Shuttle Company Might Lose License

SUN VALLEY — A Sun Valley airport shuttle services company faces possible revocation of its license for allegedly violating state law by using independent contractors as drivers, rather than company employees who receive benefits.

The practice has also raised concerns that Prime Time may flood the market with too many drivers, who could improperly solicit customers.

Prime Time Shuttle International Inc., the state’s second-largest airport-shuttle operator whose red vans are a familiar site to San Fernando Valley residents, has been on probation since May 1994 for the same violation.

Firm officials pleaded no contest at that time to three counts of failing to comply with an order by the state Public Utilities Commission and paid a $5,000 fine. A year earlier they paid $80,000 for a similar violation.

But members of the PUC’s compliance staff, testifying at hearings last week before an administrative law judge in San Francisco, contend that Prime Time has continued to use nonemployee drivers.

For a fee, the company allows independent contractors to use its name, logo and reservation and dispatch system. Prime Time thus avoids paying for certain employee benefits, said Larry McNeely, supervisor of the PUC’s passenger compliance unit.

McNeely said Prime Time has about 157 independent contractors as drivers. State law requires that airport shuttle drivers must be “under the direct control and supervision of the prime carrier,” he said.

“We’re faced with a company that violates the law daily.”

McNeely also said Prime Time’s use of contract labor has shifted its source of revenues from passenger fares to sales of the rights to use its name and logo--much the way direct sales companies operate.

“It’s Amway in a van,” McNeely said.

Prime Time, while acknowledging that it uses independent contractors, contends that the practice does not run afoul of state law. “It really will come down to interpreting the law,” said John E. Kindt Jr., Prime Time’s president.

Kindt argued that the use of independent contractors has made Prime Time’s operation more efficient and has improved its safety record by giving drivers greater incentive and responsibility.

“This is a story about the arrogance of a big bureaucracy,” Kindt said. “The only thing we really did wrong is we didn’t give in to their opinion.”

But in operating this way, the PUC’s McNeely said, Prime Time’s incentive is to continue selling the rights to its name--even when there’s no market demand for additional vans and drivers.

McNeely said Prime Time tells prospective drivers in sales seminars that they can make a profit of $4,000 a month. “From the folks we’ve interviewed, that’s not possible,” he said. For every driver who signs up, Prime Time receives $1,500 for training, plus weekly fees of $600 or more, he said.

When there are too many vans chasing the same customers, McNeely said, it encourages drivers to work more than the minimum number of hours the PUC allows, and to engage in predatory tactics such as soliciting customers from bus stops.

“We’re not roving the airport looking for passengers,” Kindt countered.