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Changes to licensing rules for transport operators

Media Statement

For immediate release
Date 5 May 2006

Changes proposed to licensing rules for transport operators


Land Transport New Zealand is calling for submissions on proposed changes to the licensing rules for transport operators.

The draft Operator Licensing Rule will affect applicants and holders of transport service licences (passenger, goods, vehicle recovery and rental services), as well as drivers of transport service vehicles, dial-a-driver service drivers, Approved Taxi Organisations (ATOs) and hirers of rental service vehicles.

The Rule consolidates and clarifies existing requirements for the licensing of transport service operators, drivers and ATOs, and proposes the introduction of several new requirements. The rule also proposes to make some existing requirements less prescriptive.

Proposed changes include:

- Requiring taxi drivers in key metropolitan areas (Auckland, Hamilton, Wellington, Christchurch and Dunedin) to hold Area Knowledge Certificates for the entire metropolitan area in which they operate;

- Giving the Director of Land Transport the power to require drivers to undergo an English language test or complete an approved course if they are unable to communicate adequately in English, even if they have passed an Area Knowledge test;

- Strengthening the accountability of Approved Taxi Organisations, including requirements to record their drivers’ ‘log on’ and ‘log off’ times and to report any serious complaint lodged against a driver to Land Transport NZ with 48 hours;

- Requiring Transport Service Licence (TSL) holders to re-sit and pass the Certificate of Knowledge of Law and Practice following a licence revocation or when there is evidence of lack of knowledge;

- Requiring TSL holders (excluding rental services) to display identifying numbers on their vehicles;

- Giving rental service vehicle operators the option of passing on traffic fines to overseas customers by charging traffic infringement fees to their customers’ credit cards.

The draft Rule also proposes to expand the range of passenger services which are exempt from licensing requirements including services offered by charities, local authorities, district health boards and licensed premises. It is also proposed to allow exempt services to use larger vehciles, allow drivers and vehicles to be provided by the organisation running the service, and to allow some organisations (such as registered charities) to receive external third-party funding for transport services.

Submissions on the draft rule close on 14 June 2006. For more information go to www.landtransport.govt.nz/consultation/operator-licensing


ENDS


Questions and answers for the draft
Operator Licensing Rule

What is the purpose of the Operator Licensing Rule?

This proposed Rule consolidates and clarifies requirements that control the licensing of transport service operators and drivers, which are currently contained in Part 1 of the Transport Services Licensing Act 1989, the Transport Services Licensing Regulations 1989, compliance manuals and policy guidelines. While some new requirements have been proposed in the Rule, the majority of provisions in the Rule reflect the status quo.

What is the legal basis for this Rule?
The Land Transport Act 1998 provides for the Minister of Transport to make Land Transport Rules that govern, among other things, the licensing of transport services, operators and drivers, and the land transport documents to be held by or in respect of them.
The Land Transport Amendment Act 2005 amended section 158(b) of the Land Transport Act 1998 and expanded the Minister’s rule-making powers to cover existing provisions in the Transport Services Licensing Act 1989 (TSLA) and the Transport Services Licensing Regulations 1989 (TSL Regulations), as well as adding details of new provisions.
What happens to the Transport Services Licensing Act 1989 (Part 1) and Transport Services Licensing Regulations 1989 once the Rule is signed?

The Rule is being produced as part of the programme of converting land transport legislation to plain language Land Transport Rules. Once this Rule is signed, an Order in Council will be issued that:
(1) revokes Part 1 of the TSLA
(2) revokes the TSL Regulations
(3) brings Parts 4A and 6A (transport service licensing and related offences/penalties) of the Land Transport Act 1998 into effect.

Who does the draft Rule affect?

The draft Rule directly affects the following:
- Applicants and holders of transport service licences (passenger services, goods services, vehicle recovery services and rental services)
- Drivers of transport service vehicles and dial-a-driver service drivers
- Approved taxi organisations (ATOs)
- Hirers of rental service vehicles

Many of the changes will have an indirect impact on users of transport services.

When will the Rule come into force?

Most of the provisions of the draft Rule are expected to come into force six months after it is signed by the Minister for Transport Safety.

Transport service licence (section 2)

What new requirements proposed by the Rule affect transport service licence holders?

