Licence Application Decision

Transcription

1 Licence Application Decision (Taxi - New) Application # Applicant GRISTWOOD, James William Trade Name (s) Address Current Licence Application Summary Haisla Taxi 885 Kuldo Boulevard, Kitimat BC V8C 1N1 None Special Authorization: Passenger Directed Vehicles New taxi service in Kitimat area with 10 vehicles. All vehicles will be conventional taxis Rates Metered rates Date Published in Weekly Bulletin Submitters (and representatives) Board Decision January 21, 2015 Kalum Kabs Ltd. (KKL) Kevin BARRY dba Coastal Taxi (Pamela Mikolaycyk, Talstra Law Corporation, Counsel). The special authorization is refused. Decision Date March 20, 2015 Panel Chair William Bell I. Introduction This is an application for a new passenger transportation licence with a Special Authorization: Passenger Directed Vehicles. The applicant proposes to operate 10 conventional taxis that pick up passengers in the Kitimat area. This includes Haisla (Kitamaat Village) and industrial facilities surrounding Kitimat. The proposed destination area includes Terrace, NW Regional Airport (YXT), Prince Rupert Airport (YPR), Smithers Airport (YYD) or hotel and Prince George Airport (YXS) or hotel. Nine (9) of the vehicles would be sedans or minivan taxis, with a seating capacity between 2 and 7 passengers plus a driver. One (1) would be a large taxi with a seating capacity between 2 and 7 passengers plus a driver. The applicant, James Gristwood, dba Haisla Taxi (HT) is also requesting return and reverse trip authority. Authority is also requested to provide transportation services under contract with Chevron Canada Ltd. and JGC Fluor. If approved, the applicant would charge metered rates. Page 1 Passenger Transportation Board Decision

2 II. Background The applicant is a long-time transportation company owner in the area. Mr. Gristwood previously owned a taxi company based in Kitimat and currently owns Haisla Shuttle Ltd. and Kitimat Minibus Ltd. His shuttle bus services provide transportation for major construction projects in the Kitimat area. He also operates the HandyDart service in Kitimat. It is his plan to operate this new taxi company with the assistance of his spouse, daughter and 10 to 15 drivers. The applicant proposes to operate a year-round taxi service that is available 24 hours per day. A brief history of Mr. Gristwood s matters related to passenger transportation licensing is as follows: March 2005 Mr. Gristwood, (dba Haisla Taxi) received expedited approval for 9 taxis (PT licence 70706) when the former Motor Carrier Act was replaced by the Passenger Transportation Act December 2005 Mr. Gristwood transferred the above licence to Kevin Barry and William Franklin dba Coastal Taxi November 2007 Mr. Gristwood, (dba Haisla Taxi) was approved for a new Special Authorization to operate 2 accessible taxis (PT licence 71523) December 2010 Mr. Gristwood was granted an amendment to the above PT licence January 2011 Haisla Shuttle Ltd. was incorporated November 2012 PT licence expired (see above) November 2013 General Authorization licence was issued to Haisla Shuttle Ltd. August 2014 Application from Haisla Shuttle Ltd. (156-14) was published for a new Special Authorization licence to operate 10 conventional taxis in the Kitimat area. The Board decision, refusing the application, was published in the PT Board Weekly Bulletin October 29, Material submitted in support of the application included the following: PDV Vehicle Proposal Public Need Indicators PDV Proposed Terms and Conditions of Disclosures of Unlawful Activity Licence and Bankruptcy Metered Taxi Rates PDV Rules Condensed Operating and Business Plans Disclosures of Passenger Financial Information Transportation Ownership Page 2 Taxi Decision Passenger Transportation Board

