Introduction

Ken Lucci 0:25

Welcome to another exciting episode of the ground transportation. podcast. I am sans my partner, James Blaine from PAX training. No doubt he's out doing a chauffeur training program with one of the bigger operators than in the region. So I'm flying solo, but I have with me. One of my best friends in the industry. I've shared a stage with, and every time we go on a stage and an executive retreat or at an NLA conference, we just rock the house with information. Don't we?

Matt Daus 1:03

We do,

Ken Lucci 1:04

So I am so pleased

Matt Daus 1:07

it's electric.

Ken Lucci 1:08

it is electric. So I am, if you're into M and a regulatory and legal, absolutely. Yes. Um, And finance. So I am so pleased to have Matthew W Dawes. With me today, Esquire, the founder and chair of the transportation practice at Wendell's Marks long storied history. The bottom line is this man is the best and most renowned transportation attorney in the United States knows the regulatory side. Knows the operator side his practice does the legal side of M& A. So we work together on a lot of deals. So I have absolutely been chomping at the bit to get him on the podcast. We're going to have him back regularly to talk about a few things today. We're going to talk about autonomous and we're going to talk about the insurance crisis. But Matt, give us a little bit of your background. You've got a long history beyond windows marks. You've been. You know, New York politics. Give us a, give us a rundown of your your bio.

Matt Daus 2:08

Well, first of all, it's an honor to be here. Um, Sorry that we're missing James today, but we'll do another one when he's back. But it, you know, those are really kind words, Ken, coming from you. That's you know, really flattering because I know you are the leading financial consultant and M& A guy in this industry. We've done such great work together. It's just, uh, it's, it's really a privilege to continue to not just share the stage with you, but we work on deals together, which is you know, been very beneficial for those involved in those deals and also uh, for the industry at large. So, you know, thanks for taking, having the, taking the time to

Ken Lucci 2:42

Listen, we are the dream team when it comes to doing deals in this industry. I have to say it, our financial analysis, the negotiation part, your, your team on the legal side. I don't think you can get better. Listen, I don't think you can get better representation from a wall street, M& A company, or what do they call that? A white shoe law firm. You guys got it dialed in.

Matt Daus 3:06

Yeah, that's a, it's an interesting phrase, luffer. I mean, We've been around for a while and you know, actually I'll, I'll, I'll go back to the beginning. I mean, I, I didn't even know I wanted to be a lawyer. I had no interest in transportation. I'm a, I'm a musician, you know, I wanted to be a musician. My parents talked me out of it, told me if you're ever homeless, you're not going to be able to come into sleep with us if you go that route. So they kind of pressured me into doing something that I could earn money at and they were right in retrospect. Right. You know, I know a lot of people who pursued their dreams. Most of them, you know, they didn't make it. So I'm in a position now where I play for fun, as you know.

Ken Lucci 3:43

Because you have a day job that pays you real money, so.

Matt Daus 3:47

you know, in my young mind, I wanted to be an entertainment lawyer. And, and you know, that was my dream because at the time when I decided to go to law school because frankly, I'm afraid of needles and I want to be a doctor.

Ken Lucci 3:59

And

Matt Daus 4:00

know, I kind of figured out this may be the way to get into the music industry. And, you know, when I got out of law school, I'm like, you know, it's not all it's cracked up to be, you know, entertainment lawyers are basically agents. And I came out of law school at a time when it was a very difficult time to get a job. It was Bush seniors, a recession. So I ended up taking, you know, the first job I could get, which was doing medical malpractice law, and I hated it. I just didn't, you know, I felt like every time that there was handling a case, I had a disease myself. Um, It was kind of a depressing thing. And then, and I just took a stab and just got involved in politics through you know, some mutual friends. I hated politics, wanted nothing to do with it. When I was in college and law school, even though I was a poli sci major. And I got involved with a couple of campaigns and then I ended up working for the city of New York. More than I ever thought I would. I started out as a human rights prosecutor got promoted. You know, if, if you're in government and you have political connections and you work hard, you're, you're, you know, the sky's the limit. If you know how to stay out of trouble. Right. So when I got into government, I went from human rights to being general counsel of community development. And then I got involved with getting the mafia out of, The trade waste industry and then I ended up working for my own boss who became my old boss at one of those agencies who became the taxi commissioner. So I really just followed her because I liked working for her. And I came in as special counsel cleaned up a huge mess with the administrative law judges. The, the, the court at the TLC was. abysmal mess. I mean, I, my first day,

Ken Lucci 5:35

what years?

Matt Daus 5:37

we're talking about 1996.

Ken Lucci 5:40

Yeah.

Matt Daus 5:41

first day at work, there was a flood with summonses and violations floating all over the floor. Um, I mean, I guess you're not and then, you know, the big issue was taxi drivers would fight with the judges and because the judges were giving the decisions in front of them, finding them guilty. So they would throw the tables over. Um, We had a crowd control problem. There was like you know, hundreds of people in the waiting room. And the prior administration's response to that. If there's too many people in the waiting room, let's not schedule things. Right. Let's just dismiss the summonses. So, I mean, my, I walked in one day and I, there was water coming down from the elevator. I had to walk through it. My suit got all wet. And then two days later, someone pulled the fire along because there was too many people at TLC in the, in the room. And it was a riot and they took the inspectors and the cab drivers were carrying them like crowd surfing, like carrying them like by their legs. I mean, it was like, it was violence. They're horrible. So. I took that job seriously. We cleaned the tribunal up. And then I was promoted to general counsel. And then when my boss retired, I was appointed commissioner reappointed and it was a tough process. You know, you had to go through the city council. It's not just, you know, the mayor appointing you. You have to actually be approved by the legislative body. I went through that twice and a lot of people have noticed, but the second time I went through for reappointment they never actually voted on me. I got it by default. I was going to get the votes anyway, but I had left because things looked really good. When they were voting on me. And then there was a council member who was elected and the guy who lost the election came in and shot up the city council and kill people, you know, so that the day I was reappointed, unfortunately you know, some people were, were injured, I believe some folks were killed and they had massive security at city hall. A lot of people don't know this story. And I have my whole TLC staff up there and I said, you know what? Things are looking good. Let's go back to our office and watch the returns on TV. They're all sitting in my office popping some champagne and then some guy comes in and starts shooting the place up. So, that wasn't the end of my career. That was kind of the beginning. I was there for about nine years as commissioner, 14 years at TLC. And then I decided to leave about almost 15 years ago. And I've had pretty much three consistent hats, as you know, since then I was asked to, when I was elevated as president of the ITR, which is the taxi commissioners organization,

Ken Lucci 8:12

That's the regulatory association of all of the regulators in the country.

Matt Daus 8:17

correct. And, and beyond it's international. So taxi commissioners, limousine commissioners, PUC entities. I've been doing that since 2009. I don't get paid for it, but. We assess best practices. We, and it's important for my clients in the industry because we don't really fight with the regulators at my law firm. Like we know the regulators,

Ken Lucci 8:38

You, you can't, you can't, it's a losing battle to, to oppose the regulators in that way. Diplomacy, diplomacy is, is a key to what you do in that role.

