Application Decision Application # 374-11 Applicant SCOTT, Gerald Michael Trade Name (s) Address Current Licence Scott Shuttle Service 7 46260 Harford Street, Chilliwack BC V2P 2W3 None Application Summary New Special Authorization (PDV) (Section 26 of the Passenger Transportation Act) 1 vehicle in the Lower Mainland including Vancouver International Airport Rates Point to Point Rates Hourly rates Publication Date February 15, 2012 Submissions Received None Board Decision The special authorization sought by the applicant is refused. Decision Date May 2, 2012 Panel Chair William Bell I. Board Considerations: The Board may approve a licence 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. Page 1
All three requirements must be met before the Board will approve an application. (Reference: section 28(1) of the Passenger Transportation Act) Applicants must decide how much information to provide to the Board. Applicants should consider the type, location and scope of the service they wish to provide. The Board has written various Application Guides to explain Board requirements. The Board publishes applications and accepts submissions. II. Background The applicant is applying for a Special Authorization licence to operate a private shuttle service. The applicant seeks authority to take passengers from Abbotsford and Chilliwack to various destination points in the Lower Mainland. The vehicle operated would have a carrying capacity of 4 passengers excluding the driver. The applicant proposes to operate a 2008 Jeep Liberty. Rates would be charged on a vehicle charter basis from point to point between specific destinations. Outside of the specific destinations an hourly rate of $40.00 would be charged. The applicant is also requesting return and reverse trip authorization. III. Reasons for the Board s Decision (a) Is the applicant a fit and proper person to provide the service that the applicant proposes to provide under special authorization, and is the applicant capable of providing that service? The Board looks at fitness in two parts: (a) is the applicant a fit and proper person to provide the proposed service; and (b) is the applicant capable of providing that service? The Board reviews the conduct of an applicant and the structure of the existing or proposed operations. Does the applicant seem to understand passenger transportation laws and policies? Is the business set up to follow these laws? Is there something in the applicant s background that shows it disregards the law? Applicants must show that they have the resources and skills to manage the service that they want to operate. The Board gets much of this information from business plans and financial statements. Applicants must also complete a Disclosure of Unlawful Activity and Bankruptcy form as part of the application process. In support of its application the applicant provided PDV vehicle and service proposals, a Condensed Operating Plan, fates and rules, a business plan that included cash flow projections for the first 24 months of operation, public need indicators and Disclosure of Unlawful Activity and Bankruptcy and Passenger Transportation Ownership forms. Letters of support submitted with the application indicated the authors had used Scott Shuttle Services for their clients. The board asked the applicant under what authority he was providing such a service. The applicant responded that when he first decided to try out the shuttle service he was unaware of the need to have a passenger transportation licence. When he found out he needed a licence with a special authorization, he submitted an Page 2 Application Decision Passenger Transportation Board
application. He indicates that he had approached the hotels in the area to determine whether his idea was feasible and whether to continue. The applicant, Gerald Scott, indicates he has experience operating a courier service in Winnipeg and this gave him small business know how. He also indicates that he has had many years of safe driving experience. Mr. Scott will be the sole driver of the proposed vehicle. The service may involve passengers travelling to a scheduled pick up location to meet the vehicle or booking the vehicle to come to their location. The service will be arranged by phone or email. The applicant s advertising plan is word of mouth as well as distributing brochures and business cards to local hotels. The applicant plans to operate 7 days a week, on a first come first serve basis. He reports that his hours are flexible. The Board asked the applicant about his plans to comply with hours-of-service rules under the National Safety Code and vehicle maintenance. The applicant responded that while his service is available 7 days a week that any vehicle maintenance or other personal commitments would take priority. He also indicates that he would undertake daily inspections of his vehicle and respond with mechanical repairs as necessary. The financial information included cash flow projections for the first 24 months of operation. Projected income was presented in bi-monthly segments for the first 6 months; then 6 month segments. The applicant notes that the projected income based on my business growing as customer realize they have another choice. The applicant was asked to provide the trip assumptions that formed the basis of his projected bi-monthly incomes. In response he estimates that he will get 3 or 4 trips a week initially and that this will grow as the service becomes known. These trip assumptions still do not support with any detail on what information they are based; for example, the type of and the costs of trips that support the projections. Combined with the lack of demonstrated public need for the proposed service as discussed below, I find it difficult to assess their reasonableness and accuracy. With no information to the contrary, the applicant has provided sufficient information for the Board to conclude he is a fit and proper person. However, I am unable to make a finding on whether the applicant is capable of providing the service. (b) Is there a public need for the service that the applicant proposes to provide under special authorization? The Board expects applicants to show that there is an unmet public need for their passenger directed vehicle service in the area where they want to pick up passengers. They should give the Board information that is factual and objective. Information in applications should show that: People will use the service People and businesses will refer people to the service People cannot obtain the services the applicant will offer The market is underserved or not served by the type of service the applicant will be providing Page 3 Application Decision Passenger Transportation Board
