WHO DRIVES? What Avis NYC Ruling Means For Operators

Posted on October 13, 2009 by LCT Magazine

LINDA JAGIELA: Last week, Commissioner Matthew Daus gave a favorable ruling to the Avis/We DriveU model in New York City. Although the New York/New Jersey Port Authority had already ruled against the Avis model, Commissioner Daus and his legal team found that the Avis model did not violate any city laws.
 
Commissioner Daus has not always followed the example of other cities in the nation. But as the limousine capital of the world, New York’s approach often influences the standards elsewhere.
 
For that reason, this ruling is a major blow to our industry. It sends a message that finding loop holes in the system is the way to go. Why pay all the permitting, inspection, and insurance costs to operate legally if you can get around it by calling a duck a chicken?
 
I believe that Commissioner Daus was well off the mark on this ruling. He is one of the most approachable regulators that I know. He is open to industry participation and listens to all sides of an issue. I also believe that this was not an easy decision for him. But I do believe that this decision does not thoroughly consider all of the relevant points. Specifically, it results in some operators avoiding costly permitting while skirting the regulatory rules that all operators of for-hire vehicles must follow. 
 
Let’s face it folks — Being legal is expensive. Having all of the permits and inspections required to be a “legal” operator adds costs to your bottom line which are then passed on to the consumer. Take that away and the price of the ride is substantially less.
 
Consider this: What if every transportation company in New York City changed its operating model to become two businesses each — one as a rental car company and a second as a chauffeur rental company? The only difference will be that the customer will get two different bills from two companies — one to rent the car and a second to rent the chauffeur. For this inconvenience, they will be awarded a combined lower bill. Sounds far fetched? I don’t think so. By making this ruling, the commissioner has opened the door to more “legal” rent-a- chauffeur companies. I would not be surprised to see companies who will set up shop under this legal model.
 
The fact that the NY/NJ Port Authority has ruled against the model is a major deterrent, but it does not go far enough. Although Commissioner Daus has not chosen to be as influential as he is in other parts of the country, others will follow his lead. Additionally, in his new role as the President of the International Association of Transportation Regulators (IATR), he has the attention of powerful regulators from across the globe.   
 
I believe that the big picture for Commissioner Daus was truly blurred. The Avis/WeDriveU model works best with group transportation. The ruling talks about not giving directions etc. by the customer, but in fact when a customer takes a vehicle on an “as-directed trip,” it looks exactly like the Avis/WeDriveU model. After all, if it looks like a duck….
 
What remedy does the industry have? Sergio Sanchez, president of the Luxury Based Operators Association (LBOA), has sent a letter to his members discussing the possibilities of either a legislative or court path. I believe that the answer for operators is not in a costly court battle but instead with legislation.
 
Start with a letter writing campaign which will inundate those who are influential and tell them that you are disappointed in this ruling. As an industry, we control many votes. Everyone in your company and those who do business with your company will be affected by this ruling. Only by letting those in power know that this ruling will hurt our industry, will we be able to get this decision overturned.
 
— Linda Moore, LCT East Coast Editor
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