Some fleets are large, some fleets are small, and some fleets are not really fleets at all.
Each demands its own approach, and one of the most difficult for jobbers to get a profitable handle on is the taxi fleet. In many jurisdictions, the term “fleet” as applied to taxis is misleading. While Chicago boasts a fleet of about 5,000 taxis, all owned and operated by a single company, the norm for the Canadian taxi business is distinctly more fragmented.
For most people, the public perception of a fleet is of a monolithic collection of vehicles with common ownership. Seeing “ABC Taxi” leads them to believe that ABC Taxi owns it. This is usually far from the truth.
Take Toronto’s Beck Taxi for example: there are hundreds of Beck-named cabs patrolling the streets of Toronto, but Beck does not own any of them.
“We supply the dispatch services; the operators own the vehicles,” says Beck’s Andrew Whiteley. According to Whiteley, the ownership of the cabs varies from single vehicle owners to owners with two or three dozen. In Toronto, as in many jurisdictions, operating a taxi requires three things: a vehicle, an agreement with a dispatch company or broker, and an operating license. Those licenses are often sublet to the operators and, because the supply is limited, they are a very real profit center for those who hold them. Conversely, they are a substantial expense for the operator. The cost to use someone else’s license–which is perfectly legal in Toronto–runs into six figures.
All these facts are important to an understanding of the taxi fleet and how the owners maintain the vehicles, and also how important it is that those vehicles remain in good working order.
Tom Hagerty operates Liberty Taxi, a Beck lessee fleet of 35 vehicles. Speaking on brake products in particular, Hagerty says that there are really only a couple of issues he considers paramount.
“One is price and the other is the quality of the product. If you can get a good quality product for a good price, then that is what we’ll use.” Hagerty says that price only becomes the most important issue when product quality is at the required level. He may want to buy goods cheap, but he doesn’t want to buy cheap goods. Rotors are an example he offers.
“We found that it depends on the country of origin. Mexican rotors warp out–their metallurgy just isn’t right–so we don’t buy them. We don’t buy Asian generally either for the same reason.”
While he is adamant that he watches costs carefully, he bristles at the suggestion that taxi operators such as him are motivated by price alone. Taxis under his care generally put on about 100,000 km a year, get oil changes every three weeks and get their wheels and brakes checked at the same time. Brake pads and shoes, he says, usually need to be changed every four to six weeks, though it varies widely by driver and individual car.
“You have to buy a quality product. You can’t just buy a cheap product because it just doesn’t last. You can’t survive with a cheap product; it wouldn’t last a week. It may be okay for your grandmother going back and forth to the store, but most taxi fleets have to use a good product, because if you get breakdowns, you get lost shifts.” In addition, the taxi industry is generally well policed, with Toronto requiring inspections three times a year. Plus, taxis can generally not be operated if they are older than seven years, although there are some exceptions for alternative fuel conversions. Hagarty says that the load that constant use puts on the vehicles has taught him what he needs from a jobber.
“We know what products we want. If you wanted us to buy it from you, it would be based on price and service. If we call you today, how quickly would we get the stuff from you? We need it like yesterday.
“Now, if you had a new product, you’d really have to show us how it would be better. But it would have to be something pretty special to get us to change.”
The experience of Calgary-based Auto-motive Village seems to agree with this profile.
Steve Snowden, assistant manager at the group’s Horizon Auto Value, store says that he services half a dozen customers who do substantial business servicing taxi fleets. They generally go for the higher quality pads, he says.
“They’ve found that, for their 200,000 km a year, they need that quality. Most of them have gone away from the regular semi-metallic. A lot of the larger taxi companies around tend to be quite demanding in what they want and a lot of them are not open to change.”
Snowden says that, while it is true that individual owner-operators tend to be very price-motivated, this isn’t usually in the realm of brakes, though sometimes it is.
