The Business Case Self-Regulation by Doug Nelson
Well hello everyone. I have been asked to respond to the negative connotations of Bill 147 as written in the previous edition of this magazine. My only comment on this is that the entire article in my opinion is emblematic of exactly what is wrong with this industry. No doubt, there are those individuals within this industry that are either truly confused or they may in fact be part of the problem we are trying to address. I have yet to hear a truly intelligent argument against this bill.
The thrust of the Self-Regulation Bill we presented to the government back in 2008 was a well-founded reaction to the government being lobbied to regulate the Towing Industry in Ontario. One must first look at the facts to determine why a government would want to look at regulating an industry in the first place. After all, if the industry in question is clearly fair and professional in all its dealings with the public it would be a waste of time to regulate it.
Let’s be brutally honest here, any regulation agenda is driven by consumer complaints. So the question is how does the towing industry stand-up to the integrity and honesty tests? Well let me tell you this. I have personally seen hundreds of invoices where fraud is committed and the public has been abused with grossly exaggerated and extremely abusive pricing. That’s a fact not fiction. That’s not just my opinion but the opinion of the many tow operators I report the complaints to when they come into our office. So what do we do about it? As an industry if we are truly professionals, we must stand up and prove we are above this kind of abuse and prepared to protect the consumer. Let’s face it, the towing and recovery industry is a capital intensive business and we must collectively charge for our services in an appropriate but fair and transparent manner. We must rise above those that cause the problems and defend the industry from those that choose to abuse it with all our might in an honest and fair manner. We must also be prepared to defend those operators that are honest in their dealings.
Back to regulation! It is a proven fact that the government (any form of government for that matter) has little knowledge of this industry so how can they regulate something they know little about without the potential of causing damage. Any government regulation is written with one agenda in mind and that is consumer protection period. If this were to happen how will the government develop the appropriate protection for our services? You can bet pricing will be main thrust of the regulation because this is the lion’s share of the complaints. Perhaps they can consult with the auto-clubs or even worse just decide on their own what the correct pricing should be. We all know what the results of this would be.
The self-regulation bill was developed, funded and presented to the Ontario Legislature by the professional operators in Ontario to answer the needs of everyone. This bill will allow for the industry to protect the consumer from unjust charges, fraud and extortion from those that choose to abuse from within the industry in concert with many government ministries and agencies. It will also provide the opportunity to set standards of operation and ensure that any newcomers will carry the appropriate training, insurance and equipment to properly perform their job. It will provide for the foundation upon which we will build our skills and training requirements. It will provide the opportunity to rid the industry of those that simply jump into the industry and abuse our customers, our friends and our families.
I can assure you that the only form of regulation that will truly protect the public and the industry is self-regulation or a delegated authority model and we must do everything in our power to show the government and the public that we are capable of taking on the task.
Currently, there are many professions and trades that are self-regulating so let’s have a look at some of them. Professions such as lawyers, accountants, doctors and engineers are what are commonly known as knowledge based professions. In other words our colleges and universities offer the education required to receive a degree in the particular profession and are all self-regulated. Other industries in Ontario such as the travel industry, the real-estate industry and the electrical industry etc. are also self-regulated. The common link between these industries is the availability of the required education. There is one other collective element these professions have in common and that is the limited capital investments required to start a business. Once someone is educated in any of the aforementioned professions or industries the capital investment to go into business is relatively low. Rent an office, purchase a desk and a few filing cabinets, install a phone and away you go. There are also few if any restrictive municipal bylaws to deal with.
The towing industry is just the opposite of this scenario. First there is no college or university or even high school that offers an education in the towing and recovery industry. All education comes within the industry through experience, experimentation and practice which are passed down to newcomers from the professionals in the industry that are serious in moving the industry forward. It should also be noted that there is no requirement for any such training, skill or business acumen.
Second, the capital investments to enter the industry are staggering. Today’s tow trucks are neither a minimal investment nor a minor commitment. The smallest of tow trucks will start with a price tag of at least $85,000 dollars and the large trucks you see on the highways can reach an investment of a staggering $500,000 to $700,000 dollars.
To handle the large transport wrecks it can sometimes take 2 or 3 of these wreckers and an extensive list of ancillary equipment. It is not uncommon for the towing industry to attend a collision on our highways with more of a capital investment in equipment on scene than both the fire and police departments combined. The next investment is in the limited, specialized and expensive real-estate to work from and store vehicles. When you add the cost of training, equipment, facilities and communications systems the investment one must make in the towing industry it is astounding.
It is a proven fact that municipal regulation of the towing industry does little to protect the public and does nothing to advance the skill level of those within the towing industry. One only needs to look at the history of public complaints of abusive towing practices to see the dismal failure of municipal licensing. The result of this is precisely why we introduced the self-regulation model to the provincial government in the first place.
We should also examine the disorderly towing response and the resulting confusion and chaos that took place recently in the Sarnia, Ontario area during the recent weather phenomenon. The towing industry took the brunt of the criticism due to removal expense involved which was the direct result of the lack of planning and a disorganized approach to deal with the vehicles trapped on the 402. The Towing Industry Council under Bill 147 would encourage an improved emergency response involving the towing industry with both the Provincial and local governments.
For example, a more effective plan would have been to simply move the stranded vehicles to the left side of the highway and leave them there. This would allow for the snow ploughs to plough the right lane, shoulders and the interchanges. Once this was done it could be broadcast over the local TV and radio stations for the owners to return to their vehicles and the tow trucks would return to the highway and help them get on their way. The ploughing would then continue on the left side of the highway. There are a lot of improvements that can be made in situations like this. The bottom line here is communication, planning and organizing for such an event and if the towing industry is to be involved in such an occurrence it should be part of the planning process long before the event takes place.
With all is said and done there are many benefits to both the consumer and the industry within the proposed self-regulation or delegated authority being;
- Establish a Consumer Protection System with the essential knowledge and experience to truly protect the consumer;
- Establishing Training Standards and the levels of skill based upon these standards;
- Recognition as valuable and professional service providers to the motoring public;
- A recognized voice at Queens Park and other industries on any issue that has an effect on the Towing Industry;
- Assisting the government and police by developing a superior service model in clearing highway traffic incidents in a safe and rapid manner;
- Finding an effective resolution for a fair and equitable system of distributing police calls to those operators qualified to perform such services and do so in a responsible manner;
- Ending the costly and ineffective regulations at the municipal level;
- Establishing Standards of Operation and providing the public with quality service at reasonable rates while protecting the public from unskilled operators;
- Fair rates for the services provided based on the individuals overheads and related expenses of effective operational standards and proper qualifications.
Finally, the entire self-regulation initiative is likely to be decided this year. There have been many supporters of the bill through generous donations of time and money but we are not out of the woods by any means. We continue to have a need for additional time and funding to remain in this all-consuming initiative and we intend on staying the course until it is done one way or another.
In closing, make no mistake about it, Bill 147 is not a done deal and we could still end up with full government regulation. This will be a sad day if it happens. Which would you rather have?