IATR OUTLOOK: THE PHILADELPHIA STORY
BY MATTHEW W. DAUS, ESQ. : BLACK CAR NEWS : AUGUST 2010
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It comes as no surprise that as the PPA seeks to institute reforms, by enhancing licensing standards and customer service initiatives such as GPS and credit cards, that there would be push-back from the industry. However,much of the recent opposition is not revolutionary, but a seriesof skirmishes that will most likely be won by the regulator when the dust settles.

First, there was an eye-opening decision of the Commonwealth Court of Pennsylvania on April 28, 2010, invalidating all of the PPA's rules and regulations due to an alleged failure to follow the proper administrative rule promulgation procedures. Germantown Cab Corp., a limited rights taxicab company, received a routine PPA summons for picking up a passenger outside the scope of its authorized area, and filed a lawsuit challenging the entire regulatory structure. The Court, analyzing the plain language of the State Commonwealth Documents Law, held that since the PPA failed to obtain the required public comment, Attorney General approval, and to file the regulations with the Legislative Reference Bureau – none of the PPA rules were valid. However, the PPA immediately sought and obtained a stay of the ruling as it appeals the decision to the Pennsylvania Supreme Court.

This is a Pyrrhic victory for the industry, however, as all the PPA needs to do is simply repromulgate its rules to render the lawsuit ruling moot. Meanwhile, cooler heads have prevailed and industry leaders have stated that they intend to continue to follow the PPA rules for now for the sake of maintaining order. Stability is especially important for the PPA as Capital One Bank (a significant lender and IATR sponsor), under the leadership of Executive Vice President Richard Antonacci, recently entered the Philadelphia market. The silver lining here is that this may be an opportunity to further improve the PPA's rules, and to work with the industry to possibly compromise and resolve some issues of contention outside the courts.

It comes as no surprise that industry advocates have beenfeeling their oats in light of the Germantown decision and have ramped up their offensive against the PPA. This time, the lim-ousine industry had its turn on the legislative front, courtesy ofthe Philadelphia Regional Limousine Association. At the request of the Philadelphia government, I testified, as President of the International Association of Transportation Regulators (IATR), before the State of Pennsylvania General Assembly, in opposition to House Bill No. 2434 – which sought to diminish the licensing standards of the limousine industry by transferring jurisdiction from the PPA back to the PUC. My testimony was heard on June 24, 2010 by the House Committee on Consumer Affairs, and according to Philadelphia officials, including PPA Director James Ney, was instrumental in helping to halt the progress of this bill.

The IATR Board of Directors felt it was important to support the efforts of the PPA. While we took no position onwhether either a State or a locality can more effectively regulate specific industries, we did express our view that it would be more effective and practical for “all” for-hire ground transportation services to be regulated by a single entity – not multiple entities. House Bill 2434 would have transferred jurisdiction to the PUC without further review, regressing to its old regulations that would have the effect of diminishing customer service and public safety safeguards for the passengers of the City of Philadelphia. For example, the PUC regulations could lead to older vehicles being on the road, no drivert raining program and less frequent criminal background checks without any government verification.

Under current PPA regulations, a car with 350,000 miles or more would be taken off the road and fail inspection, while PUC regulations would allow vehicles with unlimited mileage to stay in service. With regard to driver training, the PPA offers a five-day course which requires a passing grade on a test before a driver certificate is issued, while no training is required under PUC rules. Finally, and of the most concern from a public safety standpoint, a return to the PUC regulations would require the limousine company, and not the government, to conduct criminal background checks – which raises the concern that some companies may neglect to conduct those important checks or share them with the PUC. Also, PPA regulations not only require that the government perform the background checks, but that all felons are excluded from having a license until five years have passed from sentencing, including  probation or parole – whereas under PUC regulations, convicted felons may be immediately placed on the road pending a review.

As to the issue of having all for-hire service regulated under one roof, no compelling reasons were offered for the IATR to support having limousines regulated separately. No different level of expertise, inspection equipment or any other reason has been established that would justify transfer of jurisdiction from thePPA to the PUC. Absent such justification, the common regulatory standards that are applied to drivers and owners of both taxicabs and limousines would make uniform licensing and enforcement more efficient, fair and practical from an administrative point of view. It is a waste of government resources to pay for and develop different systems, hire additional staff and carry out identical functions in two locations many miles apart.

