Robo-Taxis & Regulations: Predictions on The Future of Transportation, with Matthew W. Daus

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In this episode, Kenneth Lucci dives deep into the evolving landscape of transportation with the esteemed Matthew W. Daus, who brings a wealth of experience in transportation regulation, law, and autonomous vehicle technology. Learn about the emerging trends, challenges, and innovative solutions shaping the industry today. In this episode, you’ll hear:

• How Matthew W. Daus found his way into the transportation industry
• Why driver telematics are critical to reducing fleet insurance claims
• The pending impact of autonomous vehicles 
• The secret to Uber’s improved safety and insurance management.
• Predictions for the future of robo-taxis and shared mobility models
• Regulatory hurdles and potential business strategies for AVs

Join us as we explore the future of ground transportation with one of the foremost experts in the field.

Connect with Matthew on LinkedIn: https://www.linkedin.com/in/mattdaus/
Visit Wendels Marx: https://www.windelsmarx.com/

At Driving Transactions, Ken Lucci and his team offer financial analysis, KPI reviews,  for specific purposes like improving profitability, enhancing the value of the enterprise business planning and buying and selling companies. So if you have any of those needs, please give us a call or check us out at www.drivingtransactions.com.

Pax Training is your  all in one solution designed to elevate your team's skills, boost passenger satisfaction, and keep your business ahead of the curve. Learn more at www.paxtraining.com/gtp

Connect with Kenneth Lucci, Principle Analyst at Driving Transactions:
https://www.drivingtransactions.com/

Connect with James Blain, President at PAX Training:
https://paxtraining.com/

Episode Transcript

Ken Lucci (00:25):
Welcome to another exciting episode of the ground
transportation.
podcast.
I am sans my partner, JamesBlaine from PAX training.
No doubt he's out doing achauffeur training program with
one of the bigger operators thanin the region.
So I'm flying solo, but I havewith me.

(00:48):
One of my best friends in theindustry.
I've shared a stage with, andevery time we go on a stage and
an executive retreat or at anNLA conference, we just rock the
house with information.
Don't we?

Matt Daus (01:03):
We do,

Ken Lucci (01:04):
So I am so pleased

Matt Daus (01:07):
it's electric.

Ken Lucci (01:08):
it is electric.
So I am, if you're into M and aregulatory and legal,
absolutely.
Yes.
Um, And finance.
So I am so pleased to haveMatthew W Dawes.
With me today, Esquire, thefounder and chair of the
transportation practice atWendell's Marks long storied
history.

(01:28):
The bottom line is this man isthe best and most renowned
transportation attorney in theUnited States knows the
regulatory side.
Knows the operator side hispractice does the legal side of
M& A.
So we work together on a lot ofdeals.
So I have absolutely beenchomping at the bit to get him

(01:49):
on the podcast.
We're going to have him backregularly to talk about a few
things today.
We're going to talk aboutautonomous and we're going to
talk about the insurance crisis.
But Matt, give us a little bitof your background.
You've got a long history beyondwindows marks.
You've been.
You know, New York politics.
Give us a, give us a rundown ofyour your bio.

Matt Daus (02:08):
Well, first of all, it's an honor to be here.
Um, Sorry that we're missingJames today, but we'll do
another one when he's back.
But it, you know, those arereally kind words, Ken, coming
from you.
That's you know, reallyflattering because I know you
are the leading financialconsultant and M& A guy in this
industry.
We've done such great worktogether.
It's just, uh, it's, it's reallya privilege to continue to not

(02:30):
just share the stage with you,but we work on deals together,
which is you know, been verybeneficial for those involved in
those deals and also uh, for theindustry at large.
So, you know, thanks for taking,having the, taking the time to

Ken Lucci (02:42):
Listen, we are the dream team when it comes to
doing deals in this industry.
I have to say it, our financialanalysis, the negotiation part,
your, your team on the legalside.
I don't think you can getbetter.
Listen, I don't think you canget better representation from a
wall street, M& A company, orwhat do they call that?
A white shoe law firm.

(03:03):
You guys got it dialed in.

