California operators helped create backdrop for big Uber decision

California operators helped create backdrop for big Uber decision

The stunning upset decision by state officials April 26 that legally deems Uber a charter party carrier, also known as a commercial ground transportation company, will reverberate throughout the industry and likely spur resolutions to some basic questions of how Uber operates, state limousine industry advocates said Friday.

“We’re very pleased the California Public Utilities Commission (CPUC) has taken a firm stance on managing Uber,” said David Kinney, the legislative coordinator, treasurer, and former President of the Greater California Livery Association (GCLA). “We look forward to a continued focus on their business practices. This could have repercussions down the road. It is a shift in how the PUC approaches Uber specifically, and this is very big for us and a big win for everybody.”

The GCLA, the largest state-based trade group in the chauffeured transportation industry, has spent years behind the scenes gradually courting and educating a long roster of state regulators, legislators, and bureaucrats on the lack of regulatory fairness between transportation network companies like Uber and the legal, licensed charter party carries like limousine services.

The outcome also serves as a model example of how a small, modestly funded trade group made up of Main Street businesses can play a role in public policy despite contending with a mega-monied, lobbied-up ground transportation service masquerading as a technology company.

“It’s a great day in the great state of California,” said Mo Garkani, the CEO of Long Beach-based COTS Group and GCLA President. “All the hard work of the GCLA, the National Limousine Association (NLA), and the Advocates For Fairness in Transportation (AFT) have finally paid off. Now everyone can see what California operators can do and follow our footsteps to hopefully get all TNCs in or out of the U.S. to obey the same rules and regulations as legal transportation operators.”

In a statement released Friday, AFT, a Los Angeles-based political action committee and advocacy group, said, “We applaud the CPUC decision that Uber Technologies, Inc., is both a transportation network company (TNC) and a charter party carrier (TCP). The CPUC decision to classify Uber as a charter party carrier levels the playing field by holding Uber to the same licensing standards as traditional services. Obviously, the decision did not apply to the entire range of Uber services, but it is a step in the right direction.”

AFT is lead and funded by operators connected to some of the largest chauffeured transportation networks in the industry. Its leaders include David Seelinger, owner and CEO of Empire CLS, Cheryl Berkman, owner and CEO of Music Express, Michael Fogarty, CEO of Addison Lee for the Americas, and Jonna Sabroff, vice president of development for Wilshire Limousine Services.

“This is something that didn’t happen overnight and we have to give credit to a lot of people,” Garkani added. “Thanks to everyone who pushed and pushed and never gave up, we finally got some results. But it’s not over yet and just getting started. I encourage all associations to help keep this momentum going and help us fight all the battles we are facing. We’ve been knocking on all doors.”

Garkani most recently led the GCLA’s annual lobbying day at the State Capitol and joined GCLA vice presidents Jeff Brodsly and Harry Dhillon for a private meeting in early April in San Francisco with Lt. Gov. Gavin Newsom, who is polling ahead among state gubernatorial candidates. While the meeting was not directly related to the CPUC decision or to the election, it helped the GCLA build another bridge in its continuing campaign to advocate for a safer ground transportation industry in California.

Dhillon, who arranged the meeting with Newsom, said the lieutenant governor and his aides listened to the GCLA’s position and gained a greater understanding of the overall industry situation in California.

“Kudos to the GCLA for all the challenging work they put in the last four months, and to our industry leaders like Dave Kinney, Kevin Illingworth, Don Mahnke and Gary Bauer, to name a few,” Dhillon told LCT, referring to fellow California operators and board directors. “Dave, along with our lobbyist, Gregg Cook, has built a solid foundation. We will do our best to leverage that and make the GCLA and its members proud. We have made some strong legislative connections over the course of a year and we will continue to strengthen our relationships moving forward.”

Brodsly added, “As a non-profit association, we all work tirelessly for the benefit of the industry, and it’s victories like this that remind me why we do what we do as an association to better the membership. I’m excited to see the GCLA, NLA, and AFT collaborate on this issue and bring home a win for California.”

While the CPUC decision redefines the terms of the debate of how Uber is categorized and stands tall on symbolism, it is somewhat limited in its overall sweep, Kinney cautioned. “This is an Uber issue, not a TNC issue.”

For example, the decision does not require any changes to Uber’s labor practices and how it classifies drivers, since in California a ground transportation operation technically can hold a TCP license but farm out all rides to licensed carriers. The decision could influence or be used in arguments before courts and agencies weighing questions about whether to classify Uber drivers as independent contractors or employees.

The process leading to the CPUC board vote stemmed from the agency’s view of Uber only, and it does not apply to Lyft or other TNCs, Kinney said. “It’s one more piece in our fight in how these two entities (Uber and Lyft) are regulated and how we achieve parity.”

Kinney noted, however, the CPUC strongly rebutted Uber’s stance and arguments during the proposal process. “All of that means the PUC is being more aggressive toward Uber.”

Continue reading:

  • In California, Uber will now have to behave as a commercial ground transportation company.

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