Commentary: Jeff Rose, president of Limousine Association of New York, explains how the permit cap ignores vital for-hire differences.
In the sports world, Houston has often been called the “losingest” city in America. But in the livery world, it is surely a winner. Houston’s unfortunate losing reputation is based on years of futility from its championless professional sports
franchises and the performance of its major universities on the competitive playing fields. But all that history certainly hasn’t dampened the spirits, nor the revenues, of the area’s livery operators.
To find out how this city has faired through the recession and oil boom and bust, L&C sat down with Ellis Milam, regulatory manager of the Transportation Section of the Regulatory Affairs Division for the City of Houston. While operators struggle to serve the population of this sprawling metropolis, Milam and his crew try to overcome the omnipresent problem of illegal operators. Two unique ways the city tries to improve legal limousine operations are by limiting the age of livery vehicles and regulating rates. Even these drastic measures have not curtailed gypsies.
Limousine & Chauffeur: How many operators are there in the city of Houston?
Ellis Milam: We have about 125 different companies operating a couple hundred cars. That varies day to day because operators get permits, which are valid for five years, and they may go in and out of business along the way.
L&C: What are some of the trends you’ve seen in the livery industry over the past five to 10 years here in Houston?
Milam: I’ve only been involved with the industry for two years. But during that time one of the changes I have seen is that the industry initially started out using mostly stretch limousines and is now primarily using sedans, with some leanings toward vans. As far as Houston is concerned, that’s the new development.
Also, we didn’t even license vans in the livery business until this past year. We amended the ordinance to allow operators to use vans.
L&C: What makes transportation unique here in Houston? Are there any keys to this city that make it different from others?
Milam: One thing is Houston is so sprawling. It comprises approximately 600 square miles. If you were coming in from the northwest section of the city going to the southeast, it’s around 52 miles across. In many cases, if a person’s coming into Houston, he’s got some travelling to do. From down town out to the airport is a pretty good drive. There’s a lot of distance between most places in the city unless you just operate in the immediate downtown area.
L&C: What’s the licensing structure here? Are there any background checks or inspections required?
Milam: Yes, we do criminal background checks on not only the permit holders, but also the drivers. The fees are $400 a year and there are two inspections required each year as well. There is a $50 inspection fee.
L&C: I understand the City of Houston recently revised some of its ordinances that applied to livery operators. What are some of these new ordinances?
Milam: We amended the limousine ordinance in August of 1992. One of the changes was that we now allow operators to use vans. Also, we had an ordinance on the books that gave a maximum age limit for limousines. In the revision, the life of stretch limousines was extended to 10 years, vans were allocated seven years, and sedans remained at five years.
When instituting these revisions, there was a negotiating factor between the livery industry, some city councilmen, and Regulatory Affairs representatives. The suggestion initially had been for a maximum of seven years for sedans and limousines and I think five years for vans. But in the negotiations, the current age limits were worked out.
We also changed the insurance requirements. We increased the limits of insurance to $250,000 for bodily damage or death of one person, $500,000 for all persons, and property damage to $100,000.
We also prohibited charging of fares on a per capita basis. When we included the vans, we didn’t want chauffeurs going around picking up five people at $10 apiece-in other words, being a taxicab.
Prior to this amendment there was no advertising allowed of any type on a limousine. We now allow advertising around the license plate area to give the name of the company.
We also allowed for temporary vehicles that were leased-that were late model, year-old cars-to not have to pay the inspection fee. One of the reasons we did this was to expedite the process by saving the operator an extra day rental fee to get the car in here and have it inspected. An operator isn’t going to rent a brand new car and then have to fix it. That pretty much was the revision.
L&C: Why is it you decided to update the ordinances and the age limit? Was it operator feedback or was it just time to change?
Milam: Well, there’s always operator feedback, but primarily we saw there was the need to introduce vans. Operators were having to do things that really weren’t quite legal. We were concerned for the liability of an operator who was using a van. If it wasn’t the right type of permit and that operator had an accident, there could be legal repercussions. Since we knew there was demand for vans, we wanted to get that in the ordinances.
L&C: Does the city regulate the rates operators can charge?
Milam: Yes. There is a $50 minimum for a limousine. That covers the first two hours of use and then it’s $12 per hour minimum thereafter. The whole purpose of that is to create a wide division between limousines and taxis.
L&C: I understand the city did a study that said share-ride is a service that is needed in Houston, but there is also an anti-jitney law prohibiting that type of transportation. Is that an ordinance change the city is looking at instituting now?
Milam: We’ll look at just about any kind of proposal that looks reasonable. That sounds like something that might be worth considering. There is another ordinance that keeps taxicabs from share-riding right now. This ordinance states that the cab is devoted to whomever gets it first. That ordinance works against share-riding.
There’s always the possibility of doing things with that taxicab ordinance or creating a new ordinance or just looking at share-ride in general to see if it needs to be created. Right now we’ve just heard of the need for this type of service and I don’t know if we’ll alter the law. I understand it’s being used in other cities though.
L&C: What’s the biggest problem you have with illegal operators here?