Matt Daus 9:55

absolutely. I mean, every once in a while we'll have a lawsuit here and there, but we try to stay away from them. There's a problem for a limousine operator. We try to solve it. We have conversations and they take us seriously because we kind of someone was telling me, you know, how are you going to be a lawyer and still hang out with the regulators? You know, I was like, well, why not? I said, why not? Like, this is an issue in the insurance industry, right? You have to represent the plaintiff sort of defendants. It's always black and white and it's it doesn't have to be that way. So for 15 years, We've kept our relationships with the regulators really good. And also my academic hat, transportation technology chair at the city, university of New York. Academia is really important to those academic connections help the industry. It helps me identify trends before they happen because It is work with the academics and the law practice. You know, transportation law did not exist when we created this practice. People like, what is that? You know, now everybody knows what it is because of all the disruption with uber you know, one of the greatest compliments is when the late sent when Senator Al Damato opened up his lobbying practice five months after he saw I was doing good work. And making money. They started calling it the transportation lobbying practice. And now you got people saying their transportation borders all over the country. And when I went out there, it was like, what is that? You know? So my firm was the perfect place to go because as you know, we are very flexible with rates because it's a midsize firm. We have 150 lawyers. We've been around since the 1800s. My, one of the partners that was here for many, many years before who encouraged me to join was Tony Kosher, who was the chair of the port authority. For 12 years now, and now he's Amtrak chairman. Really, really good group of people. And I built the team from scratch. At the beginning, it was just me. I was in court, you know, litigating cases. And then, and then we started branching out. We started with taxis and limo clients, and then we branched out and we represent everything and anybody. And we try to stay a couple of steps ahead of the curve as you do with your business, Ken. Like we, we try to identify the trends. And learn about things before they become a thing. We've done that with flying taxes or automated vehicles with you know, multimodal mobility, like micro transit and stuff like that. So the good news is, is that we, not only do we know what we're doing, it's a full service law firm. So we do everything, MNA, contracts terms and services, litigation. We do pretty much everything, but. You're not going to waste your money by getting a really good attorney who knows nothing about transportation. They're learning on your time, right? And they don't have connections that we have, and they also don't understand the trends the way they do. So it worked out well. It's a niche practice. And we even work with other law firms who do expert witness work. We do a little bit of everything. So we're multimodal and we got, we got expertise in buses, automated enforcement. You name it, we're involved in it. Trucking, you know, deliveries, logistics, where it's all on the table.

Ken Lucci 12:55

but you hit upon something that is critical. Yesterday I had a conversation with, you know, someone who's extraordinarily wealthy and Harvard educated. And his question to me was, why wouldn't I hire a boutique investment bank? I said, because they don't have the data we have in the industry. They don't know the industry. They don't know the industry trends, and you're going to be paying them a thousand dollars an hour to learn. You're going to be paying us a lot less. And I said, not to mention the fact that, you know, you, that is the key is the past experience what's going on in the industry, but most important, more importantly, is the future trends of the business. And that's what your practice brings to the table. I mean, I, I get calls all the time from people who say, well, I'm a transportation MNA attorney. And I'll say, all right, give me your last two or three transactions and they can't. You know, and I, and I will say, I, I, I mean, I appreciate you saying that about our MNA, our MNA, we've come up from the bootstrap from, from, from, you know, doing small transactions, but the depth of knowledge and experience that you have on the regulatory side, so goes New York, so goes the rest of the country eventually. So I wanted to talk about two things today. One is, is a look, the insurer, we are in a crisis on the, on the fleet insurance side of the industry that I don't believe is going to go away. My quick, my question to you is, so first we're going to talk about that fleet insurance briefly, but then I want to talk about autonomous vehicles. I gave, I was out at the Arizona livery association two weeks ago. And I, I took my first way motor ride. I also sat at the airport. Looked at their depot, watch what was going on. And then I took a bunch of Uber rides. So I really want a deep dive on that. So if we can spend. you know, 57 minutes on where you think the insurance crisis is going to go. And then let's talk future autonomous. Let's hit everything we can on what's going on with our friend Elon. And, you know, perhaps politically, what is he trying to accomplish in this realm? Some stuff hit that hit the wire today on that. So You know, you know, everybody in the industry on the insurance side. I had a great conversation with Tim Delaney from Lancer the other day. And frankly, I got to tell you, they're not the enemy. They're not the cause. They're not the they are not the ones that are risk. They're not the ones that are responsible for people's insurance increases. They are a part of an ecosystem that they have very little control over. I'm kind of tired of people saying my agents, you know, my agents no good or my carriers greedy, you know, the numbers just don't support that. They lose money on the commercial side of the industry constantly. And, you know, they've been for years talking to operators about taking risk mitigation seriously. So my question is, where does this crisis, where are we going with this and what ultimately happens?

Insurance crisis

Ken Lucci 16:07

25 And beyond

Matt Daus 16:10

something needs to change because the same old, same old is not working. I think there's a lot of things that that the insurance industry has been grappling with. I think distracted driving is on the rise. People are back with their cars post pandemic. They lost a lot of money during the pandemic, as we all did.

Ken Lucci 16:26

as we all did.

Matt Daus 16:27

bailed out like the airlines were. So, look, you find a good insurance underwriter and you file rates, you know, they could claim, oh, you know, it's because of losses and claims. I still think that, you know, part of it also is driven by not just the increases in claims and the, the size of the claims, you know, in an increasingly litigious society, you know, I think the, the, the other, the story that's behind the scenes that we'll never know about is. You know, like every other industry, they're applying, trying to play catch up and make up for losses during the pandemic. You know, some people like in New York in particular, like the two things that I think put American transit over the edge, because we, you know, since the moment I joined TLC in the nineties, there was rumors about them being insolvent or about to go under for 30 years now,

Ken Lucci 17:14

For the audience, American Transit is the biggest carrier in delivery space in New York.

Matt Daus 17:20

it's not just livery, it's taxis, it's Ubers, it's everything. They write for everybody and, and, you know, there's competition in the marketplace, but there probably needs to be more and their rates have been notoriously low, they've been able to compete and drive a lot of people out of the market. But during the pandemic the one thing that really fueled their growth and allow them to stay solvent for many years is when Uber came into the market and grew exponentially when the TLC put a cap on the number of vehicles, that really hurt. And in the pandemic was a double whammy because. American Transit and other insurers like Lansing did the right thing. They participated in this program that the TLC put together. To put medallions and and FHVs in storage so that you didn't have to pay your insurance because you weren't working during the pandemic. Well, that all those things kind of, I think put American transit finally over the edge in addition to claims piling up and now we're, we're in a pickle, but it is a unique problem for New York City because as you know, we have very solid national players like Lancer and other insurance carriers that are out there. And really good insurance brokers like research underwriters and others there. There are people that are in this space that understand it. And if you shop around, you'd be surprised what you can get. And every state has different issues like Florida, for instance, and I have to commend Rick Versace and FLA,

Ken Lucci 18:44

Rick Versace from A one A, runs a great operation down on the East Coast.

