Licence Application Decision

Transcription

1 Licence Application Decision Limousine Additional Vehicles Application # AV Applicant Legacy Limousine Services Ltd. Trade Name (s) Legacy Limousine Principals LALANI, Tajinder LALANI, Rahim Address Applicant s Representative Current Authorization (s) Application Summary Date Published in Weekly Bulletin Submitters (and representatives) Board Decision Decision Date January 20, 2014 Panel Chair A Avenue, Surrey BC V4N 5K8 William McLachlan, Barrister & Solicitor, McLachlan Brown Anderson Special Authorization: Passenger Directed Vehicle and General Authorization. PT Licence #71616 Additional Vehicles Limousines 9 vehicles ( passengers and 4 sedans). The new maximum fleet size would be 14 vehicles including at least 4 sedans. November 6, 2013 Gunter SCHLIEPER dba Classic Livery & Coach Griffin Transportation Services Inc. 6 additional vehicles are approved, including 2 sedans William Bell I. Introduction The applicant, Legacy Limousine Services Ltd. (LLSL) is an established provider of limousine service located in Surrey and serving Highway 99 north to and including Mt. Currie, the Greater Vancouver Regional District (GVRD) and the Fraser Valley Regional District (FVRD) west to but not including Hope, B.C. The applicant currently has a fleet of 5 vehicles. The applicant holds General and Special Authorization. Under its Special Authorization, the applicant may operate both sedans and 6-11 passenger vehicles. It has the following vehicles active: Two SUVs (a 5 passenger Ford Expedition, and a 7 passenger GMC Yukon); two 6 passenger Lincoln Town Cars and one 10 passenger stretch limousine. LLSL has applied to add 9 vehicles to its fleet. This represents a 180% increase in fleet size. If the application is approved, the applicant intends to add the following vehicles to its fleet: Four sedan limousines (3-5 passengers), a mid-size limousine (6-7 passengers), 3 limousine vans (3-6 passengers) and 1 stretch SUV (8-11 passengers). Page 1 Passenger Transportation Board Limo Decision

2 II. Applicant s Rationale & Background The applicant, represented by its counsel William A. McLachlan, McLachlan Brown Anderson, submits that the following factors support the significant addition to its fleet. It has increased the volume of additional business in the past 18 months It is farming out trips to competitors, and It is turning down corporate and business limousine work The applicant submitted an application to add 6 vehicles to its fleet in 2012 (AV272-12). The Board refused the application and published its decision on September 6, In support of this application, LLSL provided the following documents: PDV Vehicle Proposal Public Need Indicators Business Plan Financial Information Disclosures of Unlawful Activity and Bankruptcy Disclosures of Passenger Transportation Ownership III. Relevant Legislation Division 3 of the Passenger Transportation Act (the Act ) applies to this application. The Act requires the Registrar of Passenger Transportation to forward applications for Special Authorization licences to the Passenger Transportation Board (Board). Section 28(1) of the Act says that the Board may approve the application, if the Board considers that: (a) there is a public need for the service the applicant proposed to provide under any special authorization. (b) the applicant is a fit and proper person to provide that service and is capable of providing that service, and (c) the application, if granted, would promote sound economic conditions in the passenger transportation business in British Columbia. I will consider each of these points in making my decision. Page 2 Limo Decision Passenger Transportation Board

3 IV. Submissions and Applicant s Replies Two submissions opposing the application were received as are summarized below. The applicant raised the following procedural points with respect to the letter from Gunter Schlieper: (a) the submission letter was not signed; and (b) the required submissions fee was not paid. I have determined that the submission was acceptable and that the fee had been paid. 1. Schlieper, Gunter dba Classic Livery and Coach There is no justification for a fleet size of this size. The growth is questionable. The submitter was asked to represent and act as an agent for the applicant earlier in the year for 4 additional plates, but refused because business did not warrant the increase. The applicant was caught operating vehicles with Uber at below the minimum rates and explained it did not know its drivers were working for Uber. Therefore it would be overextended maintaining care and control with 14 vehicles. If the application is based on major contracts that justify the increase then, the additional plates should only be allowed when serving the contracts. Applicant s Response The submitter would have no ability to know one way or another if business justifies an increase. LLSL has never had any dealings or affiliation with Uber and was never ticketed for illegal operation. 2. Griffin Transportation Service Inc. dba Griffin Transportation There should be a well-established existing customer base and current contracts with support letters to show the demand for the additional vehicles. It has come to our attention the applicant violated the Act and Regulations when it was caught operating vehicles with Uber which demonstrates an inability to maintain care and control for 5 vehicles and drivers which will not improve with 14 vehicles and drivers. Page 3 Limo Decision Passenger Transportation Board