3 III. Relevant Legislation Division 3 of the Passenger Transportation Act (the Act ) applies to this application. The Act requires the Registrar of Passenger Transportation to forward applications for Special Authorization licences to the Passenger Transportation Board (Board). Section 28(1) of the Act says that the Board may approve the 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. I will consider each of these points in making my decision. IV. Rationale and Submissions (a) Applicant s Rationale HT is seeking to establish a taxi service as current demand is not being met due to economic activity levels in the Kitimat area. Service will be used by existing corporate clients, and also residents in the area. For corporate clients, there are increased trips required to YXT, Terrace and their accommodations. Turnaround times are growing longer. Flights are missed or local residents are left waiting. Business travelers to the area require a cost-effective service. Further, the community of Haisla requires reliable transportation to Kitimat as the transit service is limited and inconvenient. Elderly people at Haisla need appropriate connections for medical and other needs. Page 3 Taxi Decision Passenger Transportation Board

4 (b) Submissions There were 2 submitters to this application. 1. Kalum Kabs Ltd. (KKL) Kalum Kabs holds a passenger transportation licence with 2 authorizations: General Authorization (GA) and Special Authorization (SA). Under its SA licence, Kalum Kabs (KKL) is authorized to operate 19 taxis. Passengers may originate in Terrace and points within 48 road kilometers from within the City of Terrace. This includes YXT. KKL may not pick up passengers outside its originating area. Therefore, the company may only drop off passengers in Kitimat, not pick them up. Under its GA licence, the company currently operates two 15-passenger vans, and is not restricted in where it can pick up and drop off passengers. 2. Kevin BARRY dba Coastal Taxi (Pamela Mikolaycyk, Talstra Law Corporation, Counsel). Coastal Taxi is authorized to provide taxi service with 13 vehicles (of which a maximum of 12 can be conventional taxis) within 33 kilometers of the District of Kitimat and within 32 kilometers of the Kitamaat Village. It has return and reverse trips authority for each and with these limitations, Coastal Taxi may also pick up passengers at YXT and take them to Kitimat. The main arguments of the two submitters are as follows; There is sufficient taxi service in the area. There is no public need for an added taxi service in this northern part of the province (covering 25% of B.C). An added company picking up at the YXT and in the Terrace area will jeopardize KKL. The application will undermine all current providers. There is currently an economic downturn that has reduced taxi service demand. KKL has reduced its staff by 12%. Company accounts associated with LNG or the Rio Tinto Alcan Modernization Project (KMP) have been minimized, or are inactive. The KMP is scheduled to wind down in 6-8 months. In 6-8 weeks, the ship housing 400 crew members associated with the project is scheduled to leave. Shuttle services are not needed due to increased shuttle and bussing services over the last 14 months to the area. B.C. Statistics, as reported in media reports that were provided, indicate a 1.7% population decrease in Terrace from 2013 to 2014, 2.9% in Prince Rupert and a 1% increase for Kitimat. Media reports also indicate the Rio Tinto project is closing and the LNG project has somewhat evaporated and is on hold, and that some LNG related Page 4 Taxi Decision Passenger Transportation Board

5 companies have exited their plans for Kitimat. This has resulted in downsizing and layoffs for workers. Information has circulated in Kitimat that Haisla Shuttle has itself recently laid off 20 to 21 staff. A recent November 2014 decision by the Supreme Court of Canada (Tsilhqot in Decision) has granted First nations a greater say and involvement regarding economic activity that will slow down LNG and pipeline construction in the area. (c.) Applicant s Response The applicant in response to the submissions indicated the following: The application is limited to service in the Kitimat area and not the northern 25% of B.C. Reverse pickups is to address the need to pick up corporate clients that are diverted to airports due to weather and other factors. HT has had requests for quotations for service from corporate clients in the Kitimat area who are seeking alternatives to existing service. Organizational representatives and members of the public are reluctant to share their concerns about existing service and verification for additional service is difficult to determine. The public will be provided with additional options and the market will determine which service better meets the needs of the public. A sister community in Terrace (Thornhill area) has increased in population. While information regarding slowdowns was not available at the time of the application, the applicant believes the reduction in demand for taxi service is temporary and not indicative of Kitimat s need for alternatives to the current service. A proactive approach to meeting demand is required as businesses grow. HT submits the demand for service will remain constant. Haisla Shuttle Ltd. has not lain off any employees, but has recently hired 4 more drivers. A related company owned by the applicant has lain off employees recently due to the Chevron/Fluor slowdown. This is not relevant to or related to taxi service. The vehicles associated with the layoffs were passenger vehicles that were intended to meet demand for large scale transfers of workers and corporate clients a service which is uneconomical for small numbers of passengers. The Board gives more weight to submissions that back up general claims with facts or details. I have considered the submissions and the responses in my review of this application. Page 5 Taxi Decision Passenger Transportation Board