The IATR was happy to come to the assistance of the PPA on this important local matter, at a time of instability and unrest. While the IATR usually focuses on national and international policy matters, it does endeavor to support its members where broader principles are at stake. While the IATR is proud to have both the PPA and PUC as our members, we were grateful that both government agencies opposed the legislation in question.

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THE PRLA RESPONDS: The Philadelphia Regional Limousine Association sends an open letter to former NYC Taxi and Limousine Commissioner, Matt Daus
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Rather then render your opinion that the industry “seeks to declare their independence both in court and before legislation” you should have applied due diligence in obtaining the facts of what our association has proposed as well as the state process of passing regulations. A simple telephone call to members of our association would have clarified the fact that we are not trying to dissolve regulatory authority over our industry--quite the contrary. We are demonstrating to the legislators our need to return solely under PA PUC rules that they properly formulated, promulgated, were heard by the public and Independent Regulatory Review committee (IRC). A careful reading of the applicable legal decisions would reveal that the basis of the decision was the failure of the PPA to follow proper procedure in promulgating regulations and the ultimate preservation of due process rights – a fundamental right under both the Pennsylvania and United States Constitutions. All the court said was that unless you follow the rules, your regulations have no force and effect. You also seem to have discounted the recent legislation introduced by the PPA which would remove the necessity of following rules governing all state agencies in the promulgation and alteration of regulations. In this Commonwealth any agency must promulgate its regulations, publish those proposed regulations in the Pennsylvania Bulletin (similar to the Federal Register) and provide for a period of public comment on the proposed regulations, and have those regulations and comments and reports from advisory groups submitted and approved by not only the independent Pennsylvania Regulatory Review Committee but also by the Pennsylvania Attorney General’s Office, and ultimately by the House, Senate and Governor of the Commonwealth. We would invite your attention to Pennsylvania’s full Regulatory Review Act. The rules and regulations which were devised by the Philadelphia Parking Authority (PPA) had no such review or public comment. It is little wonder that the Commonwealth Court had difficulties with the procedures employed by the PPA.

You state that all the PPA needs to do is “re-promulgate the rules to render the lawsuit ruling moot”. If the regulations are promulgated properly, are subject to the same public and independent governmental scrutiny and under circumstances that are not merely a rubber stamp, then your statement would be correct. So far, the PPA has seen fit to spend money on legal fees appealing the Commonwealth Court ruling rather than follow time tested and lawful procedure. At present those rules are a moving target and can be (and have been) changed at the whim of the PPA. Once more, we challenge the PPA to obey the law and follow legal procedures for altering their regulations. Only if those rules and regulations are the law of the land then, and only then, may they be enforced. Until that time we will be subjected to onerous rules, regulations and aggressive fines administered by the PPA. You discussed compromise, yet when we have sat down in the past with the PPA to review the 93 pages of rules, we could only come to agreement on 24 points. The rest the PPA refused to deal with or discuss a compromise.

The part that is truly confusing in your article is where you state that you testified before the House Committee on Consumer Affairs in opposition to HB2434. While it is true that written comments which were attributed to you were contained in a packet submitted to the House Committee, your article appears to suggest that you were present – a fact which is totally untrue. Had you been present, you would have heard the PPA, a member of the IATR, continue its bashing of the PA. PUC, which is another member of your association arguing that the sole reason for the PPA receiving jurisdiction over any part of the transportation industry in Philadelphia was due to corruption in the PUC. This PUC bashing continues to this date although the PPA has never updated nor has any proof of any of its allegations. Additionally, had you actually presented your testimony orally, you would have been subject to questioning from the members of the Committee. Simply stated, your live testimony alluded to in your article never occurred. You stated that Mr. Ney has told you that our bill was halted. While he may have so informed you, that information may be wishful thinking on his part. No vote was taken that day and Chairman Preston has agreed to a further investigation into the regulatory situation in Philadelphia. This is hardly halting the bill. He said that there in fact additional hearings would be necessary to have the PA PUC present testimony. You state that the IATR board of directors felt that it was necessary to support the PPA.