4 Applicant s Response The submission offers no specifics on the allegations regarding Uber. The applicant has never been caught operating vehicles with Uber illegally and has had no business or association with Uber at all. The submission is based on conjecture that LLSL does not have the business to justify this application. The application is well founded with support by way of demonstrated evidence showing an increase in business, farm-outs, contracts and an inability to perform service due to a lack of vehicles. The significant increase is directly related to a tripling of revenue. Two of the most significant limousine operators in the Lower Mainland (Star Limousine and Aerocar) are aware of LLSL s operations and this application, but neither tendered a submission. With respect to allegations about illegal operations and safety related concerns, the applicant enclosed a letter from ICBC dated November 22, 2013 noting LLSL s maximum discount for safe driving. The Board gives more weight to submissions that back up general claims with facts or details. I have considered the submissions and the responses in my review of this application. In the course of reviewing this application, I asked Board staff to make several enquiries regarding submitted materials. These enquiries where appropriate are discussed below in my reasons. V. Reasons (a) Is there a public need for the service that the applicant proposes to provide under special authorization? Limousine companies who want more vehicles are expected to prove that there is a public need. Companies are expected to show why its current fleet is not large enough to handle more trips. The Board looks for a reasonable connection between the number and types of vehicles requested and public need. Page 4 Limo Decision Passenger Transportation Board

5 The applicant included the following information to demonstrate public need. 1. Support Letters Nine (9) letters of support came from a range of businesses in the Lower Mainland, including Kavanagh s Limousine, Bell Alliance, Complete Eyecare Optometry, CIBC, a private account executive, Intralink Transportation Services Ltd., Harbour Air/Westcoast Air Seaplanes, Pan Pacific Vancouver and the Holiday Inn Express Vancouver Airport. All provided a positive testimony to the applicant s overall professional service. Several report that more and more people are starting to choose black car services over taking a taxi because the service is more reliable and professional and that there is a shortage of high quality service in the industry. Harbour Air confirmed in its letter that LLSL was providing car service from its downtown and Richmond terminals last year. However, due to a lack of vehicles in its fleet and the growth in use by customers, LLSL could not remain consistent with its service and is no longer providing service. The Holiday Inn Express Vancouver Airport reports, on average, that LLSL provides trips per day for hotel guests and have signed an exclusive agreement with it commencing August 1, The Pan Pacific Vancouver reports its exclusive use of LLSL since January 2013 for its guests. Eight (8) letters of support came from individuals supporting the applicant s request for more vehicles and provided testimony to LLSL s quality service and also noted the lack of good quality local providers. They note the experience of refusal or the use of farmed-out vehicles due to a shortage of LLSL vehicles. One noted the need for an executive high quality VIP service. I note the applicant provided statistics pertaining to the number of trips it provided to the Pan Pacific Vancouver from February 1, 2013 and August 31, Support Documents, Financial Information And Statistics a) 2012 and 2013 (7 months March to September) Recap Statistical Summaries by Car, by Vehicle, by Drivers. The applicant produced these monthly statistics to show business growth and, as well, the comparable number of farm-outs for the above period. I have, in these reports, discounted those vehicles that are listed as those requiring General Authorization authority. For example, Page 5 Limo Decision Passenger Transportation Board