6 V. Reasons for the Board s Decision (a) Is there a public need for the service that the applicant proposes to provide under special authorization? Applicants should supply information that is factual and objective to demonstrate public need. They should demonstrate that there are people who would use the service. Applicants should explain why they are applying for a specific number of vehicles. The Board wants to be satisfied that there is a reasonable a reasonable connection between the number and types of vehicles requested and public need. The applicant included the following information to demonstrate public need. Condensed Operating Plan (COP) HT reports that its primary clients (construction firms) have been serviced by using commuter buses for limited numbers. Further, long wait times have not assisted clients in meeting scheduled airline departures. Under the heading target market, HT states that its Primary clients will be construction workers and management who rotate during construction. The applicant states that its exemplary service record providing other transportation services will cause people to use his new taxi service. The applicant notes, Our primary client base is shuttle service clients, who require timely arrival to scheduled and charter aircraft (on rotation) and that flight cancellations may require pick-up and drop-off at alternate airports. Elsewhere in the COP the applicant states its primary goal is to meet the smaller service requirement of the shuttle service with booking and payment on a one stop shop basis.the intent is to provide a taxi service to this established market involving large mega projects and increase efficiencies (i.e. using taxis instead of large buses for transporting 1-7 people). Business Plan The current demand for taxis is not being met. A market analysis notes The population increase due to projects is not proportional to the increase in transportation availability and currently taxi operators have not been keeping pace proportionately with the demand and/or the population. Large construction projects have increased demand for timely service. The Rio Tinto Alcan/Bechtel camp has an average population of 3,500 which is proposed to be filled with Shell LNG employees as the KMP ends. The Chevron/JGC Fluor camp has an average population of 100 at the moment, but is forecast to go to 6,000 during construction. Other joint ventures are Page 6 Taxi Decision Passenger Transportation Board

7 improving the chances for investment decisions on other projects. The increase in trips to the NW Regional Airport and other accommodations has resulted in increased turnaround times and longer wait times. Flights are missed or local residents are left waiting. The applicant, aside from providing service to Kitimat and the surrounding industrial/construction sites, plans to service the Community of Haisla that is minutes away from Kitimat. It notes that weather and traffic does not encourage anyone to walk to Haisla. Transit service is limited and inconvenient. Reliable transportation is unavailable. Elders in the community have difficulty making connections for medical appointments and meeting other needs. Other In other parts of the application the applicant notes, a motivation for the application is provide service to existing clients and those left behind by the current demand for services. The applicant points out that it does not intend to prioritize service to major employers. Service will be managed as a taxi service for residents in the area. The applicant included a copy of a bussing contract that expired May 31, 2014 between Haisla Shuttle Ltd. and Chevron Canada. As an example, the applicant provided an empty bussing contract dated September 10 for purchasing weekly services with JGC Fluor to show the public need that could be met using taxis. Support Documents 1. Petition A petition had 23 signatures or printed names of people and their addresses from the Kitimat area. The header identified these people as residents of Kitimat who want to complain that it takes far too long to get a taxi. 2. Letters of Support A total of twelve (12) letters came from individuals, businesses or other organizations. Of these, 6 were written during September 2014 and submitted with regard to the applicant s previous application Some of these previous letters provided general support with no details. One former letter from the Haisla Nation Council reported dissatisfaction with long wait times and the unavailability of taxi service to its members that live on and off the reserve and the general public. One letter from the Kitimat Chamber of Commerce (KCC) spoke about an expanded and needed taxi service to meet a growing commercial sector involving existing and Page 7 Taxi Decision Passenger Transportation Board