Let’s take a closer look at the IATR Board of Directors: Vice President, Joe Moira, from Miami, Florida comes from a market that is closed to our industry. Miami limousine permits are a commodity which in order to operate a transportation business in Miami you would have had to participate in a lottery. This lottery no longer exists so you must purchase the permits from existing companies for upwards of $20,000 per permit. Only the large companies grow in that market and small operators are closed out of the market. In South Florida, every municipality can require permits. The joke in that market? “Ford is designing a new window for the Town Car to accommodate all of the permits”. It is not unusual for cars to have up to nine permits on them. Boca Raton requires permits to drop off or pick up in that city but only ten companies have been able to obtain those permits. How does this serve the consumer when they are forced to choose from a limited number of providers? Mr. Daus, can you tell us how this benefits the consumer?

In New York City, your former jurisdiction where you presided as Commissioner of the Taxi and Limousine Commission, operators from other counties are forced to pay into separate Taxi and Limousine Commissions in their domiciled counties in order to drop off and pick up in New York City. Those counties without Taxi and Limousine Commissions are closed out of your reciprocity agreements. There is not a single, unified set of regulations in the state of New York, only each TLC regulations as each county deems appropriate. Mr. Daus, can you tell us who benefits? Certainly not the consumer in those counties that do not have TLC’s.

As a non-profit association, we are disappointed that the IATR would choose to get involved in this issue without understanding all of the facts particularly where it pits one IATR member against another.

While you are entitled to your opinion, your article contains many factual inaccuracies. First, the limousine industry does not seek “to declare their independence from regulation” as you so boldly declare. Perhaps you gained this opinion by the prepared remarks of Mr. Fennerty of the PPA who declared that the “PA PUC was corrupt, dysfunctional and it would be like returning to the Wild West” should they have sole regulatory authority over our industry. If you would have taken the time to read the proposed legislation yourself you would have discovered that it does several things:

1. It provides that any limousine operator who possesses a valid certificate of public convenience issued by the Pennsylvania Public Utility Commission is exempt from PPA rules, regulations or fees. §5741(g)(1);

2. Requires all limousine operators who operate only a point to point service within the jurisdiction of the PPA (read the City and County of Philadelphia) to be subject to all of its applicable rules and regulations;

3. Permits the PPA to enforce the rules and regulations of the Pennsylvania Public Utility Commission within its jurisdictional limits §5741(g)(4); and

4. Prohibits the PPA from creating any new classification of motor carriers such as a New York City type “black car” service.

The specific language of the proposed legislation is a far cry from independence from regulation. What it does do is remove dual regulation from the limousine industry which you purport to oppose. Significantly, HB2434 does not affect the PPA’s authority over taxicab operations. The argument of whether the furnishing of taxicab service is more local than the generally state-wide operating authority of limousine companies is the subject of another debate not germane to HB2434.

Certain aspects of your “testimony” ring true. For example, you express the view “that it would be more effective and practical as a general rule for ‘all’ for-hire ground transportation to be regulated by a single entity – not multiple entities.” This is precisely what H.B. 2434 would do for the limousine industry. It would reverse the establishment of two regulatory agencies to which the limousine industry must answer; two regulatory bodies that impose different rules and regulations on an individual carrier.

To illustrate the difficulties imposed by dual regulation as it currently exists in the Philadelphia area, the following example is offered:

If a family flies into the Philadelphia International Airport and has made a prior reservation to be taken from the airport to their home in Harrisburg, that transportation would be subject to the regulatory authority of the Pa. PUC. If, however, upon entering the vehicle, the passenger announces that they would like to get a bite to eat in the City of Philadelphia, that portion of the trip would be subject to regulation by the PPA. If the carrier did not possess the requisite certificate from the PPA, the passenger is presented with two options: (1) forego the family meal in a restaurant in Philadelphia, or (2) disembarking from the vehicle, securing transportation from another carrier for the Philadelphia to Philadelphia portion of the trip and then returning to the original carrier fort he trip home. PRLA suggests that the above does not aid the restaurant or tourism is the passenger foregoes doing business in Philadelphia or constitute the furnishing of reasonable service to the customer. It is the perfect example of why your suggestion of single entity regulation is perfectly valid.

PRLA’s point is this: we agree that “where a government has established a regulatory entity . . . that it would be more effective and practical as a general rule for ‘all for-hire ground transportation is regulated by a single entity – not multiple entities.” The proposed legislation does precisely what you suggest. For all limousine companies that desire only to provide point to point service within the limits of the jurisdiction of the PPA, the PPA would continue to regulate those companies. For all limousine companies that possess authority to provide service outside the jurisdiction of the PPA, they would continue to be able to provide service to and from Philadelphia without subjecting themselves to an additional layer of regulation.

