Lawsuit spotlights illegal taxi, limo kickback practice

By Richard N. Velotta

Friday, June 12, 2009 | 3 a.m.

A lawsuit filed last week spotlights a problem that has existed in Las Vegas for years and never seems to come to resolution: the alleged diversion of tourists by some taxi and limousine drivers.

In a complaint filed in U.S. District Court in Nevada, California resident Theodore Trapp is seeking certification of a class action and an order to discontinue the practice of kickbacks by local strip clubs to taxi and limousine companies that allegedly divert passengers to clubs that pay the highest bounty for customers.

Las Vegas and Clark County already have ordinances making the practice illegal, and the Nevada Taxicab Authority and the Nevada Transportation Authority, the regulatory bodies that oversee the cab and limo industries, warn the companies against violating the laws.

The suit says clubs and drivers violate the Nevada Racketeer Influenced and Corrupt Organizations Act in addition to the city and county ordinances and the state’s Consumer Fraud Act.

But the practice is so pervasive, the stakes so high and the number of enforcement officers so low that one more sheaf of paper from a judge isn’t likely to make the problem go away. A look at the list of defendants in Trapp’s suit will give you an idea of how big the challenge is. The roster is an all-star team of taxi and limo companies and adult entertainment joints.

Although the suit cites television reports by Channel 8 reporter George Knapp and Brent Jordan’s book “Stripped: Twenty Years of Secrets From Inside the Strip Club” for details, there has been considerable media coverage about the problem for years. The Las Vegas Sun’s Jeff German and the Las Vegas Review-Journal’s John L. Smith have been all over it for years. I think I first wrote about it a decade ago and it was an old story then. It’s just that now, the problem has gotten worse.

The suit says the practice of diversion hurts the tourism industry because many drivers are so busy chasing club kickbacks — the suit alleges that they are as high as $100 a customer — that other people can’t get rides.

The suit also says the practice hurts the honest drivers who play by the rules and that the illegal acts could discourage tourists from returning to Las Vegas. It also says the kickback income is unreported and untaxed, depriving the government of revenue.

Follow the money trail a little farther and you may conclude that the expense clubs bear to bring customers to their places instead of their rivals’ results in higher admission costs and drink prices for other customers.

It’s believed that more than 100,000 people could be among the victims who were diverted. The challenge in identifying them will no doubt be the willingness of those people to come forth and identify themselves. And that presumes that tourists scattered all over the world would learn about the suit and care enough to want to become a part of it.

The suit seeks designating the class, an injunction halting the process, an order allowing any proceeds from the activity to be seized and any other financial relief the court finds appropriate.

Although I’m skeptical that the suit will have any success, it’s laudable that the diversion issue has been recognized as a problem detrimental to the city’s tourism image, and industry leaders should do what they can to find solutions.

US Airways issuing certificates

Customers who lose their seats on oversold US Airways flights will get a new form of compensation for the inconvenience.

Earlier this month, US Airways began issuing Take Flight Certificates to people who volunteer their seats. Previously, the airline would issue vouchers or round-trip flight credits that offered limited availability.

The certificates are the equivalent of “flight cash” and can be applied to any flight without restrictions. They will have different values issued by the airline’s yield management team. The dollar amounts will be categorized into six zones: short-, medium- or long-haul flights, Caribbean and Latin American routes, European routes and Alaska-Hawaii routes with values ranging from $200 to $850 based on historic information and the travel season.

For example, a certificate collected for volunteering a seat on a short-haul Tuesday or Wednesday flight wouldn’t be as valuable as a long-haul seat on the Sunday after Thanksgiving.

US Airways said they made the change to reduce complaints and better meet customer expectations.

Flying Fluffy and Fido

Southwest Airlines, the busiest air carrier at McCarran International Airport, will allow small pets in the cabin of their planes beginning this month.

Under the new Pets Are Welcome on Southwest program, passengers who want to bring pets aboard will be charged $75 and the animal must be small enough to fit in a pet carrier that can be stowed beneath a seat. The pet carrier counts as one of a passenger’s in-flight bags.

