Regulations

California Operators Get Attention At State Capitol

Martin Romjue
Posted on March 4, 2014
GCLA board director and Orange County operator Matthew Strack (standing) makes a point about limousine retrofits to Edward Morley, policy consultant for Senate Republicans, during GCLA lobbying day in Sacramento on Feb. 26, 2014.

GCLA board director and Orange County operator Matthew Strack (standing) makes a point about limousine retrofits to Edward Morley, policy consultant for Senate Republicans, during GCLA lobbying day in Sacramento on Feb. 26, 2014.

GCLA lobbyist Gregg Cook of Government Affairs Consulting (center) leads a debriefing session on Feb. 26, 2014 after GCLA members visited state legislative offices at the State Capitol in Sacramento. Photos by Martin Romjue
GCLA lobbyist Gregg Cook of Government Affairs Consulting (center) leads a debriefing session on Feb. 26, 2014 after GCLA members visited state legislative offices at the State Capitol in Sacramento. Photos by Martin Romjue

SACRAMENTO, Calif. — GCLA leaders and members recently took on one of the toughest industry political assignments possible: Go into a one-party capital town not known for business friendliness and line up support for a private sector industry.

And then do it while ducking raindrops and dashing across Capitol grounds as a three-day winter rainstorm approaches.

Against such an inhospitable backdrop of bad weather, growing transportation regulations and Democratic supra-majorities in the California Legislature and State Senate, the 23 members of the GCLA fanned out throughout the Capitol and nearby offices on Feb. 26 where they met with select legislators and their staff members.

This was the first Greater California Livery Association lobbying event in Sacramento in at least seven years, and was made possible by the group’s hired lobbying team of Gregg Cook and Rob Grossglauser of Government Affairs Consulting. The experienced Sacramento political veterans, whose office sits across the street from the Capitol building, set up and coordinated a roster of 31 separate appointments with legislators and staff who have influence over laws and rules affecting charter-party carriers.

Teams of four to six operators dispersed to the list of continuous morning and afternoon appointments, with the composition of the teams shifting throughout the day so operators could meet with a diverse mix of representatives. GCLA leaders attending included: President Rich Azzolino, First Vice President Kevin Illingworth, Second Vice President John Raftery and Secretary Anne Daniells. Among participating board directors: Gary Buffo, also the President of the National Limousine Association, Christopher Quinn, David Kinney, Alex Darbahani, Perry Barin and Matthew Strack.

The lobbying event was held at a crucial time for the chauffeured transportation industry in California, as it contends with a political environment in which limousine services are increasingly viewed as cash cows among local and state regulatory authorities eager to levy fees and fines. Meanwhile, Uber and transportation network companies that do not fully comply with charter party carrier laws are undercutting legal, legitimate chauffeured transportation companies that follow all the rules, thereby creating an unfair and untenable competitive situation.

The industry also has received intense scrutiny in the wake of the stretch limousine fire May 4 near San Francisco in which five women burned to death. Although a final investigation concluded the cause was a unique mechanical malfunction, legislators nevertheless moved quickly to pass and propose onerous new safety regulations that will make limousine operations more costly to run.

The legislative appointments all were off-the-record to preserve the integrity of political communication and negotiation, but operators later shared insights during a late afternoon debriefing and strategy session at the lobbying firm’s offices. Most came away with positive impressions, particularly in instances where they had opportunities to educate legislators and staffs about how limousine companies operate and clear up any misconceptions about the industry.

Four Fronts
The GCLA and its lobbyists are staying out front on four key areas of legislation, either passed or proposed, to promote a more hospitable business environment for chauffeured ground transportation. The below summaries are from a talking points sheet prepared by Government Affairs Consulting that operators referred to during their appointments:

  • Stretched Limousine Inspections: Last year, Gov. Jerry Brown vetoed legislation (SB 338) that would have required limousines stretched to be inspected annually by the California Highway Patrol (CHP) at a fee not to exceed $75. In his veto message, Brown indicated that the fee was not adequate and wanted the legislature to adopt a measure that allowed for full cost of the inspection. Sen. Jerry Hill, D-San Mateo, has re-introduced the issue (SB 611) this year. The GCLA requests that the legislation require the CHP to determine the number and locations of affected vehicles, consider options to lessen the costs to the CHP and the financial impact on limousine operators, require consultation with charter-party carriers, and require a detailed analysis of the inspection cost determination.
  • Modification of Stretched Vehicles: Senate Bill 109 became law on Jan. 1, 2014. It requires limousines that have been stretched to increase seating capacity as of Jan.1, 2015 to provide additional emergency exits, including the installation of roof-top egress, a fifth door or “pop-out” windows. The legislation requires vehicles in service to be modified by Jan. 1, 2016. This legislation was adopted without detailed analysis of the actual cost of implementation, the impact of the modification on the structural safety of the vehicle, or the availability of vendors to accomplish the modification. [The GCLA would like to get this legislation reversed or modified to allow more time for safety adjustments].