6 48 Pax Coach, Shuttle/Tour Bus 21 Passenger Plus Luggage, Luxury Passenger Van Up to 15 Passengers, Luxury Bus Up to 22 Passengers and Stretch SUV up to 12 Passengers. With respect to the coordinating of farmed out work by Intralink, the applicant reports that this work related to the Times of India Film Awards (TOIFA). In that instance, the invoices to Legacy relate to the overall farmed-out services they organized to a number of licenced operators. The applicant notes that much of this TOIFA work and the farm-out statistics could have been handled by Legacy if they had sufficient vehicles. Because TOIFA represents a one-off event, the applicant did not include this in these comparable monthly growth statistics. The summary of all Special Authorization vehicle types for the 7 month period indicates a growth rate of approximately 96% for all vehicle types. While the comparative data is selective and varies monthly, significant business growth is apparent. Within this period, the growth rate by specific vehicle type showed the following distribution in average monthly percentages in 2013: sedans (77%), SUVs up to 6 passengers (20%) and 10 passenger limousines (2%). Usage of 6 passenger limousines was near zero. b) Farmed-Out of Work 2012 and 2013 (7 months March to September) Recap Summaries by Vehicle Type (Farm-Out) The applicant reports that its statistics indicate an increasing need to rely on referrals to competitors for business that it wants complete on its own. The statistics indicate that for the 7- month period, farm-outs for sedans increased from near-zero in 2012 to more than 6% of trips provided in-house during The increase for SUVs (up to 6 passengers) approximated 6-7%. In 2013, approximately 95% of the farm-outs related to sedan and SUV (up to 6 passenger) limousines. Farm-Out of Work March 1, 2012 to August 31, 2013 These documents show farmed out work to a wide assortment of various limousine providers and represent a significant revenue loss of work to LLSL for the period of time. Approximately 55% of this work included that performed for Intralink Transportation-Global Chauffeur Services during the Times of India Film Awards between April 1 and April 7, Page 6 Limo Decision Passenger Transportation Board

7 Farm-Out Work September 15, 2013 to October 17, 2013 These documents show 24 separate farm outs during the 30 day period. The vast majority (20) were for sedan limousines. The remainder included a stretch 6 passenger limousine, a 6 passenger SUV, a 10 passenger stretch and a 22 passenger luxury bus. c) Reservation (Quote) Requests March 1, 2012 to August 31, 2013 The applicant claims these documents show 508 reservations that LLSL had to turn down or decline and represent a significant loss of potential revenue. The applicant estimates that approximately 95% of the reservations within these statistics are for special authorization operations, mainly sedans and SUVs. My analysis shows the declines for sedan limousines represent over a third of the vehicle types requested, followed by 6 passenger SUVs, 6 and 10 passenger limousines that represent approximately 9-12 % each for roughly two-thirds of the requests requiring special authorization licences. The remainder of reservations listed includes requests for vehicles such as 12 passenger Stretch SUVs, 15 and 22 passenger vans and 21 passenger Shuttle/Tour Buses. The applicant notes that the list of farm-outs does not include business that was simply turned down, but rather business that could not be accommodated by other operators who were too busy. In other cases, LLSL convinced clients to take alternate vehicles it had available to keep the booking. d) Financial Information The Board asked for the following additional financial information: statements of income for 2012 and 2013 special authorization vehicles, if possible. income losses by vehicle type due to farm-out business in each of the years. what assumptions it used in developing projected revenues. The applicant responded indicating its detailed re-cap reports from 2012 to 2013 show significant increases in the reporting time and increases each month. LLSL also reports that its trips have increased by about 100% and revenue by about 145% from 2012 to September Page 7 Limo Decision Passenger Transportation Board

