Last year Avis Budget Group partnered with WeDriveU to create Avis Chauffeur Drive, which connects rental cars with drivers for customers who want chauffeured service. Now South Florida limo operators are contesting the rules that govern this business model.
Because Avis Budget is not classified as a limousine operator, it is not required to license its chauffeurs or meet the stricter safety requirements of the limousine and chauffeured transportation industry. One consequence is that Avis has to pay less for licensing and labor.
Such disparities prompted a meeting of South Florida limo operators and local regulators from Palm Beach, Broward and Miami-Dade counties in late September. The meeting, hosted and organized by the Florida Limousine Association, drew about 20 operators/association members along with various code compliance officers, airport law enforcement officers and consumer affairs officials.
“Our only concern is that as a new competitor Avis should be regulated as we are,” said NLA President Richard Kane, who attended the meeting. “Now, Avis goes around that public safety net of three or four decades. It uses a technical loophole by nature of its core business, rental car, to get into chauffeured transportation without registering as a chauffeured transportation operator.”
“What happened in the meeting has implications for the entire industry,” Kane said. “In the event local regulators allow them to do this, you’ll see chauffeured transportation companies no longer renewing their licenses, and they will create two separate companies. They will create and market a rental car company and they also will employ a chauffeur service. Therefore, they can be competitive.”
Under such an arrangement, a client would “rent” a limousine from a vehicle company, and then a chauffeur would be assigned from a chauffeur service company. Kane said some operators already have told him they would prefer the Avis business model since it’s simpler and more efficient.
That means limousine companies would no longer employ full-time chauffeurs and would deal with subcontracted chauffeurs only.
Avis (who declined an interview for this story) provides its own vehicles and hires chauffeurs from WeDriveU. This results in the need for two contracts to hire the car with chauffeur, said Ray Garcia, president of the Florida Limousine Association. Avis classifies its cars as private and not vehicles for hire. The WeDriveU chauffeurs are not required to complete the numerous and costly background checks, attend the classes or get the driver identification cards that are required of all chauffeurs in all counties, Garcia said.
Regulators told the operators they realize there is a problem and that they need time to research applicable ordinances and provisions.
Florida Ground Transportation Association President Carla Boroday has called for immediate action to make sure Avis complies. For South Florida operators, a quick resolution is critical since the Avis market intrusion already has hurt business. In one week alone, Avis provided 78 cars and 78 drivers for a convention at Miami’s Intercontinental Hotel, for an entire week, 24 hours a day, Garcia said.
Kane said the NLA opposes any measure or situation that compromises the safety of passengers. The NLA would prefer to maintain the current regulatory and safety structure, and make sure Avis complies. The regulatory disparities can only be addressed at the local level since there are no federal authorities, administrative rules or legislation that govern this issue. “Unfortunately, every one of these regulatory agencies has a different way of doing things,” he said.
The NLA plans to send letters to as many local officials as possible about the need for consistent regulations for chauffeured and rental vehicle services. The Avis issue in South Florida also has emerged in many major cities, including San Francisco, Houston and New York, in particular.
While Kane said he personally does not agree with the Avis business model and approach, there are chauffeured transportation owner-operators who believe Avis is leading the path to deregulation at a local level. “I’ve heard from 20 companies,” Kane said. “If Avis is allowed to do this, they will follow. It changes the whole game.”
Martin Romjue is the editor of LCT, Limousine & Chauffered Transportation Magazine.
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