Licence Application Decision _ Limousine _ by wuyunyi

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									Licence Application Decision (Limousine)
                      75-12          Applicant KWIATKOWSKI, Matthew Spencer
                      Prime Time Limo
Application #


                      3396 Hilton Road, Duncan BC V9L 4B2
Trade Name (s)


                      None
Address
Current Licence
Application           New Special Authorization

                          New limousine service in Duncan area with 1 vehicle.
Summary               (Reference: Section 26 of the Passenger Transportation Act)
                      •
                      Rates


                          Hourly Rates.
                      (Reference: Section 24 of the Passenger Transportation Act)
                      •

                      April 4, 2012
                      MC LEAN, Douglas dba Encore                     WAHLLA, Joginder dba Cowichan
Publication Date

                      Limousine Service                               Valley Limo
Submissions
Received



                      June 6, 2012
Board Decision        The special authorization is refused.

                      William Bell
Decision Date
Panel Chair



The Board may approve a licence application, if the Board considers that:
    I. Board Considerations:


(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.
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.


Page 1                               Passenger Transportation Board                        Limo Decision
The applicant requested on March 15, 2012 that this application proceed under the Urgent
    II. Background

Public Need (UPN) process because there was a public need for a St. Patrick’s Day service
on March 17, 2012. The UPN request was denied and as such the application is being
processed under the Board’s regular process. This application was published in the Board’s
Weekly Bulletin and submissions received and considered.
The applicant, Matthew Spencer KWIATKOWSKI dba Prime Time Limo (PTL), is proposing
to operate a 6 passenger limousine with both an originating and destination area that
includes any point in the City of Duncan or the North Cowichan municipality.
PTL seeks to provide a high quality limousine service for corporate business as well as
weddings, proms, etc. and wants to address an important and growing segment of the
business for quality on-call transportation services by bar and restaurant patrons who
need a sober driver to transport them home after the consumption of alcohol.
Two submissions were received. The Board gives more weight to submissions that back up
general claims with facts or details. All submissions were sent to the applicant who replied.
I have considered these submissions and the applicant’s reply.
Submissions
1. Wahlla, Joginder Singh dba Cowichan Valley Limo

    Mr. Wahlla notes that 2 companies operate in the Cowichan Valley and that both are
    struggling as there is a lack of business. He indicates that he doing 2-3 trips per month
    and that there is no need for another company in the area.
2. McLean, Douglas Reginald dba Encore Limousine Service

    Encore Limousine Service (ELS) has been servicing the area for 6 years with licencing
    for 2 vehicles and is based in Duncan, B.C. Cowichan Valley Limo has been operating
    even longer in the area. Therefore, he argues the applicant’s contention that an unmet
    need exists in the area is blatantly false. The most noticeable rising demand, based on
    phone and email booking requests, has been for 12 passenger SUV type limousines and
    party buses. ELS notes that despite spending significantly on marketing, his business
    grows at a modest rate of 3-4% per year. With respect to an on-call service home from
    pubs and restaurants, which ELS offers, there has been no growth and that apart from
    the shuttle and personal services offered by drinking establishments, pubs are well
    served by more than one taxi company in the area and have vehicles than can
    accommodate 5 passengers. ELS reports that it has a 6 passenger limousine identical to
    that proposed by the applicant which is rarely called for an on-call service. Further
    most of the on-call need originates in the South Cowichan area that would be outside
    the operating area requested by the applicant.
    ELS also submits that there are limited weddings in the proposed operating area that
    require a smaller limousine (approximately 8/year) that are currently served by it or
    Cowichan Valley Limo. Further, there is little or no corporate work in the area and the
    prom market is being taken over by large SUV limo and party bus providers. ELS is

Page 2                                    Limo Decision                  Passenger Transportation Board
    concerned that a third limousine provider in the proposed area would saturate the
    market. ELS also submits that the applicant’s pricing is too low for 1-3 passengers and
    puts the applicant is the position of competing with taxis in respect of its proposed on-
    call service for pubs and restaurants.
Applicant’s Response to Submissions