The following new proposed changes affect all transport service licence (TSL) holders, with the exception of rental service licence holders:
- Strengthening of operator identification requirements through the requirement to display on vehicle the TSL number under which the vehicle is being operated and requiring the carriage of a copy of a Certificate of Responsibility when one is in use
- Requiring TSL holders to resit and pass the Certificate of Knowledge of Law and Practice (1) following a licence revocation, and (2) when required by the Director of Land Transport (the Director) if a lack of knowledge is demonstrated
- Requiring TSL holders that are bodies corporate to notify the Director of changes in name, address and status.


Display of Transport Service Licence number

Why is there a need for TSL holders (other than rental service), to display their TSL number on the vehicles they operate?

Despite existing requirements to display licence holder’s name and business location on vehicles, the Police have highlighted problems in identifying the operator who is responsible for a vehicle. This new requirement will provide the Police with the unique identification information, ie, the TSL number, to quickly determine at the roadside the licence under which the vehicle is being operated. In the case of taxis, enforcement officers will be able to determine if a taxi service is licensed.

Where is the TSL number to be displayed on vehicle?
The TSL number is to be displayed on the two forward doors of a transport service vehicle. This could be done by painting the number on the vehicle door, or using a magnetic strip or self-adhesive stickers with a pre-printed TSL number.

How much will this cost operators?
The cost to operators of complying with this new requirement will depend on the format operators choose to use, ie, door-painting, magnetic strip or self-adhesive sticker.

Does it mean licence holders no longer need to display their name and business location?
No change would be made to existing requirements. Licence holders must continue to display their name and business location on the vehicle.

Why are rental service vehicles not required to display a TSL number?
Rental service vehicles are currently not required to display any operator identification for ‘cosmetic’ and practical reasons. Transport service operators who hire a vehicle for use under a transport service licence will be required to carry a Certificate of Responsibility and to produce it to an enforcement officer, on demand. This Certificate will provide the TSL number of the operator.


Certificate of Responsibility

What is a Certificate of Responsibility?
A Certificate of Responsibility formally transfers legal responsibility for the operation of a vehicle from its owner to the borrower and is required when a vehicle is loaned to a transport service operator to be used under his or her transport service licence. The vehicle owner is required to obtain this Certificate from the borrower and retain it for not less than 12 months. This Certificate contains detailed particulars of the borrower, including their TSL number.

Why require the carriage of a copy of the Certificate of Responsibility?
Current industry practice is characterised by more flexible vehicle ownership and use arrangements by operators, resulting in the widespread use of leased vehicles, trailer-swaps, sub-contracting and company consolidations. Vehicles can now be expected to operate under a different TSL at different times of the day, week, month or year, or over a longer period.

The borrower of a vehicle (who is a transport service operator) is not currently required to ensure that the driver carries a Certificate of Responsibility and therefore an enforcement officer has no way of validating at the roadside that the vehicle is being operated by someone other than the registered vehicle owner or the operator whose name and TSL number are displayed on the vehicle. With this new requirement to carry and produce a copy of the Certificate when demanded, the Police will be able to quickly identify the TSL number under which the borrowed vehicle is being operated.


Certificate of knowledge of law and practice (CKLP)

What is a Certificate of Knowledge of Law and Practice (CKLP)?
As the name suggests, CKLP is a Certificate that shows its holder has the required knowledge of the laws and practices relating to the safe and proper operation of a transport service. It is a prerequisite to applying for a TSL. Since 1992, unless specifically exempted, no one has been entitled to obtain a TSL unless that person, or some person who has, or is to have, control of the service, holds a CKLP.

What changes are proposed to the CKLP?
It is proposed to strengthen the requirements of the CKLP in terms of empowering the Director to require persons to sit/resit and pass the appropriate CKLP examination in the following two situations:

(i) when a licence holder reapplies for a TSL at the end of their disqualification period

This proposal is aimed at ensuring that licence holders or persons in control of a transport service who have been disqualified (for a maximum period of 10 years) demonstrate they have the required knowledge.

(ii) if the Director believes a TSL holder (or the holder of a CKLP for ATOs – see section seven) does not have adequate knowledge of the laws and practices.

This is to ensure that those with inadequate knowledge of the relevant laws and practices demonstrate they have the required knowledge.


Notification of changes relating to bodies corporate

What changes are proposed that affect a body corporate that holds a TSL?

A body corporate that is a licence holder or a person having control of the transport service will be required to notify the Director of any change in:
- the name of the body corporate
- the names of the people who control the body corporate
- the residential address of those people
- the business address of the body corporate
- the status of the body corporate (eg, merger, amalgamation).