8 planned projects, and a growing residential population. The KCC notes a need for new residents, as well as seniors, who depend on taxi service. The applicant submitted 4 new letters written between November and December 2014 and 2 letters from September 2014 not submitted with the previous application. The more updated letters spoke about the growth in business activity and unavailability of taxi service and long waits. One letter from a Ground Transportation Manager (GTM) for an LNG Kitimat based project. The GTM noted the current taxi provider cannot meet its service standards forcing the company and many of its sub-contractors to use expensive, underutilized larger vehicles and taxi service based out of town. One letter, written in December 2014, from a Manager at Rio Tinto Alcan expressed concerns about unavailable taxi service and the inability to make bookings on specific days and at specific times. This letter also notes the KMP is at peak construction and In 2015 KMP will begin to ramp down and will be fully completed by the end of The 2 letters from September 2014 were also provided and communicated general support for a new taxi service. In addition to the above letters, there were eight (8) s of support that came from a variety of businesses and individuals. Most of these (6) provided generic support and were submitted during September 2014 to support the applicant s previous application They spoke about the lack of public transportation, wait times and taxi service that was creating safety issues. Several reported major issues at peak times on weekends and the greater need for taxi service to prevent drinking and driving. One notes that the cab companies favour service to camp workers, or contracts instead of regular customers. It further notes that one cab company that can serve Kitamaat Village doesn t go there. Also shift workers get stranded and the elderly do not get services for medical and other purposes. One more recent December spoke about being told on a Friday night that only 2 taxis were on the road and, at another time, waiting 1½ hour prior to walking home. Analysis and Findings In the Board s decision published October 29, 2014 respecting Haisla Shuttle Ltd. s application , it noted the applicant s intention to provide more efficient service to its existing customer base of shuttle services in a more efficient manner using taxis. The decision also pointed out the applicant s request for a larger service area (originating and destination) would allow it to bid on future projects in the area. In this application, HT has confined its originating area to the Kitimat area including Haisla and surrounding industrial/construction sites. It also has proposed a service that provides services to its current customer base (shuttle service users) with smaller taxi vehicles. As well, it has proposed a taxi service for the general public in the community. Page 8 Taxi Decision Passenger Transportation Board

9 In viewing the proposed originating area there are 2 competitors. Coastal Taxi operates 13 taxis. Christopher Knight operates 1 vehicle within the District of Kitimat only with no service provided to or from YXT. Information received from the Registrar indicates the current operators have fleets with vehicles fully or almost fully activated. This application, if approved, would increase the current local taxi supply with 10 conventional taxis. This represents an approximate 71% increase to market capacity. I find that the dated letters and s provide general evidence relating to public need for taxi services as not being met either for smaller vehicle shuttle services or for general public ridership. More recent letters and s are small in number and indicate some need for the taxi service proposed or concerns with the current available service, but some of this is anecdotal and few provided any substantive or quantitative information. I accord them some weight. I accord the petition very little weight. There is no detailed information about individual experiences concerning issues with the current level of service such as wait times or a lack of service. Contracts for company transfers provided had expired or were a shell document for weekly service. There are no new or existing contracts from HT s corporate partners related to taxi service requests for lower volume employee transfers. One submitter provided reliable and verifiable information concerning a very small permanent population growth for the area proposed, and that the area is subject to a current economic downturn with LNG projects on hold. Further, one support letter from a Manager with the KMP validates the scheduled wind down of its project by the end of There is some evidence in front of me that, at least some of the time, recent service levels by taxis in the Kitimat area have been unacceptable. I also have evidence that shows that the local economy, which was booming around the time that application materials were put together, is cooling, at least somewhat. The resident and worker populations of Kitimat and surrounding area could experience some benefit from a higher level of taxi service. However, I must base my decision on whether HT has demonstrated that there is public need for the service proposed. Support for the proposed expansion in the local taxi fleet is frail and marginal. Supporting information is generally not substantive, factual, objective and verifiable. I find the evidence provided is insufficient to demonstrate a public need for a new taxi service, or for a new taxi service with 10 vehicles. Page 9 Taxi Decision Passenger Transportation Board