Milam: There are different definitions of illegal operators. Some of them just do not have any license at all. A lot of them have acquired a limousine license and then they just go out and proceed to act like taxicabs. They do a lot of soliciting at the airports and hotels in conjunction with the bellhops. And they’re really just acting like a taxicab, but they don’t have taxicab markings on them. So I believe soliciting business at the airport and downtown hotels is probably the biggest problem we have now.
L&C: Does all livery business in the City of Houston have to be prearranged?
L&C: What’s your agency doing to crack down on the illegal operators?
Milam: We’ve been doing several things. One is that I’ve had people work at the airport regularly for the past couple of months on weekends and various odd times to check for hustlers. We’ve also targeted specific offenders by calling companies that we know are not licensed but are listed in the telephone directory.
Another amendment to the ordinances made it a violation to either offer or agree to transport passengers for hire without a license or for less than the minimum fee. So now we don’t have to take the ride, if the person shows up with the vehicle and gives us a price, that’s enough to issue a citation. One of the things we do is to call around and make appointments to be picked up. We’ve issued lots of citations for that. We’ll also work special events, such as rodeos and conventions, and meet the limousines when they arrive to determine whether or not they’re carrying passengers for hire. If they’re not licensed, then we issue citations.
Another little tactic we use is to send letters to the hotels advising them of the problems we’re having with their employees securing customers for unlicensed vehicles. In the letters we advise hotel executives that they are putting their customers in jeopardy because in many cases these vehicles are not licensed. We’re trying to get some support from the management of hotels to slow this process. We send a follow-up letter specifically naming an employee in the case when we do one of our sting operations if we determine the employee was involved.
We also produced a 30-second public service announcement that showed the public what limousine and livery city stickers look like. We also explained in the clip what problems consumers might encounter with illegal limousines. We tried to broadcast the message right before prom season because we know that’s when the illegals really come out.
L&C: Do you think these tactics are working? Have you seen a decline in the number of illegals in Houston?
Milam: No, I haven’t really seen a decline in the number of illegals. I know we’ve gotten the attention of several of the hotels though. So in some cases it’s helped, but in some it hasn’t. I think in some of the hotels they’re using a contract valet service and the valet services are not responsible to the hotel as much as their full-time employees are. It’s just a difficult practice to stop.
L&C: In these days of economic cutbacks, many cities have had to cut their enforcement personnel.
Is this something Houston has had to deal with?
Milam: Sure, but I don’t think it’s for the purposes that we’re talking about, because our investigators are civilians. That’s a problem in itself because they don’t have the authority of a police officer. They can issue citations but they don’t have the powers of arrest and everything that goes with it.
Also, you can’t police the city with regulatory investigators. I mean, you can’t duplicate a police force to operate throughout 600 square miles on three shifts, seven days a week. The cost would be prohibitive. So what you have to do is just depend on law enforcement to enforce ordinances. That’s what law enforcement was created for and that’s what police forces are created for, not civilian investigators. They have their hands full inspecting vehicles, licensing drivers, investigating complaints, and just doing the day-to-day routine over the permitted and licensed sector. When you expect them to go out in addition to that and police a city the size of Houston, which is operating around the clock and all weekend, it’s impossible. And it’s frustrating to our investigators. They can only do so much.
L&C: How many investigators do you actually have?
Milam: Seven. But if I had 20, it would still be the same thing. They can’t pull these vehicles over. They don’t have the authority to demand identification from the drivers. They don’t have the necessary computers to check who the vehicle belongs to. All the authority that goes hand-in-hand with being a police officer, civilians do not have. So to expect them to go out and conduct enforcement activities on the scale that we’re talking about is just unreal.
L&C: When your inspectors give out citations, are they prohibitive or are they just minor fines?
Milam: The citations are approximately $100 to $200.
L&C: Is there a penalty if an illegal operator gets caught a second or third time?
Milam: No, it is the same penalty. One of the things that we’ve been doing lately when we catch chauffeurs soliciting is rather than just issuing a citation to the guy and let him go on about his business, we take him down to the municipal courthouse or police station and make him post bond. I think that little addition might help somewhat as a deterrent but it’s strictly a deterrent. We have been doing this for about a year. It is something again that our investigators don’t have the authority to do. We have to work in conjunction with law enforcement.
L&C: So what happens if an illegal operator keeps getting citation after citation? What do you do at that point?
Milam: You just have to keep issuing citations. He’s an illegal operator. That’s all we can do.
L&C: What’s the biggest problem your agency has dealt with in the livery industry?
Milam: The biggest problem we run into is the prom season because illegal operators come out of the woodwork with all kinds of old, junky vehicles. Mostly the illegals operate with stretch limousines. These old cars will come out of hiding and maybe show up late because of having mechanical problems or maybe won’t be able to finish the assignment and will leave the kids stranded. Then the parents get wakened in the middle of the night and need to try to figure out some way to pick up their kids up.
Commentary: Jeff Rose, president of Limousine Association of New York, explains how the permit cap ignores vital for-hire differences.
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