Why are the changes required?
Currently, there is no requirement for a body corporate that holds a TSL to notify the Director of a change of name or business address. In a recent check, Land Transport NZ found that more than 2,000 body corporate names had changed. This type of inaccuracy has resulted in multiple licences being issued in the same name, and has created difficulties in identifying licence holders for investigations. This requirement will enhance the integrity of Land Transport NZ’s register of transport service licences and is linked to the proposal for TSL numbers to be displayed.


Public notification of licence application

What requirements currently apply to public notification?
Currently, anyone applying for a passenger service licence or a vehicle recovery service licence must put a notice about their application in one or more newspapers, as approved by the Director. The notice must be published twice, at an interval of not more than seven days. It must specify the name of the applicant, the nature of the service and the name of the person who is to have control of the service. The purpose of this notice is to allow the public to raise any concern about the applicant with the Director before a licence is granted.

What change is proposed?
It is proposed to remove the requirement for applicants of a passenger service licence or vehicle recovery licence to publicly notify their application.

Why is this change proposed?
Experience has shown that this requirement has limited value and benefit in identifying people who are not ‘fit and proper’ to hold these licences. The need for this requirement and the significant compliance cost that it imposes cannot therefore continue to be justified.


Small passenger service vehicles (section 3)

Exemption from taxi-related rules

What key change will affect all small passenger services?
Small passenger services will be categorised as taxi services, shuttle services or private hire services.

Since 1989, for operational purposes, all small passenger service vehicles have been treated in law as taxis. Operators of small passenger service vehicles that are not taxis (eg, a shuttle or limousine) have had to apply to be exempt from the rules that don’t relate to the particular service they provide.

With this proposed change, those non-taxi services will no longer need to apply for exemptions from the taxi-related rules, because the specific rules that apply to their type of service will be clearly spelt out in the Rule.


Driver identification (ID) cards

What changes are being proposed to driver ID cards?
The proposed changes are:
(i) Dial-a-driver drivers must hold and wear photographic driver ID cards
(ii) Unique identifier to be displayed on card cannot be made up of numbers only
(iii) Position where cards are to be displayed in a vehicle is clarified.

Why are dial-a-driver drivers required to hold and wear driver ID card?
In line with a new provision in the Land Transport Amendment Act 2005 that requires dial-a-driver services to be licensed, it is proposed to align the ID requirements for drivers engaged in these services with those of other small passenger service drivers. This requirement will also subject them to yearly “fit and proper person” assessments, including yearly Police vetting, and provide users of such services with a greater sense of safety and personal security.

Does this means higher compliance cost for dial-a-driver drivers?
Yes. These drivers will incur the cost of obtaining a driver ID card and annual Police vetting. Currently it costs $8.50 for a driver ID card and $28.20 for Police vetting.

Why can’t the unique identifier on ID cards be made up of numbers only?
The use of unique identifiers on a driver ID card enables passengers to easily identify the driver. As such they should be able to be easily recalled by passengers. Unique identifiers with numbers only are not sufficiently memorable to be easily recalled by users of small passenger services.

What will happen to driver ID cards that are currently comprised of numbers only?
These driver ID cards will continue to be valid until they expire. When the cards are renewed, the unique identifier will be invalidated and replaced with one made up of letters approved by the Director. If necessary, the Director will also assign a number to a unique identifier to distinguish duplicate names.

What will change as to where driver ID cards must be displayed?
Drivers of small passenger service vehicles must continue to display their driver ID card in the vehicle they operate. The law currently requires drivers to ensure the card is displayed “in a position so as to be readily visible to hirer”. Some drivers display their cards in a variety of places inside the vehicle, including the back of the sun-visor and the ceiling. The Rule specifies requirements as to where the card is to be displayed, ie, directly facing passengers.


Fares and fare receipt
What changes are proposed regarding fares and why?
Current legislation requires that fares, charges and multiple hire discounts (for taxis only) be registered with the Director before being displayed in or on any small passenger service vehicles. The draft Rule requires that these fares registered with the Director must be inclusive of GST. Although a new provision, this proposal formalises current practice.

What changes are proposed regarding fare receipt and why?
Currently, small passenger vehicle fare receipts must show the fare, any special charges, the driver’s unique identifier and the registration number of the vehicle. The Rule will require receipts to also include the GST number, the name of the ATO (for taxis only) and the date of hire. This will provide passengers with extra essential information. This proposal is in line with the view of the Office of the Auditor General that land transport Rules should support compliance with other legislative obligations, in this case, those of the Inland Revenue Department.