10 I find the applicant has not demonstrated that there is a public need for the service that they are proposing. (b) Is the applicant a fit and proper person to provide that service and is the applicant capable of providing that service? The Board looks at fitness in two parts: (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 fit and proper test relates to such matters as the conduct and character of an applicant and whether the applicant s proposed operations are structured or organized in such a way that the applicant will be able to meet its obligations as set out in the Passenger Transportation Act and Regulations. It also includes the requirement to keep care and control over the operations conducted under the licence and to ensure that vehicles are operated properly by the drivers with respect to the regulations. The second part of the fitness test involves information and evidence that demonstrates the applicant has the capability to manage the proposed service. Business plans and financial statements are often a main source of this information. Indicators that may guide the Board in making its decision include whether the applicant has the experience and transferable skills to manage the proposed service, whether the applicant shows understanding of what is needed to manage the proposed service, and whether the applicant has the resources to sustain operations throughout the implementation phase and to continue after becoming fully operational. The required disclosure forms were included with this application with no discrepancies. HT s National Safety Code status indicates a safety rating of Satisfactory-Unaudited. Mr. Gristwood has been involved in the transportation business for many years. He also owns Haisla Shuttle Ltd. and Kitimat Mini Bus Ltd. with a fleet of approximately 50 buses. The latter company has a full-time Safety Manager and 2 dispatch supervisors. The applicant also has run the local HandyDart service in Kitimat for over 7 years. A Condensed Operating Plan and a Business Plan was submitted with the application. The Business Plan included situational and market information and sales strategy. Its marketing strategy will be directed at families and individuals and business travelers. With respect to the latter it will use its business connections associated with its 2 of its associate companies, Haisla Shuttle Ltd. and Kitimat Minibus Ltd. Page 10 Taxi Decision Passenger Transportation Board

11 Haisla Shuttle Ltd. incurred an administrative penalty in September 2014 for a failure to display proper vehicle identification on a GA vehicle and a failure to produce appropriate conditions of licence and insurance papers in the vehicle. This has since been resolved and the Board has determined that, in this case, an applicant s administrative record would not, in and of itself, be a barrier to application considerations. However, the Board can, at any time, initiate a fitness review when a licensee s fitness may be in question. The applicant provided an outline respecting its plans to train and retain drivers involving reward systems and possible future lease of vehicles by them. The applicant claims to have the ability to hire sufficient drivers. HT proposed that it would use AWD taxis in a fleet that will be safe, clean and well maintained. It has the property and infrastructure that will provide car washing and cleaning and a mechanic on contract to main the vehicles. Financial information included start-up funding, 3-year cash flow projections and a Personal Equity Statement. Business related financial information was requested through Board staff and Balance Sheets and Statements of Income and Retained earnings were provided as at November 30, 2013 for Kitimat Mini Bus Ltd. and for Haisla Shuttle Ltd. as at February 28, 2013 and February 28, For Kitimat HandyDart, information was provided regarding gross income per month and taxable income for November 30, This information requested through Board staff supports the applicant s statement that it is able to finance the start-up operation of the taxi business contemplated by this application With no evidence to the contrary, I find the applicant fit and proper and capable of providing the proposed service. (c) Would the application, if granted, promote sound economic conditions in the passenger transportation business in British Columbia? The Board looks at the economic conditions issue from a wide-ranging view. The economic conditions of the transportation business in British Columbia are considered ahead of the economic and financial interests of an individual applicant or operator. The Board supports healthy competition. The Board discourages competition that could unduly harm existing service providers. One of the submissions contained reliable information that the economic growth that has impacted and defined the Kitimat area in the past few years has declined. Population growth has been minimal. A new taxi entrant to the market and, in this case a 70% increase in supply could Page 11 Taxi Decision Passenger Transportation Board

12 de-stabilize the existing industry in the long term. The applicant has not provided sufficient and substantive information on how the proposed new taxi company fulfills a gap that is not being met by other carriers in the area. There is no compelling evidence to suggest an ongoing and increased taxi capacity is needed to meet a public need or is that important to restore public confidence in the long-term for local taxi service. I do not find that the application, if granted, would promote sound economic conditions in the passenger transportation business in B.C. VI. Conclusion For the reasons above, this application is refused. Page 12 Taxi Decision Passenger Transportation Board