Matt Daus (03:06):
Yeah, that's a, it's an interesting phrase, luffer.
I mean, We've been around for awhile and you know, actually
I'll, I'll, I'll go back to thebeginning.
I mean, I, I didn't even know Iwanted to be a lawyer.
I had no interest intransportation.
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,

(03:26):
you're not going to be able tocome into sleep with us if you
go that route.
So they kind of pressured meinto doing something that I
could earn money at and theywere right in retrospect.
Right.
You know, I know a lot of peoplewho pursued their dreams.
Most of them, you know, theydidn't make it.
So I'm in a position now where Iplay for fun, as you know.

Ken Lucci (03:43):
Because you have a day job that pays you real
money, so.

Matt Daus (03:47):
you know, in my young mind, I wanted to be an
entertainment lawyer.
And, and you know, that was mydream because at the time when I
decided to go to law schoolbecause frankly, I'm afraid of
needles and I want to be adoctor.

Ken Lucci (03:59):
And

Matt Daus (04:00):
know, I kind of figured out this may be the way
to get into the music industry.
And, you know, when I got out oflaw school, I'm like, you know,
it's not all it's cracked up tobe, you know, entertainment
lawyers are basically agents.
And I came out of law school ata time when it was a very
difficult time to get a job.
It was Bush seniors, arecession.
So I ended up taking, you know,the first job I could get, which

(04:20):
was doing medical malpracticelaw, and I hated it.
I just didn't, you know, I feltlike every time that there was
handling a case, I had a diseasemyself.
Um, It was kind of a depressingthing.
And then, and I just took a staband just got involved in
politics through you know, somemutual friends.
I hated politics, wanted nothingto do with it.
When I was in college and lawschool, even though I was a poli

(04:41):
sci major.
And I got involved with a coupleof campaigns and then I ended up
working for the city of NewYork.
More than I ever thought Iwould.
I started out as a human rightsprosecutor got promoted.
You know, if, if you're ingovernment and you have
political connections and youwork hard, you're, you're, you
know, the sky's the limit.
If you know how to stay out oftrouble.
Right.
So when I got into government, Iwent from human rights to being

(05:04):
general counsel of communitydevelopment.
And then I got involved withgetting the mafia out of, The
trade waste industry and then Iended up working for my own boss
who became my old boss at one ofthose agencies who became the
taxi commissioner.
So I really just followed herbecause I liked working for her.
And I came in as special counselcleaned up a huge mess with the

(05:27):
administrative law judges.
The, the, the court at the TLCwas.
abysmal mess.
I mean, I, my first day,

Ken Lucci (05:35):
what years?

Matt Daus (05:37):
we're talking about 1996.

Ken Lucci (05:40):
Yeah.

Matt Daus (05:41):
first day at work, there was a flood with summonses
and violations floating all overthe floor.
Um, I mean, I guess you're notand then, you know, the big
issue was taxi drivers wouldfight with the judges and
because the judges were givingthe decisions in front of them,
finding them guilty.
So they would throw the tablesover.

(06:01):
Um, We had a crowd controlproblem.
There was like you know,hundreds of people in the
waiting room.
And the prior administration'sresponse to that.
If there's too many people inthe waiting room, let's not
schedule things.
Right.
Let's just dismiss thesummonses.
So, I mean, my, I walked in oneday and I, there was water
coming down from the elevator.

(06:22):
I had to walk through it.
My suit got all wet.
And then two days later, someonepulled the fire along because
there was too many people at TLCin the, in the room.
And it was a riot and they tookthe inspectors and the cab
drivers were carrying them likecrowd surfing, like carrying
them like by their legs.
I mean, it was like, it wasviolence.
They're horrible.

(06:44):
So.
I took that job seriously.
We cleaned the tribunal up.
And then I was promoted togeneral counsel.
And then when my boss retired, Iwas appointed commissioner
reappointed and it was a toughprocess.
You know, you had to go throughthe city council.
It's not just, you know, themayor appointing you.
You have to actually be approvedby the legislative body.
I went through that twice and alot of people have noticed, but

(07:05):
the second time I went throughfor reappointment they never
actually voted on me.
I got it by default.
I was going to get the votesanyway, but I had left because
things looked really good.
When they were voting on me.
And then there was a councilmember who was elected and the
guy who lost the election camein and shot up the city council

(07:26):
and kill people, you know, sothat the day I was reappointed,
unfortunately you know, somepeople were, were injured, I
believe some folks were killedand they had massive security at
city hall.
A lot of people don't know thisstory.
And I have my whole TLC staff upthere and I said, you know what?
Things are looking good.
Let's go back to our office andwatch the returns on TV.