Matt Daus 18:49

and they in Texas are attracting new insurers because they have tort reform. You know, they have a contributory bar contributory negligence bar. For those who don't know what that is, when you go to law school, every state has different you know, comparative negligence or contributory negligence laws. What does that mean? It means if you're the person who's suing and you're the plaintiff because you've been injured in a crash, will you negligent also? And what happens if you are? Most juries will. We'll say, okay, someone was injured. It's 100 grand that damages, you know, how much of that is the plaintiff's fault and how much of that is the defendant's fault. And they'll actually put a percentage on it. So technically if it's 80 percent the fault of the defendant, they're going to get, you know, 80, 000 of the a hundred thousand that that's exactly how it works. There are minority states, and this is something that Florida and Texas. are working on a lot of tort reform called the Contributory Negligence Bar. What does that mean? After everybody decides who's responsible for what, if the plaintiff is more than 51 percent at fault, then they can't recover anything. So, like, the tort reform is actually driving where the insurers are going at this point. So they're fleeing the states that have you know these huge verdicts and the trial lawyers that represent the plaintiff's bar, you know, have a lot of power to give a lot of contributions in a lot of states, including New York and California and elsewhere. And that's the, that's the bigger battle Ken, but Like,

Manage by telematics

Matt Daus 21:25

I just don't see the blue states pushing back on that. In fact, they're looking to go in the other direction. The other day, Governor Obama has a bill about, wrongful death cases and, you know, allowing for pain and suffering where they don't currently have it now. So in states like California and New York, in years from now, I don't see massive tort reform happening. In the red states that are looking to attract people and businesses, you're going to see it.

Ken Lucci 21:52

Red or red or purple,

Matt Daus 21:54

You're already, you're already seeing it. So that's the big picture. Short term, five years to now, it depends on the industry and what they want to do. You know, people shop around, insurers, when they see that they're threatened with competition or, or the industry complaining, will try for a couple of years to just keep their rates stable. You know, so, so, but, but in addition to shopping around, there are things that operators can do. To mitigate their losses and to look into different solutions. And there's things regulators can do. What can a company do? They can get telematics. They can put the cameras in.

Ken Lucci 22:25

and managed by it. And look at them and change the behavior of the driver.

Matt Daus 22:31

Exactly. And it's a little tricky with, you know, when you have independent contractor drivers, because there are legitimate issues there, but there's a way to get it done. And I think having a third party entity. Do it and have drivers voluntarily sign up for it and agree to it. There's ways that this can be done and it reduces claims 50 to 60%. The first people that I've seen that have done this in the nineties, I saw people doing this. Tim Rose and Mike Rose when they were at flight time and Empire CLS and Sealinger, they all had this stuff way before anybody else did. And, and companies like Valera global that used to be known as computer X team.

Ken Lucci 23:11

Dave Eckstein.

Matt Daus 23:13

They Dave Eckstein did this at great risk to his business at the time because he had independent contractors, but no one ever sued him to my knowledge about the labor issue, but he has been able to his business. He told me actually survived and would have gone under if he did not have the telematics cameras in because there were a couple of big lawsuits where they caught on tape what exactly happened and they were able to, you know, to beat the case.

Ken Lucci 23:41

So let's stop there for one second because you, you've mentioned a statistic that when you have telematics in the vehicles and now they are very sophisticated speed of the vehicle distracted driver reckless driving, speeding, et cetera. You can manage by them. The, the, the claims go down 50 to 60%. You're the third person to tell me that. So when somebody complains to me that a telematics cost X, okay, my answer is, if you manage your business by it, this is another form of insurance for you. But now I want you to talk about the downside or the negative side of having it. But not managing by it because it can be, it can come back and bite you in the ass on a lawsuit. If you're not doing something with the data,

Matt Daus 24:30

that's exactly right. And this is a double edged sword because for years, back in the nineties, I tried to get this program off the ground with the insurers in New York, and it was voluntary with incentives and discounts. But a lot of the fleet. Drivers basically told the taxi owners at the time, you know, if you put this in, I'm not, I'm working for your competitor. I don't want to be watched. You know, no employee wants to be watched. Right. You know, we have worked from home now. We don't know what people are really doing during the day, but this is like something where it could really bite you hard. If you, this stuff on the videos and you don't take action like that separate additional lawsuit. So there needs to be a program in place, which is very time sensitive. Time intensive. Like I remember when I first visited, when I was commissioner computer call, when David showed me what he did, they actually had hired people to sit there and watch videos all day. You don't have to do that anymore because the software has AI and they can automatically just isolate the things that

Ken Lucci 25:28

It pops, it pops up the problems for you,

Matt Daus 25:31

and it's great, but you have to take action. Where it's tricky is when they're independent contractor drivers involved, depending on the state. You know, they might say that you're exerting control over them and bring a classification lawsuit saying that you're their employer. So

Ken Lucci 25:44

but your point about the third party doing it is extraordinary. You could, you could basically say, look this is what you get paid, but you know, we can pay you a little bit more if you're on this telematics program.

Matt Daus 25:58

correct. And that's, that's exactly how Uber did it. Uber is always very sensitive to getting these lawsuits. So in New York they actually partnered with Nexar and after Ira Goldstein from the Black Car Fund did a pilot program with Nexar, where they bought some cameras and believe it or not, it really had nothing to do with insurance because all of the insurers in New York have approval for discounts. They stopped giving them a long time ago. Hereford, Lancer American transit. That's not why the drivers put them in, but now there's 30,000 Cameras in New York City in black cars and limos because a lot of those cars also work for uber and lyft and they put it in because of the passenger ratings Like they would have fights with passengers the passengers would put in a negative rating and the driver would be turned off the platform So they bought these cameras which are forward facing and inward facing So they can press a button when they start having an argument with the drop with the passenger And that's why they did it. But the result is, is that, you know, you could actually see the entire city. The data that they collect is amazing. And it, I believe that it's made the industry safer. There are studies on this Ken There are studies in the insurance industry, tons of them that show that as soon as you put a camera in, your claims will go down 50 to 60%. And you can talk to anyone in the industry that's done this. That's what the case is. And now it's easier because all the stuff that David Eckstein used to do doesn't need to be done anymore. It can be Automated and then you but you have to take action. Like I said and uber what they did is they provided a program where the leasing and rental companies, which I think is the future who are third parties that in new york city there's like Five or six companies that they own the permits They own the vehicles and the drivers just come to them and rent the car for a day or a week And they're separate entities. So by them putting the cameras in or by the drivers putting them in on their own, Uber doesn't have to worry about it. And that's how they were able to do it. Now, there's pathways to do this. If I was a limo operator right now, I'd put them in. I'd figure out a way to do it with a separate entity and talk to lawyers about how to structure to avoid and mitigate risk. I'm on a mission now where I've been commissioned by the NLA to work with my university on a report that will be coming out on reforming and addressing the limo crisis. As you know, Ken, we gave a big presentation, you and I, the NLA you know, earlier this year, that report is going to have specific recommendations and I can give you a really quick preview regulators need to mandate it. If the regulators mandate the cameras, Okay. The labor issues go away. Whenever a mandate comes from a regulator.

