Limos Dodge Inspections, Do Business Without License

The Investigative Unit goes undercover to show Bay Area limo companies operating without active licenses and under-reporting passenger numbers, avoiding more rigorous safety inspections.

Freeway drivers share the road with limos, riders pay them for a spot in the backseat. Either way, it matters if limos are safe and have insurance: that’s why they get licensed.

The Investigative Unit uncovered several limo companies in the Bay Area operating without a license and some under-reporting how many passengers they transport to skirt safety inspections for larger carriers.

The California Public Utilities Commission regulates and licenses passenger carriers in the state. The agency requires carriers to have proof of insurance, file evidence of workers’ compensation insurance, participate in the CPUC drug and alcohol testing program, and pay a series of fees in order to have an active license.

NBC Bay Area looked up local limo companies, then checked their license status on the CPUC website and found several companies with suspended licenses who are still actively advertising and seeking business. So the Investigative Unit went undercover to see if the unlicensed operators would entertain requests for service.

To check if a limo company’s license is active, click here.

Drivers from Bay Limo in Milpitas gave the NBC undercover team a tour of their Lincoln stretch limo.

“You are sure it’s safe?” an NBC undercover producer asked the drivers.

“Totally, yeah,” one driver responded. “We are parents. We actually took our kids out in it the other night.”

“Do you have a license that you show your customers?” the producer asked. “Yeah,” both drivers responded.

According to the CPUC, The Bay Limo had its license revoked six months ago for failing to maintain proper insurance. However, it’s still doing business: its active website says the company provides “high quality and personal service.”

The undercover team also found another company, AAA City Limo in Millbrae doing business without a license.

An undercover producer asked the owner directly if he had a license. “Yeah,” he said. “I’ve been doing this for a long time.”

According to the CPUC’s website, the carrier requested a voluntary suspension in April, meaning he should not be operating.

“The illegal operator knows the system. It’s the cost of doing business,” Mark Stewart, Director of the Greater California Livery Association, a limo industry group, told the Investigative Unit.

He told NBC Bay Area it is cheaper for limo companies to operate illegally because they do not have to pay payroll tax, workers’ compensation and can avoid CPUC licensing fees.

Stewart said he believes more collaboration between the CPUC and other state agencies would bring more oversight and eliminate some of the illegal operations. “They will either get legitimate or they are going to be out of business.”

“It’s very frustrating that our own regulatory body and other agencies just sit back and nothing is actually done,” Stewart said.

According to Stewart, some of those CPUC application fees and licensing renewal fees should be better used for enhancing regulation and increasing collaboration.

“When we don’t see that type of assistance coming from our regulator body, then that’s very discouraging,” Stewart said.

However, there is another agency involved with some limo companies -- the California Highway Patrol Motor Carrier Safety Unit. The CHP performs full inspections on all limo operators that report to carry more than 10 passengers.

The gray area comes with stretch limos -- for anyone who has ridden in one, one can see, it’s possible to get more than ten folks inside. However, if limo companies report they transport fewer, they don't fall under the CHP's jurisdiction, and are not required to get inspected. 

Bay Limo in Milpitas apparently did that. When its permit was active it was licensed for a five passenger vehicle, but when trying to get the business of NBC Bay Area’s undercover team, drivers said they squeezed 11 kids in recently. “There were 11 kids,” the driver said. “Eleven. So, we handle it all.”

According to the CPUC, companies can be fined up to $7,500 per day of violation if they misrepresent seating capacities to the CPUC.

If Bay Limo was licensed for 11 passengers, it would be mandated to receive safety inspections from the CHP Motor Carrier Safety Unit.

NBC Bay Area asked Monica Christopher of the Motor Carrier Safety Unit why carriers would skirt inspections. “Less oversight by the highway patrol,” Christopher said.

Unlike the CPUC, the CHP Motor Carrier Safety Unit has a team of mechanics who perform inspections on each vehicle reported to carry more than 10 passengers. NBC Bay Area went along for a routine inspection, watching the CHP mechanics carefully looking over the fleet and scrutinizing maintenance records.

For a list of CHP Motor Carrier Units by region, click here.

“Passenger transportation is a main concern of the department,” Christopher said. “Ensuring the people are operating and driving on our highways are safe.”

State Senator Jerry Hill of District 13 that represents San Mateo wants CHP inspections for all limo carriers, despite reported passenger capacity.

To view the amended bill click here.

“I care because it’s good public policy and I don’t want to see anybody else die,” Senator Hill told NBC Bay Area.

He initiated legislation that would require fire extinguishers in all limos after the San Mateo Bridge limo fire that killed five. He recently amended the bill to include CHP safety inspections for all passenger carriers.

“More should be done and I think this legislation is that more that we will get done to make sure it is a safe environment and safe transportation system,” Senator Hill said.

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