Driving up sales

May 1, 2003 By    

In the heart of gritty, industrial Cleveland, parked on a pitted, gravel lot, some of the cleanest engines in the city are waiting to burn.

Metal clangs against metal from factories in the surrounding blocks of the city’s blue-collar Slavic Village area, where semi tractor-trailers maneuver narrow streets with experience and steel plants share the skyline with church steeples. An ancient layer of grime earned by more than a century of productive labor seems to coat the streets and buildings throughout the district.

But deep inside the engines of AMERICAB’s 120-vehicle taxi fleet, the parts are nearly clean as new. The vehicles – mostly eight-passenger Chevrolet Astro vans and 15-passenger Ford E-350 vans – run on clean-burning propane, and rarely require more attention than a filter inspection.

“It really reduces maintenance costs,” Bob Roesch, the company’s general manager, says of the propane motor fuel. “It extends engine life. It allows us to do engine work less often, filter changes less often.”



Cleveland’s second-largest cab company sprang to life 14 years ago when the AMERICAB name and a few cars were purchased out of bankruptcy by a family that also has ownership interest in the Yellow-Checker-Star cab companies in Las Vegas. Drawing on those companies’ positive experience with propane engines – Yellow-Checker-Star has more than 700 propane vehicles after using the alternative fuel more than 22 years – the owners decided to run AMERICAB’s entire fleet on propane.

“For us, it’s a business decision,” says AMERICAB President Jonathan Schwartz. “The cars last longer on propane.

“Yes, it’s an (initial) expense, but, bottom line, we think it makes better business sense to switch to propane. Yes, it is environmentally friendly, but economically we think it’s the right decision also.”



The bulk of that initial expense lies in the 30,000-gallon, above-ground tank installed at the rear of the former freight warehouse property. It is refilled each month under contract with New Jersey-based Texas Liquids. Occasionally the company will buy additional product from other suppliers.

The tank towers over four pumps, where the vehicles are refueled at least once daily. Cab drivers, who work as independent contractors and buy their fuel – with a slight markup – from AMERICAB by the gallon, swipe a credit-type card, which tracks the fuel usage. An employee then fills two, 15-gallon tanks under each vehicle.

Each van gets about 10 to 12 miles per gallon.

“I doubt if you would get better than that on gasoline because of the idle time (waiting) at the airport,” Roesch says.



While AMERICAB provides some average taxi service, 70 percent of its work comes from contracts with agencies such as the Cleveland public schools and the county’s Board of Mental Retardation and Developmental Disabilities.To fit more passengers, the company has switched to vans instead of the Ford Crown Victorias, the last of which will be taken out of service this fall.

By Cleveland ordinance, taxi vehicles cannot be older than five years, and the company cannot purchase vehicles older than two years. Therefore, the company buys a few new vehicles each year and spends about $2,000 to convert each one.

The company’s drivers, who often float between the city’s six cab companies, don’t seem to mind AMERICAB’s propane engines — and they enjoy paying slightly less for propane than they do for gasoline at the other firms.

AMERICAB mechanic Frederick Harris demonstrates the card swipe that independent drivers use to buy their fuel from the Cleveland cab company. AMERICAB invests about $2,000 to convert each vehicle from gasoline to propane, but realizes a net savings on both engine maintenance and fuel costs. 
Photos by VISCOM
AMERICAB mechanic Frederick Harris demonstrates the card swipe that independent drivers use to buy their fuel from the Cleveland cab company. AMERICAB invests about $2,000 to convert each vehicle from gasoline to propane, but realizes a net savings on both engine maintenance and fuel costs.
Photos by VISCOM

“They roll really good,” shop foreman Robert Hardy says of the propane engines. “The old saying is you lose 10 percent power, 10 percent efficiency, with propane (compared with gasoline engines). But we don’t see it in the power. The power is just outstanding.”

For its dedication to propane, the company was rewarded with a “Propane. Exceptional Energy.” Fleet Award last year from the Propane Education & Research Council. The glass trophy is parked on a table inside a small, smoky conference room, near a plaque from the Northeast Ohio Clean Fuels Coalition, which recognized the company’s dedication to using an alternative fuel in 1999.

“The awards are nice, but if you really want to sell the stuff, offer some incentives,” Roesch says. “That’s the biggest thing.”

Roesch has lobbied local U.S. Rep. Stephanie Tubbs-Jones in hopes that she would help the House pass an energy bill that contained tax incentives for using propane or other alternative fuels. The Energy Policy Act of 2002, which passed the U.S. Senate last April, offered a 30- to 50-cent-per-gallon rebate.

AMERICAB's 120-vehicle fleet -- mostly eight-passenger Chevrolet Astro vans and 15-passenger Ford E-350 vans -- gets good marks for power and reliability.
AMERICAB’s 120-vehicle fleet — mostly eight-passenger Chevrolet Astro vans and 15-passenger Ford E-350 vans — gets good marks for power and reliability.

“That’s huge. It’s a lot of money,” Roesch says. “God, everyone would jump on that real quick.”

Gearing up

Government incentives do help. Some 35,000 cabs fill the streets of Hong Kong, and all of them run on propane, says Brian Feehan, who spent the last four years in France as a director of the World LP Gas Association. Throughout France, Italy and South Korea, taxi fleets are fueled by propane. Within the last two years, Australia sold more propane as a motor fuel than for residential heating, he says.

But getting livery companies to switch to propane will take more than tax incentives. Feehan, who now serves as executive director of the Propane Vehicle Council, sees it as a two-pronged marketing scheme – helping businesses realize propane is more economical than gasoline, and showing Ford, General Motors and other manufacturers there is a market for their OEM vehicles.

Bob Roesch, AMERICAB's general manager, is convinced that running his fleet on propane is good for the environment and his bottom line.
Bob Roesch, AMERICAB’s general manager, is convinced that running his fleet on propane is good for the environment and his bottom line.

“It’s a function of putting the pieces together,” says Feehan. “The only way we are going to achieve that is by working with both and serving as the conduit.”

Jack E. Owens, the longtime general manager of Yellow-Checker-Star, has tried to help fill that role. He has met with Ford representatives in Detroit to tell them of his company’s success with propane and his desire to buy OEM propane-fueled vehicles. Even though his company buys 125 new Crown Victorias every year, Ford told him it wasn’t enough.

“They just flat out stated that unless it makes market sense they can’t produce them,” Owens says. Without the OEM vehicles, however, many companies are reluctant to make the switch to propane. “It’s a chicken-and-egg thing.”

Similarly, cab companies also need to see that it makes market sense to switch, even if that means converting vehicles themselves.

“We have some success stories,” Owens says. “We really need to market those success stories and show them to other cab fleets. We’ve had inquiries from cab companies in Miami. They all agree, but first and foremost, they’re businessmen and this makes sense for them, especially if you look at where the price of gasoline is today.

“There is an economic advantage to running LPG, and we just have to show people how to do it.”

Everyone’s responsibility

For Schwartz, the decision to use propane rather than gasoline was always one of economics. But he’s happy that his decision can also help the environment.

“We think other companies should be doing the same,” Schwartz says. “When you’re using the amount of fuel that we use — and we’re really a small company when you look at large fleets around the country — I think it’s everyone’s responsibility to look at it.”

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