The applicant indicates that Abbotsford and Chilliwack would benefit from his shuttle service. The service would flourish because of the applicants reliability, experience and reasonable rates. He is aware of what the public is looking for and plans to provide an individualized service to his customers. He reports the letters of support he received from hotels in the Abbotsford and Chilliwack area indicate the need for a private shuttle that would cater to their customer s individual needs. The applicant reports that his customers will live in Abbotsford or Chilliwack or be visitors to the area. The applicant states: There are other transportation services available like limousines and taxis which are more expensive as well as shuttle services which have multiple pickups, but not individual. He also states Most shuttle services do multiple pickups where the customer is not the only one on Board. My service offers individual service at reasonable rates. The material provided in support of this application included 6 letters as follows: 1. The President, Canadian Council of the Blind, Chilliwack Division reported that she is legally blind and values a reliable, reasonably priced service. She says that the applicant s proposed service would be an asset to the community. Members of the Board of Directors need the services in order to travel from and to other communities. 2. The Front Office Supervisor, Coast Chilliwack Hotel indicates a need for a shuttle service serving the Abbotsford and Vancouver areas especially the Abbotsford Airport (YXX), Vancouver Airport (YVR) and the Ferry terminals. It notes the applicant s rates are reasonable as compared to taxi service or other transportation services. 3. The Sales Manager/Group Bookings, Best Western, Chilliwack is enthusiastic about the much needed service. The letter indicates that many guests need transportation to and from the Abbotsford International Airport (YXX), Vancouver International Airport (YVR) or B.C. Ferries. The letter submits that it attempted to arrange a flat rate with 2 Chilliwack based taxi companies to and from the terminals whose rates are very high and which most guests feel are completely unreasonable. In the writer s opinion an Airport Shuttle Service is an asset for Chilliwack as there is not currently any public transport linking it to Abbotsford or Vancouver. The applicant s service provides a more economic solution to guests in comparison to taxi service. 4. The General Manager, Coast Abbotsford Hotel and Suites reports hotel staff are always getting asked if there is an airport shuttle service. It reports that guests have a sense of security when they can book drop-offs and pick-ups at the airport, something they do not get from taxis. It notes that the service is an option the travelling public appreciates and would like to see it continued. 5. The Director of Sales and Marketing, Best Western, Abbotsford reports that the public, in these challenging economic times, needs as many transportation options as possible so that customers can select those that best fit their budgets. The applicant offers fair and competitive rates. The hotel supports all the local transportation Page 4 Application Decision Passenger Transportation Board
companies and uses them on a daily basis. It notes the applicant s service presents another option for its clients which it will recommend along with the other options available in the community. It supports the service continuing to operate the wide variety of services between local hotels and YXX as well as service into Vancouver and BC Ferry terminals. 6. The Ramada Plaza and Conference Centre, Abbotsford, in an unsigned letter, notes it has large demand and need for a shuttle service in the area. It reports that it receives calls on a regular basis not just from its guests, but also from the general public for such a service. The letter observes that there are only 2 means of transportation in the area. The first is by taxi which is expensive or by Greyhound which has limitations regarding stops. It indicates it will use the applicant s proposed service. Overall, I found the letters submitted insufficient to indicate the need for the proposed shuttle service. With the exception of the letter from the Canadian Council of the Blind, most of the support letters came from several hotels in the area. The letters did not provide specific information how often they would use the applicant s service. The applicant claims a selling point of his service is individual service at reasonable rates. However, there were no letters from individuals who need or who would use the service and who indicate dissatisfaction or an unmet need for the proposed service. In an area the size of Abbotsford and Mission, the evidence of need is limited and weak. I accord the support material very little weight. I find that the applicant has not in any convincing fashion demonstrated that there is a public need for the proposed service. 3. Would the application, if granted, promote sound economic conditions in the passenger transportation business in British Columbia? The Board looks at the state of transportation services in the area where the applicant applying to operate. The Board considers how your service could benefit the market and whether the market has the capacity to absorb additional services. The Board may consider such things as: Will the service fill a gap in the market? Has a similar business recently left the market? Is this a specialized or niche service? Will the service give the public additional transportation options? Are the rates competitive? I have concerns with regard to the test of sound economic conditions and the proposed service- specifically that the charter rates proposed would be very low when compared to taxi rates or the rates of other transportation providers serving the area. The applicant s charter rate for a trip between Chilliwack and Abbotsford would cost $44.80 (with tax) Page 5 Application Decision Passenger Transportation Board
compared to a taxi at approximately $108.00(with tax) one way. Cheam Tours Ltd. dba Airport Link Shuttle provides service in the proposed operating area and their per person rates one way for 1 adult between Abbotsford and YVR would be $ 100.00 and $200.00 for 4 adults as compared to the applicant s rate of $80.00 for either 1 or 4 adults. Cheam s rates one way for 1 adult between Chilliwack and YVR would be $120.00 and $240.00 for 4 adults compared to the applicant s rate of $100.00 for either 1 adult or 4 adults. Another example would be using Cheam s mileage charter rates for a one way trip between Chilliwack and Horseshoe Bay (approximately 119 kms) for 1 person which would be $265.00 compared to the applicant s rate of $120.00. The applicant is proposing a shuttle service. In the case of this application the charter rates proposed are very low when compared to taxi rates for services between Abbotsford and Chilliwack and when compared to the per person rates of other similar transportation options serving the area. I have concerns that approving this application will impact other operators in a negative manner and contribute to destructive competition. Further, I have concerns about the applicant s proposed rates and whether they would support a viable business. As a result, I find that the application, if granted, would not promote sound economic conditions in the passenger transportation business in British Columbia. VI. Conclusion For the reasons above, I am refusing the application. Page 6 Application Decision Passenger Transportation Board