Ken Lucci 28:37

completely.

Matt Daus 28:38

Used against you in court that solves the problem. And you don't have to, because operators, unfortunately, very short sighted like, Oh, I want a discount. I want money now. They, I don't want, why should I invest in this? You know, how many times I speak to people and they're like, why should I invest in a camera system? It's too much money. I'm trying to make ends meet. Well, you know what, when your claims and your insurance in five years go down significantly, everything will pay for itself by tenfold. And so I'm a big believer in telematics. One thing I think that should be explored more is people either sharing their vehicles or creating and working with independent entities like rental companies that

Ken Lucci 29:14

Right. Connect, connected and shared capacity because you cannot afford to build the cathedral of three, four, 500 cars for the Sunday service. You have to have connected and shared capacity. A hundred percent agree with you. Especially in the sedan SUV side,

Matt Daus 29:35

can be done. It's an interesting business model. I mean, look, let's follow what Uber did. Look Uber is you know, they've had their issues. They've been a long time before they got profitable. But they, they have a model that they use Enterprise Hertz and Avis vehicles for their drivers, which is a third party entity. And in New York City, like I said, there's like five or six companies that all they do is rent to Uber and Lyft drivers and those same drivers service the limo industry. So the model itself is a good one because it solves the insurance crisis to a certain extent, because those companies have the ability to get captive insurance models and get fleet insurance and self insurance. Things that a small operator can't do, a small operator with three vehicles can't do that. So why not, why wouldn't all the, you know, and this is something that, you know, Rick in Florida is looking at, you know, with the captives. Captives are complicated. It's, it's something that you need capital. And I think that

Ken Lucci 30:30

captive insurance is very complicated. Financially, number one, operationally, and you hit the nail on the head with that total emphasis

Matt Daus 30:41

someone would develop a business model similar to the companies in New York that are working for Uber, it would be very successful. So what do I mean by that? A company that buys vehicles. And rents them out to the limo drivers and to, and, and also when you need to get a bus every once in a while, and, but you don't need it all the time. That's a great place to start. Like I, you know, I have, there are 10 small companies in California and they can't afford you know, their own bus. So why not put your money together or have a separate entity that. will rent it out to them and take care of the insurance.

Ken Lucci 31:17

And the maintenance and the repair. It's basically a communal leasing company. There's no question about it.

Matt Daus 31:24

but having a safety program with your drivers, putting the telematics in. These are things that can be done right away. Captives are very complicated. Self insurance is complicated. It involves investments and not every operator is able to do that. So I would say focus on the rental industry. Telematics have a safety program in place. And, and, and also you know, look at alternative business models. And this is something that can be done in the short term. I think tort, tort reform is a law. It's going to take 5 to 7 years to get a build on and changes to be made in that regard. However, like in New York, in particular, they have the split insurance thing. The DLC is unfortunately proposing to get rid of it, which I think is a mistake. Where you have 100 300 in limits, you can get the first 2550. That's state mandated for every vehicle through a general carrier like Geico or State Farm, and then you could buy from another carrier. The difference between the 2550 and 100 300. You can get you can stack policies. It's cheaper. It can be done. Uber's kind of done it in a, in a roundabout way with the TNC insurance, where you basically get, you know, the state minimum and then they pay for everything above that. That's a model that I think Canon should be explored in various states. And those are things that can be done midterm solutions, but short, short term, put some cameras in the cars, figure out a way to do it that will reduce. Like in a year or two you know, it'll, it'll show your losses and your claims reduction. And your drivers will be more responsible. And it'll be, it'll be much better for you. So we, we, we're going to be looking at all these issues in our report. Can we're hoping to have the report out, you know, in January or February specific concrete recommendations on what limo operators can do. We're working with the NLA. We're going to be surveying. The NLA members as part of this project and we're excited about it and we do believe things Can and will change over time, but we have to be we have to treat it like the crisis that it is and not You know make it's a crisis until I renew and then I have to worry about it for the rest of the year

Ken Lucci 33:33

Well, and they

Matt Daus 33:34

bottom line is, you know,

Ken Lucci 33:35

And what they do, unfortunately, what operators do is they are a matter of fact and reactive about their insurance renewal time. Oh, well, my insurance will take my agent will take care of me. Okay, well, the other 12 months of the year you need to build a case. And I talked to Steve Friedberg about this from research underwriters. We spent a lot of time on the phone and the same with Tim Delaney from Lancer. You have to mitigate risk every single day and create a culture of safety that becomes muscle memory. Okay. And you look at telematics, you look at your driver safety scores, and if they're sub 90 percent you need to, you need to address them. If you find you have a driver that's, that is aggressive driving braking, speeding, et cetera. You really have to have a paper trail where you try to say you, you change that behavior or, or you have to get rid of them. And, and for those of the operators that think, oh, I just stole a chauffeur. From my biggest competitor. Well, you might've just taken his worst headache off, off his plate. I think you need to be more collegiate about getting the risk, risky chauffeurs and CDLs out of the industry. Okay. And I'm really only passionate about it because it has permeated my business. Okay, people are coming to me. They want to sell their businesses, so they need to borrow and create a line of credit to borrow money to pay their insurance bill. So, you know, one last thing. Rick Versace in Florida has proven small business and operators. I mean, not a small operators, about 10 million operators. That independent businesses can make a difference. I think that guy is spending a third to 40 percent of his time on the insurance crisis for Florida. So I would encourage the state associations to let's drop the competitive aspects and be more collegiate on this and cooperative. On this crisis. So, and listen, you're at the forefront of it. If they didn't, if the NLA didn't have you to do the, the education and the research on this and put together the position paper, I think we'd be in trouble as an industry. And that's the stuff that nobody sees when they hire you. They, and they say. You know, wow. You know, you, you charge more than my real estate lawyer. No shit, because I know the transportation space. You're well worth it because of what you do for the industry. So now let's turn the topic to something that again, coming across our desk every single day is autonomous. Taxis, where do you think the first of all, where do you think that's going? They're

Robo Taxis & AVs

Ken Lucci 36:20

in right now they've been approved in la they've approved in san francisco They are all over phoenix, arizona. They're going to be going to austin, texas. They're going to be opening in miami next year waymo is big in this And waymo is part of google zuex Is part of Amazon, if I'm not mistaken. And then obviously we have Elon Musk looming around and the rumor is that he's his robo cabs are going to go right to Uber. So give me your thought process on the timeline on regulatory, where are we going to see this grow to 10 cities, a year,