8 With respect to its 3 year revenue projections, LLSL reports there would be significant cost in the first year of vehicle acquisition, but that in years 2 and 3, based on 2012 and 2013 farm-outs and turn downs, it would be able to service the additional business that is available, boosting revenues by 15%. e) Listing of Affiliate Limousine Companies The list shows a North American network of limousine companies that LLSL has become associated with in the last 12 months and who direct their local customers to LLSL when travelling to B.C. The applicant reports that this association has contributed to its significant growth and that although specific record is available, a significant number of bookings were turned down as result of insufficient capacity. f) Canadian Tourism Commission and Tourism Vancouver Statistics Statistics from the above documents include: Canada received 16 million international visitors in 2012 up 2.7% over With spending increases of 2.3% to 12.3 billion dollars. In 2012 Canadians took over 32 million outbound trips to international destinations a 6% increase over Tourism Vancouver Statistics show total international visitors to Vancouver have increased 6.6% in 2013 over The 2013 Tourism Vancouver Sales and Marketing Plan shows tourism is up significantly in Vancouver. Visitors from China, for example, are up 15.9% over Cruise ship revenue passengers to Vancouver increased modestly by 1% from 2011 to Projections, however, for 2013 show an increase of 24% over LLSL notes that the cruise ship statistics have a direct effect on its business as it has become the exclusive limousine provider for the Pan Pacific Hotel which is located at the cruise ship terminal. Further, the second cruise ship location at Ballantyne Pier is now incorporated with the operation at Canada Place. The volume increase in business and the same volume increase from Vancouver International Airport to and from the cruise line terminal is another factor impacting LLSL s business increase. Page 8 Limo Decision Passenger Transportation Board

9 3. LLSL Website The applicant reports that Google Analytics can outline statistics on the website. In 2012, there were 2,580 clicks which in 2013 increased to 10,272 clicks. The report from Google references both clicks and impressions. The latter is a generic inquiry whereas a click is a direct access to the Legacy website presumably by an interested potential customer. The applicant posits that the website is a marketing website, not an information website and while there is no ability to track the number of clicks to a specific customer, the general upturn in business (i.e. a 300% increase in traffic) supports a direct correlation. 4. Findings A plethora of information was submitted without any detailed analyses that would show how the applicant arrived at its request for the increase in numbers and types of limousine vehicles. The applicant has provided support letters, annual growth statistical information regarding trip volumes and farm-outs, reservation declines, financial information and tourism statistics to establish public need. I found the information with respect to reservations and website traffic speculative. These represent, to a large extent, inquiries by prospective individuals about a limousine service and not actual ridership. I accorded the letters of support from business and individual s weight as they referred to vehicle shortages and the lack of service the applicant provides. All of the letters gave strong testimonials regarding the applicant s quality of service. Overall revenue growth between 2012 and 2013 is substantial, but what amount of this revenue is attributable to LLSL s special authorization is not made clear. Despite this, I accorded the re-cap summaries and the farm-out data significant weight as they show business growth and that the fleet of LLSL is operating at or near capacity. In particular, substantial business growth in the need for sedan service is followed by that of SUVs (6 passengers) is demonstrated. Little growth for the other vehicles requested is demonstrated. I find the applicant has demonstrated that it cannot respond to its business growth and its customers need for service. LLSL, therefore, has had to rely on affiliates in the industry to service a customer base it has established. Collectively, the information shows the company is Page 9 Limo Decision Passenger Transportation Board

10 experiencing difficulty serving a public need due its lack of capacity to handle the demand for its services. I find the applicant has demonstrated that public need for sedan and SUV ( 6 passenger) service exceeds their present capacity. The applicant has not demonstrated a need for the 9 vehicles requested. I approve 6 additional identifiers: 4 sedan vehicles and 2 SUVs (6 passengers). (b) Is the applicant a fit and proper person to provide that service and is the applicant capable of providing that service? The Board looks at fitness in two parts: (i) is the applicant a fit and proper person to provide the proposed service; and (ii) is the applicant capable of providing that service? The applicant company has been in operation since 1988 and the acquisition of Legacy by its current principals took place in two stages in 2012 and The principals have extensive management experience in both business and the financial services sector. Drivers of LLSL undergo screening regarding driving tests and criminal record checks. Road tests are performed on prospective drivers to ensure they have the appropriate skill sets. LLSL currently has 10 employees and provided their list of drivers. The Business Plan was basic and indicates the company operates Limo Anywhere software which is a state of the art system that provides online reservation and quotations and tracks limousine trips, driver information and payroll. Other financial information indicates the applicants have the wherewithal to fund the proposed service. The support letters attest to professional drivers and excellent customer service. The applicant was asked for additional financial information in the form of statements of income for 2012 and 2013 and its 3 year projected Statement of Income. The information submitted shows revenue growth and the applicant, in a reasonable manner, explained how their projections were established. With no other information to the contrary, I find the applicant to be fit and proper and capable of providing the service. Page 10 Limo Decision Passenger Transportation Board

