The class action filed by Diva Limousine blames Uber's predatory pricing strategies for hurting legitimate chauffeured services.
(Editor’s Note: While this regulatory tale affects Philadelphia operators, the experiences are all too typical of operators battling regulatory hassles in other cities and states.)
PHILADELPHIA — The Philadelphia Regional Limousine Association (PRLA) has had enough of being pushed around by the Philadelphia Parking Authority and they are doing something about it. They are taking their fight to the state’s capital, Harrisburg, and rewriting the law that gives oversight to the limousine industry.
The proposed PRLA legislation would return oversight of the limousine industry to the state Public Utility Commission (PUC). Since the Philadelphia Parking Authority gained oversight in 2004 from the PUC, operators pay an average of $10,000 in additional fees per year to provide the same level of service. This does not include costs associated with replacing fleets under the restrictions of the PPA. The costs have continued to rise as the fines and fees for noncompliance climb.
The PRLA has in place State Senate Bill 759 sponsored by Sen. Edwin B. Erickson of Delaware County with Sen. Lisa Boscolla of Allentown as one of 15 cosponsors. The co-sponsors represent one third of the Senate offering co-sponsor support. The bill has gone through budget review and is making its way through the Senate. A sister bill is being sponsored by House Rep. Thaddeus Kirkland of Chester.
Association members are working on letter and telephone campaigns seeking support for the bills from the state senators and representatives in their districts. Association members will march on Harrisburg June 2 to continue the momentum of these bills. Time is working against the association as the legislation will need to be completed before the end of the legislative session in July.
To date, the association already has met with numerous legislators and selected representatives of the Public Utility Commission’s legal and ground transportation staffs. These individuals have indicated their support and understanding for this bill to pass.
In addition to its battle with the Philadelphia Parking Authority, the PRLA is fighting a perception issue. The word “limousine” conjures up images of wealth and luxury. Although the vehicles are just that, it is not what the industry is truly about. The PRLA is comprised of transportation operators who provide sedan, limousine, shuttle bus, and van service in the state of Pennsylvania. Most of its members are small businesses with fewer than 10 vehicles in their fleets. They employ office staff, car washers, and chauffeurs to run their businesses. Although the vehicles they drive are luxury vehicles, for members they are only the tools of their trade leased from the bank with hefty payments and high insurance costs.
Couple those expenses with the onerous fees that are arbitrarily placed on operators by the Philadelphia Parking Authority, and it becomes very difficult for these operators to eke out a living. Many operate without any benefits or health insurance. Some of these business owners contemplate crossing the bridge into New Jersey where there are fewer regulations and charges to provide the same service.
In 2004, the PUC turned over regulatory responsibilities for the taxi, shared ride and limousine industry in the city of Philadelphia to the Philadelphia Parking Authority. Until this point, regulatory oversight was solely by the PUC. Now, the two would share oversight.
Many citizens mistakenly believe the Philadelphia Parking Authority is part of city government. But the PPA is actually a private entity run by a company called PRWT. PRWT is a privately owned enterprise that manages the airport parking garages and city parking meters, and collects parking ticket fines while providing administrative services to the Philadelphia Parking Authority. Its executive board is appointed by the governor and state legislature. The Philadelphia Parking Authority board has been a place for patronage placement of those who have supported politicians in their election bids. The chairman of the PPA executive board, Joseph Ashdale, is president of the Philadelphia Glazier’s Union which controls a large block of votes in Philadelphia. Executive Director Vince Fenerty was a ward clerk in the Northeast Philadelphia Region.
Scandal Plagues the PPA
Revenue from the Philadelphia Parking Authority is supposed to go to the city for the first $25 million with the remainder going to the Philadelphia public school system. To date, the school system has gotten very little of the $45 million a year promised at the time of the takeover proposal by State House Rep. Perzel, who orchestrated the original PPA takeover. The PPA takes in $200 million per year in fees and fines, but most of that goes to authority operating expenses. While in office, Rep. Vincent Fumo had called for an audit of the agency which is supposed to be performed yearly as part of the Authority’s operating charter. While Fumo sits in jail over misdeeds, the audit results of the PPA have yet to be made public.
In February, the taxi industry also got fed up with the PPA adding arbitrary fees without public hearings or any oversight. They have since won a major victory. They had taken their fight to the Pennsylvania State Supreme Court which upheld that the PPA is a commonwealth agency, meaning it must hold public hearings before it can make any changes to charges and laws governing the industries it oversees.
But that hasn’t stopped the PPA from continuing these practices. The ruling stated that as a state agency the PPA was ignoring the administrative process. The industry will now have an oversight body to air complaints regarding fines and regulations. Additionally, before new laws can be applied, they will need to go through a review process by the Independent Regulatory Review Commission (IRRC).