PRLA also submits that in order to prevent discriminatory treatment or preference over local as opposed to regional carriers, that entity should have state-wide authority with the ability to enforce uniform rules and regulations throughout the Commonwealth. What also cannot be denied is that on July 16, 2004 with the signing of Act 94, Governor Rendell created a second entity to provide regulatory oversight in a geographical subpart of the Commonwealth, clearly violating your “single entity” principle.

You state that reverting back to PUC rules would mean less safety for the consumer when you yourself have said in public meetings that “the luxury limousine industry is self regulating and that we were not really the concern of yours”, when you were the TLC commissioner—“only the taxis were”. Regarding background checks, we would not be opposed to having them conducted by the PUC. Our insurance carriers also require background checks. We wonder how well background checks are when done by the PPA when the department of Immigration and Homeland security recently conducted a sting and arrested over 25 individuals for being in the country illegally all of which held PPA issued Taxi and Chauffeur licenses that included a PPA background check. Additionally, we as an industry have on numerous occasions informed the PPA of convicted felons that hold a PPA issued Taxi and Chauffeur license to which we have been told that they “made a mistake and have been granted an exception”.

You also point to the fact that under the “PPA regulations, a car with 350,000 miles or more would be taken off the road and fail inspection, while PUC regulations would allow vehicles with unlimited mileage to stay in service.” While this is almost correct, you apparently have not read the Pa. PUC regulations which require any vehicle that is more than 8 years old to be removed from service unless it meets a rigorous inspection standard regardless of the number of miles on its odometer. Your statement implies that once a vehicle reaches 350,000 miles on the odometer it is unfit for service and must be replaced. Such is simply not the case. As provided by PPA rules, if the vehicle is less than 5 years old, you may run it for an additional year even if the mileage is over 350,000 if a waiver is requested. Of course, the waiver costs the vehicle owner $200.00 and an additional inspection fee of $75.00. While waivers can be obtained from the PUC there is no fee attached to the filing of the waiver or the resulting inspection. If however, my vehicle only has 349,000 miles on the odometer, I may run it for an entire year without any problem from the PPA. This is hardly a ringing endorsement of PPA safety requirements.

You also appear to hint that you may operate a limousine under the jurisdiction of the Pa. PUC without having that vehicle inspected. Such is not the case. Not only are all vehicles in Pennsylvania subject to inspection under the Pennsylvania Motor Vehicle Code by certified inspection stations, but they are inspected annually by the PUC Enforcement Division. This is in contrast to the PPA testimony where the House Committee was informed that the PPA inspects only ¼ of an operator’s fleet every year. Accordingly, a vehicle may be inspected by the PPA only once every four years. This is hardly a ringing endorsement of PPA’s inspection procedures. One must not forget that the PPA requires an owner to bring his vehicles to Philadelphia to be inspected at a PPA sponsored garage (at an additional charge). If I have a fleet of 40 vehicles in Harrisburg and make runs in Philadelphia, and assuming that the PPA inspects ¼ of an owner’s fleet every year, I am required to drive 10 of my vehicles to Philadelphia for an inspection in addition to the required state inspection required by the Motor Vehicle Code and the Pennsylvania Public Utility Commission.

Finally, the PRLA does not care who is responsible for enforcement of properly formulated and promulgated regulations. Those of us who believe in providing a quality product for the convenience of the citizens of the Philadelphia region only wish to be afforded the opportunity to compete on a level playing field with the rest of the Commonwealth and not be burdened with the current dual regulatory environment. We do not wish to strip the PPA of any of its regulatory oversight for those individuals who only wish to provide service within the boundaries of the PPA’s jurisdiction. We do not want to strip the PPA of its ability to inspect the vehicles of those carriers. We do not wish to strip the PPA of its ability to enforce the same regulations of the Pa.PUC that are applicable everywhere else where we operate. That is the purpose and effect of the enactment of HB2434.

We are also questioning why the PPA has taken in over $492 Million during the past 5 years with less then $4 Million distributed to the Philadelphia school system as was originally promised to the legislature when the entire PUC budget over the past 5 years has not exceeded $250 million. What is startling is that the PUC’s budget which is funded by the payment of annual assessments covers the regulation of not only the transportation industry but also railroads, electric and natural gas companies as well was water and sewer operations.

