LCT Staff
Posted on May 21, 2010

SUMMARY: The California General Assembly passes AB 2572 by an overwhelming margin on Friday morning. The bill, which would regulate Avis WeDriveU statewide in the same way as limousine operators, now moves to the Senate for further action.

SACRAMENTO, Calif. -- A bill that would put Avis WeDriveU under the same regulatory authority as licensed limousine operators sailed through the California General Assembly Friday on a 55-2 vote.

In coming weeks, AB 2572 will move through State Senate committees for approval and eventual referral to the Senate floor for a vote.

If the bill passes and is signed into law by Gov. Arnold Schwarzenegger, it would require the Avis rental car agency to obtain "TCP" limousine licenses from the California Public Utilities Commission for all Avis vehicles used as part of the WeDriveU chauffeured service -- now a company set up separately from the actual rental agency.

Such a requirement would put chauffeured Avis rental cars on the same regulatory level as all other legitimate licensed luxury limousine operators throughout California. Avis would have to pay the same fees, follow the same safety rules, and meet the same licensing requirements as chauffeured transportation operators. Under its current business structure, Avis offers clients the opportunity to rent a car from one company, and the chauffeur from a separate one, thereby skirting the conventional business model of a licensed chauffeured transportation company.

An industry victory in California would qualify as one of the biggest blows to Avis yet in its attempt to circumvent limousine licensing regulations that put it at an unfair advantage over operators. It would be comparable to similar victories in the past year in New Jersey and at the Port Authority of New York and New Jersey. Like the GCLA, the Limousine Associations of New Jersey was instrumental in getting the legislation passed in that state.

AB2572 also would herald another major victory for California operators: Reduced CPUC license renewal fees.

The bill would change the cost to register a chauffeured operation for the first time from $500 to $1,000, with a $100 renewal fee every three years thereafter. The current law requires operators to pay $500 every three years for renewal. The $1,000 registration fee would only apply to NEW chauffeured transportation companies registering with the CPUC for the first time.

For existing operators, the licensing renewal fees every three years drop from $500 to $100.

A new company would eventually save on licensing fees under the new law the longer it stays in business. For example, a new operator who stays in business for at least six years now must pay a total of $1,500 in CPUC licensing fees over six years ($500 to start, $500 to renew every three years thereafter). The new law would cost $1,200 in total licensing fees after six years; and $1,300 after nine years, compared to the current $2,000 after nine years in business.

Gregg Cook, a GCLA lobbyist who along with fellow lobbyist Rob Grossglauser was instrumental in getting the legislation through the Assembly, predicted to a GCLA Town Hall meeting in San Francisco Tuesday night: "We are going to be successful. California is one of few states to take on this legislation."




-- Martin Romjue, LCT editor

LCT Staff LCT Staff
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