(07:47):
They're all sitting in my officepopping some champagne and then
some guy comes in and startsshooting the place up.
So, that wasn't the end of mycareer.
That was kind of the beginning.
I was there for about nine yearsas commissioner, 14 years at
TLC.
And then I decided to leaveabout almost 15 years ago.
And I've had pretty much threeconsistent hats, as you know,
since then I was asked to, whenI was elevated as president of

(08:09):
the ITR, which is the taxicommissioners organization,

Ken Lucci (08:12):
That's the regulatory association of all of the
regulators in the country.

Matt Daus (08:17):
correct.
And, and beyond it'sinternational.
So taxi commissioners, limousinecommissioners, 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 myclients in the industry because
we don't really fight with theregulators at my law firm.
Like we know the regulators,

Ken Lucci (08:38):
You, you can't, you can't, it's a losing battle to,
to oppose the regulators in thatway.
Diplomacy, diplomacy is, is akey to what you do in that role.

Matt Daus (08:50):
absolutely.
I mean, every once in a whilewe'll have a lawsuit here and
there, but we try to stay awayfrom them.
There's a problem for alimousine operator.
We try to solve it.
We have conversations and theytake us seriously because we
kind of someone was telling me,you know, how are you going to
be a lawyer and still hang outwith the regulators?
You know, I was like, well, whynot?
I said, why not?
Like, this is an issue in theinsurance industry, right?

(09:12):
You have to represent theplaintiff sort of defendants.
It's always black and white andit's it doesn't have to be that
way.
So for 15 years, We've kept ourrelationships with the
regulators really good.
And also my academic hat,transportation technology chair
at the city, university of NewYork.
Academia is really important tothose academic connections help

(09:34):
the industry.
It helps me identify trendsbefore they happen because It is
work with the academics and thelaw practice.
You know, transportation law didnot exist when we created this
practice.
People like, what is that?
You know, now everybody knowswhat it is because of all the
disruption with uber you know,one of the greatest compliments

(09:55):
is when the late sent whenSenator Al Damato opened up his
lobbying practice five monthsafter he saw I was doing good
work.
And making money.
They started calling it thetransportation lobbying
practice.
And now you got people sayingtheir transportation borders all
over the country.
And when I went out there, itwas like, what is that?
You know?
So my firm was the perfect placeto go because as you know, we

(10:18):
are very flexible with ratesbecause it's a midsize firm.
We have 150 lawyers.
We've been around since the1800s.
My, one of the partners that washere for many, many years before
who encouraged me to join wasTony Kosher, who was the chair
of the port authority.
For 12 years now, and now he'sAmtrak chairman.
Really, really good group ofpeople.

(10:38):
And I built the team fromscratch.
At the beginning, it was justme.
I was in court, you know,litigating cases.
And then, and then we startedbranching out.
We started with taxis and limoclients, and then we branched
out and we represent everythingand anybody.
And we try to stay a couple ofsteps ahead of the curve as you
do with your business, Ken.
Like we, we try to identify thetrends.

(11:00):
And learn about things beforethey become a thing.
We've done that with flyingtaxes 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 lawfirm.
So we do everything, MNA,contracts terms and services,
litigation.
We do pretty much everything,but.

(11:21):
You're not going to waste yourmoney by getting a really good
attorney who knows nothing abouttransportation.
They're learning on your time,right?
And they don't have connectionsthat we have, and they also
don't understand the trends theway they do.
So it worked out well.
It's a niche practice.
And we even work with other lawfirms who do expert witness
work.
We do a little bit ofeverything.
So we're multimodal and we got,we got expertise in buses,

(11:43):
automated enforcement.
You name it, we're involved init.
Trucking, you know, deliveries,logistics, where it's all on the
table.