“The main thing is a cost comparison and a repair comparison, longevi-ty of pads, rotors, bearings, seals and what you have to go through to be servicing once a month rather than every four or five months,” says Snowden. “The savings can go a long way with anybody. A lot of the newer organizations are open to suggestions of things that will save them money in the long run.
“When they were using the regular semi-metallic pads, they were changing them every four to six weeks; since they’ve gone to the better product, they seem to be lasting four or five months.”
Information from Honeywell (formerly AlliedSignal) suggests that fleet product friction can have an expected life of many times that of either budget pads or OE products.
Colin Philip, manager of technical services, says that some misconceptions continue to exist regarding severe duty pads. “A lot of people remember the 1970s, when severe duty pads tore up rotors. Today’s friction provides superior wear, great performance, no fade and doesn’t wear out rotors.” Pad life, he says, averages one and a half to two times that of OE pads, and three times the life of economy pads. Philip admits, however, that this fact and its impact on overall maintenance costs doesn’t always get through.
The key to improving profitability in selling to the taxi industry then is understanding the difference between being price-conscious and being solely price motivated. That equation differs by operator, and it differs by type of fleet.
Andrew Davies, vice-president of Davies Auto Electric Ltd., Mississauga, Ont., says that fleets are similar to installer customers in many ways.
“The underlying priorities they look for are the obvious: quality, price and service. The issue is how they weight them.” Davies Electric services a variety of fleets, including municipal, courier, and police. “I was in a sales strategy seminar recently and the presenter got to the point where he was saying that price wasn’t an issue. Price is important and will always be important. It’s a point that determines whether you will get the business, but in general, quality is more important to fleets than to the installer. If you had to rank them, the installer would put price at the top.
“Municipalities, transit, police, and utilities are more interested in quality. They want a guaranteed product that is not going to let them down. They’re concerned about downtime. Delivery fleets and courier companies are in the same boat.”
Davies says that fleet managers don’t take maintenance lightly and some employ sophisticated record keeping and maintenance scheduling software that allows them to know when parts need replacing before they fail. Likewise, they take a conservative approach to changing which products they buy.
“One of the tactics that these fleets use is to test products. If a supplier is confident that the product will work, they’ll test some samples. They take a standalone analysis, and how long it is out there determines whether your products are good enough for them.
“Rest assured, if the product doesn’t perform, you’re not going to get the business.”
One other type of fleet that Davies has been exposed to is the rental car business. Peculiar among the fleet business is the fact that due to the short time a vehicle is often kept in the fleet, operators are motivated differently and price is the end-all and be-all, says Davies.
“They want everything
cheap. They’re not so concerned about quality because they mile out these cars so quickly, so they keep their maintenance costs to a minimum.”
Overall, says Davies, fleet operators run the gamut from having highly organized maintenance scheduling based on expected part life, all the way to operators who have neither a plan nor a policy for maintenance.
Large operators tend to the former, smaller tend to the latter, but there is no sure way to tell beyond experience.
“With some fleets, the cost of replacement versus downtime is factored in. The cost to those guys is figured out and then you can get back to the quality issue,” says Davies. He says too that the sales cycle for this type of fleet customer tends to be long, particularly if they’re intent on testing the product you hope to sell them.
“It’s not like you have to check on it every week though. You might not get an answer for months, but if they have 400 vehicles, hey, I’m willing to wait.”
FLEET OFFERINGS EXPANDING
All major brake market players include some degree of severe duty products in their lineup. Here is a list of what some of the more popular brand names have to offer:
ACDelco offers its line of DuraStop brake products.
Dana Brake and Chassis has just introduced its Raybestos Super Stop line of rotors to complement its existing Super Stop friction line.
Federal-Mogul offers its Wagner SevereDuty line of brake products.
Honeywell (formerly AlliedSignal) has its Bendix MetLok line of severe duty disc pads for fleets and SUVs.
Satisfied Brake Products recently launched its Metalazer FLT friction offering for fleet and severe duty applications.