Following Rules: Matt Daus Taps Multiple Roles

Martin Romjue
Posted on October 26, 2011

By Martin Romjue, LCT editor

When you look at the career of Matt Daus, it’s easy to get lost in the alphabet soup of acronyms: NYTLC, IATR, LANJ, LBOA, TLPA, BCAC, LANY, LILA — and that’s not even a complete list. Daus either works for or with a growing roster of groups that either represent or regulate the chauffeured and ground transportation industries.

The resulting access, connections and insider insights have made Daus one of the most influential and helpful industry figures. As a former 10-year Commissioner of the powerful New York Taxi & Limousine Commission, and before that its general counsel, Daus has navigated the Byzantine workings of New York city government, worked with Mayors Rudolph Giuliani and Michael Bloomberg, and handled one of the toughest crowds on city streets: Cab drivers. His diverse professional background puts him at the hub of many industry regulatory issue debates.

With his recent promotion to law firm partner, Daus now securely stands on the other side of the public/private sector divide: As a private attorney who leads the Transportation Group Practice at the prestigious Manhattan law firm of Windels, Marx, Lane & Mittendorf. His division’s clients include a roster of private sector taxi, chauffeured transportation, shuttle transportation, and ground transportation companies and operators.

Daus also is president of the International Association of Transportation Regulators, a professional group for such regulators. He is counsel to the Limousine Associations of New Jersey and the Luxury Base Operators Association — the two most high-profile groups of operators in the New York/New Jersey transportation megalopolis. His multiple roles certainly give him a unique vantage point, as he deftly taxis among state and federal issues while based in the heart of America’s chauffeured transportation industry.

Daus recently spoke with LCT Magazine about the state of rules, the art of making rules, good rules, bad rules, and how to make sense of them. We caught him just before he was about to embark on another busy travel schedule to various events defined by their acronyms: TLPA convention in San Francisco, LANJ and LBOA meetings at the Limousine Digest Show in Atlantic City, N.J., NLA board of directors conference in California in December, and IATR’s first European conference in Amsterdam. And that was his out-of-town schedule just for the rest of 2011.

Q: Being President of the IATR and a private attorney representing transportation companies that prefer fewer regulations would, on the surface, appear to be at odds. How do you reconcile the two roles?

A: It’s actually been very complementary. We help private clients in the Transportation Practice Group. We have 30 attorneys working on disciplines that are full service for anything on four wheels. We negotiate contract agreements, develop new business relationships with regulators, and call deputy commissioners. Fortunately, when you get on the other side you see things in the process that could work better. Cutting red tape for clients is a top priority for Transportation Group.

The IATR is more educational. We focus on best practices, research, and breaking down barriers between regulators and the industry. There used to be a lot of suspicions between regulators and the industry. We instill a philosophy of open doors with regulators. We need to understand that regulating is part of the business and it has impact. They’re not trying to hurt the public, but trying to serve the public.

Q: What are some of the most common misconceptions about regulations and regulators that you find among chauffeured transportation operators?

A: The biggest one is they think they are out to get them, that they are out to make money at the expense of the public. Overall, that is not true at all. They care about the passengers. When I hit the lecture circuit, there are people all over country who practice  voluntary compliance. Nothing is mandatory. Others are crying out for regulations. When you get people in a room talking to one another, they get more comfortable talking to each other, and often realize they are on same page.

Q: What is an example of a good and fair regulation for the chauffeured transportation industry?

A: A good example would be cell phone rule for distracted driving. We have the strictest ones in the country in New York. Three strikes and you’re out. What we realized is you can’t be putting anyone out of business; drivers have to take calls. We sat down with every trade group and got input and crafted an exemption for push button communication. Now we have devices to do that. It’s much safer than it was before. The industry signed off on it. The regulators, the federal government, the TLPA and the NLA were all on the same page. We had a great compromise worked out and everyone liked it. We believe there should be tougher distracted driving rules, but we should be fair and not put the transportation industry out of business.

Q: What is an example of a bad regulation that should be eliminated?

A: I can’t think of one offhand. But, there comes a point where licensing [vehicles] gets out of hand. You have situations where there are five or six license stickers on a window. There has to be more consolidation. Airports and taxi commissions need to work together. I don’t think they talk enough to one another. There are too many fingers in the pot. It becomes a revenue raising thing that takes revenues from towns and villages that already charge licensing fees.

Q: What are the most critical regulatory issues/matters facing the chauffeured transportation sector today?

A: The U.S. Department of Transportation and its sub-agency the Federal Motor Carrier Safety Administration have become very aggressive because of bus accidents nationally in not only changing laws to have limousines required to have USDOT permits, but actually are going out and doing audits of limo bases and showing up and hitting them with tens of thousands of dollars in fines. Limos had been exempted for many years. If you do interstate travel, you now need driver medical certifications, insurance, a USDOT number, etc. If you start fighting after the fact, then the inspectors are dug in. You have to hire a lawyer to attend the initial audit conference. Sometimes inspectors don’t have reasonable grounds to inspect. There has to be a reasonable cause. Any [operator] consenting without checking with an attorney can get themselves in trouble. If someone is there, it limits what they say and do. Operators around the country are scared. . . .