Taxi services (section 4)

Display of information in Braille

What key changes in the rule impact taxi services?
A key change is the new requirement for taxis to display vital information in Braille to improve security for visually impaired passengers. This requirement was introduced in the Land Transport Amendment Act 2005. The draft Rule specifies that the information in Braille must be displayed on the inside of the front passenger door and back left passenger door. The information must also be in a form approved by the Director.

Will this impose costs on taxi operators?
Yes. It is estimated that each Braille label will cost approximately $45; this means it will cost each taxi $90.

What key changes in the rule impact taxi drivers?

Area Knowledge Certificate

Taxi drivers in key metropolitan centres (ie, Auckland, Hamilton, Wellington, Christchurch and Dunedin) will be required to hold area knowledge certificates (AKCs) for the entire metropolitan area they operate in. For example, a taxi driver in Auckland would be required to hold AKCs for North Shore City, Waitakere City, Auckland City, Manukau City and Papakura District.

This proposal will initially apply to taxi drivers in Auckland, Wellington and Christchurch only. This is because the area knowledge requirements for Hamilton and Dunedin currently cover the entire metropolitan area. This situation will be reviewed, as and when appropriate.

Why is this change required?
The change is being made in response to feedback from the taxi industry and taxi customers who have called for taxi driver standards, in terms of local area knowledge, to be improved. It also reflects the public’s higher expectations of taxi drivers who operate in more complex metropolitan areas.

Will this proposal affect all taxi drivers in these metropolitan centres?
The proposal will affect all taxi drivers in these centres, both existing and new. New taxi drivers must hold all the required Area Knowledge Certificates before they start driving a taxi. However, existing taxi drivers will be given 12 months lead-in time to comply with the new requirement.

What compliance cost will this proposal impose on taxi drivers?
Taxi drivers who currently operate out of the Auckland airport are already required by Auckland Airport Ltd to hold all five AKCs; some ATOs also require this of their drivers. Consequently a large majority of taxi drivers in Auckland already hold all five AKCs. This is however not the case in Wellington and Christchurch.

It is estimated that this proposal will cost the taxi industry $756,000 (one-off) for existing drivers and an ongoing additional annual cost of $672,000 for new drivers.

Who will be responsible for ensuring drivers meet this new requirement?
Approved taxi organisations (ATOs) have a legal obligation to ensure their drivers hold the appropriate Area Knowledge Certificate(s) and maintain an adequate knowledge of their operating area(s). This responsibility will continue in respect of the new requirement.

What will be done if a taxi driver does not have adequate local area knowledge?
The Director of Land Transport currently has the power to require a taxi driver to re-sit an area knowledge test. The draft Rule provides the Director with a new power to revoke the area knowledge certificate of someone who does not have adequate knowledge of his or her operating area and removes the existing power of a person who issues such certificates to do so.

What will be done if a taxi driver is not able to communicate in English?
Taxi drivers are expected to be able to receive and understand directions given by passengers, and also to be able to communicate with their passengers in terms of taking the fare, etc. The draft Rule extends the powers of the Director to require a driver to undergo an English language test or complete an approved course if they are found to have an ongoing inability to communicate adequately in English, even if they have passed an AKC test.

TSL Requirements for taxis

Will the new requirement to display a TSL number apply to taxi services?
Yes. Taxi operators will be required to ensure that every taxi used under the licence displays their TSL number on the forward doors on both sides of the vehicle.

This information is in addition to the existing requirement for taxi operators to display on every taxi the name, business location and telephone number of the ATO to which they belong and the unique fleet number assigned by the ATO to the vehicle.

How much will the requirement to display a TSL number cost taxi operators?
The cost to taxi operators of this new requirement will depend on whether the TSL number is painted on the doors or a magnetic strip or self-adhesive sticker with a pre-printed TSL number is used. It will also depend on the number of vehicles being operated by the taxi operator.


Position where driver ID card is to be displayed

What is new about the display of driver ID cards by taxi drivers?
The draft Rule clarifies where taxi drivers must display their photographic driver ID cards, namely, directly facing passengers, in a central and vertical position, so that a front or rear seated passenger can easily see the photograph in sufficient detail to allow accurate identification of the driver as the card holder.