    PTL contends that the market is not saturated and that with successful marketing and
    promotion there is an untouched market in the valley. PTL refers to a more recent
    survey that it completed going to 3 local establishments that indicates use of the
    proposed service. PTL argue that its rates for the on call service are attainable and
    accessible for the regular passenger whereas ELS caters to a luxury market. It also
    argues that it will not compete with taxis which do not offer the experience of lighting,
    music, travelling with larger groups, etc. and who do not offer a set or hourly rate. With
    regard to the lack of proms or weddings, PTL feels there is adequate business to allow a
    third limousine operation. With respect to the competitive limousine operations in the
    area, PTL contends they have not adequately advertised and marketed their business.
    Finally, although the service area requested does not encompass all of the Cowichan
    Valley, in the event its service grows, PTL will apply for a larger service area.
    The concerns raised by the submitters where appropriate are addressed in my reasons
    below.
    III. Reasons for the Board’s Decision
(a) Is the applicant a fit and proper person to provide that service and is the applicant

The Board looks at fitness in two parts:
    capable of providing that service?


    (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 Board reviews the conduct of an applicant and the structure of its 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
want to operate. The Board gets much of this information from business plans and
financial statements.
The applicant submitted PDV Vehicle and Service proposals, a Business Plan with Cash
Flow Projections, Proposed Rates and Rules, Public Need Indicators, Disclosures of
Unlawful Activity and Bankruptcy and Passenger Transportation ownership.
The applicant reports that he has a good history as a business owner and as a service
provider with extensive experience operating industrial equipment. Several support letters
attest to the applicant’s customer service skills, professionalism and creativity. The
applicant has also acquired a chauffeur’s permit and indicates an awareness of the


Page 3                                     Limo Decision                   Passenger Transportation Board
necessary licencing and insurances that are required to operate the proposed service. The
applicant also provided personal net worth information.
The business plan submitted consisted of several pages that refer to a growing demand for
the services proposed and the market for the proposed limousine services. A section on
company operations consisted of a paragraph describing in general terms the applicant’s
background followed by income projections and a description of the proposed vehicle.
In his reference to the proposed market the applicant refers to several surveys conducted
by him regarding need for the proposed service; one survey interviewed 22 unspecified
local businesses and another undertook a random sample of 25 people dining at local
establishments. Because PTL plans to keep its prices 75% below those charged in Victoria
its income assumptions are based on this lower pricing which is something the
respondents to were asked about regarding preferences .
Income projections were provided for Year 1 and 2. The cash flow projections were based
on the type of service with an assumption made regarding the number of trips as well as
income per month. However, it is not clear what rates proposed by the applicant were used
in the calculations. Also not clear are the assumptions behind ridership or the number of
trips contained in the revenue projections for Year 2. Income per month for proms was not
provided and a category called “Misc Other” offered no explanation about the assumptions
behind ridership. The category “bar and restaurant” registered over 75 % of all the
projected trips (50 out of 66) and in Year1 represented close to 19% of total income.
The applicant refers to having a local driver on call, 24 hours per day that will enable
business and users the availability of the service when it is needed. However, no details
were provided regarding the adherence to driving hours required under the National
Safety Code or the recruitment and hiring practices, credentials and training of drivers.
There are no details about other how the business will run. Who will manage the bookings
and accounts, customer service; supervise drivers and other staff, etc.? What is the role the
applicant will have in the business? There is no information concerning care and control of
the operations given the plan to operate a 24 hour service.
With regard to the on-call pub and restaurant services proposed and which constitute an
important source of income few details were provided as to how this aspect of the business
would operate. The applicant did not explain how customers will book the service. The
applicant indicated that he did not wish authorization to hail or flag people from the street.
How, then, will the service to the pubs operate?
This service is not expanded upon. How would it work with the rates structure outlined?
I find the application materials lack specificity. Information is general and vague. There is a
lack of analysis and reasoning to support the information. As a result and based on the
information provided in this application, I am unable to make a determination with respect
to the consideration of applicant fitness.




