Business Opportunities Weblog

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  stewart on February 19th, 2009 7:50 am

  Wanted: A Level Playing Field
  The Limousine Industry Calls Avis Chauffeur
  Drive to the Carpet
  by Liz Hunter

  Not all of us saw it coming. Not all of us took the threat seriously. But now, in the middle of a recession where price means almost everything, the Avis Chauffeur Drive program is capitalizing on the industry’s weaknesses with a mass hiring
  wave in some of the nation’s largest markets. Advertisements
  for chauffeur positions have been posted in Atlanta, Chicago, Denver, Philadelphia, D.C., and more. Twenty-eight in all. For those not familiar with this program, it’s time to get educated because it could be coming to your city soon. Avis is a rental
  car company that also happens to own a 45 percent stake in Carey International. WeDriveU is a chauffeur rental service. Combine the two and you can have a rented vehicle driven by
  a rented chauffeur. Sounds a lot like the model for the livery industry, doesn’t it? But Avis isn’t really operating up to the same standards as our luxury ground transportation industry. As we’ve reported previously, members of Florida Limousine Association (FLA) decided to use the service, and videotaped the entire trip for educational purposes. The vehicle provided to them was a Hyundai Sonata—not exactly classified as luxury. On top of that, there is nothing that shows Avis Chauffeur Drive licensing or background checking its chauffeurs, nor are the vehicles being outfitted with the proper permitting stickers. Yet everyday groups, corporate executives, and other travelers use Avis to get around, unaware of the potential danger and liabilities—insurance and otherwise—they risk when getting into one of these vehicles. As Chauffeur Drive gains momentum across the country, operators are taking up the fight—a large majority of them using power in numbers. Associations are leading the charge fighting the cancer that is spreading and further weakening our industry. Florida is ground zero. “It is literally destroying Florida,” says Barry Lefkowitz, executive director of Limousine Associations of New Jersey (LANJ). “This is a crisis of major proportions. The industry cannot roll over and play dead and just let somebody put us out of business.” Operators from Florida to San Francisco are asking Avis for one thing: a level playing field. “It’s a free country. If you want to go into business that’s fine, but you need to be operating on the same playing field as the rest of us,” says Carla Boroday, president of Florida Ground Transportation Association (FGTA) and owner of Associated Limousine Services in Hallandale, Fla. “The fact that Avis is operating without having to jump through the hoops we have to jump through just to be in business is ridiculous. We want to see them stop, cease and desist otherwise.” Boroday gives several examples of the ways Avis is violating local and state regulations in Florida. For one, there is no universal county license; her chauffeurs must have licensing in all counties. Her vehicles must also be licensed in each individual county. “We have a lot of vehicles, and let’s say for instance one of my chauffeurs takes the wrong car, arrives at Miami’s airport, but doesn’t have his Miami identification, even though he is licensed,” she says. “He will be fined $1,000. On the other hand, the Avis drivers don’t need any certifications and they don’t even have AVI transponders on their vehicles.” AVIs are required on all for-hire vehicles coming in and out of Miami International. Disregard for the industry’s regulations on Avis’ behalf has been something that operators in the New York City area have pointed out for nearly a year. There have been several meetings between National Limousine Association (NLA), Black Car Assistance Corp (BCAC), LANJ, WeDriveU, Avis, and NYC Taxicab & Limousine Commission (TLC). Victor Dizengoff, BCAC executive director, has attended these meetings and says it is all a work in progress. “It’s an issue in flux right now,” he says. “Our thoughts are that if we all have to be regulated, then there’s no reason Avis can’t play the game the same way.” At press time, BCAC had lawyers involved to draft regulatory language and to urge TLC to take some action. Lefkowitz sat in on some of these meetings as well. “We’ve made it most clear that if TLC allows WeDriveU to do what it is doing, then limousine companies are going to adopt the same template and TLC would end up with no one to regulate,” Lefkowitz says. “It puts TLC between a rock and a hard place because Avis could sue for restraint of trade, but then our industry could sue if this went forward without the service meeting the same responsibilities required of limousine and black car operators.” Drivers with unknown backgrounds frightens Mike Ballard, chairman of Maryland Limousine Association (MLA). As the country’s most historic inauguration is upon us, Avis Chauffeur Drive is of course advertising in the nation’s capital to provide service during inauguration week. “There are at least 5 million people coming into D.C. on inauguration day,” says Ballard, co-owner of Hire Quality Limousine in Bel Air, Maryland. “Unknown drivers will be working this event, possibly driving politicians, and it’s our duty to say something to the regulating authority about this.” Ballard has been in contact with Maryland’s Public Service Commission (PSC). He sent his contact at the agency the Chauffeur Drive recruiting information and explained his fears. Like Lefkowitz, Ballard has mentioned the possibility of the limousine industry adopting the Chauffeur Drive template. “I told PSC if it cannot control Avis, I will write a letter to operators in Maryland saying, ‘You are now a vehicle leasing company and people can rent your chauffeurs. Scrape off your permit stickers and get regular vehicle tags.’ PSC could no longer regulate us and no longer take money from us.” Ballard has alerted local news media about this issue as well. Joanna Fridinger, MLA president, says, “This isn’t getting attention from anybody except for within our industry. The only way the public is going to be aware is through the media.” The limousine industry has high standards for its chauffeurs: intensive training, stringent insurance requirements, background checks, drug tests, and various licensing. If one can’t make it through this process, what would stop him from going to Chauffeur Drive where he doesn’t have to go through half of that and still make decent money? The chauffeur advertisements offer $15 per hour, which is appealing considering the economy. Boroday has had chauffeurs leave her company to work at Avis. “We put our chauffeurs through a two-day class, fingerprinting, background checks, and without their chauffeur ID they can’t drive, so it’s easier for them to just go to Avis,” says Boroday. Clients are also looking for a better deal. Avis is charging about $35 an hour for its Chauffeur Drive service. “We have a legislative minimum in Florida and that is way below,” says Boroday. “Businesspeople or destination management companies (DMC) are going to look at the difference between $35 and our $55 per hour and say the limousine is too much, especially once our gratuity, surcharges, and airport fees get tacked on.” While associations in the New York area and Florida have some lawyers involved, some other options can be explored to help prevent Avis from operating, says Lefkowitz. “It really has to be looked at on a state-by-state basis,” he says. In New York, the industry will need help from surrounding states to get legislative language passed. The Limousine Association of Houston acted fast and stopped Avis from operating there. Airports may also be of help, an unusual ally considering the industry’s relationship with them. San Francisco International, Sky Harbor in Phoenix, and Denver International have all come out and said the Chauffeur Drive program cannot be done there, and Atlanta Hartsville made it clear that it could not operate there. Philip Devlin, VP national operations for Cooper-Atlanta Transportation Services, says the airport has not formally gone on the record with its position, however. “The airport says it doesn’t see the value of Avis becoming involved in Chauffeur Drive because it would be a detriment to the rest of the livery industry,” Devlin says. “If we’re driven out of business it’s no good for the clients the airport is servicing.” Devlin is aware of Avis advertising for chauffeur positions in Atlanta, but says none of the jobs the program has done have been at the airport. “The airports can be our ally in this situation,” says Devlin. “There is revenue on both sides. Airports get money from rental car services and limousines, so why would they want to cut one out of that equation?” Avis Chauffeur Drive is a local problem various markets are facing, but one that will soon become a national epidemic if nothing is done. Lefkowitz says operators should not only contact state legislators to raise awareness, but also their state associations because that is who is going to pick up the ball and run with it. “If this continues,” says Lefkowitz, “the industry is on the brink of becoming obsolete.” LD
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  stewart on April 24th, 2009 11:28 am

