In 2010, seven years after the almost penniless Davood (now known as David) Kaheh arrived in the U.S., his thriving limousine rental business had been hit hard by the Great Recession, as had all other businesses in the travel industry. He had to sell all but five of his limousines just to survive. Where others saw nothing but possible ruin, David saw opportunity. In a bold gambit, pregnant with risk, he offered to provide complete transportation, free of charge, for the guests of the Wigwam, one of most storied, expansive, and luxurious resorts in the Phoenix area. In return David, dba Arizona Corporate Coach (ACC) was promised all of the Wigwam’s tour business. In mid 2010, he moved out of his home office and into an
office provided by the Wigwam. (See Davood Kaheh, Part 2 at coastalbreezenews.com.)
Until 2012, David ran the business by himself, commuting the 29 miles from his home at day break, returning in the evening, and working into the night from his home office doing paper work. David’s small fleet of five cars was barely sufficient to transport the Wigwam’s guests from Phoenix’s Sky Harbor Airport, 35 miles to the east. To alleviate this situation, ACC made its first bus purchase, a used 33-seat minibus, for which David paid cash, having to sell one of his few remaining investments to do so. Gradually he was able to add five more limousines and four vans, freeing him from having to rent vehicles for moving visiting tourists around the Phoenix
area. Now he needed buses for the Wigwam’s tour business, buses that he couldn’t afford to buy. To assure him of a profit, he had to rent them from other tour bus companies at cut rates.
Many of the Wigwam’s guests were booked there for area tours set up by travel agents. Per David’s deal with the Wigwam, these agents would contract with ACC to provide the buses. This was to be David’s bread and butter, but it would require a lot of work. With no staff to help him, David now found himself responsible for the scheduling and maintenance of his own fleet and for the rental and scheduling of buses – a lot of wheeling and dealing and paperwork. “I was paying bus companies a
lot of money,” said David, “I had to find a way to buy my own buses.”
By 2012, doing all the work himself and squirreling away the profits, he was ready. He bought his “first real bus,” an eight-year-old, 57-passenger tour bus, which he financed for $154K (10% down) through a Riverside, California broker. On March 24, 2012, he also made his first hire. Whitney Wilson, a pert 24-year-old veterinary assistant with an associate’s degree in equine science, impressed David so much that he immediately put her to work in his office (even though she was applying for a limousine driver position). It wasn’t much of an office. “The Wigwam office was the size of a glorified broom closet,” says Wilson, now in charge of customer relations,
“It was comfortable for two people and you could have three people if needed, but if you needed to move around, someone would have to stand up so you could get to the door, printer, or file cabinet.” From this cramped setting, and with Wilson minding the store, David was able to buy more used buses in the next two years, paying cash for each and traveling all over the U.S. for the best deals.
A brief note: David’s contacts keep him advised of the most promising deals for used buses – throughout the U.S. A satisfactory personal inspection by David (who knows buses, inside and out) would be followed by negotiations resulting in cash purchase prices, between $100K and $200K. One of his drivers would then
be dispatched to drive the bus back to Phoenix, or a tow truck hired to bring it back, where it would be restored to mint condition in the ACC shop.
“I had to find work [for these additional buses] when they were not being used by the Wigwam,” David said. To pick up more business, he offered discounted prices to other tour bus companies, who in response started sending some of their tour groups to ACC. David had to rent parking space in his competitors’ yards to accommodate parking for his growing numbers of buses. In late 2013, David was able to lease a large enough lot close to the Phoenix airport, where he could park his entire fleet of buses and limousines, as well as house a maintenance shop large enough to care for his vehicles.
It was at this point that David realized that the future lay in buses, not limousines. Companies like Uber and cheap leasing deals from Ford and Chevrolet, with their built-in GPS systems, now made it possible for anyone to make a living [ferrying passengers around]. Leasing his town cars at $200 a day would bring in $2,000 in ten days of trips, but revenues were falling by as much as fifty-percent; Whereas, a ten-day tour in one of his own buses, could bring in tens of thousands of dollars. David began selling off his limousines and buying more buses. By 2014 he had 20 of them.
In late 2013, Davids contract with the Wigwam came up for renewal. The new resort manager wanted a destination management company to manage both the setting up of the tours and the transportation for the guests. David was not willing to do this. The travel agents had been setting up the itineraries and logistics for the tours. David said, All we did was to provide the buses. If done right, there was plenty of profit in that. I wanted to continue working that way.
In May 2014, David moved out of the Wigwam office in the western suburbs to the eastern edge of Phoenix, 35 miles away. He had leased enough parking space for his buses, which also contained a shop, large enough for complete bus maintenance. The new office space, cavernous when compared to the glorified broom closet at the Wigwam, was a half-mile away. This was a watershed decision. We were finally breaking through into the big leagues for the Phoenix [tour bus] industry, said Wilson, who was still Davids sole assistant, We would need to continue to up our game to stay there. Upping the game was in Davids DNA.
By mid-2015, after hiring more mechanics and office staff and buying more buses, ACC had outgrown the shop area, which was servicing the fleet. The final piece of the puzzle fell into place when a competitor moved out of their Phoenix headquarters to a different location. David moved quickly to obtain a lease ($11,000 per month) on the eight acre property, with 60,000 feet of office space. It had four times the shop space, ten times the parking spaces, and ten times the office space, said Wilson, David finally realized his goal of having all facets of the company on the same property. In December 2015, the company made its third and final move. With the expanded property, Davids vision for the company expanded also.
Today, David oversees ACCs 48 employees, who keep his customers happy and his 35 buses up and running. An additional seven employees work in ABC Heavy Towing and Ryder Rentals, incorporated in 2016 as adjunct companies. Ten of ACCs buses work out of Los Angeles and Las Vegas; the rest operate out of Phoenix. Tours extend to practically all of the western states.
Davids emphasis is on bus safety and proper maintenance. Accordingly, he pays his chief mechanic, who has five assistants, in the high five figures. Eric Urteago, one of Davids earliest bus drivers, has worked for two other tour bus companies, which he said were not nearly as fastidious in caring for their buses. Good mechanics are hard to find, says Urteago, David manages to find and keep excellent ones. The drivers take pride and have confidence in their assigned buses as they come out of the shop. This was not the case where I worked before. Every bus undergoes a 45-point inspection when returning from a trip and again before going out on the next trip.
Thanks to his reputation for honesty and integrity, Davids commitment and drive now finds him officiating at the birth of what he hopes will become a successful conglomerate. As Whitney Wilson puts it, The sky is the limit. But David believes he could have done better and provided employment for more people, had the Obama administration not hamstrung him with some smothering regulations.
Next Edition Davood Kaheh Part 4, Postscript Government Overreach?