Ken Lucci (11:50):
but you hit upon something that is critical.
Yesterday I had a conversationwith, you know, someone who's
extraordinarily wealthy andHarvard educated.
And his question to me was, whywouldn't I hire a boutique
investment bank?
I said, because they don't havethe data we have in the
industry.
They don't know the industry.
They don't know the industrytrends, and you're going to be

(12:11):
paying them a thousand dollarsan hour to learn.
You're going to be paying us alot less.
And I said, not to mention thefact that, you know, you, that
is the key is the pastexperience what's going on in
the industry, but mostimportant, more importantly, is
the future trends of thebusiness.

(12:32):
And that's what your practicebrings to the table.
I mean, I, I get calls all thetime from people who say, well,
I'm a transportation MNAattorney.
And I'll say, all right, give meyour 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, ourMNA, we've come up from the
bootstrap from, from, from, youknow, doing small transactions,

(12:56):
but the depth of knowledge andexperience that you have on the
regulatory side, so goes NewYork, so goes the rest of the
country eventually.
So I wanted to talk about twothings today.
One is, is a look, the insurer,we are in a crisis on the, on

(13:18):
the fleet insurance side of theindustry 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 insurancebriefly, but then I want to talk
about autonomous vehicles.
I gave, I was out at the Arizonalivery association two weeks
ago.
And I, I took my first way motorride.

(13:39):
I also sat at the airport.
Looked at their depot, watchwhat was going on.
And then I took a bunch of Uberrides.
So I really want a deep dive onthat.
So if we can spend.
you know, 57 minutes on whereyou think the insurance crisis
is going to go.
And then let's talk futureautonomous.

(14:00):
Let's hit everything we can onwhat's going on with our friend
Elon.
And, you know, perhapspolitically, what is he trying
to accomplish in this realm?
Some stuff hit that hit the wiretoday on that.
So You know, you know, everybodyin the industry on the insurance
side.
I had a great conversation withTim Delaney from Lancer the

(14:20):
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 theones that are risk.
They're not the ones that areresponsible for people's
insurance increases.
They are a part of an ecosystemthat they have very little
control over.
I'm kind of tired of peoplesaying my agents, you know, my

(14:41):
agents no good or my carriersgreedy, you know, the numbers
just don't support that.
They lose money on thecommercial side of the industry
constantly.
And, you know, they've been foryears talking to operators about
taking risk mitigationseriously.
So my question is, where doesthis crisis, where are we going
with this and what ultimatelyhappens?

(15:02):
25 And beyond

Matt Daus (15:04):
something needs to change because the same old,
same old is not working.
I think there's a lot of thingsthat that the insurance industry
has been grappling with.
I think distracted driving is onthe rise.
People are back with their carspost pandemic.
They lost a lot of money duringthe pandemic, as we all did.

Ken Lucci (15:20):
as we all did.

Matt Daus (15:22):
bailed out like the airlines were.
So, look, you find a goodinsurance underwriter and you
file rates, you know, they couldclaim, 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 andthe, the size of the claims, you
know, in an increasinglylitigious society, you know, I

(15:44):
think the, the, the other, thestory that's behind the scenes
that we'll never know about is.
You know, like every otherindustry, they're applying,
trying to play catch up and makeup for losses during the
pandemic.
You know, some people like inNew York in particular, like the
two things that I think putAmerican transit over the edge,
because we, you know, since themoment I joined TLC in the
nineties, there was rumors aboutthem being insolvent or about to

(16:06):
go under for 30 years now,

Ken Lucci (16:09):
For the audience, American Transit is the biggest
carrier in delivery space in NewYork.

Matt Daus (16:15):
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 beennotoriously low, they've been
able to compete and drive a lotof people out of the market.
But during the pandemic the onething that really fueled their
growth and allow them to staysolvent for many years is when

(16:37):
Uber came into the market andgrew exponentially when the TLC
put a cap on the number ofvehicles, that really hurt.
And in the pandemic was a doublewhammy because.
American Transit and otherinsurers like Lansing did the
right thing.
They participated in thisprogram that the TLC put
together.
To put medallions and and FHVsin storage so that you didn't

(16:57):
have to pay your insurancebecause you weren't working
during the pandemic.
Well, that all those things kindof, I think put American transit
finally over the edge inaddition 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 youknow, we have very solid
national players like Lancer andother insurance carriers that

(17:20):
are out there.
And really good insurancebrokers like research
underwriters and others there.
There are people that are inthis space that understand it.
And if you shop around, you'd besurprised what you can get.
And every state has differentissues like Florida, for
instance, and I have to commendRick Versace and FLA,

Ken Lucci (17:39):
Rick Versace from A one A, runs a great operation
down on the East Coast.