Here are some of the facts which you have not considered in your “testimony”:

• Under the PUC it cost an operator $3091.00 to enter our industry. Under the PPA it now cost that same operator $30,036.00. This is based upon a typical start up operation of: two sedans, one SUV and one van. The numbers include authority licensing, vehicle registration, chauffeur licensing, vehicle state inspections for a four year period of time.

• The fines charged to the industry are astronomical compared to other parts of the country.

o First offense of a chauffeur not having a PPA issued license, of which the majority of the questions asked are about operating a taxi cab (this is the five day course and testing of which you are referring to): The Fine: $125 to the chauffeur and $1000 to the licensed operator. There is no second offense—it goes right to a third offense where the chauffeur gets a $500 fine and the operator gets a $1000 fine along with license suspension for 30 days. (In Pennsylvania, the fine for driving without a regular driver’s license is only $250.)

o Additionally, if you merely pay $80 and get a CD you do not have to take the driver education course which you cite as one of the safety issues in favor of the PPA.

o We have duplication of inspections between the PPA and State for our vehicles. So we pay twice for an identical inspection. This does not include the expense of taking the vehicle to the PPA only inspection facility (driver fees, fuel, vehicle out of service until inspection process completed)

o Although the State of Pennsylvania has a Sunshine law, minutes of PPA meeting can only be obtained by submitting a request under the Pennsylvania Right to Know Law.

Due to the lack of space in any magazine, we cannot detail the many other inconsistencies in your testimony and that provided by the PPA to the House Consumer Affairs Committee hearing. While, of course, you are entitled to express your opinion, we believe that any conclusion that you formulate should be based upon the facts and an unbiased view of our industry.

Respectfully, The Philadelphia Regional Limousine Association .

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PRLA LETTER FROM THE PRESIDENT

As President of the Philadelphia Regional Limousine Association (PRLA) , I would like to welcome you to one of the best resources your company can find.

The PRLA continues to honor industry representatives coming together to share information, network, become involved in regulatory initiatives and to promote the industry to the riding public. We are intimately involved in these areas and have garnered much success in multiple environments. Due to this involvement, the association was recognized with the highest industry acknowledgement- “Limousine, Charter & Tours 2008 Association of the Year Award Winner”. This recognition did not stop with this award as we actively participate with local, state and national regulatory agencies while promoting our philanthropic values to the communities we serve. These efforts provided more benefit to our members with:

• Philadelphia Airport Commercial parking - concession of waving the AVI transponder and annual account maintenance fees for PRLA members
• Philadelphia Parking Authority - significant reduction of the original vehicle registration fees, expansion of the vehicle age and mileage requirement, rescission of the “remote carrier” requirement for registration and a plethora of other items
• Public Utility Commission of the Commonwealth of Pennsylvania - the governing body that oversees our industry within the commonwealth, face-to-face meetings with the Board Chairman, Transportation Director and legal staff. During these meetings we were able to further review and comment on topics directly affecting our livelihood. This included, but not limited to, UCR status, successful repeal of a portion of the increased annual PUC assessment, the PPA and the Avis/WeDriveU proposed program.
• Sunoco - all members can benefit by the total volume of fuel purchase by receiving the highest industry rebate of 3%. The association also benefits direct with a ¼% rebate when certain total volume purchases are met also
• National Limousine Association - besides the many benefits associated with belonging to this organization, the PRLA receives a rebate for all PRLA members who join this organization
• Vendor Members - a wide variety of vendors (insurance, coach builders, car dealerships, web hosting service, marketing tools, vehicle parts suppliers, etc) provide significant discounts for their services, hosting of “mini” conferences, training seminars along with their vast industry business experience
• Philanthropy - annual St. Christopher's Hospital for Children “Limo by Santa” event, Alex Lemonade support as well as Susan G. Komen Breast Cancer organization

This is a small sampling of the benefit you too could acquire. I invite you to be a part of the solution, a part of our success, a vital participant to the industry by maintaining a membership with fellow industry representatives at the Philadelphia Regional Limousine Association.

Respectfully,

Philip S. Jagiela
President
Phone:800-573-5466

P.O. Box 653
Richboro, PA 18954-0653
Phone: 215.322.4114
Fax: 215.396.2772
E-mail: Philip.J@aries-limousine.com

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