Licence Application Decision

Transcription

1 Licence Application Decision Limousine New Special Authorization Application # Applicant BC Ltd. Principals Address Current Authorization (s) Representative for applicant Application Summary ALI, Mohammed Khalid th Avenue, Surrey BC V3W 3M2 None Andrew Spence, Barrister and Solicitor, Affleck Hira Burgoyne, LLP New Special Authorization (Reference: Section 26 of the Passenger Transportation Act) New limousine service from Boundary Bay airport with 2 vehicles. 1 vehicle will be a sedan limousine. Rates (Section 24 of the Passenger Transportation Act) Rates are set by the Rates and Rules for Limousines in the Lower Mainland and CRD.) Date Published in February 19, 2014 Weekly Bulletin Submitters (and Delta Sunshine Taxi (1972) Ltd. and Tsawwassen Taxi Ltd. representatives) represented by counsel William A. McLachlan, Barrister and Solicitor, McLachlan Brown Anderson Board Decision The special authorization is refused. Decision Date April 16, 2014 Panel Chair Brenda Brown I. Introduction This is an application for a new limousine service to originate from the Boundary Bay Airport which is located in Delta. The applicant is requesting a passenger transportation licence with a Special Authorization: Passenger Directed Vehicles. He asks to operate 2 vehicles: a sedan limousine, and a stretch limousine. II. Background This is a new applicant to the commercial transportation business. The principal, Mohammed Khalid Ali, is currently the agency operator for 3 Thrifty Car Rental agencies in Page 1 Passenger Transportation Board Limo Decision

2 the Lower Mainland. (Two are reported as active, Vancouver and Surrey, with Langley pending.) Supporting documentation received with the application is as follows: PDV vehicle proposal Business plan with executive summary Financial information Disclosure of unlawful activity and bankruptcy and disclosure of passenger transportation ownership. On January 27, 2014, the applicant was asked to supply public need indicators and cash flow projections. A reply was received and forwarded to the Board on February 14, 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 The applicant claims: There is a demand for a limousine service in the Delta area, especially at the Boundary Bay Airport. Page 2 Limo Decision Passenger Transportation Board

3 The applicant states that he has been running a car rental company for the past 8 years and he kept getting calls for limousine service. On average, the airport requires 2 rental cars a day which will be replaced by the limousine service. The airport is upgrading to accommodate more flights and the demand for service will increase over time. In Ladner and Tsawwassen areas there is no limousine service and we will be servicing this area from the Boundary Bay Airport. (b) Submissions & Applicant s Response Delta Sunshine Taxi (1972) Ltd. and Tsawwassen Taxi Ltd. had a common submission from their counsel. The issues cited are as follows: The airport facilities include airport maintenance, flight training, parking and air traffic control training. Alpha Aviation flight base serves business, corporate and general aviation customers. There are currently 2 charter airline operators providing services from this airport. There is no focus on passenger transportation from this airport. With parking facilities available and with the focus on private aircraft, there is minimal need for taxis or limousines. The submitters contacted 2 Boundary Bay Airport administrative personnel. They reported very occasional requests for a limousine which are referred to AEROCAR from Vancouver International Airport (YVR). There is no taxi stand or limousine stand at the Boundary Bay airport as there is simply no demand for such a service. The submitters have established taxi stands in Ladner and there are regularly 5 taxis standing within 5 minutes travel time to the Boundary Bay airport. Page 3 Limo Decision Passenger Transportation Board

4 Included with the submission was a trip summary report for December, 2013, January and February, 2014 showing 31 trips originating at the Boundary Bay Airport. The prospect of earning any revenue that would support the acquisition and maintenance of 2 limousines is negligible. In regards to fitness, the applicant is unknown in the taxi/limousine business. There is no need for any further type of ground transportation and that 2 additional vehicles would not promote sound economic conditions at the Boundary Bay Airport. The applicant replied as noted: A fit and proper person is a person whose character and conduct upholds the integrity and public confidence in the taxi industry, follows the requirements of the Passenger Transportation Act and regulations and conducts themselves and their business lawfully. Whether an applicant is known or unknown to parties opposing an application is of little value in determining whether any particular applicant is fit and proper to provide the proposed service. The applicant does not propose to offer taxi services but is proposing to provide limousine services catering to a specific clientele that would not likely use taxi services. Currently, the only provider of limousine services to the Boundary Bay airport is AEROCAR. The submitter is not privy to the volume of calls experienced by AEROCAR. The applicant has been in contact with the airport manager, who has written a letter of support. The proposed addition of 2 limousines will not have a significant impact on the area s transportation business given that the applicant is seeking to service a niche market that is not currently being serviced to its full extent. Page 4 Limo Decision Passenger Transportation Board