LCT SB109/SB338 background article here

  • Charter-Party Carrier Regulatory Environment: Limousine operators are highly regulated by state and local government agencies. The California Public Utilities Commission (CPUC) licenses limousine operators, requires chauffeurs to be drug and alcohol tested, requires minimum vehicle insurance, and is responsible for enforcement of the law. In a compromise measure passed by the Legislature in 2010, operators agreed to pay a fee to provide for enforcement by the CPUC, but since then enforcement efforts have been severely lacking. The Department of Motor Vehicles licenses the vehicles, provides livery plates, and reports chauffeur-driving records to the CPUC and charter-party carriers.  The CHP conducts charter-party carrier terminal inspections and reviews vehicle maintenance records. California’s airports require vehicle licensing and inspections. There needs to be an analysis of the regulatory process to determine the most efficient, effective and economic administration regulation to assure public safety. A regulatory environment that ensures public safety and promotes licenses, insured limousine operators needs to be the focus.
  • Transportation Network Companies: The CPUC recently adopted regulations outlining rules for Transportation Network Companies to provide public transportation. GCLA requests that those entities be subjected to equal regulatory requirements imposed on charter-party carriers. Those requirements must include: driver drug and alcohol testing; driver records reported by the Department of Motor Vehicles; California Highway Patrol safety and maintenance record inspections; vehicle, passenger and driver insurance coverage; licensing by California airports and revocation of CPUC licensing and impoundment of vehicles operating in violation of California laws and regulations.
GCLA board director and Orange County operator Matthew Strack (standing) makes a point about limousine retrofits to Edward Morley, policy consultant for Senate Republicans, during GCLA lobbying day in Sacramento on Feb. 26, 2014.
GCLA board director and Orange County operator Matthew Strack (standing) makes a point about limousine retrofits to Edward Morley, policy consultant for Senate Republicans, during GCLA lobbying day in Sacramento on Feb. 26, 2014.

Republicans Can Still Help
The challenging environment for limousine operators was underscored during two back-to-back afternoon sessions led by Republican operatives, Daniel Ballon, principal consultant for the California State Assembly Republican Caucus, and Edward Morley, policy consultant for the Republicans in the California State Senate.

Lobbyist Cook emphasized the need to work with Republicans, despite their deep minority status in Sacramento, since bipartisan coalitions of helpful legislators are needed to advance industry interests. The fact is Sacramento will remain a majority Democratic political town for at least another generation, he said.

Ballon told a group of operators that regulations must be streamlined and limited, since an excess of rules now raises the barrier of entry into the chauffeured transportation industry. He said a political strategy is complicated by the fact some legislators are not even interested in exploring the costs, effects and necessity of safety legislation.

“Once there is an established regulatory and legislative framework, it’s very hard to make it go away,” Ballon said. One possible angle is to hold up Uber as an example of why the industry actually needs to be de-regulated in order to level the playing field, he added.

In a following session with Morley, operators focused on how the retrofit bill (SB 109) damages the finances of limousine operations. Orange County operator and GCLA board director Matthew Strack pointed out that an operator who recently bought a new stretch limousine and financed it for six years won’t be able to do business with it after Jan. 1, 2016 unless he invests $7,000 to $8,000 in a structurally unproven retrofit job. If not, then the stretch limousine would be rendered worthless in California, with the operator upside down on loan payments. One possible solution is to modify the measure for a longer phase out period on stretch limousines that do not comply with SB109, he suggested.

Morley told operators the goal should be to fix components of the bill to make the most of a bad situation. “We’re arguing real world situations to people [some legislators] who don’t know or care,” Morley said. “We have to put something together that says we’re not saying ‘no’ to regulations, but providing an efficient and reasonable alternative.”

Since 2014 is an election year, Cook and Grossglauser recommended to the GCLA members that the group start a biennial Sacramento lobbying cycle in 2015, since odd-numbered years are those following election years and most conducive to moving legislation.

— Martin Romjue, LCT editor: GCLA Sacramento Visit Blog Post Here

Related Topics: California operators, Chris Quinn, Gary Buffo, GCLA, Greater California Livery Association, Gregg Cook, industry politics, John Raftery, Kevin Illingworth, leadership, limo fire, limousine safety, lobbying, Matthew Strack, regulatory enforcement, Rich Azzolino, state regulations, stretch limousine, taxes, TNCs, Uber

Martin Romjue Editor
Comments ( 2 )
  • stewart

     | about 4 years ago

    California regulators warned four app-based ride companies on Thursday that they haven’t provided some information required to receive state operating permits. The companies in turn said they are working to comply. The move came a day after several San Francisco supervisors blasted the regulators for not cracking down more on the transportation networking companies, or TNCs. http://blog.seattlepi.com/techchron/2014/03/07/california-to-lyft-uber-sidecar-wingz-get-your-act-together/

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