Matt Daus 37:01

To back up for a minute, you know, I think this is a thing, I mean, you know, this is real. Like people are still thinking, oh, this is just fantasy. It is real. Do I think it is going to take over the limo industry or the taxi industry and replace everything overnight? Absolutely. I don't think even in the longterm it will, it will be one of many different ways that you get around. It'll increase over time and in scope. And in certain cities before others, because there are some regulatory environments that are more harsh than others. And, you know, the state laws that that are dealing with this issue and this labor issues. So when, when you, it depends on the regulator that you're dealing with. Like, the transportation regulators are obviously concerned about safety, but there are other issues that are socioeconomic issues that they're very much top of mind for them. That's wheelchair accessibility. It's equity. It's still an issue in a lot of blue states and cities. There's the issue of labor displacement, which is political. The Teamsters is trying to fight every single one of these bills and trying to get, you know, a requirement that there'd be a driver in the car. Well, what's the whole point of having an autonomous car if you don't, if you have a driver in it, but I don't see this affecting the non emergency medical transit or limousine industry anytime soon, people like me are paying for a limo because I want somebody in there. Right. I'm not, you know, that's the, but, but people, you know, in certain communities or at Disney and retirement communities and. Places like Arizona. I don't know how, how was your, like, how was your experience? Can

Ken Lucci 38:33

It was, it was a, it was a novelty. It was a little nerve wracking, you know, cause I'm an anxious person anyway. And I think from a type a control perspective, I, I felt better. I would feel better to have a dragger in the seat. I didn't, it would seem slow to me. It definitely seems slow to me. But it was, it was enjoyable. You know, they have the dental chair music playing and it was, it was Jetson's kind of a thing. In general, I think it was better than if you had a recalcitrant driver or you had a driver that you kind of cringed about how they were driving. It seemed safe to me. The funny thing is I was behind heading back to the airport in a chauffeured car. I, I was watching four of these vehicles, right, Matt, literally within seconds there, the, the, the blinkers are going on within seconds at the, it was like a choreographed, so the precision was unbelievable to me. And when they pulled up. They all pulled up within inches of that line the same way. So I'm with you that I think it's going to affect the limousine aspect of the world and the NEMT aspects of the world later, but we have the Elon factor. And, and I have to, what, just for the audience, what came out today was the Trump administration wants to stop the mandate that autonomous vehicles vehicles have to report accidents on the federal level. Now, to me, that is the first of what Elon's agenda is. I'm going to be careful. I guess I don't. I, I, I, I believe that that Elon's purpose of saddling up to our president is to move forward on the federal level. autonomous vehicles and his robo taxis. You know, he has a habit. If you I've read all the biographies on this guy, he has a habit of goosing his stock by talking about the next thing. And he's been talking autonomous for a long time, and he stubbed his toe on the tech side. So his stock goes up. And then when he doesn't. necessarily is not able to deliver as the tech is fast, you know, it stock regulates again. The other piece of the autonomous thing, Matt, the front, excuse me, the patents that are coming out on the autonomous technology, the value of those patents is incredible. So put a timeline on this. When do you see this going to 20 cities, 25 cities, 30 cities? And then when do you see it happening in New York, Boston, Philadelphia, the old line eastern, east, eastern cities?

Matt Daus 41:37

Well, it's already happening in New York. The testing and the mapping is done. And let's just step back and do big picture. And I'm glad you enjoyed the ride because I was very skeptical myself until I took them myself in. We did our conference last year in Scottsdale. So all the regulators in the cars, I took them in San Francisco. At the TRB arts convention, a couple, you know, a year or so ago. And, you know, like it's sophisticated. I mean, both cruise and Waymo have the most dedicated, best technology. Cruise, unfortunately is out of the running as of this week.

Ken Lucci 42:11

Came out, that came out this week that General Motors is gonna focus their autonomous tech on their consumer vehicles and they're dropping the taxicab crews.

Matt Daus 42:21

and apparently I heard, you know, just some inside information. Cause I know people like cruise, unfortunately, the employees at cruise from what I was told, never learned about it. Internally that they've read about it in the paper, which,

Ken Lucci 42:34

that's General Motors. That's General Motors.

Matt Daus 42:37

that's the GM way of doing things. But you know, and it creates less competition in some ways because the only real robo taxi models that are left in the mix, when you look at the big picture are, are way more improves. And these are sophisticated cars. When I got in them, I mean, they were going around in opposing traffic when someone was beeping and backing up into us. Like they are sophisticated. They, and you could, they have eyes behind their head and at every level, like octopi, I mean, basically you could see things that a driver can't see. They could see things in the blind spots.

Ken Lucci 43:11

And that'll be the argument. That,

Matt Daus 43:13

the safety question has been answered. It is safer than a human driver. There's no question about it, but some vehicle technology is. Different and better than others. And we won't, you know, call names here, but, you know, the business models are also different. There are basically three business models. There's the robo taxi model, the Uberization, which is the Waymo cruise way now cruises out of the picture, Uber was smart to get out of doing it themselves and now being more like a platform. So

Three AV business models

Matt Daus 43:43

their partnership with Waymo is where I think the future is going to be in the next five years is where they start cropping up in more and more cities. As using their own app waymo, but also as one of many ways to get around on the Uber app. And I think it's going to remain that way for a long time, but it is scaling and you will see it in New York. You will see it elsewhere. The mayor of New York wants this. I mean, he said that on his the night he was elected. There's more legislation and local rules that are very strict in New York City, so it's a lot of hurdles, but Waymo has the Uber type, you know, on demand model Zooks and Beef and you know, May Mobility, which has an accessible

Ken Lucci 44:26

Yeah, Maymobility's up in Michigan, privately held at this point.

Matt Daus 44:30

It's a very different business model. It's more shared mobility, multiple passengers. You're going to see those at airports retirement communities, college campuses. And it's going to be integrated into transit. Waymo, Waymo is really the only company left standing with Tesla has a different business model. That's the third business model. And I think there's a lot of confusion about where Elon is going to go with this. And I think, you know, to your point, we could talk about Elon for like an entire podcast.

Ken Lucci 45:01

We're gonna try to get them on, by the way, Matt. You're gonna be, you're gonna be on that episode when we get them.

Matt Daus 45:06

We'll have to go. We'll just have to go down and hang outside the gate at Mar a Lago.

Ken Lucci 45:10

Well, didn't that get, yeah, we gotta be careful about that.

Matt Daus 45:13

because you know what you do for clients is kind of like what Doge is doing, right? Like, so I love the fact that him and the bank are going in there, looking to cut the federal government because it is, it is a mess and it

Ken Lucci 45:25

Oh, it's a total mess.

Matt Daus 45:26

but like, you know, you do that for your clients. You're like the Doge for limo operators Cause you go in there, you tell them how to trim their, their costs and they're, they're spending money on unnecessary things. That's really, really important, but putting his agendas aside because he's got tons of agendas, I

Ken Lucci 45:42

Oh, God, yeah. Oh,

Matt Daus 45:44

I gotta tell you, there's a lot of skepticism about his recent announcements, because he left everybody on the fence, pushed back his announcement from August. It's just one of these things where they don't engage their team the way that Waymo does. Like, Waymo is out on the streets, Talking to the regulators and to the public officials and you know, when they're coming, they're collaborative. Tesla has probably the most data that you can imagine because of the self driving mode. They have been on the road for years and their business model to date has been different with speculation about the business model. Is that, and this is, this is something that Elon's been talking about for years. I even had students doing a hackathon on it in 2015, that people are going to buy them for themselves, and then they're going to lease them out as robo taxis. And it's going to come back. So you take it to work. It goes to pick people up and then it comes back to pick you up and take you home. That, that could be real, but he, he didn't, in his press announcement, talk more about that. Everybody was expecting it to be more and he basically just unveiled two new vehicles. You know, he has the cyber cab, which is the robot model, and he's got the robot van, right? So, so, I just don't know. There's a lot of questions being raised about what he's planning to offer it for, you know, he's saying that basically in 2026, he's going to, it's going to be something like 30, 000 to buy a cyber cab. I just don't know how those numbers make sense. I think it's a legitimate question to raise. You know, they didn't talk about apps and deployment the way Waymo is doing it. He more caught the vehicle, had some glitz, you know, like typical unveiling of a vehicle, but didn't get into a lot of detail.

