California Association Takes Bold Step Against Avis

LCT Staff
Posted on March 17, 2010

A comprehensive proposed “limo bill” would redefine WeDriveU as the same type of carrier as a luxury limousine company.

SACRAMENTO, Calif. — If a bill helpful to the California chauffeured transportation industry becomes law this spring, it could become the biggest blow yet to the Avis WeDrveU chauffeured business model.

The proposed bill, AB 2572, simply defines a charter party carrier to include rented vehicles operated by a for-hire driver. If passed, Avis WeDriveU would have to follow the same rules and regulations as all other licensed charter party carriers, i.e. chauffeured transportation operators.

The Greater California Livery Association has been working on getting such legislation on the books for some time. In the state with the most chauffeured transportation activity in the U.S., Avis has a lot of potential to undercut limousine operator with its “split” business model that requires clients to rent a vehicle from Avis and then hire a chauffeur to drive it from WeDriveU.

“The arrangement between a car rental company and a for-hire driver is pre-arranged transportation and qualifies as a charter party carrier,” said Gregg Cook, president of Governmental Affairs Consulting, the Sacramento-based lobbying firm retained by the GCLA to represent its interests. Cook has worked closely with state authorities and regulators in crafting the proposed bill.

Cook said it would remain to be seen if a stricter charter party carrier rule would come down more on Avis itself or more likely the company that hires out the drivers. Either way, the law would require either Avis or its chauffeured service company (WeDriveU) to obtain a TCP license and certifications, along with proof of insurance.

The Avis WeDriveU chauffeured business model has been a thorn in the side of the chauffeured transportation industry for several years, since it enables the car rental agency to circumvent the fees, licenses, and regulations that legal limousine operators must abide by. That model was most recently rolled back in New Jersey, where a law was signed by the governor in January. It signified the largest victory over Avis to date.

AB 2572, sponsored by Rep. Steven C. Bradford, D-51st District-Inglewood, also would bring about the following changes:

• Eliminate the tri-annual California Public Utilities Commission renewal requirement of $500 per operator with a one-time fee of $700 when an operator first gets a CPUC license.

• Allow CPUC enforcement personnel to enforce local airport regulations statewide at all airports in addition to the CPUC state rules, which would streamline and simplify regulatory enforcement consistently in all airport jurisdictions.

• Enable the CPUC to impound the vehicle of a suspected illegal operator everywhere in the state. The current law limits such impoundments to two miles within the U.S.-Mexican border, within 100 feet of airport property, or on airport property.

• Require that the owner of an impounded livery vehicle pay any towing and impoundment fees. Now, the law enforcement agency that impounds the vehicle gets stuck with the fees if a District Attorney decides not to prosecute the case. Authorities often are reluctant to impound vehicles because of the time and costs involved, Cook said, and D.A.s often choose to put more priority on more serious caseloads. But by simply impounding a few illegal vehicles and prosecuting the owners while removing the burden of the fees, the state could go a long way in providing more of an incentive to deter such activity, Cook said.

A request has been made for AB 2572 to be set for a hearing before the Assembly Utilities and Commerce Committee, with has jurisdiction over the CPUC. It also might get forwarded to the Public Safety Committee. If the Assembly passes the bill, it would then proceed to the companion committees in the California Senate for consideration.

— Martin Romjue, LCT Magazine

LCT Staff LCT Staff
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