Matt Daus (17:44):
and they in Texas are attracting new insurers because
they have tort reform.
You know, they have acontributory bar contributory
negligence bar.
For those who don't know whatthat is, when you go to law
school, every state hasdifferent you know, comparative
negligence or contributorynegligence laws.
What does that mean?
It means if you're the personwho's suing and you're the
plaintiff because you've beeninjured in a crash, will you

(18:05):
negligent also?
And what happens if you are?
Most juries will.
We'll say, okay, someone wasinjured.
It's 100 grand that damages, youknow, how much of that is the
plaintiff's fault and how muchof that is the defendant's
fault.
And they'll actually put apercentage on it.
So technically if it's 80percent the fault of the
defendant, they're going to get,you know, 80, 000 of the a

(18:27):
hundred thousand that that'sexactly how it works.
There are minority states, andthis is something that Florida
and Texas.
are working on a lot of tortreform called the Contributory
Negligence Bar.
What does that mean?
After everybody decides who'sresponsible for what, if the
plaintiff is more than 51percent at fault, then they

(18:47):
can't recover anything.
So, like, the tort reform isactually driving where the
insurers are going at thispoint.
So they're fleeing the statesthat have you know these huge
verdicts and the trial lawyersthat represent the plaintiff's
bar, you know, have a lot ofpower to give a lot of
contributions in a lot ofstates, including New York and

(19:09):
California and elsewhere.
And that's the, that's thebigger battle Ken, but Like, I
just don't see the blue statespushing back on that.
In fact, they're looking to goin the other direction.
The other day, Governor Obamahas a bill about, wrongful death
cases and, you know, allowingfor pain and suffering where
they don't currently have itnow.

(19:29):
So in states like California andNew York, in years from now, I
don't see massive tort reformhappening.
In the red states that arelooking to attract people and
businesses, you're going to seeit.

Ken Lucci (19:41):
Red or red or purple,

Matt Daus (19:43):
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 withcompetition or, or the industry
complaining, will try for acouple of years to just keep
their rates stable.
You know, so, so, but, but inaddition to shopping around,

(20:03):
there are things that operatorscan do.
To mitigate their losses and tolook into different solutions.
And there's things regulatorscan do.
What can a company do?
They can get telematics.
They can put the cameras in.

Ken Lucci (20:14):
and managed by it.
And look at them and change thebehavior of the driver.

Matt Daus (20:20):
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 wayto get it done.
And I think having a third partyentity.
Do it and have driversvoluntarily sign up for it and
agree to it.
There's ways that this can bedone and it reduces claims 50 to
60%.

(20:40):
The first people that I've seenthat have done this in the
nineties, I saw people doingthis.
Tim Rose and Mike Rose when theywere at flight time and Empire
CLS and Sealinger, they all hadthis stuff way before anybody
else did.
And, and companies like Valeraglobal that used to be known as
computer X team.

Ken Lucci (21:00):
Dave Eckstein.

Matt Daus (21:02):
They Dave Eckstein did this at great risk to his
business at the time because hehad independent contractors, but
no one ever sued him to myknowledge about the labor issue,
but he has been able to hisbusiness.
He told me actually survived andwould have gone under if he did
not have the telematics camerasin because there were a couple

(21:23):
of big lawsuits where theycaught on tape what exactly
happened and they were able to,you know, to beat the case.

Ken Lucci (21:30):
So let's stop there for one second because you,
you've mentioned a statisticthat when you have telematics in
the vehicles and now they arevery sophisticated speed of the
vehicle distracted driverreckless driving, speeding, et
cetera.
You can manage by them.
The, the, the claims go down 50to 60%.

