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Dawson Rutter Defines Key Limo Industry Issues

Tom Halligan
Posted on December 19, 2013
Dawson Rutter, Founder and CEO of Commonwealth Worldwide Chauffeured Transportation, Boston, and NLA board director.

Dawson Rutter, Founder and CEO of Commonwealth Worldwide Chauffeured Transportation, Boston, and NLA board director.

Dawson Rutter, Founder and CEO of Commonwealth Worldwide Chauffeured Transportation, Boston, and NLA board director.
Dawson Rutter, Founder and CEO of Commonwealth Worldwide Chauffeured Transportation, Boston, and NLA board director.

BOSTON — A veteran and champion of the limousine industry, Dawson Rutter will not only have an opinion about any topic, but he can add the benefits of hindsight, insight and foresight.

The three-decade operator and seven-year National Limousine Association board director has created one of the most prestigious limousine companies and affiliate networks in the U.S. Commonwealth Worldwide Chauffeured Transportation operates a fleet of 225 vehicles and serves renowned financial and corporate clients in the chauffeured luxury hubs of Boston and New York.   

With his New York upbringing and adopted Boston pedigree, and an executive persona fit for central casting, Rutter has shepherded the NLA’s Political Action Fund to a record high of $80,000, from $3,000 in 2008. As fund co-chairman, he knows all the major industry issues, as the last five years have brought a cascade of political and regulatory challenges.

All of this experience, ignited 31 years ago while driving a cab as a college student who simply wanted to make extra money, has given Rutter the street cred to dissect such issues as diverse as New York politics and the Taxi Limousine Commission, mobile app technology, Obamacare, employee wage and overtime lawsuits, the mission of the NLA, and just about every facet of chauffeured business.

True to its venerable luxury transportation tradition, Commonwealth Worldwide recently bought 20 2014 Mercedes-Benz S-550 sedans. The redesigned version of the established chauffeured model debuted to the limousine industry Oct. 28-29 at LCT Show East in Atlantic City.

Rutter, whose fleet decisions and views influence operators nationwide, recently talked with LCT for his first wide-ranging interview in more than four years:

• • • • •
Q: The industry is trying to figure out the EFFECTS of smartphone hailing apps. How do you see the technology affecting limo operators?

A: My opinion is they don’t affect my business because I focus on high-end customers, luxury hotels and corporate clients who want consistent, reliable service. These customers won’t tolerate sub-standard service, or not being able to get a car when they need it. I think apps like Uber really hurt the taxi industry because that’s where they are competing — and that’s a problem. Taxi drivers need big $20 to $30 fares to make money; they can’t make it just on the small $3 to $5 fares. If Uber and other private transportation app businesses take away those bigger fares, taxi drivers can’t survive on small fares and they’ll give up driving a cab because they can’t earn a living. That will really be a big problem that legislators will have to deal with because people who rely on taxis — the elderly for example — will have fewer taxis available to them.

• • • • •
Q: What is your opinion about limousine operators who participate in the smartphone hailing business?

A: They basically become a taxi service. Do they really want to run their vehicles into the ground for small fares? It’s just not cost effective. That’s not the business we are in. We are in luxury transportation and we charge more because we provide reliable, consistent service. I’ve heard drivers of UBER and Lyft brag that they make $25 or $30 per hour at their busy times. Well, that is gross before their expenses, taxes, gasoline, car payments, insurance and all the other expenses associated with operating vehicles for hire. When the ride sharing apps have been around for a while, I think you will see degradation in quality of vehicles and drivers; much like the taxi industry.

• • • • •
Q: There has been an increase in employee lawsuits in several states. How concerned are you?

A: It’s on fire. Employment litigation can be very destructive to our industry. Operators have to be FLSA (Fair Labor Standards Act) compliant or face potential lawsuits from employees. It all centers on misclassification of employees and FLSA violations and can cost an operator big money in attorney fees, settlements and court judgments. I’ve been working for 18 years fine-tuning our FLSA compliance. Now it is spreading like wildfire across the country — judgments and attorney fees in the multi-millions of dollars. In so many of these lawsuits, employees think that employers are screwing them, and in many cases that is not true, but we have to spend money defending ourselves. Many of us know more employment law than we ever cared to know.

I think it’s important to remember that if you keep settling they’ll keep coming at you because they know you are an easy target and will settle. I think it’s better to fight and win although it’s costly. My advice is to hire an employment attorney who can guide you to make sure you are in compliance and [know] how to properly classify employees. There are certain states more active in these kinds of suits, like Florida, California, and Massachusetts, but we see lawsuits popping up in New York and Chicago and other areas around the country. Don’t assume you’re safe. The problem is growing and coming your way, and you don’t want to be blindsided by a lawsuit. The only safe way to avoid these kinds of lawsuits is to have employees rather than independent contractors, and paying overtime, lunch breaks, etc.

Commonwealth Worldwide CEO Dawson Rutter has put a lot of thought to buying vehicles for his Boston and New York fleets in the wake of the retirement of the Lincoln Town Car sedan. He is trying out the Mercedes-Benz E350, the Cadillac XTS, and the Lincoln MKS sedans in his fleets to see how they compare.
Commonwealth Worldwide CEO Dawson Rutter has put a lot of thought to buying vehicles for his Boston and New York fleets in the wake of the retirement of the Lincoln Town Car sedan. He is trying out the Mercedes-Benz E350, the Cadillac XTS, and the Lincoln MKS sedans in his fleets to see how they compare.

