Mike Andes audited a chauffeuring business and found a $140 ten-minute airport ride. After $10 taxes, $20 tip, $40 driver wage, and $25 customer-acquisition cost, only $45 remained for vehicle leases, insurance, and overhead. The real money comes from $3k to $5k rides.
Recently, I did a turnaround for a chauffeuring business and we did a secret shopper trip where we actually purchased a trip from them. It was like five or 10 minutes from the airport. So the trip itself cost $140. However, we had to pay taxes of $10 a tip, 20 of that, and then the wages that he pays his drivers is $40 per trip. Even if it's a quick trip, that's the minimum amount is $40 as the base. So we now have $70 left over on the trip. But then we came to find out that he was spending $25 per lead. That was his customer acquisition cost when it comes from Google or Facebook getting a new customer. So at the end of the day, on $140 trip, he actually has $45 left over. And that has to cover the cost of the vehicles, their leases and the loans on them, as well as insurance, as well as cleaning the vehicles and having to take care of all the business operations in terms of an office and everything else that goes into running a company. What we found out, though, is they make their money on the big trips that are 3, 4, $5,000 per ride.