Why is this clarification needed?
Some taxi drivers have been displaying their driver ID cards in a variety of places inside the vehicle (including the back of the sun-visor and ceiling), and in a manner that does not allow the card to be clearly visible to passengers. The draft Rule provides more specific guidance to drivers, but without being overly prescriptive.

What changes are proposed in terms of taxi driver duties and conduct?
No changes are proposed. Existing rules applying to taxi drivers are carried over into the draft Rule, including those that relate to accepting and refusing a hire; cruising for hire; fares; use of fare meters; multiple hiring; luggage; left behind property; use of designated taxi stands; obstruction of other small passenger service vehicles or road; and use of most advantageous route to hirer.


Shuttle services (section 5)

How does the draft Rule impact on operators of a shuttle service?
Shuttle service operators must comply with the rules that apply to all small passenger services (section 3) and the rules that apply specifically to shuttles (section 5). These rules are largely the same ones as those that apply to shuttles at present. For example, shuttle services must operate between defined start or finish points; and a shuttle may not cruise for hire.

The draft Rule also clarifies that these points must be a main transit point, such as (but not limited to) an airport, bus or ferry terminal, or railway station: these points must continue to be registered with the Director.

What is a shuttle?
The draft Rule defines a shuttle as a motor vehicle that is a small passenger service vehicle that is designed or adapted to carry no fewer than eight persons and no more than 12 persons, including the driver. In addition, the vehicle is used for hire or reward for the carriage of passengers who must begin or end their trip at a defined transit point.

Are shuttles required to display a fare schedule?
No. However, a schedule of standard fares must be carried in a shuttle and be made available to passengers on request. A notice must be clearly displayed in the shuttle to advise passengers of its availability from the driver.


Private hire services (section 6)

How do private hire services differ from taxi and shuttle services?
Private hire services are hired for a pre-determined itinerary. The services are pre-booked and drivers may only charge pre-determined fares that are negotiable. Examples of private hire services are limousines and private charter tours.

Must private hire vehicles display a TSL number?
No, the new requirement to display a TSL number on vehicle doors will not apply to private hire vehicles. These vehicles are currently exempt from having to display operator identification. However, the draft Rule requires drivers of private hire services to produce the following information to Police when required:
- the full name of the holder of the passenger service licence
- the location of the business
- the telephone number of the business
- the transport service licence number


Approved taxi organisations (ATOs) (section 7)

What changes in the draft Rule impact on ATOs?
Several key changes in the draft Rule will have an impact on ATOs. These relate to:
(i) introduction of a Certificate of Knowledge of Law and Practice (CKLP) for ATOs
(ii) strengthening the responsibilities of ATOs in respect of their members and drivers
(iii) registration of taxi fares

Why introduce a CKLP for ATOs?
Although the CKLP has been a prerequisite to obtaining a TSL since 1992, there has been no similar requirement when applying to be an approved taxi organisation (ATO). However, a new provision was introduced by the Land Transport Amendment Act 2005 to allow for this.

The draft Rule therefore proposes that when applying to be an ATO, at least one of its responsible officers must hold a CKLP for ATOs. This new requirement will ensure that the person who will have, or is likely to have, control of a proposed ATO has adequate knowledge of the rules and regulations that apply to ATOs, holders of a passenger service licence and taxi drivers. The detailed content of this Certificate will be developed by Land Transport NZ in conjunction with the taxi industry and appropriate industry training organisation.

What new responsibilities will ATOs have in the draft Rule?
The draft Rule imposes the following new responsibilities on ATOs:
- ensure its members who operate a taxi service hold a passenger service licence
- ensure its drivers hold a current driver licence, passenger (P) endorsement and photographic driver ID card
- ensure that changes to its existing approved signage or new signage are approved by the Director
- ensure the telephone number relating to each approved signage is advertised in the White Pages of the telephone directory covering the area in which the service operates, as soon as practicable after the signage is approved by the Director
- notify the Director of a change in its business address or telephone number, within 14 days of a change occurring
- report details to the Director within 48 hours of a driver whose membership of or employment under the ATO has been terminated due to improper behaviour, including violence, assaults, sexual offences, or driving under the influence of alcohol or drugs
- report details to the Director within 48 hours of a serious complaint (similar in nature to those for terminating a driver’s membership)
- record the log-on and log-off times of its drivers, and retain those records for 12 months
- ensure its members only use signage that has been approved by the Director and display the fare schedule and a telephone number in respect of that signage

Why is the accountability of ATOs being significantly strengthened?
It is recognised that ATOs can and do have significant influence over the standards of safety and service of their members and drivers. There have been strong calls from the taxi industry itself that ATOs be made more accountable for their members and drivers in order to improve the quality of taxi services. There have been anecdotal claims that some ATOs are merely levy-collecting entities.

