The limousine hire industry has grown rapidly in recent years with a rise in the number of limousines seen on UK roads.
Traditional limousines have been available to hire for many years, and are typically used for formal occasions such as weddings, funerals and civic ceremonies. Chauffeur driven luxury car hire has also been available for some time, and this type of service is mainly aimed at business users, VIPs, and those wanting an upmarket airport transfer service.
Throughout much of the 2000s, demand for these services remained steady, with airport transfers in particular being a big source of work, especially in south east England. However, during the economic downturn of the late 2000s and early 2010s many businesses cut back on 'unnecessary' expenditure, and this resulted in reduced demand for limousines from corporate clients. This same period also saw a significant reduction in the number of overseas holidays and other trips taken by UK residents, and this is likely to have had a knock-on effect on the airport transfers market. The weddings and 'proms' market held up reasonably well during this period, however. Profitability for many limousine hire operators in the early 2010s was squeezed by sharp fuel price increases which in many cases operators were unable to pass on.
The economy improved in the second half of 2013 and the recovery continued throughout 2014 and into the first half of 2015. It slowed however in the second half of 2015 and into 2016. The vote in 2016 to leave the EU added a further degree of uncertainty to the economic outlook. Economic growth slowed in 2017 as a result of a reduction in consumer spending caused by a squeeze on household spending power due to higher inflation and little growth in wages. Despite this, consumers continued to spend on experiences and entertainment, which is good news for limousine hire businesses. Despite economic growth continuing to be subdued, consumer spending increased in 2018 and spending on entertainment remained strong as it continued to be prioritised by consumers. This is good news for the limousine hire sector. However, if the uncertain economic picture continues, it is likely to result eventually in both individuals and businesses once again cutting back on non-essential expenditure and this could lead to a reduction in business for the sector.
Although fuel prices fell between 2013 and 2016, they started to rise again in 2017 and 2018 as a result of the rising cost of exports due to the fall in the value of the pound following the Brexit vote. As consumers feel the pinch, operators may find that they cannot pass on the increased cost to customers.
The fall in the value of the pound had the beneficial effect of making visits to Britain less expensive. This has led to an increase in the number of overseas visitors to the UK with a resulting increase in the potential for airport transfer work.
American stretched limousines are a relatively recent introduction to the UK but have grown in popularity over the last few years and are becoming an increasingly common sight on the roads. According to industry sources there are over 11,000 stretched limousines operating in Britain and the number is increasing every year. Their availability has encouraged the development of a whole new market. Stretched limousines have become popular to hire for a wide range of events including stag and hen nights, birthday parties, work functions, sporting events, school proms, college and university balls and all kinds of group outings. While they are still sometimes used for formal occasions (particularly weddings), it is the suitability of stretched limousines for such a variety of events that has led to their wide appeal to the general public. Many small firms have been established to meet this new demand for stretched limousine hire.
The licensing of limousines used for hire purposes and the number of passengers they can legally carry has been the focus of much debate in recent years. The National Limousine and Chauffeur Association (NLCA) has campaigned for a standard nationwide system of regulation and licensing and has had lengthy discussions with the Vehicle and Operator Services Agency (VOSA)/Driver and Vehicle Standards Agency (DVSA), the police and the Department for Transport (DfT) over how limousines should be licensed in the future. In May 2014, the Law Commission published a report on the legal framework relating to taxis and private hire vehicles, including limousines, and its recommendations are likely to be adopted by the government and come into force in the next couple of years in a dedicated Taxi Bill. (Two of the measures suggested by the Law Commission - measures that are largely unrelated to limousine operators - were included in the Deregulation Act that came into force in early 2015.) The NLCA has summarised the main areas of the report that affect limousine hire businesses and this is available on the NLCA website. In brief though, the key elements include:
- all vehicles up to eight seats will be licensed by the local authority and standards and rules will be harmonised across all authorities. American stretched limousines are also likely to come under this requirement at some future point, although this will require amendments to various pieces of transport legislation
- operators of vehicles up to 16 seats will have the choice to register them as PSV vehicles (the current position) or bring them under the PHV regime
- vehicles used for weddings and funerals will remain exempt from licensing
In 2009, VOSA was given new powers to impound and destroy limousines that were being used without the correct licence and exercised these powers for the first time in 2011.
Keeping up to date with developments
Joining a trade association is an excellent way of staying up to date with developments in your industry. The National Limousine and Chauffeur Association is a trade association for professional chauffeured car service providers in the UK. It aims to promote the industry in the UK, has established rules of conduct for members, provides advice on licensing and how to operate legally and maintains registers of members' vehicles and drivers.
The British Vehicle Rental and Leasing Association (BVRLA) is a trade association for companies that offer vehicle hire services, including limousine hire.
You can also find lots of information about the limousine hire sector online, for example on the Limo Directory website and on trade associations' websites.
You can get a lot of useful information by visiting a trade show for the motoring, wedding or hospitality sector. You will be able to meet suppliers and importers of limousines and prestige cars. You may also be able to find out about current trends in the sector and make contact with potential business customers. The Exhibitions website has information of forthcoming exhibitions.