• • • • •
Q: What are you adding to your fleet and any thoughts on a replacement for the Lincoln Town Car?

A:  Recently, we added 20 Mercedes Benz S550s for one of our customers. We also have Cadillac XTS, Lincoln MKS and Mercedes E350 [sedans]. We have been running the MKS four-door sedan for three years now with no mechanical issues. I think the MKS, XTS and E350 are all competing to replace the Town Car. But it comes down to what’s best for your business and customers. You have to look at purchase price, livery packages, extended warranties, repair costs, resale value and how long cars can last, especially for us because we run 225 cars between Boston and New York and it’s OK to have a few cars down for normal maintenance. But if we have more down, that’s a problem. We’re still test marketing the aforementioned vehicles to replace the Town Car, so we’ll see what works best for us and is the best return on investment. Right now the MKS looks like it is working well for us. The jury is still out on the E350 but we are concerned about warranties and repair costs.

• • • • •
Q: Newly elected New York City Mayor Bill de Blasio has said he intends to replace Taxi & Limousine Commission (TLC) head David Yassky. What are your expectations of the new mayor and a possible new TLC Commissioner?

A: We’ll have to wait and see but we hope things will get better. The TLC has burdensome regulations that the Limousine Association of New York continues to oppose. We need to eliminate redundancy and shorten the time it takes to register and inspect vehicles, among other issues. For example, each vehicle must be inspected four times per year; you have to make an appointment and it takes a couple of hours. I have one employee and that’s all he does because I run 150 vehicles and that’s 600 inspections per year. That doesn’t make sense, especially with new vehicles that are required to go through the same inspection process even though they’re new. It also takes drivers five weeks to get licensed, and that hurts because we lose drivers who can’t wait that long to be hired. It’s a cumbersome bureaucracy that needs to change to do a better job for our customers in New York.

• • • • •
Q: What are your thoughts on bidding on Request for Proposals (RFPs)?

A: I dislike the RFP process because all too often they are based solely on price, commoditizing our industry; like buying pencils. Companies that bid low to get a contract are less likely to provide consistent, reliable service because they have to make it up somewhere. They have to cut costs when they bid too low. They can’t spend money on superior personnel to run the company, to buy new vehicles regularly, on training drivers and call-center staff, or hiring customer service reps – so the client ends up with unsatisfactory service. We don’t bid low because we invest in a high quality infrastructure but rarely win many RFPs. At least the RFP participation gives us exposure to the company and gets our name out there. We often have gained significant new business with accounts that are not happy with the low-bid operator. One high profile RFP that we did win, we realized after some time that we were losing money on the account. On $500,000 of revenue it was costing us $700,000 to service the account. We quickly shed that account.

• • • • •
Q: As a longtime member and board director of the National Limousine Association, what have you observed about the NLA's relationship with LCT?

A: I think people do not fully appreciate LCT as our management company and the value that brings to the NLA. Let’s be clear, the NLA is an independent body and LCT has no power or influence over our association. Yes, they have a seat on the board to voice opinions on issues like everyone else, buy that’s the extent of it.

Before LCT took over management responsibilities, the NLA was broke. Now we have major fundraisers at LCT Las Vegas and the show in Atlantic City. That has injected financial security into the NLA, which allows us to raise money to tackle industry issues on a national level while enabling us to give money back to associations every year to help keep them strong.

One of Dawson Rutter's favorite hobbies is traveling back roads with his 2011 Harley-Davidson Road Glide Ultra cruiser. Although his favorite mode of transportation, he still likes the Mercedes-Benz E350 and S550 for his fleet.
One of Dawson Rutter's favorite hobbies is traveling back roads with his 2011 Harley-Davidson Road Glide Ultra cruiser. Although his favorite mode of transportation, he still likes the Mercedes-Benz E350 and S550 for his fleet.

BIO BRIEF: About Dawson Rutter
Dawson Rutter, 61, is president and founder of Commonwealth Worldwide Chauffeured Transportation in Boston. He started in the limousine business with one car in 1982 and grew to a 22-car fleet during the next 16 years. In 1998, Rutter decided to build a larger business and developed a growth strategy and business model that has moved the company into the ranks of the largest chauffeured transportation companies in the U.S., with offices in Boston and New York City, a 225-vehicle fleet, 375 employees and a vast global affiliate network.

Rutter and Commonwealth have won numerous service awards, including the 1983, 1984, 2001, 2004 and 2009 Boston Magazine “Best of Boston” Award for “Best Car Service.” Commonwealth also has been recognized for six years by the Initiative for a Competitive Inner City (ICIC), a national non-profit organization founded in 1994, as one of the 100 fastest growing inner city companies nationwide and is in its Hall of Fame. Rutter, born in New York, grew up in Ardsley outside of the city. He attended college in Boston.

Related Topics: Boston operators, Commonwealth Worldwide Chauffeured Transportation, Dawson Rutter, DOL issues, employee issues, fleet management, industry politics, National Limousine Association, New England operators, new vehicles, NLA board of directors, NLA PAC Fund, Uber, vehicle apps

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