What compliance costs will be imposed on ATOs from the new requirements?
The additional costs that the new requirements will impose on ATOs will largely depend on the extent to which ATOs are currently monitoring the standards of their members and drivers. ATOs that have systems in place at present will incur minimal compliance costs.

How can ATOs find out the licence status of their drivers?
ATOs have the option of registering with Driver Check, an Internet site operated by Land Transport NZ that enables individuals or companies to check the licence status of their drivers. To be part of this scheme, a company must first register with Land Transport NZ and provide details of its drivers (full name, date of birth and driver licence number). Land Transport NZ automatically advises a company if the licence status of any of its registered drivers changes (eg, due to licence expiry, suspension or revocation). This notification can be made by post, fax or email.

How much does joining Driver Check cost?
The registration of each driver on Driver Check costs $1.52 a year. A separate charge (currently $1.52) applies when a driver is added or removed from Driver Check or for an on-line query about a driver. Detailed on-line information about Driver Check is available at:
www.drivercheck.govt.nz/DriverCheck/Information.aspx


Requirement to record drivers’ log-on and log-off times

Why require ATOs to record their drivers’ log-on and log-off times?
Taxi drivers are subject to work-time restrictions, including being liable for driving hours and log book offences. This requirement will enable ATOs to identify and verify which drivers were on duty in the case of serious incidents, by quickly checking against their log-on/log-off records.

In addition, this requirement aligns with recent changes in transport law which introduced the ‘chain of responsibility’ principle, ie, the recognition that individuals in the transport chain (other than drivers and operators) may contribute to breaches of transport law and should also be liable for those breaches.

Does it mean that taxi drivers no longer need to keep a logbook?
No. Taxi drivers will continue to be responsible for completing their logbook entries, as required at present.


Why require ATOs to report serious complaints within 48 hours?
The ability to take swift action against a driver who is suspected to be no longer a fit-and-proper person to drive a taxi can be hampered by a lack of timely information. This proposal will strengthen Land Transport NZ’s ability to take action against these reported drivers.

What constitutes serious complaints?
These are complaints that involve driver violence, assault, sexual offences, driving under the influence of alcohol or drugs, or dangerous or reckless driving.


Multiple signage or brand names

How many signage or brand names can an ATO operate?
ATOs are not prohibited from introducing more than one signage or brand name (and fares) to target different customer groups. The Land Transport Amendment Act 2005 clarifies that when approving an ATO, the Director must be satisfied that the signage of the proposed taxi organisation is sufficiently distinguishable from the signage of any other approved taxi organisation operating in the same area. This is because an ATO’s signage may have implications for the safety of taxi passengers – it is important that a complainant be able to clearly identify the company to which the taxi belongs. This provision should also help to identify quality service and improve consumer protection.

What new changes are proposed concerning signage?
The draft Rule requires that:
- any changes made to an approved signage or proposed new signages be approved by the Director
- an ATO register in the White Pages of the telephone directory a telephone number for each approved signage, as soon as its signage is approved by the Director
- all vehicles operating under a common signage must offer a common registered fare schedule
- all vehicles operated under an approved signage must display that signage (brand name), the associated fare schedule, and the telephone number registered in the White Pages.


Rental services (section 8)

What changes in the draft Rule have an impact on rental services and why?
The requirements that currently apply to rental services are highly prescriptive and are considered to be disproportionate to the risks they pose. To address these concerns, the draft Rule simplifies and reduces the requirements that apply to rental services.

Key changes affecting rental services are:
- applicants for a rental service licence will not be required to hold a CKLP
- the existing prescriptive rental hire agreement will not be carried over into the draft Rule
- a rental service operator will be allowed to reject a hirer’s own vehicle insurance if it is not considered by the operator to be comparable to what was offered to the hirer
- rental service operators will be allowed to debit a vehicle hirer’s credit card to pay infringement fees for traffic offences.

Why exempt applicants for rental service licence from holding a CKLP?
Simplifying the rules that apply to rental services will greatly reduce the already limited range of topics covered by the CKLP rental service module and the number of questions that can be asked in the CKLP examination. The need for such an examination is therefore not warranted.

How then would rental service operators know about their legal obligations?
Key legislative requirements relating to operating a rental service will be communicated to rental service operators by way of education/information material.