Ken Lucci 47:34

Fell flat. A lot of the financial analysts that I've read, it fell flat.

Matt Daus 47:39

well, you know, but I wouldn't underestimate him. I think he's got, he's got more data than anybody else. He's not using LIDAR, which is raising other questions too. He's got AI and cameras in the vehicles, but he's not using LIDAR the way way.

Ken Lucci 47:53

LIDAR for the crowd.

Matt Daus 47:55

Well, I mean, LIDAR is an imaging technology, which works with the cameras to kind of really map out the road. You know,

Ken Lucci 48:02

And, and identify, and identify what's on the picture.

Matt Daus 48:07

correct what I think Elon is going from, at least what I believe from his public statements is, you know, He's investing in general in AI and predictive technology. So, you know, like what these companies are going to end up doing is making predictions about what's going to happen next on the road as a public safety matter, which really makes it even safer, much more safe than a human. Cause now we're talking about. You know, not only what they've mapped the road, they know what the road looks like. They know what things happen on the road. So it's not just what's happening in real time. But you know, a school bus crosses this intersection every day at this time.

Ken Lucci 48:42

Every day between 3. And do you think most people understand that every Tesla on the road is sending the data back? Does everybody know that?

Matt Daus 48:54

I mean, I don't I don't know if people are really cued into it. using lasers and creating 3D models you know, this technology does all that. It's really sophisticated. I believe it's been developed by certain companies better than others. But one thing I think the movement is playing catch up on is that there's been such a focus on road safety and getting the technology to be safe. And deploy it to save lives, but not enough focus on the socioeconomic issues and the political issues,

Ken Lucci 49:25

Oh,

Matt Daus 49:25

know, so, you know, they're going to be stopped in their tracks if they don't have an accessible vehicle, they're going to be stopped in their tracks in certain cities. Because the Teamsters is very powerful, and they, you know, they've already been successful in throwing it out of the trucking industry to some extent. So, so I think, you know, to answer your question, I think in the next 3 to 5 years, we're going to see more and more of them in more cities and states, more, more so in the areas that, you know, that have less licensing requirements, you know, like, I mean, every state has a deployment and testing law for the most part, some are easier to get into than others. You know, you know, Connecticut, D. C., Hawaii Massachusetts, for instance, they restrict. They've used the testing only, but, you know, You know, and there's a couple like Arkansas, Louisiana, that it's just for commercial purposes, but for the most part, the law allows testing and deployment. If you go through certain hoops, some states don't even have licensing requirements like Colorado, Tennessee and Texas. Right? So, You know, we're going to see more and more states and cities doing it. You're going to see more and more of these vehicles being normalized. When I went back after our conference this year to to the Phoenix area it's become normalized and I

Ken Lucci 50:36

100 percent normalized.

Matt Daus 50:38

it's like, oh, you know, I would ask the person, the concierge, what about these vehicles are oh, yeah, they, sometimes they, they come here, they pick up our passengers and you know, they stop and they get a little confused, but they come in and there's never any issue. It's like normalized. I think that's important that these vehicles people see them they get used to them it's not a novelty anymore, but it's is it going to take over the world overnight? No, I I think it's going to be just one of many ways to get around. It's going to become niche a niche industry for many years to come I mean will there be a point where everything's driving itself probably in the future? But there's a lot of mystery surrounding elon's business model. I would not underestimate him for one second You

Ken Lucci 51:19

No.

Matt Daus 51:20

He definitely has agendas floating all

Ken Lucci 51:23

He never disappoints. Never disappoints.

Matt Daus 51:26

again, there are three business models, and this is. This is great news because when I first started in this movement, there wasn't a business model. People were, I went to a conference in Brussels. I was, the U S government appointed me to go to this thing where we're working with the European union and people were off their chairs saying, everybody's going to buy five driverless cars and we're going to have congestion. Well, that didn't happen. You know, it's basically the Uber model, the shuttle model, and Elon is selling to the masses. It's So, like the way most of the cruises of the world, they bought the vehicles and control them themselves. A lot of people at the beginning of the movement just thought that people are gonna buy them, which is what Elon's been doing. But I wouldn't count him out yet. I think he's got a lot more surprises that will come. Obviously, there's been investigations and things

Elon's advantage

Matt Daus 52:15

that have saddled down the company. So,

Ken Lucci 52:17

On the accident side?

Matt Daus 52:21

Well, yes, and also, you know, the self driving mode, you know, there's, NITS has been investigating you know, I think people you know, there's theories that it's political and there's a lot of politics involved. So I actually think his foray into politics. Was a brilliant move because he was being, you know, killed by politics.

Ken Lucci 52:41

Oh, masterful.

Matt Daus 52:43

he doubled down. He, he, he won the bet. The aligned himself with Trump and now he's at Mar a Lago all day. But

Ken Lucci 52:50

Now look, that could have gone another way. Matt. That could have gone another way and he'd be moving more money offshore. Uh,

Matt Daus 52:58

He's a risky guy. I

Ken Lucci 53:00

he does. Yeah.

Matt Daus 53:02

any, any reinvestments, like a gambler that just doubles down all their winnings. But he's been on top and right a lot of times. So he's very smart. I wouldn't count him out

Ken Lucci 53:12

No way.

Matt Daus 53:13

Constructive criticism his team needs to engage more With cities like you can't really have a new disruptive technology like this and not talk to the government people and have a good PR and government relations strategy. Waymo has successfully done that and look at them. They launched in San Francisco, L. A. Miami.

Ken Lucci 53:35

And they have the data. They have the data. They have

Matt Daus 53:38

They have an

Ken Lucci 53:39

data.

Matt Daus 53:40

amazing government relations and media team, Elon, the Tesla, everything's been shrouded in secrecy,

Ken Lucci 53:49

Like, like the skunk works back in the day, right? The skunk works of, of new aeronautic technology. I agree with you. I think that's one of his modes of operation is secrecy.