(21:51):
You're the third person to tellme that.
So when somebody complains to methat a telematics cost X, okay,
my answer is, if you manage yourbusiness by it, this is another
form of insurance for you.
But now I want you to talk aboutthe downside or the negative
side of having it.
But not managing by it becauseit can be, it can come back and

(22:14):
bite you in the ass on alawsuit.
If you're not doing somethingwith the data,

Matt Daus (22:19):
that's exactly right.
And this is a double edged swordbecause for years, back in the
nineties, I tried to get thisprogram off the ground with the
insurers in New York, and it wasvoluntary with incentives and
discounts.
But a lot of the fleet.
Drivers basically told the taxiowners at the time, you know, if
you put this in, I'm not, I'mworking for your competitor.
I don't want to be watched.
You know, no employee wants tobe watched.

(22:40):
Right.
You know, we have worked fromhome now.
We don't know what people arereally doing during the day, but
this is like something where itcould really bite you hard.
If you, this stuff on the videosand you don't take action like
that separate additionallawsuit.
So there needs to be a programin place, which is very time
sensitive.

(23:01):
Time intensive.
Like I remember when I firstvisited, when I was commissioner
computer call, when David showedme what he did, they actually
had hired people to sit thereand watch videos all day.
You don't have to do thatanymore because the software has
AI and they can automaticallyjust isolate the things that

Ken Lucci (23:17):
It pops, it pops up the problems for you,

Matt Daus (23:20):
and it's great, but you have to take action.
Where it's tricky is whenthey're independent contractor
drivers involved, depending onthe state.
You know, they might say thatyou're exerting control over
them and bring a classificationlawsuit saying that you're their
employer.
So

Ken Lucci (23:33):
but your point about the third party doing it is
extraordinary.
You could, you could basicallysay, look this is what you get
paid, but you know, we can payyou a little bit more if you're
on this telematics program.

Matt Daus (23:47):
correct.
And that's, that's exactly howUber did it.
Uber is always very sensitive togetting these lawsuits.
So in New York they actuallypartnered with Nexar and after
Ira Goldstein from the Black CarFund did a pilot program with
Nexar, where they bought somecameras and believe it or not,
it really had nothing to do withinsurance because all of the
insurers in New York haveapproval for discounts.

(24:08):
They stopped giving them a longtime ago.
Hereford, Lancer Americantransit.
That's not why the drivers putthem in, but now there's 30,000
Cameras in New York City inblack cars and limos because a
lot of those cars also work foruber and lyft and they put it in
because of the passenger ratingsLike they would have fights with
passengers the passengers wouldput in a negative rating and the

(24:29):
driver would be turned off theplatform So they bought these
cameras which are forward facingand inward facing So they can
press a button when they starthaving an argument with the drop
with the passenger And that'swhy they did it.
But the result is, is that, youknow, you could actually see the
entire city.
The data that they collect isamazing.
And it, I believe that it's madethe industry safer.

(24:53):
There are studies on this KenThere are studies in the
insurance industry, tons of themthat show that as soon as you
put a camera in, your claimswill go down 50 to 60%.
And you can talk to anyone inthe industry that's done this.
That's what the case is.
And now it's easier because allthe stuff that David Eckstein
used to do doesn't need to bedone anymore.
It can be Automated and then youbut you have to take action.

(25:16):
Like I said and uber what theydid is they provided a program
where the leasing and rentalcompanies, which I think is the
future who are third partiesthat in new york city there's
like Five or six companies thatthey own the permits They own
the vehicles and the driversjust come to them and rent the
car for a day or a week Andthey're separate entities.
So by them putting the camerasin or by the drivers putting

(25:39):
them in on their own, Uberdoesn't have to worry about it.
And that's how they were able todo it.
Now, there's pathways to dothis.
If I was a limo operator rightnow, I'd put them in.
I'd figure out a way to do itwith a separate entity and talk
to lawyers about how tostructure to avoid and mitigate
risk.
I'm on a mission now where I'vebeen commissioned by the NLA to

(26:00):
work with my university on areport that will be coming out
on reforming and addressing thelimo crisis.
As you know, Ken, we gave a bigpresentation, you and I, the NLA
you know, earlier this year,that report is going to have
specific recommendations and Ican give you a really quick
preview regulators need tomandate it.
If the regulators mandate thecameras, Okay.

(26:22):
The labor issues go away.
Whenever a mandate comes from aregulator.