Will a rental hire agreement no longer be required?
A rental hire agreement will still be required. A rental service operator and a prospective hirer must enter into a written agreement for the vehicle hire.

How different is this written agreement from the existing agreement?
At present, the wording in the rental agreement is tightly prescribed by law - rental companies have no flexibility in setting out a form that suits their business needs. The draft Rule does not prescribe the wording of the written agreement. Instead, it lists the items that must be included in the agreement (Schedule 3 of the Rule). Operators will have the flexibility of including other items that they consider to be appropriate.

What changes are proposed concerning the insurance of a hired vehicle?
As part of the written hire agreement, the existing requirement for a rental service operator to offer vehicle insurance to a prospective hirer, and the right of the hirer to not accept the offer, would be retained. If the rental service operator’s vehicle insurance offer is not accepted, the hirer would be required to provide alternative insurance cover. The draft Rule clarifies that the operator can refuse to hire the vehicle if this alternative insurance cover is not considered to be comparable to what the operator had offered.


Hirer’s liability for infringement fees

What does this involve?
Rental car companies will have the option of passing on fines to overseas-based customers by charging any traffic infringement fees to their customer's credit card.
The draft Rule specifies the requirements that rental car companies must comply with in order to do this. For example, at the time of hire, a prospective hirer would have to be informed about their possible liability in the event of their committing a traffic offence.

Why is this new provision being introduced?
In 2004 around 14,000 speed camera tickets were waived because the vehicle involved was a rental vehicle and the driver had given an overseas address. In addition, tourist centres such as Queenstown and Rotorua report difficulties enforcing parking restrictions against tourists. By increasing the likelihood that visitors will pay their fines, this proposal sends a clear message that New Zealand takes compliance with traffic law seriously.

What fines can be passed on?
Infringement fees resulting from 'owner liability offences' (speed camera, traffic signal and parking infringements, and future toll offences) committed during the period of the hire.

What safeguards are in place to prevent incorrect traffic infringements being charged to customers' credit cards?
There will be a number of safeguards put in place to protect customers.
For example, the rental contract will have to contain a clear statement warning customers that infringement fees will be charged to their credit cards for specific offences. Copies of an infringement notice and reminder notice will need to be provided to the customer, within 2 working days of receipt of notice, to prove that the offence was committed during the period of their hire.

Will a hirer be able to dispute the offence and charge?
Hirers will be advised they have the right to challenge, complain, query or object to an offence to the issuing enforcement authority, as well as the right to seek a court hearing within the permitted time period.

The person who has been charged may dispute the charge with their issuing bank, and seek that appropriate protocols have been followed. As is the case with other credit card transactions, the charge will be reversed if satisfactory evidence cannot be provided that the charge was correctly applied.

Is the debiting of a hirer’s credit card by rental service operators for paying infringement fees mandatory?
No. Rental service operators will not be obliged to take part in this scheme – it is optional.

What will happen if a rental service operator chooses not to debit their hirer’s credit card?
They may, if they wish, continue with existing arrangements. That is, if they do not wish to pay the ticket, they complete a statutory declaration and advise the name and address of the person who hired the vehicle. This is sent to the authority that issued the infringement notice (ie, New Zealand Police or a road controlling authority) that would then amend their records to reflect the nominated driver's details and take necessary actions against that person.

Will rental car companies be able to charge a processing fee for handling infringement notices?
The draft Rule provides for a rental car company to charge an administration fee on the debit charge. Public comment is sought as to whether this fee should be prescribed in regulation (as they are for fees relating to vehicle towage for parking infringements) and if so, what would be a reasonable fee?

What if the customer pays cash for the rental car hire?
This is not a common occurrence. Only a few rental customers pay for their car hire in cash.
In such cases the company generally demands a large deposit to cover any repairs and incidental costs such as petrol. In these cases, the company has the option to either take the cost of the infringement fee out of the deposit (if stipulated in the contract) or refer the ticket back to the ticket-issuing authority, as they can do at the moment.


Vehicle recovery services (section 9)

What changes are proposed that will impact on vehicle recovery services?
The large majority of existing requirements relating to vehicle recovery services are carried over into this draft Rule. The three key proposed changes are:
(i) TSL number to be displayed on the front vehicle doors
(ii) Holder of a vehicle recovery service licence to be responsible for the conduct of their drivers and employees based at their business location
(iii) Drivers of a vehicle recovery service vehicle to behave in an ‘orderly and civil’ manner while operating the vehicle.