This process will now show the glaring disparities in regulations between the PPA and the PUC. PRLA president Philip Jagiela said this is a major step in the right direction but not enough.
“We want to rid the industry of the redundant rules and fees that we must adhere to from both the PUC and the Philadelphia Parking Authority,” Jagiela said. “The amount of fees that we have been saddled with since the Philadelphia Parking Authority took over the oversight of the industry is an extreme hardship on all of the small business owners in our industry. This legislation will be a major step to making it easier to operate legally in the state of Pennsylvania.”
David V. Goliath
As limousine owners who are members of the PRLA wage their battle, they squeeze in letter writing and phone calls between answering the phones in their businesses, driving as chauffeurs, and performing other daily operations while they struggle through an economic downturn.
One blatant disparity in this battle between the limousine industry and the Philadelphia Parking Authority is the fact that PPA executives can march on Harrisburg while on the state’s payroll. They bring their attorneys, Linda Miller and Dennis Weldon, who are on the PPA payroll. The top 20 executives at the PPA make more than $100,000 per year with executive director Vince Fenerty making more then Pennsylvania Governor Ed Rendell. For operators, it is a lop-sided battle, but one they are more than willing to fight to make running their businesses easier.
A Day In The Life
At 6 p.m. on Friday, May 15, limousine operator and PRLA board member Perry Camerlengo got a phone call from Rep. Kirkland. Kirkland had been visited by members of the PPA executive staff along with their attorneys.
Rep. Dwight Evans of Philadelphia orchestrated the meeting with Kirkland, who is sponsoring the House version of the bill. The meeting was held to allow the PPA to state its case against returning authority of the limousine industry to the PUC. (This meeting alone cost taxpayers thousands of dollars in salaries and this wasn’t their first meeting with legislators).
After the meeting, Kirkland wanted clarification of the issues. Camerlengo three-way called to association president Philip Jagiela who was just returning from chauffeuring an executive from King of Prussia to the Philadelphia airport.
Jagiela relayed the story of how his company had been fined $1000 for a first offense for a chauffeur who had not renewed his operating authority with the PPA. He personally was not aware of this as the PPA does not notify companies when their chauffeurs do not renew. He explained that although the PPA had originally negotiated with the association at the original takeover, they have not followed through on many of the items they agreed to at that meeting.
One case in point was the fact that since members already gave financial information to the PUC, it would not be necessary to duplicate the information in only a different form to the PPA.
PRLA Marches on Harrisburg
Operators will have to leave their businesses to office staff and travel upward of two hours to Harrisburg. A day of lobbying will cost operators a great deal but to all it should be worth it.
“We expect a large contingency from the industry on June 2,” explained Tony Viscusi, owner of Global Limousine in Philadelphia and a board member for the PRLA. “The benefit of this legislation passing is huge to our industry.”
Joining the group is James Schantz, administrative aide to Sen. Boscolla. Schantz has been helping the association draft this legislation and push it through Harrisburg.
“You would be amazed how many people have gotten behind us,” Viscusi said. “We couldn’t have gotten this far with out an army of people moving mountains. We don’t have a professional lobbyist working on this — just our members. They are dedicated and working hard to make this happen for everyone.”
Vendor members are also getting behind this. Brian Engel of Wolfington Bus has agreed to donate the transportation from Philadelphia to Harrisburg. Other vendor members also will participate. Richard Ackerman from the PA Post Insurance Agency will walk the halls in Harrisburg in order to show how this legislation is far more reaching than just the operators alone. Ackerman has marched in the past on Washington with the National Limousine Association to fight for their issues.
Fear of Retaliation
Since the proposed legislation began traveling through Harrisburg, half of the PRLA association members have received notices by the PPA that they must provide in depth financial information to the Philadelphia Parking Authority.
This is in addition to the information that they already provided to the PUC. The PPA has not asked for this information for the past four years. The fine for not providing the financials is $250.
Operators can fight this but they must pay $150 just to have a hearing with a judge who is an employee of the PPA. Many operators worry that if they continue this battle, then their businesses will get singled out for scrutiny at the airport or on city streets.
“Business is down. It would be terrible to lose an account as a result of being stopped by the Philadelphia Parking Authority while (the client) was in the car,” said one Philadelphia operator who asked to remain anonymous.
Time will tell if this far-reaching effort by the PRLA will net the desired result. In addition to fighting the PPA, the PRLA is battling the clock on the legislative session. They are also fighting complacency among members who need continuous prodding to write letters and pick up the phone to call representatives.
Although the proposed legislation will result in major savings to operators, it is hard to find time away from the daily operations of a struggling industry to do the right thing. Unfortunately, without the dedication of the members, the end results will not occur. Board members pick up the phone daily to remind members to make their calls and write their letters. They’re hoping this will be enough to change the system.
Source: Linda Moore, LCT Magazine
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