Licence Application Decision

Transcription

1 Licence Application Decision Limousine New Special Authorization Application # Applicant Pinnacle Chauffeurs & Car Service Ltd. Trade Name (s) Pinnacle Car Service Principals KANG, Jarnail S. KANG, Gurwinder S Address Current Authorization (s) Application Summary th Avenue, Surrey BC V3W 1L2 None New Special Authorization (Reference: Section 26 of the Passenger Transportation Act) New limousine service in GVRD area with 3 vehicles, one of which may be a sedan limousine. Rates (Section 24 of the Passenger Transportation Act) Rates set by the Rates and Rules for Limos in Victoria, Vancouver and Surrounding Areas. Date Published in June 25, 2014 Weekly Bulletin Submitters (and None representatives) Board Decision The special authorization is refused. Decision Date July 31, 2014 Panel Chair William Bell I. Introduction The applicant, Pinnacle Chauffeurs and Car Service Ltd. dba Pinnacle Car Service (PCS) seeks authority to operate a new limousine transportation service using 3 vehicles originating out of the Greater Vancouver Regional District (GVRD). The applicant plans to operate the service outlined as a Black Car Sedan Service 24/7 targeting corporate clients in the GVRD. II. Background This application was originally submitted under Section 26 (1) and (3) of the Passenger Transportation Act (the Act) and there was a request for the Board to process the application on the basis of urgent public need. The panel was not satisfied that there was Page 1 Passenger Transportation Board Limo Decision

2 an urgent public need for the service. The application was then required to be processed through the regular process, with publication and receipt of submissions. Publication of the application took place on June 25, 2014 in the Board s Weekly Bulletin. No submissions were received. PCS previously applied for a similar licence in July In October 2013 the Board refused the application based on a lack of evidence to demonstrate public need. For this application, the applicant provided a business plan, a Condensed Operating Plan, a PDV Vehicle Proposal, PDV Proposed Terms and Conditions, Proposed Rates, financial information, public need indicators (letters of support) and the forms Disclosures of Unlawful Activity and Bankruptcy and 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. IV. Rationale and Submissions (a) Applicant s Rationale Principals for the applicant, Mr. Gurwinder Kang and Mr. Jarnail Kang have shared and operated a vehicle as an independent lease operator with Aerocar paying a monthly fee for use of the plate. In April 2014, Aerocar terminated its lease operator arrangements by Page 2 Limo Decision Passenger Transportation Board

3 switching from a lease model to a commission model. The new model is based on paying Aerocar a significant commission with all expenses including fuel paid by the chauffeur. The applicant finds these changes no longer financially viable. PCS claims that the sudden change by Aerocar has left its personal client base without a chauffeur. As a result, the goal of PCS with its own licence is to manage its established client base and to expand and grow the business operation based on referrals in response to superior levels of service. The services will include airport transfers, corporate events, weddings, in-town service, etc. PCS plans to operate 1 sedan vehicle with a seating capacity of 3-5 passengers and 2 newer SUVs such as a Mercedes GL350 diesel and Cadillac Escalade hybrid or flex fuel that seat up to 7 passengers. (b) Submissions & Applicant s Response No submissions were received with this application. V. Reasons for the Board s Decision (a) Is there a public need for the service that the applicant proposes to provide under special authorization? Applicants should supply information that is factual and objective to demonstrate public need. It should demonstrate that there are people who would use the service. Applicants should explain why they are applying for a specific number of vehicles. The Board looks for a reasonable connection between the number and types of vehicles requested and public need. The applicant states that the changes in Aerocar s business model means that many of its chauffeurs are no longer employed. They state that the 1.9% taxi rate increase in 2013 makes chauffeured transportation more reasonable. They argue that changes by Aerocar compromises service reliability. PCS has been approached by many Aerocar clients for recommendations or services. Many of these clients request specific terms and PCS is offering them. PCS claims that the following service features will distinguish their operation in the industry: Shorter cancellation policy of 3 hours instead of the standard 12 or 24 hour policy Page 3 Limo Decision Passenger Transportation Board

4 Online Bookings or Mobile App reservations that larger companies cannot accommodate. Driver Assignments allowing corporate clients to match specific chauffeurs Luxury, eco-friendly vehicles PCS further notes Metro Vancouver population projections with an average increase of 44,000 residents per year. As a result, PCS suggests that corporate car service demand will increase in Vancouver. PCS describes its current client base as made up of 40 small to medium sized businesses who use sedan service on average 3-5 times per week for key executives. PCS anticipates its market share to be approximately 2% of the sedan and limousine market in the Greater Vancouver area. In support of public need for this application, PCS included 24 letters of support in addition to the 4 letters previously submitted to support an Urgent Public Need request. Eleven (11) of the letters were submitted with its previous application in The letters came from corporate or individual clients. Most letters refer to the applicant s attributes such as professionalism, reliability, flexibility and trust. More than half of the letters refer to the applicant s flexible cancellation policy that suited their travel needs. Several noted their reliance on PCS attention to tracking their flights and specific driver assignments. Several referred to service from other providers that were not consistently satisfactory. Only 2 referred to a need for specific luxury vehicles such as Mercedes and/or BMW, or Mercedes equivalent. Many letters represented a general preference for the client s service. Preference does not constitute public need. It is laudable that the applicant proposes to provide a high quality level of service with its special distinctive offerings. However, this is not evidence of an unmet demand in the limousine industry. The business goal of providing a high quality service is not unique goal in the industry. There was no indication in any of the documentation that service could not be provided because a limousine was not available. Further, the applicant s support letters contain little evidence that the vehicles and particular service features that people need are unavailable. Many licensees offer a variety of vehicles and services in the GVRD and many have a licence with the flexibility to offer the same vehicles and services proposed by the applicant. The applicant s materials do not Page 4 Limo Decision Passenger Transportation Board

5 persuasively show that services currently available in the area are insufficient, inadequate or unsatisfactory. PCS proposes a business operation with distinct features to maximize its relationship with corporate clients and other potential users of its services. However, it has provided insufficient evidence of need to increase the supply of limousines in the proposed operating area. Evidence of public need for the service proposed is weak. I find the applicant has not demonstrated public need for the service. (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 business would be operated by the two principals. Each applicant has 17 years of experience in the transportation industry that includes limousine operation and taxi ownership. One of the principals has experience as a dispatcher with Aerocar and as a Director of Finance with a locally-based taxi company. Each has sound safe driving records. The application included a business plan with information on advertising and business networking approaches, vehicle maintenance, market analyses, driver recruitment and training, etc. The information reflects an understanding of the regulatory requirements to set up and operate the proposed business. The financial information included one and five year projected income statements. It also included personal net worth statements and assurance of equity financing to indicate an ability to finance the start-up of the proposed business. I find the overall information demonstrates the applicant is a fit and proper person to provide the proposed service and is capable of providing the service. Page 5 Limo Decision Passenger Transportation Board

6 (c) Would the application, if granted, promote sound economic conditions in the passenger transportation business in British Columbia? 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. As noted above, the application materials have not demonstrated that a public need exists for the new limousine service in the GVRD. As result, I am unable to find that approving the application would promote sound economic conditions in the passenger transportation industry. VI. Conclusion For the reasons above, this application is refused. Page 6 Limo Decision Passenger Transportation Board