Why are these changes necessary?
The display of a TSL number on the vehicle doors will enhance the existing requirement to display operator identification on a vehicle recovery service vehicle. It will also enable the Police to quickly identify at the roadside the licence under which the vehicle is being operated.

The proposal that tow operators be responsible for the conduct of their drivers and employees addresses complaints about tow yard staff using intimidating tactics and behaving in an inappropriate manner towards members of the public. It also aligns with a similar requirement that applies to drivers of a small passenger service vehicle.


Exempt passenger services (section 11)

What are exempt passenger services?
They are passenger services that are exempt from licensing requirements. This means:

- Operators are exempt from holding a passenger service licence (and, therefore, from the CKLP requirement)
- Drivers are not required to hold a P endorsement or photo ID card (and, therefore, not subject to annual fit-and-proper person assessments, including Police vetting)
- Vehicles used in these services do not have to be certified as a passenger service vehicle (PSV) and comply with PSV standards, nor are they subject to six-monthly Certificate of Fitness inspections and signage requirements.

What passenger services are exempt now?
The following are currently exempt from licensing:
- a passenger service operated by or under the control of a district health board, local authority or incorporated charitable organisation
- a passenger service involving the carriage of persons to or from their place of employment or business pursuant to a cost-sharing arrangement between occupants of the vehicle
- a passenger service carried on exclusively for the purpose of providing relief or assistance during a state of emergency
- a service where the vehicle used is a large passenger service vehicle hired from a person who holds both a passenger service licence and a rental service licence and the only payments made in respect of the vehicle hire to the hirer are payments reimbursing that person for the costs of hiring and operating the vehicle
- a passenger service involving transporting of school children by parents in return for a Ministry of Education private transport allowance
- a passenger service provided by persons providing home or community support services.

What changes are proposed to existing exempt passenger services?
The changes proposed to existing exempt passenger services are:
- to allow these services to use vehicles that are designed or adapted to carry not more than 12 persons (including the driver); vehicles with a carrying capacity of up to 9 persons only are allowed at present
- to allow drivers to be staff members of the organisation providing the service, where applicable; volunteer drivers only are allowed at present
- to allow some organisations to receive external third-party funding for the transport, where applicable (eg, registered charities and providers of home and community support services)
- to clarify that reimbursement for the running cost of the vehicle is to be made by an organisation to a staff member or volunteer driver who provides the vehicle
- to allow vehicles used to be provided by the organisation (ie, not just those vehicles provided by the volunteer driver or staff member).
- to widen the car-pooling provision to include tertiary educational purposes and sports activities (eg, a tramping club).

Why are these changes proposed?
These changes are proposed to widen conditions governing existing exempt passenger services, in particular those operated by incorporated charitable organisations, local authorities and district health boards. Allowing the receipt of third-party funding for the transport service recognises the non-profit nature of charitable organisations and the need for them to raise funds from external sources for their charitable activities.

What new exempt passenger services are proposed in the draft Rule?
The following new exempt passenger services are proposed:
- a passenger service involving the transporting of children and their escorts to or from any activity of a school or institution providing pre-school education
- a passenger service provided by an organisation offering liquor, meals and refreshments for consumption on licensed premises, where a fee or fare is not required of its passengers

How do I have my say on the proposals in the draft Rule?
The consultation (yellow) draft of the Rule together with supporting information is available on the Land Transport NZ website at www.landtransport.govt.nz/consultation/operator-licensing or a copy can be obtained from the Land Transport NZ help desk by calling 0800 699 000. Guidance on making a submission is included in the overview to the draft Rule.

What’s the deadline for submissions?
Submissions close with Land Transport NZ on 14 June 2006.

What will be done with my feedback?
Comments made in submissions will be analysed and taken into account in redrafting the Rule.

What will be the next stage of the process?
Following completion of the public consultation phase, the draft Rule will be submitted to the Ministry of Transport for the government’s consideration. The final version of the Rule will go to Cabinet for noting and will then be signed by the Minister for Transport Safety.

When will the Rule come into force?
Subject to approval and signature by the Minister, the Rule will come into force in 2007.

Who will able to provide more information about the Rule?
Queries about the draft Rule should be made in the first instance to the Land Transport NZ Help Desk by calling 0800 699 000. Where necessary, the queries will be referred to the relevant contact person at National Office, Land Transport NZ to respond to.

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