5 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. 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 submits the following information as evidence of public need. Alpha Aviation Inc., which operates Boundary Bay Airport under a lease from the Corporation of Delta, has expressed an intention to make Boundary Bay Airport the preferred location for both visiting and locally based corporate aircraft as well as adding regular flights to Vancouver Island. Boundary Bay Airport continues to expand its operations. Currently, the only provider of limousine services to Boundary Bay Airport is offered by AEROCAR which is based out of Vancouver. Through the applicant s contacts with the operations management at Boundary Bay Airport in the context of car rentals, Mr. Ali became aware of the airport s need for limousine services to provide transportation to a specific segment that use private jet services. Attached to the application material is a letter from the airport manager, who expresses a specific need for limousine services to target passengers using corporate aircraft. The manager identifies a hole in our customer service model as a result an unfulfilled need for high end, VIP transportation at Boundary Bay Airport that is not currently available. Page 5 Limo Decision Passenger Transportation Board

6 The applicant also stated that it would be the limousine provider for the Travelodge in Richmond. In the executive summary, the applicant reported on numerous calls for car hire service which he does not offer. Boundary Bay Airport and the Travelodge will use the proposed limousine service exclusively. Waits for AEROCAR at the Boundary Bay Airport are 30 minutes to 1 hour. Analysis and Findings The onus is on the applicant to provide valid, accurate and quantitative data to show a need exists for a service that is not currently being met. An applicant s preference for a service does not indicate need. In reviewing the information presented, several areas of concern and unanswered questions arise. The future development/expansion of the Boundary Bay Airport does not translate into current public need. Nowhere is there any data as to the number of requests for limousine service on a daily, weekly or monthly basis. There is no information as to the number of times AEROCAR has been used. How many corporate/private jets does the airport serve on an annual basis and how does this compare to the past few years? How does the applicant know that the 2 daily rental car requests will become limousine requests? There are no letters of support from customers who will use this service. The applicant must also realize that authorization for an originating area of the Boundary Bay Airport does not allow passengers to originate from the Travelodge in Richmond or other areas in Ladner or Tsawwassen. There are approximately 60 limousine service providers that are authorized to pick up passengers at the Boundary Bay Airport, which is included in their originating area. While a limousine service is a preferential service for a certain clientele that may not be satisfied with a taxi service, the applicant has failed to supply independent evidence that substantiates a public need for 2 limousines at the Boundary Bay Airport. The public need requirement has not been met. (b) Is the applicant a fit and proper person to provide that service and is the applicant capable of providing that service? Page 6 Limo Decision Passenger Transportation Board

7 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 fact that the applicant is unknown in the taxi/limousine industry does not impact the consideration of being a fit and proper person. The Board considers such things as skills gained through education, experience or work history that can be applied to running a limousine service. The applicant submitted a business plan which included an executive summary. The applicant currently is the agency operator for two or three Thrifty Car Rental agencies. Mr. Ali oversees the managers and plans to use these individuals in the proposed limousine operation. The Thrifty Car Rental agencies will be used to promote the business. It will be a car hire service that includes a chauffeur. The service plan outlined driver requirements and training. Financial material submitted included an income statement and a balance sheet to December 31, The applicant was asked to provide projected cash flow statements for the proposed limousine service. In reviewing the financial information, there are no details on the start-up costs or how the vehicles will be financed. No explanation as to the vehicles usage for the cash flow projections was provided. For example, some months showed revenue of $30,000. How many hours/trips is this based on? The same financial projections were given for 2014, 2015 and 2016, showing no planned growth. It appears that the applicant has transferable skills that would be used in the proposed service. There is nothing in the application material to indicate that the applicant is not fit and proper. However, given the limited financial information relating directly to the limousine service, I am unable to make a finding that the applicant is capable of providing such a service. (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 Page 7 Limo Decision Passenger Transportation Board

8 specialty services. 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 has not provided verifiable evidence that a public need exists for a limousine service dedicated from the Boundary Bay Airport. As a result, I have not made a determination as to whether this application, if granted, would promote sound economic conditions within the limousine industry. VI. Conclusion For the reasons above, this application is refused. If BC Ltd. makes an application in the future, the applicant should refer to the I want to start a new limousine service page on the Board s website. Page 8 Limo Decision Passenger Transportation Board