Regulations

California Operators Ready To Benefit From Favorable Laws

Martin Romjue
Posted on September 18, 2019
GCLA leaders Mark Stewart and Mo Garkani update members on key legislative and regulatory victories at a member meeting, Tuesday, Sept. 17, 2019, in Los Angeles. (LCT photo)

GCLA leaders Mark Stewart and Mo Garkani update members on key legislative and regulatory victories at a member meeting, Tuesday, Sept. 17, 2019, in Los Angeles. (LCT photo)

LOS ANGELES — The GCLA achieved a milestone of sorts on Sept. 17 with its report to members on regulatory and legislative results.

Its customary update was all success and good news, a rarity given most such discussions over the years at member meetings bring up challenges, uncertainties, and setbacks.

Four pivotal matters are breaking in favor of the fortunes of the state’s luxury ground transportation operators:

AB5: Assembly Bill 5, the highly publicized labor measure that would put transportation network companies (TNCs) like Uber on the same footing with employee-based commercial transporters, was signed the morning of Sept. 18 by Gov. Gavin Newsom after passing both houses in the Legislature.

Breaking News: GOVERNOR SIGNS AB5

Gov. Gavin Newsom signs AB5 at the Capitol in Sacramento, Wednesday, Sept. 18, 2019. Sponsor Assemblywoman Lorena Gonzalez, D-San Diego, is at right. (photo from Mo Garkani/GCLA)

Gov. Gavin Newsom signs AB5 at the Capitol in Sacramento, Wednesday, Sept. 18, 2019. Sponsor Assemblywoman Lorena Gonzalez, D-San Diego, is at right. (photo from Mo Garkani/GCLA)

AB5 codifies the sweeping Dynamex decision into law and would eventually force TNCs to reclassify their drivers as employees, thereby paying them at least minimum wage with benefits, workers comp, insurance, and other requirements — just as legal, licensed TCP-numbered commercial operations have been doing for years.

“We have literally been in every one of the hearings on this bill,” Stewart said. The GCLA leaders worked closely with Assemblywoman Lorena Gonzalez, D-San Diego, in refining the scope of the bill. In a recent meeting, Gonzalez told GCLA leaders she had already prevailed upon city attorneys in San Francisco and San Diego to enforce the bill against TNCs, and would be working with the Los Angeles city attorney as well. The bill’s enforcement provision stemmed from a last-minute amendment.

AB5 background article here

“That amendment coming in at the 11th hour for enforcement threw the rideshares (TNCs) into a tizzy,” Stewart said. “It’s a huge deal having the enforcement aspect.”

Stewart and other leaders met with Newsom, who indicated he favors the Dynamex decision. Stewart warned the TNCs will try to pursue a ballot initiative to modify or reverse the measure in their favor. AB5 also won the backing of unions, who were focused on getting TNC drivers classified as employees, he added.

“These are two huge wins and everyone should be proud. Our industry has been hurting, going back as far as nine years. Now we could actually be seeing some potential relief.”

What Is Dynamex? A State Supreme Court ruling in a major independent contractor case on April 30. The landmark case, Dynamex Operations West Inc. v. Superior Court of Los Angeles, placed more burdens on businesses and entities to establish they have properly classified workers as independent contractors. The decision embraced a standard that presumes all workers are employees. Employers must prove: 1) Contractors are free from employer control, 2) outside the regular scope of the business, and 3) independently established in that trade, according to the California Labor Federation.

AB1810: Known as the cannabis bill, it included a last-minute amendment that added a cannabis smoking and vaping ban in commercial vehicles statewide. Although most luxury transportation services already ban the practice as company policy, the bill will assure operators their policies now have legal and law enforcement backing.  

“That is a big win for this industry,” Stewart told members. “We’re still pursuing a separate standalone bill next year for drug and alcohol testing for the ridesharing companies.” The GCLA is reaching out to Mothers Against Drunk Driving (MADD) to help sponsor and advocate for the bill.

Separately, a bill that would have required ventilated driver compartments for vehicles taking customers on cannabis tours was tabled so legislators could work out conflicts and get more input from state agencies.

LAX-Exit: The plan to re-route commercial ground transportation traffic at LAX as part of a major renovation and expansion project will be announced the first or second week of October, Stewart reported. Los Angeles World Airports plans a publicity blitz in coming weeks to make passengers aware of the temporary transportation options.

Background on LAX upgrades here

Under the plan, luxury ground transportation operators and TCP-licensed commercial for-hire vehicles can continue to pick-up arriving passengers on the lower-level CTA loop, while TNCs and taxicabs will have to retrieve their riders on a revamped lot just east of Terminal 1.

“What’s going to be the impact to our industry?” Stewart asked. “It could mean maybe our industry getting some of the business back because some of our corporate clients aren’t interested in hopping on a shuttle or walking from the various terminals over to the lot.”

Whether congestion will ease remains hard to tell, especially since LAX curbside accesses will be reduced by 38% during the peak construction of the project to be finished in 2023. Hotel and rental shuttles will still be relegated to the departure loop. “I think as this thing moves forward we’ll have to see what their progress is, and then we as an association should be involved with LAX on a future dialogue.”

GCLA President Mo Garkani said the preserved access for luxury transportation operators was a hard-fought outcome, especially since airport officials were uncertain about the industry’s access when they first announced the project. He and other GCLA reps along with members of Advocates for Fairness in Transportation (AFT) often met with airport and city officials to advise on the plans.

“For two to three years it looked like we may be kicked out of LAX,” Garkani said. “Now (the TNCs) are. This show how things can get done with just a few people. I’m so proud to be part of an organization that fights often for its members.”

PUCTRA Fees: Stewart and Garkani also alluded to an earlier victory for the GCLA, the suspension on Jan. 31 of PUCTRA fees (rhymes with yuck) for operators. The Public Utilities Commission Transportation Reimbursement Account required quarterly fees for PUC enforcement and administrative services. The fees were suspended for a year because the account accumulated a surplus, and now the GCLA is working with state officials to boost spending on enforcement against illegal operations.

Garkani underscored how much money state operators were saving on PUCTRA fees. He estimates his company, C.O.T.S. Group of Long Beach, is saving $30,000 in fees.

These outcomes culminated GCLA lobbying visits to the State Capitol and numerous meetings with state and Los Angeles city officials. Leaders heavily involved in the efforts have included GCLA President Mo Garkani, legislative committee leaders Mark Stewart and David Kinney, lobbyist Gregg Cook of Government Affairs Consulting in Sacramento, GCLA vice presidents Harry Dhillon and Robert Gaskill, and board director Don Mahnke, who also serves as a board director for the National Limousine Association which supported the GCLA’s advocacy outreach.

Related: LCT GCLA PHOTO GALLERY HERE

Related Topics: airports, California operators, cannabis, David Kinney, employee vs independent contractor, Greater California Livery Association, Gregg Cook, Harry Dhillon, independent contractor issues, law enforcement, LAX, legislation, limo associations, lobbying, Los Angeles, Los Angeles operators, Lyft, Mark Stewart, Mo Garkani, regulatory enforcement, Robert Gaskill, state regulations, TNCs, Uber

Martin Romjue Editor
Comments ( 5 )
  • Susan Lundquist

     | about 2 months ago

    Always worth reading Martin's articles, but this well written piece is chock full of excellent information. Should be mandatory reading for everyone in our industry. It explained several complex issues in simple to understand terms (and some were even funny - "Yuck").

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