Feds Hit Operators With Costly New Rules, Sudden Visits

Posted on September 9, 2010 by LCT Staff - Also by this author - About the author

The tri-state region becomes ground zero for a federal DOT change that kills a vital interstate commerce exemption for chauffeured operators. The Limousine Associations of New Jersey is helping operators take steps to comply and avoid “crazy” fines.

PRINCETON, N.J. — Operators across the nation are facing stiff new permit fees and requirements since a key exemption for limousine vehicles expired on May 3.

Operators who take clients across state lines face total additional compliance costs of $2,000 per company per year in the first year, and about $1,000 for each year thereafter. The steep fees hit especially hard in the tri-state region of New York, New Jersey, and Connecticut, which is the nexus of the national chauffeured transportation industry. Most operators serving the NYC metro region must be able to carry clients in and across all three state lines.

The LIMOUSINE ASSOCIATIONS OF NEW JERSEY will advise operators of the need to obey the new rules and to be aware of stepped-up enforcement at its general membership meeting at 12 p.m. Wednesday, Sept. 15 at the Clarion Hotel, 3499 Route 1 South, in Princeton.

Former New York Taxi and Limousine Commissioner Matthew Daus will conduct a presentation for operators that will explain the new requirements, detail the procedures for handling compliance, and review the legal options for limousine businesses charged with violations. Daus, who stepped down from his post earlier this year, is now a partner in a New Jersey law firm that specializes in ground transportation issues and serves as the president of the International Association of Transportation Regulators.

At issue is an administrative decision by the Federal Motor Carrier Safety Administration (a division of the U.S. Department of Transportation) that removed an exemption May 3 that applied to limousines being classified as “common carriers” engaged in interstate commerce.

In a column released today, Daus explained that the exemption that applied to commercial motor vehicles that transport nine to 15 passengers in interstate commerce within a 75 air-mile radius no longer applies. “This means that licensing and safety requirements that apply under federal law to motor carriers now apply to any limousine businesses that conduct any type of pick-up or drop-off within the tri-state region for any distance whatsoever (and likewise, for such businesses located in geographic proximity to state borders around the country). These new regulations define interstate commerce not only as actually crossing the border — but simply “intending to cross the border” — even if it has not happened before,” Daus wrote.

As a result, operators running limousines of certain seating capacities that engage in interstate commerce (i.e. move across states lines) must do three things: 1) Obtain operating authority and permits from the federal government, 2) Ensure that the drivers of those vehicles obtain medical certification; and 3) Maintain required minimum levels of vehicle liability insurance.

Daus estimates the average cost for a chauffeured transportation company to comply with those three requirements is about $2,000 the first year, and $1,000 per year afterward. “The fines for noncompliance could range from $1,000 to $3,000 per violation, which may be increased or decreased due to culpability, history of prior offenses and any additional public policy/safety considerations,” Daus wrote.

Since the official federal compliance deadline of June 1, authorities have made surprise visits to several New York and New Jersey operators who were found in violation of the post-exemption rules, Daus told LCT. His firm is representing operators facing federal fines and penalties.

“The fines are crazy and I will explain all of that,” said Daus, referring to the DOT’s lack of an established fine schedule, which could result in subjective assessments. “They are showing up at companies and inspecting on site, and then the company gets a notice finding you guilty and in violation. If you don’t act quickly, [the feds] can file a judgment against you in [U.S.] District Court.”

Daus will provide operators with tips and procedures at the meeting on how to comply and also fight back if cited.

The aggressive DOT changes and enforcement are happening as part of a wider trend toward more federal regulation and revenue-raising that began with the political shift in Washington, D.C. since early 2009.

“There has been an internal change in the department [DOT] that is part of the atmosphere in D.C. about [more] regulating,” said Barry Lefkowitz, the executive director of the LIMOUSINE ASSOCIATIONS OF NEW JERSEY. “I think this is an attitude that seems to be pervasive throughout the federal government. We’re seeing a new era of greater regulatory activity.”

Sources: LANJ; Martin Romjue, LCT Magazine

View comments or post a comment on this story. (8 Comments)

More News

Uber Appears To Be Losing A Big Case In Europe

Should the TNC be treated as a taxi service subject to the same safety and employment rules?

Drivers File Preemptive Labor Suit Against Uber Chiefs

The suit alleges disgraced ex-CEO Travis Kalanick and co-founder Garrett Camp advised the company to misclassify drivers.

Virginia Operators Fight TNC Bill And Unfair Tax

The Virginia Limousine Association gears up to repeal TNC registration relief and unfair vehicle tax advantage.

Inside Travis Kalanick’s Resignation As Uber’s CEO

At a Chicago hotel, two venture capitalists presented him with a list of demands, including his departure by the end of the day.

Push To Close Long Island TNC Sex Offender Loophole Begins

Uber and Lyft can start operating in Suffolk County on June 29th.

See More News

Facebook Comments ()

Comments (8)

Post a Comment



See More

LCT Store

LCT Magazine - July 2017 $12.95 COVER STORY: * Why These Titans Work So Hard to Give it Away * *


Experience the three annual industry events for networking for business, showcasing vehicles and products, and getting the tools for success.

Read About Your Region

What’s Happening Near You?
Click on any state to see the latest industry news and events in that region.

More From The World's Largest Fleet Publisher

Automotive Fleet

The Car and truck fleet and leasing management magazine

Business Fleet

managing 10-50 company vehicles

Fleet Financials

Executive vehicle management

Government Fleet

managing public sector vehicles & equipment


Work Truck Magazine

The number 1 resource for vocational truck fleets

Metro Magazine

Serving the bus and passenger rail industries for more than a century

Schoolbus Fleet

Serving school transportation professionals in the U.S. and Canada

Please sign in or register to .    Close