Industry Leaders Urge Operators To Beat TNCs, Not Join Them

Posted on February 11, 2015 by - Also by this author - About the author

GCLA panelists and operators Cheryl Berkman, Kevin Illingworth and Joey Phelps encouraged the limousine industry to stay the course in the campaign against TNCs during a GCLA meeting in Los Angeles, Tuesday, Feb. 10, 2015. (Photo by Tim Crowley/LCT)
GCLA panelists and operators Cheryl Berkman, Kevin Illingworth and Joey Phelps encouraged the limousine industry to stay the course in the campaign against TNCs during a GCLA meeting in Los Angeles, Tuesday, Feb. 10, 2015. (Photo by Tim Crowley/LCT)

LOS ANGELES — Challenges are mounting for Transportation Network Companies amid rising safety violations, criminal incidents, labor lawsuits and a long-term unsustainable business model, a panel of industry leaders told Greater California Livery Association members Tuesday night.

Operators should not give up hope but instead ratchet up the fight against TNCs for regulatory fairness, said Music Express CEO Cheryl Berkman, also the President of Advocates For Fairness In Transportation (AFT). Berkman was joined on the panel by GCLA President Kevin Illingworth and Joey Phelps, executive vice president of global operations at Empire CLS  Worldwide Chauffeured Services.

The panelists brought out some key points during a wide-ranging discussion that went into overtime with audience questions and views:

  • TNCs are increasingly vulnerable to labor and wage lawsuits and regulations, as driver pay gets squeezed and unions stir up TNC drivers to file wage and labor related lawsuits, especially in California.
  • The TNC business model would be unsustainable if their drivers were employees, with all the accompanying rules on wages, benefits, meal breaks, overtime, gratuities, sick leave, workers comp and vacation time. Not to mention, the costs of insurance coverage requirements, licensing and registrations, driver background checks, and drug tests.
  • Limousine companies should never compete with TNCs and taxis on price, and make the effort to closely follow and even exceed all the wage and labor standards, Phelps said. It is possible to be profitable with such a focus on safety and quality. Empire CLS, for example, had 13% growth in 2014 and 10% in 2013, despite the surge of TNCs into the ground transportation market. Focusing on “service and price will get you where you want to be,” he said.
  • It’s better to be regulated fairly than to have a deregulated environment in ground transportation that compromises safety, Berkman said. Limo operators should take every step to make sure their companies are running clean.
  • Much of the public and many politicians are simply uninformed and uneducated about the problems with TNCs, and once told the truth, are more likely to get on board with sensible regulations.
  • A TNC-related sexual assault-related incident is on average being reported about every 10 days.
  • Operators should avoid filling any downtime with TNC work, as it puts them at risk for running like independent contractors susceptible to violations and lawsuits. Operators should preserve the integrity of the limousine industry by not giving any affiliate work to companies that do business with TNCs.
  • All associations across the industry are needed to not only fight TNCs on every level but educate the riding public. AFT was founded by Berkman, Empire CLS David Seelinger and ITS President Jonna Sabroff to complement and enhance such efforts.
  • Illingworth shared an anecdote about how his 14-year-old daughter printed out 35 pages of Uber safety and criminal violations in a Google search that he was able to bring to a recent meeting with Los Angeles Mayor Eric Garcetti. As a result, the major was very receptive to safety concerns. “She told me it’s not right. . . she said you’ve been doing this for 25 years, go in there and fight and don’t give up.”


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