Increased State Regs, Diverse Fleets Seen For 1990s

Posted on March 1, 1992 by LCT Interview

As Bob Dylan so eloquently put it, “The times, they are a changing.” Little did he know when he wrote this ditty, just how well it would apply to the limousine industry over 25 years later.

In the past five years since Wayne Smith became the National Limousine Association’s (NLA) executive director, the industry has seen a number of changes. The IRS has cracked down on independent contractor use by limousine operators. A once-booming market has reverted to the pre-expansion level of the 1980s. Because of this boom, cities and airports across the nation have recognized livery operations as a legitimate industry and have begun regulating and taxing it. Also, there has been a shift in fleets from stretch limousines to sedans, vans, and motorcoaches.

In the following interview, Smith provides his own observations on these changes and suggests what it may take to succeed as a livery operator in the years ahead.

Limousine & Chauffeur: Many people believe the current trend towards diversification of fleets was caused by the recession. What is your opinion?

Wayne Smith, executive director of the NLA, believes livery operators will diversity their fleets into sedans, vans, and motorcoaches in an effort to become full-service transportation companies.
Wayne Smith, executive director of the NLA, believes livery operators will diversity their fleets into sedans, vans, and motorcoaches in an effort to become full-service transportation companies.

Wayne Smith: The transition in the industry started a little before the recession. There was an emphasis more on sedan use and less on the limousines. The recession heightened this trend even more. When times got tough, corporate America began analyzing its expenses and finding that maybe it should lean more to sedans, rather than the stretches. This trend continues on every day as the recession moves forward.

That is a big change in the industry’s way of operating, but operators are still strong on the stretch limousines for proms and weddings. Weddings continue to be a big factor on a weekend-use basis. There will always be the social entertainment business where the stretch is used instead of a sedan.

L&C: What will the fleet of the future be like?

Smith: I think the limousine industry will evolve in the later part of this decade into providing full-service transportation. The average operator will have sedans, stretches, vans, mini-buses, and in some cases, the big coaches. It all depends on where they are operating, what their needs are, and if they want to be a full- service transportation company.

L&C: Do you think a fleet that’s comprised of only sedans and limousines will be able to survive?

Smith: It all depends. If operators can find a niche and meet the needs of that niche, they will be able to survive. If they can’t, they are going to have to broaden their horizons — become a transportation company.

L&C: What are some of the major issues the NLA will be involved in 1992?

Smith: The issues we will be addressing are ongoing ones. The independent contractor issue is one that we will be continuing on until Congress resolves the issue one way or the other. Mainly, we will be concentrating on a lot of state and local tax issues either from states who want to impose new restrictions, local cities and governments, or airport authorities who are looking for new fees.

L&C: Do you see any major legislation on the horizon in 1992.

Smith: Possibly. There have been some proposed changes in the in­ dependent contractor legislation that could be enacted this year. We may also see more mandated benefits for operators who use employees. Health care might be one of these benefits. There may also be an increased cost in worker’s compensation, but that will be on a state-by- state basis.

L&C: Do you see a trend toward more state regulation or is the trend more towards municipal regulation like we see in New York?

Smith: We would like for the states to have more control. Some of that control may have more safety ramifications than regulatory ramifications or it could be a combination of both. We have to look at each state to see what its intended purpose is. Then either we will work with them or against them. In all probability what we’ll see are states that are either revising or changing their attitudes about the livery industry.

L&C: In light of the recent NLA support for the current battle between operators who do work in NYC and the NYC Taxi & Limousine Commission (T&LC), did the NLA make a conscious decision to begin ad­ dressing regional issues, as op­ posed to the national issues you had been concentrating on in the past?

Smith: Yes, we made a conscious decision to examine the regional issues. There were some local fights that we had been involved with, but we are spending a lot more time on regional and local issues now.

L&C: What is the reason for the concentration on regional issues?

Smith: Well, there is a trend in America that if one area does something, it is generally followed by many other areas. For instance, take the T&LC issue. We are finding that more municipalities are trying to enact similar legislation to that of NYC.

We were successful in the state of Washington in getting state sup­ ported legislation instead of having individual cities tax our limousine industry. We are starting to address this issue with other states and have them control the licensing and registration instead of local communities, which we would find more beneficial to us rather than forcing an operator to buy six or ten different licenses for different cities.

L&C: What are the NLA’s goals for the future?

Smith: We will be focusing on continued growth. Each day we get more members, and we want to make sure that the services we give them continue to grow. We are exploring different services that we will be talking about at the next board meeting. We are very excited about our poster campaign. We now have two excellent posters that are out there for people to use to help pro­ mote the industry.

Much of our concentration will also be on working on these regional and local problems. I was in Pittsburgh the other night and spoke on the T&LC issue. We were in New York two weeks ago addressing that same issue. I was just talking to the people up in Maine. There is some new legislation the city of Portland wants to enact. So, there isn’t a day goes by that we’re not getting a call.

We just instituted our new action line for people to call about problems they have had relating to the industry. So far we’ve had about four or five calls in the two weeks that the operation has been in effect. The number is 800/652-7007. So, those are some of the new things we will be emphasizing and working on this year.

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