Dawson Rutter Defines Key Limo Industry Issues

Posted on December 19, 2013 by Tom Halligan - Also by this author

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Dawson Rutter, Founder and CEO of Commonwealth Worldwide Chauffeured Transportation, Boston, and NLA board director.
Dawson Rutter, Founder and CEO of Commonwealth Worldwide Chauffeured Transportation, Boston, and NLA board director.

BOSTON — A veteran and champion of the limousine industry, Dawson Rutter will not only have an opinion about any topic, but he can add the benefits of hindsight, insight and foresight.

The three-decade operator and seven-year National Limousine Association board director has created one of the most prestigious limousine companies and affiliate networks in the U.S. Commonwealth Worldwide Chauffeured Transportation operates a fleet of 225 vehicles and serves renowned financial and corporate clients in the chauffeured luxury hubs of Boston and New York.   

With his New York upbringing and adopted Boston pedigree, and an executive persona fit for central casting, Rutter has shepherded the NLA’s Political Action Fund to a record high of $80,000, from $3,000 in 2008. As fund co-chairman, he knows all the major industry issues, as the last five years have brought a cascade of political and regulatory challenges.

All of this experience, ignited 31 years ago while driving a cab as a college student who simply wanted to make extra money, has given Rutter the street cred to dissect such issues as diverse as New York politics and the Taxi Limousine Commission, mobile app technology, Obamacare, employee wage and overtime lawsuits, the mission of the NLA, and just about every facet of chauffeured business.

True to its venerable luxury transportation tradition, Commonwealth Worldwide recently bought 20 2014 Mercedes-Benz S-550 sedans. The redesigned version of the established chauffeured model debuted to the limousine industry Oct. 28-29 at LCT Show East in Atlantic City.

Rutter, whose fleet decisions and views influence operators nationwide, recently talked with LCT for his first wide-ranging interview in more than four years:

• • • • •
Q: The industry is trying to figure out the EFFECTS of smartphone hailing apps. How do you see the technology affecting limo operators?

A: My opinion is they don’t affect my business because I focus on high-end customers, luxury hotels and corporate clients who want consistent, reliable service. These customers won’t tolerate sub-standard service, or not being able to get a car when they need it. I think apps like Uber really hurt the taxi industry because that’s where they are competing — and that’s a problem. Taxi drivers need big $20 to $30 fares to make money; they can’t make it just on the small $3 to $5 fares. If Uber and other private transportation app businesses take away those bigger fares, taxi drivers can’t survive on small fares and they’ll give up driving a cab because they can’t earn a living. That will really be a big problem that legislators will have to deal with because people who rely on taxis — the elderly for example — will have fewer taxis available to them.

• • • • •
Q: What is your opinion about limousine operators who participate in the smartphone hailing business?

A: They basically become a taxi service. Do they really want to run their vehicles into the ground for small fares? It’s just not cost effective. That’s not the business we are in. We are in luxury transportation and we charge more because we provide reliable, consistent service. I’ve heard drivers of UBER and Lyft brag that they make $25 or $30 per hour at their busy times. Well, that is gross before their expenses, taxes, gasoline, car payments, insurance and all the other expenses associated with operating vehicles for hire. When the ride sharing apps have been around for a while, I think you will see degradation in quality of vehicles and drivers; much like the taxi industry.

• • • • •
Q: There has been an increase in employee lawsuits in several states. How concerned are you?

A: It’s on fire. Employment litigation can be very destructive to our industry. Operators have to be FLSA (Fair Labor Standards Act) compliant or face potential lawsuits from employees. It all centers on misclassification of employees and FLSA violations and can cost an operator big money in attorney fees, settlements and court judgments. I’ve been working for 18 years fine-tuning our FLSA compliance. Now it is spreading like wildfire across the country — judgments and attorney fees in the multi-millions of dollars. In so many of these lawsuits, employees think that employers are screwing them, and in many cases that is not true, but we have to spend money defending ourselves. Many of us know more employment law than we ever cared to know.

I think it’s important to remember that if you keep settling they’ll keep coming at you because they know you are an easy target and will settle. I think it’s better to fight and win although it’s costly. My advice is to hire an employment attorney who can guide you to make sure you are in compliance and [know] how to properly classify employees. There are certain states more active in these kinds of suits, like Florida, California, and Massachusetts, but we see lawsuits popping up in New York and Chicago and other areas around the country. Don’t assume you’re safe. The problem is growing and coming your way, and you don’t want to be blindsided by a lawsuit. The only safe way to avoid these kinds of lawsuits is to have employees rather than independent contractors, and paying overtime, lunch breaks, etc.

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