  Another Avis Victory; Score 5-0
  “HOUSTON, WE DON’T HAVE A PROBLEM!”

  Joe Jordan, president of the Limousine Association of Houston, reports:
  (Note: Portions edited by LCT Magazine)

  HAIL, HAIL, THE WICKED WITCH IS DEAD. In a stunning series of events, the City of Houston Aviation Department, Finance and Administration Department, Transportation Department, Administration and Regulatory Affairs Department and the City Controller all sent urgent memos to the Mayor and City Council affirming that the Avis WeDriveU program was illegal and that immediate action was necessary to ameliorate the situation.

  The Avis corporation concocted a nationwide scam wherein they would rent a car on one piece of paper and the on the piece of paper under it you would “Rent” a private driver, thereby evading the taxi and limousine ordinances. It’s a wonder they didn’t try to sell a fake Rolex watch in the same transaction. All very slick if you can get away with it.

  In the City of Houston, limousine companies must have a license from the city and have large commercial insurance policies with the city named as an additional insured. Each vehicle must be licensed and inspected by the city and have Texas plates and inspection. Property taxes to the city and the county are also levied on the vehicle. The chauffeurs must pass stringent FBI background checks with no felonies the last 10 years and be finger printed and drug tested and have a doctor’s physical exam. All that data must pass through a certified chain of custody process through the Houston Police Department. The city is obligated to take these measures to protect public safety and health. Avis chose not to be trifled with and took the illegal path, becoming what the limo industry calls a “gypsy operator,” one who has no permits or insurance and skulks about going “psst-hey buddy want a limo at a cheap price?”

