Illegal Ops Draw Industry Ire In California

LCT Staff
Posted on May 27, 2009

SAN DIEGO — The Greater California Livery Association recently received updates on three critical issues facing operators in the state with the most limousine and livery activity nationwide.

The proliferation of — and lack of adequate enforcement against — illegal operators dominated a presentation on May 20 by GCLA lobbyists Gregg Cook and Rob Grossglauser of Government Affairs Consulting in Sacramento. The team spoke at the GCLA’s monthly meeting held in San Diego.

While the GCLA has agreed to higher operator license fees to fund state enforcement against illegal operators, the California Public Utilities Commission has failed to provide enough enforcement officers on the ground, Cook said, allowing illegal operators to continue undercutting legal chauffeured transportation companies.

“I am not impressed by the role of the PUC in enforcing the laws,” Cook told operators during the dinner meeting. “We are prepared to say that if the PUC does not increase enforcement, then cut their budget please. We shouldn’t be paying a dime to the PUC if they are not enforcing the law.”

Cook said he and the GCLA will pursue this matter in every arena possible until they get results. “We need to complain daily about gypsy operators,” Cook told GCLA operators. “Let us know when these occurrences are happening. I have to work with you.”

Following Cook, Mike Nakasone, the senior transportation representative in the PUC’s Los Angeles division, told GCLA members that the agency has been disconnecting the phones of busted illegal operators and impounding vehicles. He mentioned that the agency carried out the 100th impound of an illegally operated vehicle at Los Angeles International Airport within a six-month period. The PUC also busted six illegal operators at hotels in the San Diego area, Nakasone said. He encouraged operators to get business cards of the gypsy operators so the PUC can move to disconnect their business phones.

“We can terminate the phone of any illegal operator as long as it is in writing,” Nakasone said. However, he conceded that illegal operators are adept at getting new cell phone numbers, websites, and Craigslist ads up and running in a short amount of time.

Given the fees, budget, and resources available to the PUC, enforcement should be much more frequent, Cook said, adding that in Northern California, enforcement is practically non-existent.

“I want to see (PUC chief) Richard Clark implement the law or I’m going after his ass,” said Cook, with a hint of comedic bravado.

In a follow-up interview, Cook said taxi cab and limousine operators are working hand in hand on this issue.

“What happens is some guy buys a fancy black car and hangs out in hotels and airports and steals business from limos and cabs,” Cook said.

The California Public Utilities Commission has a wide authority to catch illegal operators. “Those guys are the ones we’re trying to go after,” Cook said. “The GCLA has now gone before the California Legislature twice to increase the PUC budget for enforcement. That’s the root of the frustration.”

Under state law, the PUC can suspend or revoke the license of any operator providing illegal services, and it can fine unlicensed operators, impound their vehicles, and disconnect their business phone numbers.

Cook said he’s not sure the PUC necessarily needs to spend more money — just allocate enough people to boost enforcement at airports, hotels, and on the streets.

Hotels are at big risk if doormen put clients into the vehicles of favored illegal operators, Cook said. The hotel could be sued by a guest in the event of an accident, since a doorman arranged transportation in his capacity as a hotel employee. Therefore, hotels are interested in working with the GCLA to boost enforcement, Cook said.

Airports need to crack down on illegal operators as well. At San Francisco International Airport, for example, operators are frustrated because the PUC claims it cannot assign officers there because the airport won’t give the agency office space. “I don’t want office space; I want fanny space out there by baggage claim,” Cook said.

While operators and GCLA members can report illegal activity to the PUC, no state agency or group keeps any statistics on the number estimated to be operating illegally.

If the PUC does not “get its act together,” Cook said the GCLA will push for an audit of the agency to see exactly how it spends its money and allocates its resources and people.

Cook and Grossglauser also updated members on two other regulatory matters:

Assembly Bill 830, aka the “Prom Bill”

Although it became law on Jan. 1, the California Highway Patrol and Department of Education have not finalized the details of requirements and procedures.

The law requires operators who transport students to school functions such as proms to make sure its chauffeurs pass a DOE-approved safety test. However, the DOE has until Dec. 31 to devise a training curriculum for chauffeurs. Cook said the goal is ensure chauffeurs only need to meet requirements specific to the vehicles they drive instead of having everyone meet stringent training requirements for large school buses.

Likewise, the law empowers the CHP to inspect chauffeured vehicles carrying students, but has yet to devise vehicle inspection guidelines.

For operators, the key reform in the bill is a change in the contracts for service with the school district. As of Jan. 1, operators do not have to sign a service contract with school districts for any vehicles that can transport up to 24 passengers. This means that parents or legal guardians of students renting limousines and limo buses must sign the service contracts and legal waivers with school districts, essentially taking operators off the hook. Operator contracts still apply for vehicles carrying 25 or more passengers.

Assembly Bill 709

This proposed law would streamline background check permits for limousine operators at major state airports. The bill — sponsored by the GCLA and authored by state Reps. Ted Lieu, D-Torrance, and Sandre Swanson, D-Oakland — now sits with the Assembly Appropriations Committee awaiting consideration.

The PUC said its costs would be too high to implement it, but GCLA lobbyists are challenging that assumption.

“The fact of the matter is, we don’t believe criminal background checks on people who access the public areas of airports are required, but airports have the authority to place conditions on operators if they choose to,” Cook said.

Since some airports are requiring background checks while others are not, the GCLA proposes a uniform background check to save everyone time, money, and hassles. Such a background check would be valid and recognized at all state airports.

Without such uniformity, operators in metro areas with multiple major airports, such as Los Angeles and the Bay Area, would need several security badges. “One badge fits all; that is the issue we are pursuing,” Cook said.

“The airports in general have said that’s a good idea, but they don’t have the resources to implement it, although that’s what they want,” Cook said. “Some airports said they don’t care, they want to do their own anyway. The argument is whether or not you will have a single background check accepted by all airports in California or not.”

Source: Martin Romjue, LCT Magazine

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