Matt Daus 54:01

That's his M. O. I agree with you on that. That's his M. O. And then strategically, things are announced and stock prices go up, but we all know how that game works, right? But ultimately, I think the technology has proven itself. SpaceX, Tesla. He's ahead of the curve, but I think what, where he's got the edge and is a threat to a lot of folks in this movement is number one, he's got a tremendous amount of data, remember he's had this self driving mode for years now, and it kept getting more and more sophisticated and more and more vehicles are out there. And this he's got internally such tremendous data that has not been shared. Number two, he is doubling down on AI. AI plays a significant portion of how a robo taxi works. And the fact that he's actually doing, you a bus is very interesting. Right? But do I think it's going to affect the limousine industry anytime soon? No, because the reality is, is that look, I just made arrangements to my, my, my, my daughter's birthday to have her go to Atlantic City. You know, I don't want a driverless bus, you know, I want somebody who's going to be like a chaperone Look out for the girls when you go down there You know Just turn 21 and and and you know, we also have like, you know the the ability to on the big picture, the customer service side like even if limos were Driverless people are going to expect someone to take their luggage To tell them where to go to talk to.

Ken Lucci 55:27

meet them at the meet them in the meet and greet at the airport. Handle the logistics concierge aspect. I 100 percent agree with you. You know,

Matt Daus 55:35

not going to happen anytime soon. And in any the risks are so great for not having somebody with disabled people and people that are our senior citizens getting in the vehicles to go to doctor's appointments. I don't see those 2 industries being affected the taxi industry. And the industry will be affected to a certain extent over the next five years, but it's going to be just one of many ways to get around. And it also, not everyone's going to want to use it. It's going to be more of the forward thinking, younger folks that want to do something cool, or if it ends up being cheaper, the people that can't afford it, we'll take it. I think it remains to be seen, but again, three business models, self ownership, Elon, and you know, people could power to the people,

Ken Lucci 56:17

And put it on a platform. If you want to put it on a platform is what you're saying.

Matt Daus 56:22

I still think that's in play. He had, he didn't mention it at his last announcement, but It was their idea and I think that's the direction that they're going to go.

Ken Lucci 56:30

That's in a couple of analysts. That's

Matt Daus 56:34

is

Ken Lucci 56:35

Yep. That's in a couple of analyst reports that I read. Let me just not identify them. But the rumor that I'm hearing is The, the Uber is going to be in the beginning, they're going to really try to put everybody in the platform, including Waymo. Why wouldn't they? Right. But at the end of the day, I think that this whole self driving, this ownership of a self driving vehicle and the ability to, if you want to deploy it while you're, instead of a sitting in the parking lot, I think that's the play between Tesla and Uber. The other piece of. Of of musk is the ability to literally, you know, almost at some point Autonomize some of the older teslas in some sort of a retrofit model But I I think that that business model of I own it, but i'm going to put it on the uber platform during the day Right to mitigate my cost I agree with you. I think that that That's where he's heading. So

Matt Daus 57:39

There's no secret like if he says it's going to be thirty thousand dollars I don't believe that he he could be profitable at thirty thousand dollars, but let's not forget uber when they started they subsidized Driver pay and passenger fares for years. I can see a world where Elon wants to get a massive scale of these vehicles out there for people to use them as if they're their own fleet owners. And he will possibly subsidize it to make it affordable for a period of time so that he can scale quickly by offering the robo taxis, the cyber cabs for 30, 000. Even, even though like the actual costs may be. 70 or 100, 000, whatever it

Ken Lucci 58:23

whatever it ends up being,

Matt Daus 58:25

get them out there. And then people will start becoming their own entrepreneurs. If that, if that can be done from a regulatory standpoint, you're giving power to the people. Number one, number two, look at Toro for an example, Toro started out as something where it's like sharing economy, like Airbnb, I just want to let my vehicle go out there. People in Florida and Arizona, all sorts

Ken Lucci 58:48

They have fleets of them.

Matt Daus 58:50

It's it is now a business model. So I could see like somebody saying, I'm going to buy 10 Teslas

Ken Lucci 58:57

Yes. And put them on the Uber platform.

Matt Daus 58:59

and it could be done just like they're doing with Toro. Like if I go rent, like a luxury vehicle in Miami, you know, I realized that when I had a problem with one of the people I rented from that, that person owned like, you know, like half of the fleet in Miami, you know? So, so I realized that this has become almost like a, like a de facto franchise

Ken Lucci 59:20

Yes. And then for those that don't know, Turo is an independent rental platform that Turo puts you on their platform and you as an individual, Can supply five vehicles. I mean, we've done some pro from some financial and analysis for these churro guys, when they've said, Hey, I want to, what do you think about putting a Rolls Royce in my fleet? I'm like, you're out of your mind, but I mean, and we prove it with math. Elon can do the same thing. If this vehicle cost him 45, 000. To make at some point, he goes to, to a Uber and says, I want a revenue share on this, right? And it's a mathematical equation of how many trips it takes to reach that. But you, you, to your point, he can afford to subsidize these autonomous taxis for a period of time. Just to test the waters.

Matt Daus 1:00:12

And going back to the first question you raised about insurance, though, when we talk about the Toro model, That's a perfect example of how the limo industry could come up with. They can, first of all, you can probably use Toro start, you know,

Connected capacity

Matt Daus 1:00:26

renting vehicles and driving people around, but wouldn't it be great if like the NLA, like, or the Florida limousine association had an app, you know, where people can list all their limos and other competitors could use the vehicles when they need it. I mean, that's a great solution, you know, because they can get fleet insurance. As a rental entity and and use it as an app just like toro did where if if you're You're strapped and all of your connections in your neighborhood the five vehicle companies that you work with the five limo competitors You know, sometimes they you need a vehicle and you can't get it Like there needs to be a platform where the limo industry can go to get these Vehicles without you know, because sometimes especially when there's peak traffic Supply and demand times, you know, like prom season or there's a, you know,

Ken Lucci 1:01:14

an event, an event.

Matt Daus 1:01:16

event that needs to be another way to tap into vehicles that are insured and ready to go that drivers can just get behind the wheel. And that is something that we should seriously be looking at, in terms of a solution to the insurance crisis, because if remember, Uber and Lyft did this already, and it's been successful. Okay, drivers don't even buy or insure vehicles anymore in a large number of states. They just go and they rent the vehicle. You know, it has to be a niche thing because obviously you're not going to have like these luxury little operators renting, like, you know, like a Prius necessarily, or going, you know, to, to get one of these rental vehicles that you would get at

Ken Lucci 1:01:57

But to your point, to your point, I mean, connected capacity. Is the first thing that if, if, if I was an operator on the big, the, the, the large operators connected capacity to me is the first order, meaning the first step is, and the technology in our industry, I'm just going to say it flat out. It sucks. Even the best software out there. I'm not naming name. It sucks because connected,

Matt Daus 1:02:22

we've been through that Ken with the integration and getting the different companies to integrate, but. Remember, the greatest example of a sharing economy is the limo industry. The industry is built upon sharing clients, sharing you know, making it an ecosystem. So why can't we just translate that to the vehicle side, like grid technologies, and they automate the affiliation effort. Why you do that with the vehicles, that it's, it's a great,

Ken Lucci 1:02:49

it's the vehicle and the driver. The connected capacity is knowing right now that who's dropping off at JFK. Right. Whether it's Empire, Boston coach, any of the bigs dropping off and knowing that that guy has two hours, two or three hours before his next scheduled trip. Connected capacity is the first step. And we have to get that so that an operator in LA knows what's on the road today in New York and has an idea. The, and it falls back to labor. If we have to pay this person an eight hour minimum, or we have to pay them for being. You know, it's tough to put them down and they've got a two hour gap. How do you maximize the use of that piece of equipment and that driver? And to your point, why don't the big companies get together and say, you know what, let's, let's create a contract with a leasing company, a common leasing company that, that owns the vehicles, trains the drivers to your point and, and deploys that connected capacity. Okay. So I think at the end of the day, that's where our hamstring has been from a tech perspective. And there needs to be again, more cooperation and a collegiate mentality, both on the insurance side and the capacity side.