Page 4                                    Limo Decision                   Passenger Transportation Board
(b) Is there a public need for the service that the applicant proposes to provide under special

The Board views limousine service as a “discretionary” transportation service. In cases
    authorization?

where a limousine service is not offered in an applicant’s target market, broader evidence
(describing the market itself and the types of transportation available) may be sufficient to
indicate “public need” and/or “sound economic conditions”. Where an applicant’s proposed
service would add to the existing supply in a targeted market, the broader evidence should
be supplemented by more “micro level” evidence relating to actual ridership, indications of
support for the proposed service from direct users or entities in a position to advise others
to use the service. Facts relating to the inability of current supply to meet a transportation
need would also be helpful to the panel in reaching a decision.
Applicants must prove to the Board that there is a public need for a new limousine service.
Applicants may show this public need with the following types of information:
         letters from booking agents, travel agents or prospective passengers
         signed contracts
    •


         population data
    •


         community plans
    •


         other relevant material
    •


The Board often finds comments written by individuals more useful than pre-completed
    •

surveys or petitions. The Board also reviews business plans and financial statements.
PTL seeks to satisfy a demand for quality transportation by providing a limousine service
to both personal and corporate clientele that would include business type services,
weddings, proms, birthdays, etc, and also “returns from bars and restaurants”. The latter
would comprise a quality on-call service to transport people home after the consumption of
alcohol. The applicant reports his 6 passenger vehicle will be able to handle larger groups
than a taxi. PTL proposes to charge hourly charter rates of $100/hour for 4-7 passengers
and $75.00/hour for 1-3 passengers. The applicant states PTL “offers a celebrity-type
experience at a price which does not dent the pocketbook”.
PTL notes limousine ridership has risen in the last 15 years because of the need by
personal and business clientele for discrete and comfortable service. It also refers to an
important and growing segment of the limousine business to address the on-call
transportation services by bar and restaurant patrons who need a safe ride home after the
consumption of alcohol. The applicant reports the Cowichan Valley has a population of
nearly 80,000 and an evolving commercial and service sector. Also referenced in the plan is
an initial demand study that apparently shows the acceptance of the service locally,
although the applicant does not clarify what study is being referred to.




Page 5                                     Limo Decision                   Passenger Transportation Board
Other material provided in support of public need for this application includes the
following:
    1. 6 email letters dated March 15, 2012 that provided general support and indicate
       some use of the proposed service. Several were enquiries only.
    2. A letter dated March 25, 2012 from a Customer Representative at Island Savings
       that indicates with recent changes to the drinking and driving laws and high taxi
       fares there is a need for the proposed service.
    3. The applicant refers to a survey conducted that interviewed a variety of 22
       businesses to see if a need existed for the proposed service. The applicant indicates
       18 of the 22 businesses “said they might have used the service in the past year if the
       service existed.”
    4. The applicant asked a random sample of 25 people dining at local establishments if
       they would use the service proposed if it existed and 16 provided a positive
       response. The applicant notes that this indicates a strong desire to try such a
       service. The applicant also states “we also asked respondents about their pricing
       preferences and given that Prime Time rates would be well below what is charged in
       markets like Victoria and Nanaimo, we felt that the demand would increase if we
       could keep our target prices at or below 75% of what is charged in Victoria.”
    5. On April 15, 2012 in response to a submission, the applicant refers to a subsequent
       survey that he completed by going to 3 local establishments and asked patrons 3
       questions and in a column associated with each question provided a space for their
       signature. Presumably a signature would indicate a positive response and a space
       left blank would indicate a negative response. The questions were in fact statements
       as follows:
             “I would use this service if it was available.”
             “I am aware that there is a simmiler (sic) service in the area.”
         •


             “I could afford to use this service.”
         •


         I note the survey was headed with the following. “PRIME TIME LIMO SERVICES WILL
         •

         BE SERVICING DUNCAN AND THE COWICHAN VALLEY….Rates: $75.00 an hour 3

         A mix of 74 names signatures or initials were received that signed and indicated use
         passengers and under $100 an hour up to 6 people”.

         of the service if available and could afford the service. With regard to awareness of a
         similar service in the area a mixed response was received with 14 of the 74 writing
         a “yes” or providing their signature to indicate such. The remainder either left the
         signature block empty (40) or wrote “no” (20)
    6. A letter from an individual with a mortgage company who used the limousine
       service as a free service who notes the special features offered such as a special
       sound system, lighting, etc. The writer indicates they would recommend and use the
       service 6 times a year.


