
    Tough times don't last. Tough people do.

    Limo Kings Limousine Service
    www.limokings.net

  12. #12
    Super Moderator gunny's Avatar
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    Thumbs up David Also Roots For Guvmint Controlled Pricing At Micky D's

    Sure many in the Inustry would just love for big bro to step in & regulate pricing ala taxicab style... The same would would pitch a bicth fit (in their own homes of course) if guvmint controlled the pricing on other consumers products.

    And WTF does guvmint have any business economically regulating "Luxury Service" in the 1st place. As a PA Court pondered... how in the fark does one even prove need & necessity for a luxury product?
    Airport Limo Service Spring Hill, Brooksville, Citrus County FL
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  13. #13

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    Quote Originally Posted by Brian K View Post
    DANGER, DANGER, DANGER!!! You might not consider this price fixing because one company's prices are not the same as another company's, but this topic comes awfully close to violating the Sherman Act. When firms that sell the same service agree on any type of pricing they are forming a conspiracy that violates antitrust laws. Having this conversation casually, spoken between two competitors is bad enough. To have this in print is very questionable. There is no way thinking along these lines should be promoted or endorsed.

    HIt this one on the head. This type of "casual gentlemen's agreement" is exactly what brought huge fines to Sotheby's and the Taubman's.
    Events Limousine
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  14. #14

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    Quote Originally Posted by Events Limousine View Post
    HIt this one on the head. This type of "casual gentlemen's agreement" is exactly what brought huge fines to Sotheby's and the Taubman's.
    Because I'm the one that brought up "price fixing" in the first place(in my title), I'd appreciate a little evidence or specific law citing to show something illegal. I'm not trying to be sneaky with any "gentleman's agreement". I've been more than honest with my approach. Until then, nobody has hit anything on the head, but we'll see if someone is ducking.
    Tough times don't last. Tough people do.

    Limo Kings Limousine Service
    www.limokings.net

  15. #15
    Senior Member cvclubs's Avatar
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    Quote Originally Posted by Geoff Levine View Post
    Dave, I respect your many years of experience in the industry, but this belongs in the forum funnies. Vegas is the most corrupt system around(except maybe Tampa's gestapo BS that Gunny has to deal with). But in theory I get what you're saying.
    BINGO! The entire processes of starting a limousine company out here is corupt.

    Heres a few of the many hoops we have to jump through:
    • Identify the market the applicant intends to service, demonstrating that such market willsupport the proposed operations. If you dont have a specif market already established you cant start a company period. That means you must have hundreds of prior reservations in a specif market before you even come close to your own limo.
    • The geographical area proposed to be served pursuant to the certificate, including,
      without limitation, the terminal and other points to be served, the number and location of

      points where equipment will be located, and a concise, narrative description of the
      proposed route. A map or sketch of the route and points to be served, drawn to a suitable scale which isindicated on the map or sketch. The map or sketch must show present and proposedoperations by distinctive coloring or marking.MAP OUT YOUR ROUTES?!?!?!
    • Facts showing that the proposed operation is or will be beneficial to the traveling public. You must prove you are beneficial. Try making a list of facts.. its not easy
    • Create a pro forma income statement, pro forma balance sheet, balance sheet for the service and perosnal balance sheets. You must have enough cash to sustain your company for 6 months without a single reservation and you must not be in any debt. Your credit core must also be outstanding and your personal finances must be perfect. All documents must be done by an accountant and must adhere to GAAP (thousands of dollars to do)
    After this and much more other companies are allowed to intervene o you and say they dont want you in the area. You then must spend thousands on a lawyer to write rebuttals and appear at hears before these other companies that have the authority to deny your comany because they feel we will hurt their business. After all this you can be denied for no reason at all.

    Once your approved here your part of an elite industry and you have so much power over new applicants its quite disturbing. Although you have so much power over new companies you have no control of your own. You cant change pricing without a huge application, you cant expand, you cant get new vehicles without approval you cant even move location unless approved. You also must keep an insane amount of information which must be available to the NTA from 9-5 5 days a week. They come and check all your files and trip sheets and fine you if you dont dot your i's and cross your t's the perfect way.

    Of course then theres the kickbacks to hosts, doormen, promoters, airports and hotels... its insane. Its a giant mess that is very messed up.

    Trust me you dont want an authority regulating everything you and your competition do.... its more aof a pain in the ass than its worth. Plus if another company has been approved for lower rates than you you are not allowed to ever match them. It makes it extremely hard to get rides.

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