  Here is the deal: The City of Houston Chapter 46-231 Ordinance states: “It shall be unlawful to lease a car including the service of a driver unless the person has a current and valid City of Houston Limousine Company License”. Sounds straightforward enough, right? Avis, however, saw what they felt was a loophole. If they use a totally separate company for the drivers, they have not supplied the car and the driver together, or so they thought.

  How does the federal government look at these sorts of arrangements? Take airplanes and boats. If you rent an airplane and hire a commercial pilot, or if you rent a boat and hire a Coast Guard licensed captain and then charge people to ride on them, you now have a commercial airline service and a licensed commercial passenger vessel subject to all the laws of the FAA and the USCG. You are no longer a private citizen attending to a private matter.

  We recommended a course of action to other limousine associations around the country to look into the concession agreements and ground leases for rental car agencies at the airports. These are very tightly written. “Subleasing” or “boothsharing” are not permitted, or the airport terminals would become flea markets complete with wandering minstrels and carnival hucksters. For instance, a magazine stand cannot sell mixed drinks and a shoe shine stand cannot sell airplane tickets. You can only provide the specific products or services permitted by your concession and ground lease.

  Here’s where Avis’ incompetent attorneys dropped the ball. We are in possession of a letter sent to the Limousine Association of Houston dated 10/24/2007 by Avis’ Chief Legal Counsel, Frederic R. Grumman. He said, “Avis has a partnership with WeDriveU” and “Avis facilitates our customers seeking such services” and “Avis receives no portion of the payment” but “WeDriveU drivers are additional authorized drivers on our rental agreement”. (Can anyone say SUBLEASE, ENABLER, FACILITATOR!!!!!)

  Like luring longhorn cattle into a box canyon, here is how we corraled the Avis chauffeured operation:

  1) If the chauffeurs are de-facto Avis employees, then Avis is violating the Taxi and Limousine Ordinance.

  2) If WeDriveU is in fact a totally separate company, then it is illegal for them to send employees(Chauffeurs) onto airport property and operate out of Avis facilities because they have no concession or lease privileges and are in fact trespassing as they are on airport property without a legitimate reason to be there.
  EITHER WAY, THE AVIS WeDriveU OPERATION IS TOTALLY ILLEGAL AND WAS DESIGNED TO BREAK THE LAW AND ENDANGER PUBLIC SAFETY WITH UNLICENSED CHAUFFEUR AND UNINSPECTED OUT-OF-STATE VEHICLES

  The Limousine Association of Houston would like to thank all the city departments who responded so forcefully to this scandalous affront of law and order and the common decency of the citizens of Houston. A very clear message was sent to Avis that their type of inappropriate business behavior is not tolerated here.

  The Limousine Association of Houston is now in the company of other limo associations in Phoenix, San Francisco, Atlanta, and Miami who have been successful in holding regulators’ feet to the fire and have them enforce the the laws designed to protect the traveling public in interstate commerce.

  We also feel that Avis’ stockholders should call a special meeting and demand that the Avis CEO, COO, CFO and Board of Directors do the right thing and submit their resignations for their ill-advised and illegal pursuits that evade the laws governing the regulation of their industry.

  The Limousine and Taxi Industries in Houston have now been protected for generations from unscrupulous interlopers such as Avis, thanks to the efforts of the Limousine Association of Houston and the multitude of public officials who stepped up to the plate, did the right thing, and won the game for the citizens of Houston.

  Joe L. Jordan, President
  LIMOUSINE ASSOCIATION OF HOUSTON
  P.O. Box 640
  Kemah TX 77565-0640
  713 680-3181
  http://www.houstonlimos.info
  PHOTO CAPTION: Left to right: Limousine Association of Houston President Joe L. Jordan and Board Members Richard Mishriky, Linda Pomerleau, Dave Hutson and Erich Reindl. (Not pictured, Vance Lane
• 

