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Vancouver Limousine Rates Issues for Discussion01 Jan 2001

The Discussion Paper also identifies some limousine rates issues that are not directly related to the pilot project. These issues were raised by operators in a Summer 2013 survey about limousine rates issues. As a result, we are considering a minimum / ma

The Passenger Transportation Board implemented a limousine rates pilot project1 in July 2011. This project established minimum and maximum hourly rates for limousines in the Lower Mainland and Capital Regional District (CRD). Details about the pilot project are posted on the Board’s limousine rates webpage.

The Board is evaluating the project. The evaluation aims to answer these questions:

1. Should minimum / maximum rates continue in the Lower Mainland and Greater Victoria?
2. If yes, what adjustments should be made to the rates and rules?

In June 2013, the Board sent email invitations to limousine licensees to invite them to complete an online survey. Surveys were completed by 25 owners or employees in the limousine industry. The Board thanks those who took the time to complete the survey and provide thoughtful comments. The results helped the Board identify potential changes that should be made to the minimum and maximum hourly rates.
This discussion paper has two parts. Part 1 discusses key aspects of the pilot project and sets out policy directions that the Board intends to implement in Spring 2014. Part 2 identifies emerging issues that are relevant to limousine rates. This paper also identifies some potential options for the Board to consider.

The Board wants to learn more about industry perspectives on these topics. You are invited to send comments to the Board by January 20, 2014.

1 The Board’s minimum-maximum hourly rates pilot project relates to limousines with a Special Authorization licence that operate in the Lower Mainland (Vancouver and area) and CRD (Greater Victoria area). Limousines in British Columbia may only charge rates that are approved by the Board. For the purposes of this discussion paper, ‘limousine’ refers to a limousine operated with a Special Authorization licence to pick up passengers in the Lower Mainland or CRD, unless specified otherwise.

1. Board Directions on Limousine Rates Structure Summary of Board Directions on the Pilot Project 1.1 Keep minimum & maximum hourly rates in the Lower Mainland and CRD 1.2 Keep standard rules for limousine rates in the Lower Mainland and CRD 1.3 Move rates for antique sedans into the rate category for mid-size limousines 1.4 Increase most minimum rates 1.5 Decrease most maximum rates 1.6 Keep the optional PDV Fuel Surcharge (and make some adjustments) 1.7 Introduce periodic reviews of minimum and maximum rates

1.1 Keep the Minimum and Maximum Hourly Rate Structure A minimum-maximum structure for hourly rates is generally acceptable to the industry. With minimum / maximum rates, operators have broad parameters within which they can adjust their rates. This gives them the flexibility to respond to changes in transportation markets and business cycles. They are relieved of the burden of applying for changes to company-specific rates every time they want to adjust a rate. The Board will make this rate structure permanent in Spring 2014. It also plans to make some minor adjustments that are described in this Discussion Paper.

1.2 Keep Standard Rules for Limousine Rates (including discounts) The continuation of standard rules is generally acceptable to the industry. Where disagreement existed, it related to discounts. A majority of survey respondents preferred a maximum discount of 15%. A fifth preferred a discount of 20% and almost a fifth preferred a discount of 10%. For familiarization trip discounts, 60% supported the current 100% discount and 40% preferred a smaller discount of between 0% and 25%. There is no apparent rationale for changing either of these two discounts. At present, the Board intends to maintain the discounts without changes.

1.3 Merge ‘Antique Sedan’ Rate Category with ‘Mid-Size’ The Board intends to reduce the number of rate categories from 5 to 4. This is because few limousines fall within the antique sedan limousine category. Also, there is no clear benefit to maintaining a special rate category. This class of vehicle seeks a premium over regular sedan limousines. Thus, the Board intends to associate the rates for antique sedan limousines with the rates of mid-size limousines.

1.4 Increase Some Minimum Rates Most survey respondents indicated that the current minimum rates were either ‘reasonable’ or ‘too low’. Current rates were more acceptable for sedan limousines than SUV Stretch rates. Table 1 sets out the minimums that are now in place for five rate categories. It also sets out the minimums for four rate categories that the Board intends to implement in Spring 2014.

1.5 Decrease Some Maximum Rates Most licensees either state that maximum rates are reasonable or too high. Some (13% to 19%) stated that they are unnecessary. Keeping a maximum legitimizes a range of rates in the marketplace. Without a maximum, there could be greater pressure than already exists to charge the minimum. For sedan limousines, the Board will maintain a 100% spread between minimum and maximum. For higher rate categories, the Board is reducing the spread to about 60%. Specifics are set out in Table 2.