Page 6                                        Limo Decision                 Passenger Transportation Board
    7. A letter (undated) from an account manager at Island Savings that indicates it has
       many staff events and would use the applicant’s services throughout the year due to
       drinking and driving laws. It supports the service that is fairly priced.
    8. A letter (undated) from an individual who indicates he cannot afford a minimum of
       $120.00 pickup and drop off that Encore Limo service offers or $100.00 an hour for
       events with a minimum of 2 hours. The writer wants to experience a limousine ride
       at a price that makes it feasible to enjoy. The writer indicated use and booking of the
       service on several specific dates.
    9. A letter dated April 13, 2012 from a business owner which supports the application
       and indicates there is a high demand for a limo service such as the one proposed by
       the applicant and who indicates the rates are reasonable and would refer the service
       to its customers.
    I find the application does not provide sufficient factual and substantiated evidence of
    public need for the service. There was very little evidence in the form of statements or
    letters to indicate that the limousine service currently available in the area is insufficient,
    inadequate or unsatisfactory. Many letters represented a general preference for the client’s
    service. While it is laudable the applicant proposes to provide a high quality level of service
    with some special features, this is not evidence of an unmet demand in the limousine
    industry, nor is providing a high quality service a unique goal in the industry. Preference
    does not constitute public need. Only a few indicated potential corporate business, and
    there was little to no evidence in the letters to suggest there were major difficulties or
    there was an inability in getting limousine service from current providers in the area.
    There was no indication in any of the documentation that service could not be provided
    because a limousine was not available or was refused. There was also no strong
    documentation from local pubs and restaurants that indicated a need of the proposed “on-
    call” service for its patrons over that of taxi providers in the area.
    Further, the survey of 22 businesses and 25 dining patrons provided largely anecdotal
    evidence and were afforded no weight.
    I also accord the more recent survey no weight as evidence of public need. There is no
    information provided about how this survey was developed or how the sample size was
    determined, where it was specifically conducted, etc. Many of the respondent signatures
    are illegible and there is no phone contact information provided. I also found the lead-in to
    the survey misleading with regard to rates. The reference to “Under $100 an hour up to 6
    people” is not consistent with the applicant’s published rate of $100.00 for 4-7 passengers.
    Further, the “questions” on the survey are essentially statements that did not allow any
    objective level of individualized participation in response. Finally the survey provided no
    ability for the respondents to indicate how often they would use the applicant’s proposed
    service or to express concerns with regard to the lack of availability of the limo service
    proposed or that of the service being currently provided by local companies.
    Evidence or indication of public need for the service proposed is weak. I find the
    applicant has not demonstrated public need for his service as required by section 28(1)
    (a) of the Passenger Transportation Act.


Page 7                                     Limo Decision                  Passenger Transportation Board
(c) Would the application, if granted, promote sound economic conditions in the passenger

There are many markets for limousines. Some limousine companies may serve the
    transportation business in British Columbia?

wedding or special event market. Others may serve corporations. Still others may offer a
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 applicant has not demonstrated a good understanding of the local and existing
limousine service. The Business Plan refers to the closest limousine service alternative as
in Victoria or Nanaimo. Submissions to its application have raised its own awareness
accordingly. I have a further concern with respect to its proposed on-call service for pubs
and restaurants and the use of the charter rates proposed for 1-3 and 4-7 passengers. The
application lacks detail on how this aspect of service will operate. While the addition of 1
limousine in the area is not necessarily large, it could have a deleterious effect on local
limousine carriers and other operators when little need is apparent for the services and
businesses to be targeted by the proposed by the applicant. Granting the application would
simply result in more capacity competing for limited business.
The applicant has also failed to demonstrate fitness or public need for the service
requested, and, as such, if granted, the service could end up competing with the existing
carriers and result in a detrimental effect on the passenger transportation business.
I am not satisfied approving this application would promote sound economic conditions in
the transportation industry.


For the reasons above, this application is refused.
    IV. Conclusion




Page 8                                    Limo Decision                 Passenger Transportation Board

								
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