  stewart on April 24th, 2009 5:31 pm

  BREAKTHROUGH! Avis Agrees To Halt Miami-Dade WeDriveU Operation
  March 25, 2009
  MIAMI — The chauffeured transportation industry scored a major victory Monday with confirmation that Avis WeDriveU has ceased its operations in Miami-Dade County.
  The county had become a national focal point for the controversial Avis chauffeured drive model which avoided the rules and regulations required of chauffeured transportation operators of luxury vehicles. By not playing on a level playing field, Avis WeDriveU had the potential to seriously undermine the longstanding business model of chauffeured transportation operators and thereby radically remake the industry. Avis also was not required to follow the consistent standards of safety, reliability, and quality that have become the hallmarks of law-abiding, license-paying chauffeured operators.
  The Miami-Dade County Consumer Services Department ruled that Avis would have to follow country ordinances that require permits, fees, licenses, safety and background checks, and other regulations that apply to luxury chauffeured vehicles, said Ron Sorci, president of the NLA and CFO of Miami-based Aventura Worldwide Transportation. Avis had managed to avoid these rules by forming two separate companies — one for its chauffeured rental vehicles, and another one for its chauffeur service.
  The department told Avis they were not in compliance with the rules and regulations of the county’s chauffeured transportation ordinance, Sorci said. Officials also determined that Avis was violating its concessions agreement with the Miami International Airport. As a result, the Consumer Services Department received a letter from an Avis attorney confirming that the car rental agency had ceased its chauffeured service in the county, Sorci said.
  Sorci said the decision has national implications for the industry. “The same arguments we made in Dade County are the same arguments you can make in other counties throughout the U.S.”
  Since Avis began operating, the NLA, the Florida Ground Transportation Association, the Florida Limousine Association, the West Florida Limousine Association, and other NLA-affiliated associations nationwide have been blowing the whistle on such regulatory inequities. The decision against Avis this week culminates many meetings between association leaders and county officials, industry awareness efforts, and a videotaped expose of Avis chauffeured practices that were given to the Miami-Dade department.
  Miami now joins Phoenix and Atlanta as the cities were Avis chauffeured operations have been beaten back, Sorci said.
  The Miami-Dade decision concludes this phase of a 15-month battle for Carla Boroday, president of the Florida Ground Transportation Association and owner of Associated Limousine in Miami. Boroday was instrumental in first alerting the department to the Avis problem in the first quarter of 2008. She and other operators then repeatedly met with the Consumer Services Department through its Limousine Advisory Board.
  “As far as we’re concerned, Avis was like a gypsy operator,” Boroday said. “They didn’t follow all the rules and regulations like everyone else did.”
  Boroday said issuance of the final decision took a long time because the department wanted to make sure Avis would cease chauffeured operations at all airports and venues throughout the county.
  Avis also is supposed to pull any WeDriveU advertisments in the county, she said.
  Boroday remains cautiously optimistic that the problem has been resolved. Avis can still retain WeDriveU as a separate company, and continues to advertise the services of chauffeurs for clients’ personal cars, instead of rental cars.
  “I hoping that this is the end,” Boroday said. “But what’s to stop WeDriveU from hooking up with someone else? Can they still be a personal chauffeur service? Is that a way of getting around it?”
  A recent letter to a client promoted a $36.80 per hour personal chauffeur, with the first hour free. “Why waste thousands of dollars on limousine services?” the letter stated.
  Now, the FGTA and other associations need to tackle the Avis chauffeured operations in other counties, such as Broward and Palm Beach, where going after the company is a bit more difficult.
  Miami-Dade was a logical focal point for the battle because of its heavy regulatory atmosphere, Boroday said. “If ordinances were to be broken, that’s where they’d be broken. Palm Beach is open entry where it’s more difficult to stop.”
  Scott Solombrino, CEO of Dav El Chauffeured Transportation Network and an NLA board member, said the decision marks a strong beginning to the eventual end of Avis inroads into the chauffeured transportation market.
  “I think it starts to show that the regulators are now paying attention to operators trying to skirt the regulations and operate illegally,” Solombrino said. “This gives us huge credibility with other regulators, and gives us an example that says these people are breaking the rules and the laws.
  “In short order, this program will no longer be viable for Avis.”
  Solombrino said this decision is a “very positive step in a long process.” “I’m very excited about it. People are finally listening to us.”
  The next fronts in the Avis battle will center on the New York Taxi and Limousine Commission and the California Public Utilities Commission. Solombrino predicted that the NY TLC’s standards will set the benchmark for other municipal regulators nationwide.
  During a recent Limousine Associations of New Jersey meeting, TLC Commissioner Matt Daus appeared favorably receptive to the industry’s argument that Avis operates outside of the rules, Solombrino said. “Matt Daus gave us hope that they would take a hard, aggressive look at this.”
  As to Avis still promoting personal chauffeurs, Solombrino said the correct concept of a personal chauffeur is essentially “your housekeeper chauffeuring you to work and then going back to clean your house” — as a hired employee.
  A rented Avis chauffeur still would need to be subject to the same regulations as any other chauffeur, he said.
  “Long term, we are going to win this. This will come out favorable to us.”
  Source: Martin Romjue, LCT Magazine

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