1.6 Keep the PDV Fuel Surcharge with Modifications Sixty percent of respondents have used the PDV fuel surcharge at some point. Seventy nine percent want to keep it ‘as is’. The Board recognizes that the surcharge has benefits limousines that enter into long-term contracts. The Board will maintain this optional fuel surcharge with two changes. First, it will reset the baseline fuel price (up or down) based on the annual fuel cost average for the prior calendar year. The Board will implement the reset each Winter or Spring. Second, the Board will simplify the PDV fuel surcharge by changing the increments in changes in the surcharge amounts to 1.0% (instead of 0.5%). There will be no change to the 2.0% threshold that must be surpassed for any surcharge to be applied.

1.7 Introduce a ‘Limousine Rate Review Mechanism’ Eighty percent of survey respondents supported a general rates review (and potential increase) every two years or every year. The Board will develop an objective mechanism to review limousine rates.

2. Other Industry Issues and Comments

The Board received feedback from Lower Mainland and CRD limousine companies on rates issues that are not directly related to the pilot project. They include zone rates for limousine operators that have a contract with YVR, rates for short limousine trips and the ability of larger limousines that have a licence with General Authorization to charge rates that are not subject to Board approval2. Board comments and responses are noted below.

2.1 Consider Testing a Minimum/Maximum flat rate on YVR-Vancouver-Whistler Trips Almost half of survey respondents (48%) saw that minimum / maximum flat rates would be beneficial for trips between YVR, downtown Vancouver and Whistler. Some respondents (24%) were neutral and some (24%) saw such rates as harmful. The Board is open to establishing flat rates for all limousine operators that have authority to pick up passengers from YVR, the City of Vancouver or Whistler. These limousine operators are invited to suggest minimum and maximum flat rates for these trips in either direction:

 YVR – Downtown Vancouver
 Downtown Vancouver – Whistler
 Whistler – YVR

2 The Board does not make licensing or rates decisions pertaining to limousines operated under a General Authorization licence. Click here for more information about General and Special Authorization licences.

2.2 Consider Testing a ½ Hour Minimum Charge for Short Limousine Trips The Board is open to considering a half-hour minimum rate at 60% of the hourly minimum. If implemented, the half-hour minimum would become an option for all limousines in Metro Vancouver and the CRD. The half-hour minimum could be charged whether or not a smartphone app is used to hire the limousine. A half-hour rate would not be subject to any discounts. For discussion, Table 3 sets out what a minimum half-hour charge could look like. Comments and alternative suggestions are welcome.

NOTES: (1) Minimum half-hour rates for the mid-size and non-SUV stretch categories have been adjusted to the nearest $5. (2) Maximum rates would also apply to half-hour charges. Maximums would reflect the ‘spread’ between minimum and maximum rates as noted in Table 2.
2.3 Rates Inequities with ‘GA’ Limousines Limousine operators with a Special Authorization licence remain concerned about the un-level playing field created by provincial legislation that excludes limousines with 12 passengers or more from the requirement to charge Board-approved rates. A number of survey respondents commented that ‘GA’ limousines should be subject to the minimum and maximum rates. The Ministry of Transportation and Infrastructure is responsible for the legislation. The Board has raised this industry concern with the Ministry on various occasions, including a meeting in October 2013.

3. Invitation for Comment
Interested parties are invited to comment on the limousine rates issues addressed in this
document. Send comments to:
Passenger Transportation Board 202 – 940 Blanshard Street Victoria, British Columbia V8W 9T5
Email: ptboard@gov.bc.ca
Fax: 250-953-3788
Phone: 250-953-3777

The deadline for comments is January 20, 2014.

4. Upcoming Industry Sessions
In February 2014, if there is enough interest, Board Chair Don Zurowski will host two industry session to discuss limousine rates issues. A summary of feedback to this report will be presented at those sessions. One session will be in Victoria. The other will be in Richmond. The Board will send meeting details to limousine licensees in January 2014.
5. Milestones
Milestones
Date
Comments on Discussion Paper (Deadline)

  • January 20, 2014 Limousine industry meetings about rates (Richmond, Victoria)
  • Early February 2014 Board decisions on pilot project (post on Board website)
  • March 2014 Effective date of changes to min./max. hourly rates
  • May 1, 2014 Decisions on other limousine rates issues To be determined

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