Southwest, which has prided itself in avoiding charging some of the fees other airlines have had, also announced new fees for unaccompanied minors and is doubling the cost of a third suitcase or overweight bag.

The expense of carrying an unaccompanied minor, which the airline has absorbed for years, will be offset by the airline charging $25 per flight, including free tickets redeemed in the airline’s Rapid Rewards loyalty program. Unaccompanied minors are only allowed on nonstop or direct flights with no changes of planes.

The fee for a third bag or to check an overweight bag between 51 and 70 pounds will climb from $25 to $50 per flight.

The new fees take effect June 17.

Pilots reject contract

In another news item involving Southwest, the Southwest Airlines Pilots Association surprisingly rejected a contract the union’s board had endorsed.

In a vote that was almost as close as last week’s Las Vegas City Council race, the pilots rejected a five-year deal that included pay raises at a time when many airlines, including Southwest, are struggling. It was the first time that a pilot contract was rejected at Southwest and negotiators are planning to go back to the bargaining table immediately.

Union leaders are still analyzing why the deal was rejected, but some say it wasn’t because of pay but over changes in how pilots bid for the routes they fly.

Aviacsa flying again

There was a minor commotion at McCarran last week when Mexico’s Communications and Transport Ministry grounded Monterrey-based Aviacsa, a Mexican discount air carrier that has one round trip a day to Las Vegas.

Aviacsa was given 60 days to fix reported maintenance irregularities that Mexican regulators said put passengers at risk. Instead, the airline took the agency to court and convinced a judge to strike down the order and was flying again four days later.

The Associated Press reported Aviacsa issued a statement denying any safety problems and accusing officials of violating a court order by grounding the planes. The ministry apparently grounded several regional airlines recently for not paying airport fees.

Aviacsa has 26 planes and serves 17 Mexican cities and Las Vegas. The airline has one nonstop round trip a day between McCarran and Monterrey. Last year, it was ranked the seventh largest airline in Mexico, and in the first four months of 2009 Aviacsa flew 12,253 passengers to and from Las Vegas on its fleet of Boeing 737 jets.

A McCarran spokesman said Aviacsa rebooked stranded passengers to Mexico on two other carriers, Aeromexico and Mexicana, that serve Las Vegas.

Chukar promotion

A dozen fans of the Idaho Falls Chukars, a rookie league team that plays in the Pioneer League and is affiliated with the Kansas City Royals, will be coming to Las Vegas thanks to a promotion by Las Vegas-based Allegiant Air.

The Chukars announced that the names of two fans would be drawn on “Free Flight Fridays” at the team’s six Friday night home games in 2009. The winners will get a pair of round-trip airline vouchers from Allegiant good for free flights from Idaho Falls to Las Vegas. The first drawing is June 26.

In addition to the benefit of drumming up enthusiasm for Las Vegas with the promotion, locals may be enriched by learning the answer to a question I asked when I heard about this: What’s a Chukar?

It’s a Eurasian game bird related to the pheasant. In the United States, they’re most prominent in Washington, Idaho, Oregon and Nevada.

US Airways to Rio

US Airways will fly to a new continent — South America — when it begins service to Rio de Janeiro in December.

The Phoenix-based carrier, the No. 2 operator at McCarran, will offer daily flights from the airline’s Charlotte, N.C., hub on Boeing 767 jets. With the addition of Rio, US Airways will have flights to 56 destinations in Europe, the Caribbean and Latin America. It’s the fifth new international route for US Airways this year.

When flights begin Dec. 2, the route will represent a new one-stop option to Rio.

Competitors offer other one-stop options. Delta Air Lines flies the route through Atlanta, American through Dallas-Fort Worth, Continental via Houston and United through Washington’s Dulles International Airport.

Richard N. Velotta covers tourism for In Business Las Vegas and its sister publication, the Las Vegas Sun. He can be reached at 259-4061 or at [email protected].