Limo regulation plan proceeds

By Richard N. Velotta (contact)

Friday, April 16, 2004 | 11:07 a.m.

The Nevada Transportation Services Authority will be asked to draft regulations to limit the number of limousines operating in Clark County.

A legislative subcommittee studying an allocation system for limousines similar to rules that limit the number of taxicabs in the county on Thursday voted 5-1 to begin the lengthy process of establishing a system to cap the number of limos.

The subcommittee will take its findings to the Legislative Commission, which has until May 28 to forward a recommendation to the TSA. The TSA, which regulates buses, limousines, moving companies and tow trucks throughout the state and taxicabs in all but Clark County, is required to announce by June 15 whether it would start drafting regulations for an allocation system.

TSA Chairwoman Sandra Avants indicated she plans to undertake the project with a series of meetings across the state to develop regulations.

Those regulations would be turned over to the Legislature, which would consider them in its 2005 session.

But Thursday's subcommittee vote was critical for keeping the proposal alive.

The subcommittee determined that there were enough legitimate concerns and problems involving the operation of limousines and taxicabs to warrant implementing an allocation system. Committee members were told that there were incidents of price gouging, customers diverted from taxis to limousines, illegal operators and uncertified and uninsured drivers.

"I'm pleased with the way it's headed," said Brent Bell, president of Whittlesea Bell Transportation Co., the parent company of limousine operator Bell Trans. "Now that we've got something to work with, we can really start talking about it and get our hands wrapped around it."

Bell said the saturation of the market could cut into operators' profits and force them to cut corners on safety issues. He said he is encouraged that lawmakers not only sought an allocation system, but emphasized that any system put in place be fair not only to existing operators, but potential newcomers to the industry.

But not everybody was convinced that a fair allocation system could even be developed. And free-market advocates say an allocation system is a government intrusion on the free enterprise system.

Sen. Maggie Carlton, D-Clark County, who cast the dissenting vote on the subcommittee, said she was concerned that small limousine companies would be at a disadvantage in any allocation system. She also noted that small companies would not be able to bear the regulatory costs of an allocation system as easily as a large company.

The TSA estimated a cost of $584,979 to hire an additional six people for the allocation and oversight of the industry.

State officials have estimated that the additional cost of regulating limousines through an allocation system would cost about $600 per vehicle per year, a charge that would be paid by the operators. Carlton said regulators already are having a hard time monitoring limousines on city streets without having to check to see if companies are complying with fleet limits.

"None of the allocation schemes appeal to me," Carlton said. "They seem to hurt the little guy, they'd be unfair to small independent operators. The question that keeps getting asked is, is this being done just to keep other people out?"

Avants said the process for drafting regulations would require a series of workshops through the rest of the year.

She said she hopes to have a schedule in place by the end of June, but there's a problem -- money. Avants wants an independent expert to develop the allocation formula. The formula must not only consider supply-and-demand issues and be fair to established companies as well as new entrants, but operators also asked that it consider rewarding companies that provide good service.

"The formula is the heart of the whole thing," Avants said after the hearing. "We're looking for an expert in economics and transportation to develop a formula that has room for entry into the industry as well as reward the merit of companies that do a good job."

The subcommittee recommended that $50,000 be authorized to the TSA to pay for that expertise. Avants said it hasn't been determined from where the money would come.