Ken Lucci (26:26):
completely.

Matt Daus (26:27):
Used against you in court that solves the problem.
And you don't have to, becauseoperators, unfortunately, very
short sighted like, Oh, I want adiscount.
I want money now.
They, I don't want, why should Iinvest in this?
You know, how many times I speakto people and they're like, why
should I invest in a camerasystem?
It's too much money.
I'm trying to make ends meet.
Well, you know what, when yourclaims and your insurance in
five years go downsignificantly, everything will

(26:49):
pay for itself by tenfold.
And so I'm a big believer intelematics.
One thing I think that should beexplored more is people either
sharing their vehicles orcreating and working with
independent entities like rentalcompanies that

Ken Lucci (27:03):
Right.
Connect, connected and sharedcapacity because you cannot
afford to build the cathedral ofthree, four, 500 cars for the
Sunday service.
You have to have connected andshared capacity.
A hundred percent agree withyou.
Especially in the sedan SUVside,

Matt Daus (27:24):
can be done.
It's an interesting businessmodel.
I mean, look, let's follow whatUber did.
Look Uber is you know, they'vehad their issues.
They've been a long time beforethey got profitable.
But they, they have a model thatthey use Enterprise Hertz and
Avis vehicles for their drivers,which is a third party entity.
And in New York City, like Isaid, there's like five or six

(27:44):
companies that all they do isrent to Uber and Lyft drivers
and those same drivers servicethe limo industry.
So the model itself is a goodone because it solves the
insurance crisis to a certainextent, because those companies
have the ability to get captiveinsurance models and get fleet
insurance and self insurance.
Things that a small operatorcan't do, a small operator with

(28:05):
three vehicles can't do that.
So why not, why wouldn't allthe, you know, and this is
something that, you know, Rickin Florida is looking at, you
know, with the captives.
Captives are complicated.
It's, it's something that youneed capital.
And I think that

Ken Lucci (28:19):
captive insurance is very complicated.
Financially, number one,operationally, and you hit the
nail on the head with that totalemphasis

Matt Daus (28:30):
someone would develop a business model similar to the
companies in New York that areworking 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 limodrivers and to, and, and also
when you need to get a bus everyonce in a while, and, but you
don't need it all the time.

(28:51):
That's a great place to start.
Like I, you know, I have, thereare 10 small companies in
California and they can't affordyou know, their own bus.
So why not put your moneytogether or have a separate
entity that.
will rent it out to them andtake care of the insurance.

Ken Lucci (29:07):
And the maintenance and the repair.
It's basically a communalleasing company.
There's no question about it.

Matt Daus (29:13):
but having a safety program with your drivers,
putting the telematics in.
These are things that can bedone right away.
Captives are very complicated.
Self insurance is complicated.
It involves investments and notevery operator is able to do
that.
So I would say focus on therental industry.
Telematics have a safety programin place.
And, and, and also you know,look at alternative business

(29:35):
models.
And this is something that canbe done in the short term.
I think tort, tort reform is alaw.
It's going to take 5 to 7 yearsto get a build on and changes to
be made in that regard.
However, like in New York, inparticular, they have the split
insurance thing.
The DLC is unfortunatelyproposing to get rid of it,

(29:56):
which I think is a mistake.
Where you have 100 300 inlimits, you can get the first
2550.
That's state mandated for everyvehicle through a general
carrier like Geico or StateFarm, and then you could buy
from another carrier.
The difference between the 2550and 100 300.
You can get you can stackpolicies.
It's cheaper.
It can be done.

(30:17):
Uber's kind of done it in a, ina roundabout way with the TNC
insurance, where you basicallyget, you know, the state minimum
and then they pay for everythingabove that.
That's a model that I thinkCanon should be explored in
various states.
And those are things that can bedone midterm solutions, but
short, short term, put somecameras in the cars, figure out
a way to do it that will reduce.

