Hawthorne’s Leros Point To Point Car Service Gears Up For Its Next Ride
Celebrating 30 years in Westchester, the local car company has grown from owning just five cars to being one of the largest fleets in America.
Remember when you’d get off the plane and look for a guy holding up a handwritten cardboard sign with your name on it?
If your car service is Leros Point to Point, the guy is still there, but the cardboard sign has been replaced by an iPad, an outward sign of innovation and growth for a company that was originally spawned 30 years ago in the bleachers at a Little League game in Armonk.
That growth has taken Leros, headquartered in Hawthorne, from just five cars in 1983 to more than 200 today, making it, in terms of cars on the road, the 11th-largest limousine fleet in the United States, according to the latest survey by LCT Magazine, the leading publication of the car-service industry. Leros is also the largest ground-transportation company in Westchester and Fairfield counties.
And those rankings don’t include the network of more than 550 partners operating 25,000 cars around the world, giving Leros an international reach and the ability to serve corporate customers just about anywhere their employees need to go, from Los Angeles and Boston to Zurich and Singapore.
That growth, from $500,000 in revenue in 1983 to $23.5 million in 2013, came despite two devastating setbacks: 9/11 and the recession of 2008-09, which hit the New York area car services particularly hard with a plummeting demand for rides.
But, as is often the case in business and in life, there is no success without hardship.
“We managed through some of the worst crisis situations this country has seen in the last 12 years or so,” says Leros' COO Jeff Nyikos, 43, stressing the youth of the team—his brother, CFO Chris Nyikos, 41, and Vice President of Operations Michael Basso, 39—as an asset because they are not set in their ways but open to change.
“From a management standpoint, I feel that we’ve been through so much together, and there’s going to be more to come. But, at this point, I feel confident that we can manage ourselves through almost anything,” he adds.
When Leros was first conceived, Jeff and Chris Nyikos were kids. At a Little League game, their father, John Nyikos, struck up a conversation with a man in the bleachers who was related to the operators of a limousine service in New Jersey that was looking to expand. At the time, the elder Nyikos was working as director of human resources for Playland, but looking for a business opportunity.
So he and partner Lonnie Lehrer put parts of their surnames together and became Leros, an affiliated service of Empire Transport Service, a company that is today called EmpireCLS, one of the country's top limousine services. After a few years, Lehrer and Nyikos broke off from Empire to form their own outfit and, eventually, Lehrer departed. Jeff Nyikos joined the company officially in 1993, when revenues stood at about $3 million. Brother Chris joined in 2000. John Nyikos, 67, is now CEO and is able to stay removed from the day-to-day operations.
From its beginning, Leros focused on serving business clients rather than private, individual customers. “My father started out with five cars and the idea of providing transportation to corporations," says Nyikos. “That’s always been our focus.” The reason was simple: John Nyikos thought there was a big opportunity in focusing on corporate customers, an emerging business model in the early 1980s. “The idea of sedans taking executives back and forth to the airports was a new idea at the time,” says Nyikos.
Before then, Nyikos says, businesspeople either took taxis to the airport or drove themselves. But then things started to change, in part, because of liability issues, Nyikos speculates, and because companies began to consider that the time spent in the car could be spent working. “[The trip] from Westchester to LaGuardia or JFK could be an hour, hour and a half, depending on traffic. [Using a car service] allows passengers to unwind and also to be productive in the car," Nyikos says. “It has evolved into not only convenience but also efficiency and an extension of the workplace."
The Leros company seemed to arrive at just the right time for a change in corporate travel habits, but so did the tools. In 1980, Lincoln introduced what would become the bread-and-butter car for Leros and for car services across the country: the Town Car, a rear-wheel-drive workhorse with a big back seat and, most important, an enormous trunk—just what was needed for an industry moving into new space.
Though the Town Car was discontinued in 2011, Leros stocked up before the end of production, so it is still the company’s mainstay vehicle. (Its replacement, for now, is the Lincoln MKT Town Car, a front-wheel drive crossover.)
Another big concern for limo companies like Leros is the balance in fleets between cars they own and operate with their own drivers, and those they run through agreements with private contractors, known as owner-operators.