The RIDE ACT was passed many years ago but now we need PUFA (Prevention of Unreasonable Fees Act) that restricts fees just for picking someone up. What PUFA would do is restrict airports from charging entry fees. For interstate commerce, there has been a backlash against the fees airports are charging. We have to curb the ability of airports to charge those revenue raising fees. Airports are getting more aggressive. . .

[FYI: PUFA H.R. 1691, introduced by Congresswoman Laura Richardson (D-CA) on May 3, 2011, and referred to the Committee on Transportation and Infrastructure.  The bill is identical to S. 1764 that was introduced on October 8, 2009 by U.S. Senator Frank Lautenberg (D-NJ) and Senator David Vitter (R-LA), and to H.R. 6301 introduced by Congress Member Richardson previously.]   

There’s a growing amount of litigation involving worker classification. Federal, state and local governments are getting more aggressive on workers compensation, unemployment insurance, overtime, and wage and hour laws. Unions are trying to unionize workers and trying to claim they are owed back wages under federal wage laws based on improper classification. They can get many years of back wages. This is a growing trend and it’s only getting worse. It affects the limo industry big time. Aside from the politics behind it, it is also a government thing that has to do with raising and collecting revenues that it desperately needs. The government is in shambles now because of the fiscal crisis and looking for revenue sources. What better way than to go after people not paying taxes who should have been. Government agencies are talking and sharing more info with each other. It spirals out of control very quickly. The law is uncertain in this area. . .  

There are too many definitions of what an employee is. There is a lot of gray area there. The definitions of an independent contractor and an employee in one statute are different from another. There needs to be a national standard that is clear cut. There is a lot of uncertainty out there. The fear for a small to mid-sized business is that the government shows up and levies hundreds of thousands [of dollars] in back wages that could put you out of business. Some operators pay more in wages and benefits and are willing to classify workers as employees because they don’t want the hassles. . .

One last trend being looked at by the IATR’s Research Advisory Committee is the interplay of state DOTs and taxi regulators with the limousine industry. Everyone looks like a black car now; we now have party buses . .  is it a limo or bus? Should super-stretch limos be regulated like buses? This whole area needs to be looked at and cleaned up. As you get state governments reacting to high-profile bus crashes, regulators are looking more at bus companies. Before you know it, the whole industry is preyed upon by government. Many limousine companies are diversifying, adding buses to fleets and becoming full service. We haven’t seen too many bus companies add limos. With all this diversification going on, these gray areas are going to pop over issues of jurisdiction. Such overlap is going to be a challenge. It is a growing concern for every ground transportation operator.

Q: There’s a widespread sentiment among transportation company owners that regulations are too complex and costly and that they should be minimized. What is your assessment of that view/goal?

A: Regulations are good, but some should be less, and some should be more. It’s a case-by-case basis. I’m all for cutting down bureaucratic red tape. If there is a requirement that is silly, you should get rid of it. If there is something for the benefit of regulators, we should get rid of it. Bureaucracies are paper intensive and that slows things down. I always think regulations should truncate the licensing process without sacrificing safety standards. But there is a trend to more regulations. It’s not necessarily a bad thing, depending on which ones you are talking about. Illegal operators without licenses should rightfully be taken out of the equation. Government should offer protections for legal licensed operators.

Q: As the head of NYTLC for 10 years, what were some of the major business and/or regulatory mistakes you observed among limousine transportation operators?
A: The biggest example would be not communicating with regulators. Sometimes the regulators and sometimes the industry are at fault. I would have an advisory board so everyone could come in and talk things out. Sometimes we passed rules, and they objected, other times we compromised. Sometimes we solved problems, and sometimes we couldn’t, but at least we got [participation], which is important with stakeholders in the industry. But communication is important. If trade groups get too antagonistic, it doesn’t’ help with anything.

Sometimes it just takes a phone call and everyone benefits. At the end of the day, the regulators hold all the cards. If you get them angry, it’s not a good thing. Both sides have to be open minded and civil to one another — and talk.

Q: What constructive lessons about handling regulatory issues can other limousine industry groups learn from Limousine Associations of New Jersey?

A: They set a good example for other trade groups around the country by simply showing up and working with the NLA and getting operators to talk with one another. We recently solved the problem of window tinting tickets. We made one phone call to a supervisor, he said the problem is ridiculous, talked to an officer and found the officer doesn’t understand law, and mostly solved the problem. LANJ has also worked hard to help operators understand and become compliant with DOT laws. They always invited me and others to speak at their meetings and conferences. The black car and limousine industry is a great industry. They are my favorite industry because they are low maintenance: If you don’t provide good service, your clients are walking. They have to deliver great quality service. I’m happy to be involved with the policy legislation and the bread and butter work that needs to be done.

Related article: Barry Lefkowitz of LANJ Becomes IATR Lobbyist On Capitol Hill

Related Topics: bus regulations, industry regulations, LANJ, LBOA, limousine regulations, Matt Daus, RIDE Act

Martin Romjue Editor
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