Industry Research

FEES Cut 80% For California Operators; AVIS Gets Driven Back

Posted on September 15, 2010 by LCT Staff - Also by this author - About the author

A California measure approved by the state legislature is the most sweeping state-level law to date related to chauffeured transportation.

LOS ANGELES — California operators are only days away from seeing the benefits of a comprehensive bill very likely to be signed by Gov. Arnold Schwarzenegger.

Lower limo registration fees

The bill (AB 2572) drops the tri-annual renewal fee for an operator TCP license from $500 to $100.

However, it raises the cost to register a chauffeured operation for the first time from $500 to $1,000, with the $100 renewal fee applicable every three years thereafter. The $1,000 registration fee would only apply to NEW chauffeured transportation companies registering with the California Public Utilities Commission for the first time.

New operators would eventually save on licensing fees under the new law the longer it stays in business. For example, a new operator who stays in business for at least six years now must pay a total of $1,500 in CPUC licensing fees over six years ($500 to start, $500 to renew every three years thereafter). The new law would cost $1,200 in total licensing fees after six years; and $1,300 after nine years, compared to the current $2,000 after nine years in business.

Avis, You've Been Driven

The law requires the Avis rental car agency to obtain "TCP" limousine licenses from the California Public Utilities Commission for all Avis vehicles used as part of the WeDriveU chauffeured service — now a company set up separately from the actual rental agency. This puts chauffeured Avis rental cars on the same regulatory level as all other legitimate licensed luxury limousine operators throughout California. Avis will have to pay the same fees, follow the same safety rules, and meet the same licensing requirements as chauffeured transportation operators. Under its business structure, Avis offers clients the opportunity to rent a car from one company, and the chauffeur from a separate one, thereby skirting the conventional business model of a licensed chauffeured transportation company.

The industry victory in California over Avis WeDriveU qualifies as the biggest blow yet to Avis’ attempt to circumvent limousine licensing regulations that put it at an unfair advantage over operators. The California limo law is comparable to similar victories in the past year in New Jersey and at the Port Authority of New York and New Jersey.

Legislative coup

GREATER CALIFORNIA LIVERY ASSOCIATION lobbyist Gregg Cook told GCLA members Tuesday night the victory surpassed override margins, with a 68-5 final vote in the General Assembly and a 27-7 vote in the state Senate.

Schwarzenegger’s staff has assured Cook that they do not have any exceptions or opposition to the bill, and that the Governor will sign the bill upon his return from a trip to China. In the very unlikely event of a veto, enough support exists to override it, Cook said.

The bill defied odds since it packed in a total of five provisions improving the conditions of the chauffeured transportation industry in California, said Cook, responding to earlier criticism that the bill was too ambitious.

Other provisions:

AB 2572 reforms procedures in three other key areas:

• Expands the authority of local peace officers to impound vehicles operating illegally anywhere within the state.

• Requires immediate return of impounded vehicles upon payment of impound fees by the owner of the vehicle.

• Allows the CPUC to enforce rules and regulations adopted by an airport commission.

— Martin Romjue, LCT Magazine

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