Owner-operators take jobs, or trips, on a case-by-case basis, providing the vehicle, fuel, maintenance, and driver, who often is the owner himself. Ideally, a customer would not know the difference between Leros cars and drivers and owner-operator ones. Jeff Nyikos credits that to the Leros training program, which treats owner-operators and employees alike.
“Owner-operators go through the same checks and balances our employees go through,” he says, noting that only 10 percent make it through training.
The ratio of owner-operator cars to Leros-owned cars has varied over the years as the company tried different approaches. But now, Nyikos says, they have arrived at an ideal number: 70 percent Leros-owned to 30 percent owner-operated.
The reasoning behind that ratio involves finding the right spot between the two extremes. If the percentage of owner-operators gets too high, Nyikos explains, there’s a risk of losing control of the business because owner-operators have no direct responsibility for company commitments, being free to accept or reject jobs. A car service may have contracts to fulfill and suddenly find itself without enough drivers, say, on a busy Monday morning.
At the opposite extreme, if a company owns a high percentage of its cars and the bottom drops out of the business, like it did after 9/11 and during the financial crisis of 2008-09, it can encounter a credit squeeze because most of the cars, if not all, are financed. And if the cars are sitting in the lot and not earning fares, yet payments are still due, the company has nowhere to turn.
Nyikos explains the common sense behind the 70-30 ratio like this: At that number, the company could sustain a 30-percent drop in business but still have all its own cars on the road by cutting down on jobs to owner-operators—a tough spot for the owner-operators but a survival necessity for the company.
A further cushion is the car-inventory rotation. Cars are typically financed on a three-year basis but tend to last about four years. So at any given time, roughly 25 to 33 percent of the fleet is paid off. Nyikos credits Ford Motor Co. for helping Leros get through the recent financial crisis by extending a grace period on loans.
Through the tough times of the last dozen years, Leros has been able to stay on a steady growth path, Nyikos says, by regularly acquiring smaller companies; by establishing more and larger long-term corporate contracts, which includes providing companies’ global ground transportation needs; and by emphasizing technology in its back-end, and now also front-end, operations, which has made operating the fleet and managing costs more efficient. And Nyikos credits management software for allowing many other areas of the business to thrive.
For example, Leros has been able to acquire nearly a dozen car-service companies in the last decade without, in many cases, the local customers even noticing a change in ownership.
One example is Greeley Transport Service in Chappaqua. When Leros bought it in 1998, nothing changed—not the name of the company and, most certainly, not the phone number. Customers still call the number they’ve grown accustomed to over the years, but, thanks to technology, instead of the call going through to a local dispatcher, it goes to a centralized Leros dispatcher.
Likewise with cars. Instead of keeping 10 cars at Greeley Transport in Chappaqua, for instance, only five may be needed on a regular basis because Leros can route extras to the location during busy times from its larger 200-car fleet. In a phrase, Leros has applied economies of scale in acquiring local companies to add another piece to its growth formula.
In a similar way, Leros has been able to extend its reach around the world through better management and communications software. A client headed from Chicago to Paris, for example, can be picked up and dropped off at O’Hare by one Leros affiliate and then met at Charles de Gaulle in Paris by another without the need to make separate arrangements.
Another way software is providing a key foundation for management and growth is the way it can be deployed with smartphones and tablets. “When we first started out, we would write trip tickets on a piece of paper and then stick them on a cork board under a driver's name. And that’s how we dispatched,” Nyikos says. “Today, with the iPad, we send the job directly to the driver through our software. They accept the job on the iPad. When they get to the pickup spot, they hit ‘on location.’ It lets the dispatcher know the driver is on location, sends an email or text to the passenger letting them know the driver has arrived, and tells them exactly where the driver is within the airport.”
Leros is in the process of rolling out an iPhone app nationally (it's already available in New York) that allows customers to make, change, or cancel reservations and to eliminate that old anxious question, “Where’s my driver?”
“You hit the ‘locate your driver’ button, it gives you the driver’s name, cellphone number, and you can see him coming to pick you up using GPS technology,” Nyikos says.
A far cry from a cardboard sign, a far cry from a company with just five cars, and far cry from the bleachers of a Little League field 30 years ago.