What is a limousine and black car service worth?

A limousine and black car service sells a chauffeured ride, so when pricing one, ask whether the vehicles, the drivers and the booking experience can keep supporting its rates after a sale. Ask how old the vehicles are, whether each driver has the permission the work requires, and whether the customers were won by one person’s relationships. Ask what a buyer would be getting beyond the cars: the repeat bookings they produce and the right to keep producing them after the owner leaves.

Whose relationships are the accounts?

Corporate accounts, wedding referral partners and hotel or event contacts are worth testing before you settle on a price. Ask who built each relationship, who answers when the client calls, and whether any account depends on a personal friendship. BDC notes that buyers may insist on a reduced price if the seller cuts all ties after closing. Ask whether accounts are managed through a dispatcher and a booking system or run from the owner’s mobile phone.

What the fleet will cost to keep

If clients book partly for how the vehicles look, presentation is part of the product. When valuing a fleet, ask for the model year and condition of each vehicle, the maintenance record, and what the owner would have to spend to keep the fleet credible at the current rates. A fleet that needs wholesale replacement is a future cost to weigh against the price. Also ask which vehicles are owned outright, which are financed and which are leased, since that changes what is actually transferring.

Permission to operate can add value or remove it

What a licence is worth depends on whether it moves. In British Columbia, the Passenger Transportation Board says limo and other operators can apply to transfer their passenger transportation licence to another business entity, that both the transferor and the transferee must apply for approval, and that all of the licence’s terms and conditions transfer with it. In Québec, the Act respecting remunerated passenger transportation by automobile requires paid passenger transportation to use a qualified automobile driven by a qualified driver, except transportation exempted under its Chapter XVI, and section 168 says the Act, apart from section 167, does not apply to passenger transportation offered for baptisms, weddings or funerals. If wedding work is a large share of the bookings, ask a Québec lawyer how that affects the authorizations the company needs. Outside those two provinces, find out which authority issues the licence and price it only after learning what that authority says about a change of ownership.

How earnings get recast

Ask how the seller’s statements treat the owner’s own driving time. Ask whether the owner drives, whether that time is paid, and what a replacement chauffeur would cost. Check how drivers are engaged as well. The Canada Revenue Agency says an employee generally works under the direction and control of the individual or business who hired them under a contract of service, and says a self-employed worker is not under the direction or control of the payer, so a driver classified one way may need a second look. Ask your accountant how any adjustments should be shown.

What gets discounted

Ask how each of these would affect the price: a fleet that needs refreshing, accounts concentrated in one or two clients, a licence that may not transfer, and chauffeurs whose records or permits are incomplete. Each is a cost or a risk that would sit with the buyer after closing, and BDC lists due diligence among the factors that can affect the final selling price. BDC also notes that unaddressed issues complicate a sale because the buyer has to think about resolving them without the seller’s knowledge of the business.

Competition from ride-hailing is a question to prepare for. From booking records, work out why clients choose a chauffeured service, and which bookings would be lost if a standard ride were the only alternative.

Booking records tell the story

Ask for booking history over several years, split by type of client: corporate, airport, wedding and event, and hotel or referral work. Look at whether the work is spread through the year or clusters around particular events, and whether any single client or referrer accounts for a large part of it. Have the booking history ready for the buyer’s accountant and any lender, rather than relying on the owner’s memory.

Why similar companies price differently

• One company has accounts under standing arrangements with several clients, while another depends on one wedding referrer.
• One owns a late-model fleet, while another will need to replace a large part of it soon.
• One holds a licence that transfers on approval, while another holds one that the city may not let a buyer take over.
• One has chauffeurs with clean records and the right permits, while another has gaps a buyer would have to fix.
• One has booking records that show where the work comes from, while another cannot show that.