Matt Daus 1:04:08

and I may be missing stuff on the insurance side. It'd be good to really get like a you know, a podcast going maybe like Tim and. Or Steve, even Andrew from research and Tom get them all here and talk about, you know, like how this could work because, you know, there's always a concern about, you know, underwriting and how it works. It's a mystery name drivers versus corporate policies, loss runs. Like, how do you ensure something like this? And, and, and also adhere to existing regulations that at the insurance side. So the

Ken Lucci 1:04:36

right. And the, but to your point, the model is there. The model is there.

Matt Daus 1:04:44

So why not look into it? I think it's a better endeavor than looking. I mean, Rick is still looking into captives and it could still happen, but it's very hard to ask an industry like the limo industry to pony up hundreds of thousands of dollars to capitalize a captive.

Ken Lucci 1:05:00

Trust me, I see their balance sheets. They don't have it.

Matt Daus 1:05:04

but it's also hard to get them together. I think, and try to do something like this too. I almost feel like it cries out for a dealership or a separate entity. That does rental to expand like

Ken Lucci 1:05:15

Absolutely.

Matt Daus 1:05:17

5 or 6 companies kind of doing it in New York, in my opinion, especially Voyager, which was known as Buggy. They should expand around the country. They're already in Mexico City, but they should expand around the country in the limo industry. There are other companies thinking about this, but there would need to be probably somebody that comes in and does it because I think it's going to be very difficult. For like the limo industry to get organized to do this, but once it gets going and there's a platform list of vehicles, there will be an app and there'd be companies that do all this stuff. And then they could offer, like you said, ancillary things like training and say things that that independent contract operators be concerned about doing. But again, bringing it back to the Rick Versace model. I take his vehicles like every other week. His drivers are independent contractors. You would never notice the difference in other states. I noticed the difference right away. And

Ken Lucci 1:06:06

But yep,

Matt Daus 1:06:07

my vendors who know me very well know that I always insist on a house car, you know, because I want the trained employed chauffeur. From that company. And I got to tell you, there's a way to do it and manage the risk. So you basically have to manage, do I want to take the risk of a crash? That's going to put me out of business or a customer is going to be so pissed that they fire me and I lose my biggest account versus the risk of having a labor lawsuit against you. You have to balance those risks. You know, David Eckstein from Valera Global years ago, balance those risks. And he ended up on top and saved this company. And he could. Come on here and tell you all about that, that experience. You might forget them on here, but at the

Ken Lucci 1:06:49

to the franchise model,

Matt Daus 1:06:51

end of the day, I always tell our clients, you need a good human resources and driver management person. Because nine out of 10 times, I've seen companies and clients of mine go under from these worker classification suits nine out of 10 times, it's because the drivers are being treated like crap by the people that run the business. And

Ken Lucci 1:07:09

team.

Matt Daus 1:07:09

every once in a while, you're going to get a crazy driver. You can't control them. Nothing works. But nine out of 10 times, if you treat them with respect. And dignity, they don't get pissed because it's usually that driver that feels that they got wrong. They got shortchanged on something miscommunication. They get their friends riled up and they bring these labor lawsuits against you and have them a B. S. sometimes right? But they'll give you a hard time. And these plaintiffs lawyers come in just like the personal injury plaintiff where they get a contingency fee. So they're not going to leave until they like, like a sexual harassment case. Mhm. They're not going to leave until they get a certain amount of money. So this is part of the problem is the contingency fees, tort reform extends into the labor field. But like, if you're doing that balancing act, you pick someone who's really good with people to manage these drivers and keep them happy. You know, I, I referred to that. I don't know if you remember the cheers episode, you know, when, when Norm. Was involved in firing people in the back of the bar and the guy who was doing the firing norm from shears would come out crying And the employee that was being fired fired his patting him on the back saying it's going to be okay You need somebody like that who's going to be able to be compassionate and connect with the drivers And that's 90 of solving your problem with morale and the independent contractor issue if drivers feel disrespected And they feel like they're being taken advantage of and there's poor communication. That's what leads to the labor lawsuits. And it's just, it's a, it's a fact.

Ken Lucci 1:08:42

And think about it. If you treat them like chattel, what, how do you think they're going to treat the customer? Look, we could have, that's another, that's another episode that we're going to have, and I think you're right. You bring in an X team for that. And then on the insurance side, I, Steve Friedberg, I'm a big, big fan of research. Okay. I'm a big fan of, of Lancer because Tim reached out to me and I'm like, this guy, this guy is an advocate for our industry, but we also have to advocate for ourselves. Matt, this episode to me has crystallized why you're not just a transportation attorney. You are the. transportation attorney for the industry because of the vast knowledge that that you have and we both live at 50 60 hours a day. I mean a week. You live it across the world. The regulatory side. There's nobody. You are the unicorn as far as transportation lawyers. We need to definitely do this more often. And, and we also need to collaborate more. I mean, look, I view this as my second act in the industry. As far as the MNA side, we try our hardest. to get people's babies looking beautiful before we sell them. Sometimes it's difficult because they're pretty ugly going in and we try to get people more profitable so that they can afford to absorb any cost driver that goes up and insurance is the big one. I am so glad to have you on because I've been worried about this autonomous thing. I have my own suppositions on it. I agree with you. That limousine industry, the chauffeur industry, the luxury side of the industry is going to be affected last. I think we're probably right before any, any MT. I do think the taxi issue industry is going to be further disrupted by these things quicker than we possibly, then we're going to know. So, thank you for coming on our little podcast again, Matt, tell everybody how to reach you by email. So that if they have any questions or have any legal needs, how do we reach you?

Matt Daus 1:10:47

Well, yeah, you can get me at M D a U

Connect with Matthew W. Daus

Matt Daus 1:10:50

S at Wendell's marks. com. You can always call me on my cell six, four, six, two, six, one. I'm my team and I are ready and available to help you at any time. And um, you know, anyone who uh, references Ken's podcast, we'll give them a discount. Uh, So thanks for all your kind words.

Ken Lucci 1:11:09

Look, you are officially going to be our first frequent guest because I love interacting with you. I think that when you and I get on stage, we get rave reviews together. Sometimes it's a drier topic, but frankly, it's a, it's a, it's a financial necessity and a business survival. All of our subjects are, are those are, are of that ilk. I appreciate you coming on more than I can say. This was a coup for our audience and it's a highlight of my week. And I know I'll see you soon.

Matt Daus 1:11:44

Same here. Happy holidays to you, your listeners. And uh, let's get excited about 2025. I think we're going to have a great year and let's, let's get this industry rocking and roll.