PUC Lets Airport Shuttle Keep Its License

Prime Time Shuttle, the state’s second-largest airport van service, will keep its license to operate despite violations of airport rules, the state Public Utilities Commission has decided.

The PUC stopped short of revoking Prime Time’s license at its meeting Aug. 2, instead voting 5 to 0 to give the Sun Valley van service another chance to comply with a Los Angeles International Airport ban against the use of independent drivers, PUC spokeswoman Kyle Devine said.

The PUC threw out assertions by its own compliance staff that Prime Time had violated state law through its use of so-called owner/operators instead of employee drivers.

Prime Time is guilty only of violating LAX regulations, the commission decided.

Prime Time called the decision a victory--even though the commission tacked on a $100,000 fine for noncompliance. The company is still paying off a previous $80,000 fine for similar violations.

“I feel very good about this. Finally, it is over,” said John Kindt, chief executive of Prime Time.

So bitter was the disagreement between Prime Time and the PUC’s staff that the commission included an order that company executives undergo “dispute resolution” training.

“We had a real problem with a war of words going on between Prime Time and our staff,” Devine said. “There were letters written to commissioners by Kindt calling our people ‘liars.’ ”

“I didn’t call them liars,” Kindt said. “But certainly there is no love lost between me and the PUC staff.”

The source of Prime Time’s troubles is its 150 or so independent owner/operators, who drive the company’s vans in place of hired drivers.

In exchange for a 40% cut of revenue, the company allows these independent contractors to use its name, logo and reservation and dispatch system. The owner/operators buy their own vans and insurance and pay all maintenance bills, Kindt said.

PUC compliance officials alleged that the arrangement saved the company money in employee benefits while encouraging drivers to work long hours and engage in predatory practices.

Kindt said the firm phased in the arrangement not to save money but to improve safety and service.

The commission ruled that as long as Prime Time’s drivers are individually licensed with the PUC, there is nothing in state law to prohibit their use, said Robert Berry, advisor to Commissioner Henry Duque.

However, the PUC does require that shuttle services obey the rules of the airports they serve, and in Prime Time’s case, the company was clearly not complying, Berry said.

Prime Time has three months to come up with a plan for compliance and will be on probation for four years, said Steven Kotz, the administrative law judge who ruled on the case.

What happens next depends on whether the airport enforces its ban against contractors.

This ban--as well as many other airport ground transport rules--is under review. If the airport board of commissioners decides to drop the ban on contractors, Prime Time could continue operating as it has, said Timothy Hogan, an assistant Los Angeles city attorney who represents the airport.

Hogan said airport officials are mainly worried about how to keep control over exploding airport traffic.

“If we just let the gates wide open, there would be nothing but shuttle vans every 2 feet,” he said.