11 (c) Would the application, if granted, promote sound economic conditions in the passenger transportation business in British Columbia? There are many markets for limousines. Some limousine companies may serve the wedding or special event market. Others may serve corporations. Still others may offer a specialty service. A healthy, competitive limousine industry provides the public with a range of service options while enabling efficient operators to run a successful business. The Board discourages competition that could unduly harm existing service providers. The applicant is an established operator. The approval of the additional and specified vehicles will allow LLSL to serve a customer base it has established and to capture revenue streams. Although the operating area is well populated with limousine service providers, the demonstrated business growth should allow the marketplace to absorb the added vehicles to the applicant s fleet. I find approving the application will promote sound economic conditions in the limousine industry in the Lower mainland. VI. Conclusion For the reasons above, this application is approved in part as set out in this decision. I establish the activation requirements and the terms and conditions of licence that are attached to this decision as Appendix I. These form an integral part of the decision. Page 11 Limo Decision Passenger Transportation Board

12 Legacy Limousine Service Ltd. Appendix I Licence Required to Operate Vehicles Approval of application may expire The Registrar of Passenger Transportation must issue the applicant a licence before the applicant may implement the amendments approved in this decision. 1. The applicant must activate at least 1 vehicle within 6 months of the date of this decision. 2. If the applicant does not meet the requirements set out in 1 above, this Special Authorization expires. 3. The Passenger Transportation Board may vary the requirements set out in 1 above, if circumstances warrant it. 4. If an applicant needs more time to activate its vehicles, then the applicant must make a request to the Board before the end of the 6 month activation period. (Note: activate means that the applicant has submitted the documents required to obtain a Special Authorization Vehicle Identifier to the Registrar of Passenger Transportation.) Notice to Registrar The Registrar must not, without direction from the Board, issue the applicant a licence or any Special Authorization Vehicle Identifiers if the applicant has not activated at least 1 vehicle within 6 months of the date of this decision. (Note: activated means that the applicant has submitted to the Registrar of Passenger Transportation the documents required to obtain a Special Authorization Vehicle Identifier.) Terms & Conditions: Special Authorization Vehicle Type: Passenger directed vehicle Maximum Fleet Size: 11 vehicles of which: 4 must be sedan limousines 2 must be 6 passenger SUVs Specialty Vehicles: Sedan vehicles may only be operated if the vehicles are sedan limousines, including eco-friendly sedan limousines, as defined by Board policies or rules in effect at the time a special authorization vehicle identifier is issued by the Registrar of Passenger Transportation for the vehicle. Vehicle Capacity (SL): Any vehicle that can accommodate a driver and not less than 3 and not more than 5 passengers must be a sedan limousine. Page 12 Limo Decision Passenger Transportation Board

13 Vehicle Capacity (LV): Vehicles other than a sedan limousine must accommodate a driver and not less than 6 and not more than 11 passengers. Services: Originating Area: Transportation of passengers may only originate from any point: along Highway 99 north to and including Mt. Currie in the Greater Vancouver Regional District in the Fraser Valley Regional District west of but not including Hope Destination Area: Transportation of passengers may terminate at any point in British Columbia and beyond the British Columbia border when engaged in an extra-provincial undertaking. Return Trips: The same passengers may only be returned from where their trip terminates in the destination area to any point in the originating area if the return trip is arranged by the time the originating trip terminates. Transfer of a licence: This special authorization may not be assigned or transferred except with the approval of the Board pursuant to section 30 of the Passenger Transportation Act. Page 13 Limo Decision Passenger Transportation Board