As NATIONAL BUS TRADER readers following this series have noted, our judicial system seems to be "running the table" with TNC-related issues. The $220,000,000 settlement of a case against FEDEX effectively eliminated the notion of an "independent contractor" in its six states. And the California courts are soon likely to boot out Uber. The FEDEX case in the U.S. Court's 10th Circuit effectively rippled a TNC's ability to deprive its drivers of a regular employee's costly array of fringe benefits. This settlement is likely to soon play out in the other nine "Circuit" encompassing the other 44 states. And if Uber is booted out of California altogether, on top of the FEDEX settlement, the TNC threat will be diminished significantly.
At the other extreme, as noted in Part 5 of this series, our executive and legislative branches of government have done little to stem the tide of this invasion. At the local end of the spectrum, New York City has opened the floodgate to as many TNC taxis as wished to enter the service area. This is a pretty sizeable flood controllable only by how little the TNC and traditional taxi drivers are willing to work for, as their densities are being thinned and their deadhead time and mileage grows, minute by minute. At the Federal level, in contrast the FMCSA's recent rulemaking (going into effect on January 1, 2017) will shift far more responsibility - and liability - to a prime contractor compared to its subcontractor. This rulemaking was presumably intended to make a service provider think twice about which subcontractors it engages to handle its overflow.
Limiting the choices is likely to hamper flexibility in some regions of the country, although newcomers are likely to "fill the slots" over the long haul. So there was some grumbling in the industry over this legislation. But far more importantly, these regulations create big problems for TNCs entering the motorcoach market with their traditional "no-management/low-safety" model. It is one thing for a wild, common motorist with a $15,000/30,000 insurance policy to maul a pedestrian. But it is not the same when a 57-passenger motorcoach's driver falls asleep at the wheel and rear-ends a slow-moving 18-wheeler, or crashes through the guardrail of a bridge and rolls down an embankment or into a creek.
While all this, good and bad, has been going on, the most vocal contingency in the battle against the TNCs has been members of the taxi and, mostly, limousine industries themselves. While far more at the "talking stage" than the "walking stage," at least industry leaders and their "umbrella organizations" are speaking up, particularly at the State and Federal levels. Among the highlights of activity this last year or so:
This is particularly true given the FMCSA's rulemaking when it applies to a large passenger vehicle required to carry a lot of insurance, and held to the "highest standard and duty of care" as a legal principle in all or most states.
Thanks largely to Limousine, Charter and Tour magazine, the statements of individual taxi and limousine company owners were given a voice, along with some poignant editorial comments. As examples:
Are these organizations, their members and their magazines simply crying "Wolf?" Has any of these activities accomplished anything? Hard to tell. But one thing is for sure: TNCs are not the only new players with an eye on the charter and tour markets. Bobit Business Media had insightful and almost overwhelming coverage of TNCs in its Limousine, Charter and Tour magazine in 2014. It is somewhat a consensus in the limousine industry that, with or without TNCs, successful limousine owners will increasingly expand into the motorcoach charter and tour sectors - as they have already begun to do with both large body-on-chassis conversions and small, integrally-constructed motorcoaches.
Yet my two-person firm's office manager/research assistant spends a good deal of her time on social media and website SEO. Do you have even a moderately-sized company with no one with these skills?
As the reader should have noted from the chronology above, even the taxi and limousine industries did not begin lobbying at the Federal level until June, 2014. Instead, they futilely chipped away at state and local regulators. Only the FMCSA (not even with the same agenda) and our judicial system helped keep the TNCs at bay. Keep in mind how this unfolded in New York City at the executive level - where Uber was not only given the red carpet, but a red carpet as long as it needed, and one its driver did not have to pay very much to drive onto.
We almost always buy either Coke or, Pepsi. Those are what most of the stores, bars and restaurants carry. But the limousine and taxi industries are starting to see new colas all around them. And while these colas may not be as good for your health or safety, you can summon one to your doorstep literally by pressing against an icon on your cell-phone. Your company's sub-regional "app" may help you retain many of those customers in your small service area who would likely use your company's service anyway. But this app will not get you many new customers these days because those outside your service area will not likely have it. But also because your crummy little app is not a household name.
No one buys ketchup. We all buy Heinz "catsup." No one buys tissues. We all buy Kleenex. Following suit, everyone will remember the name UberKoach - or whatever the giant TNC chooses to call its nationwide "network" of charter and tour companies. These realities are a particular problem in an industry where business grows very slowly, mostly through word-of-mouth, and largely because few of us ever do anything creative. Unless the entire motorcoach industry forms a network reachable by a single "app," your business will diminish when UberKoach arrives. Remember, as I have been pointing out article after article: To "win," UberKoach does not have to capture every rider. It only needs to thin your density. Because after a certain point, it will become too thin for you to survive. And when you abandon it, or it shrinks enough, your competitor's density will fatten up like a corn-fed hog on recreational marijuana.
Working with one's competitors is "the new" working against them. We may not have to do much different at the operating level. But we must have a universal app, and a meaningful universal affiliation. And we must find a way to exclude the dangerous, ignorant and sloppy operators from this network. The FMCSA just gave us a huge boost to do this. As one should know by now, it is not wise to kick a gift horse in the mouth. Better to throw it a kiss (or perhaps support its objectives a bit more regularly and more aggressively).
Next time around - the final installment in this theory - I'll share with you some things you can do to compete with the "robots." Before then, it might help to review Part 2 of this series - to glimpse again at the fortune a creative service provider can gain almost overnight with a single brilliant idea - yet how quickly a myopic regulatory agency can snuff it out if it does not adjust to changes.
So before the next installment of this series arrives, you might think about humming a few bars of "I'm in the Mood for Change." Because if you are not in such a mood, you may soon be in the mood for loss.
The opinions expressed in this article are that of the author and do not necessarily represent the opinions of NATIONAL BUS TRADER, Inc. or its staff and management.
Ned Einstein is the President of Transportation Alternatives, a passenger transportation and automotive consortium engaged in consulting and forensic accident investigation and analysis (more than 350 cases). Specializes in elderly, disabled, schoolchildren. Mr. Einstein has been qualified as an Expert Witness in accident analysis, testimony and mediation in vehicle and pedestrian accidents involving transit, paratransit, schoolbus, motorcoach, special education, non-emergency medical transportation, taxi, shuttle, child transport systems and services...
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