With so many limousine companies adding buses to their fleets in recent years, it is critical that such operators stay current on compliance and regulatory matters. While a great many of these operators are members of the National Limousine Association, precious few are also members of either the American Bus Association (ABA), United Motorcoach Association (UMA), or both. ABA and UMA are staunch advocates of operators’ rights and are highly effective at identifying overreaching regulations and mobilizing member action to combat them. As both organizations prepare for their respective Capitol Hill legislative outreach programs, limousine operators must begin participating in earnest. A prime example of dangerous legislative overreach is Rule 49CFR Part 390, sub-part F which is commonly referred to as the “Lease and Interchange” rule. This rule will once again be the focus of these associations’ efforts on Capitol Hill. The Lease and Interchange rule has technically been in effect since March 16, 2016. Due to fierce resistance from associations and operators alike, however, the official compliance date has been deferred twice and is now set for January 1, 2018. This rule essentially governs the farming out of trips between DOT-flagged transportation providers. It was designed to regulate the property-carrying segment of the transportation industry, but it has a devastating effect on passenger carriers. According to the rule, when company A farms work to company B, several things must transpire in order to make the subcontract legal:
There must be a written “lease” agreement between the companies at least 48 hours prior to trip time.
Company A must notify the passengers of the subcontract at least 24 hours before trip time.
Company B must display Company A’s USDOT number and markings.
Company A thereby assumes responsibility for all compliance violations assessed during the trip.
Company A assumes all insurance and property damage liability for Company B’s actions.
In essence, Company A is on the hook for all roadside inspections, violations, out-of-service orders, accidents, damages, liability, and compliance sanctions during audit of those trips. This is antithetical to the affiliate model that is so ingrained in our industry. And while the official compliance date is now deferred to January 2018, the rule itself is actually active and officially on the books, so while FMCSA may not choose to enforce it, in the event of an accident, a good defense team surely will raise the issue. All in all, this is an extremely dangerous rule. I urge all operators with large equipment to consider joining ABA and UMA, availing themselves of the great information and advocacy provided and becoming actively engaged in protecting our way of business.
ABA website: www.buses.org
Legislative Fly-In May 3-4, 2017
UMA Website: www.uma.org
Capitol Hill Days April 25-26, 2017
Written by Barry Gross
LMC’s partner in Fleet and DOT, RLS Management Services of Reston Limousine.