(30:39):
Like in a year or two you know,it'll, it'll show your losses
and your claims reduction.
And your drivers will be moreresponsible.
And it'll be, it'll be muchbetter for you.
So we, we, we're going to belooking at all these issues in
our report.
Can we're hoping to have thereport out, you know, in January
or February specific concreterecommendations on what limo

(31:01):
operators can do.
We're working with the NLA.
We're going to be surveying.
The NLA members as part of thisproject and we're excited about
it and we do believe things Canand will change over time, but
we have to be we have to treatit like the crisis that it is
and not You know make it's acrisis until I renew and then I
have to worry about it for therest of the year

Ken Lucci (31:22):
Well, and they

Matt Daus (31:23):
bottom line is, you know,

Ken Lucci (31:24):
And what they do, unfortunately, what operators do
is they are a matter of fact andreactive about their insurance
renewal time.
Oh, well, my insurance will takemy agent will take care of me.
Okay, well, the other 12 monthsof the year you need to build a
case.
And I talked to Steve Friedbergabout this from research
underwriters.
We spent a lot of time on thephone and the same with Tim

(31:47):
Delaney from Lancer.
You have to mitigate risk everysingle day and create a culture
of safety that becomes musclememory.
Okay.
And you look at telematics, youlook at your driver safety
scores, and if they're sub 90percent you need to, you need to
address them.
If you find you have a driverthat's, that is aggressive

(32:09):
driving braking, speeding, etcetera.
You really have to have a papertrail where you try to say you,
you change that behavior or, oryou have to get rid of them.
And, and for those of theoperators that think, oh, I just
stole a chauffeur.
From my biggest competitor.
Well, you might've just takenhis worst headache off, off his

(32:31):
plate.
I think you need to be morecollegiate about getting the
risk, risky chauffeurs and CDLsout of the industry.
Okay.
And I'm really only passionateabout it because it has
permeated my business.
Okay, people are coming to me.
They want to sell theirbusinesses, so they need to
borrow and create a line ofcredit to borrow money to pay

(32:55):
their insurance bill.
So, you know, one last thing.
Rick Versace in Florida hasproven small business and
operators.
I mean, not a small operators,about 10 million operators.
That independent businesses canmake a difference.
I think that guy is spending athird to 40 percent of his time

(33:15):
on the insurance crisis forFlorida.
So I would encourage the stateassociations to let's drop the
competitive aspects and be morecollegiate on this and
cooperative.
On this crisis.
So, and listen, you're at theforefront of it.
If they didn't, if the NLAdidn't have you to do the, the
education and the research onthis and put together the

(33:38):
position paper, I think we'd bein trouble as an industry.
And that's the stuff that nobodysees when they hire you.
They, and they say.
You know, wow.
You know, you, you charge morethan my real estate lawyer.
No shit, because I know thetransportation space.
You're well worth it because ofwhat you do for the industry.
So now let's turn the topic tosomething that again, coming

(33:58):
across our desk every single dayis autonomous.
Taxis, where do you think thefirst of all, where do you think
that's going?
They're in right now they'vebeen approved in la they've
approved in san francisco Theyare all over phoenix, arizona.
They're going to be going toaustin, texas.
They're going to be opening inmiami next year waymo is big in

(34:21):
this And waymo is part of googlezuex Is part of Amazon, if I'm
not mistaken.
And then obviously we have ElonMusk looming around and the
rumor is that he's his robo cabsare going to go right to Uber.
So give me your thought processon the timeline on regulatory,

(34:45):
where are we going to see thisgrow to 10 cities, a year,

Matt Daus (34:50):
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 takeover the limo industry or the
taxi industry and replaceeverything overnight?
Absolutely.
I don't think even in thelongterm it will, it will be one
of many different ways that youget around.

(35:11):
It'll increase over time and inscope.
And in certain cities beforeothers, because there are some
regulatory environments that aremore harsh than others.
And, you know, the state lawsthat that are dealing with this
issue and this labor issues.
So when, when you, it depends onthe regulator that you're
dealing with.
Like, the transportationregulators are obviously

(35:34):
concerned about safety, butthere are other issues that are
socioeconomic issues thatthey're very much top of mind
for them.
That's wheelchair accessibility.
It's equity.
It's still an issue in a lot ofblue states and cities.
There's the issue of labordisplacement, which is
political.
The Teamsters is trying to fightevery single one of these bills
and trying to get, you know, arequirement that there'd be a

(35:55):
driver in the car.
Well, what's the whole point ofhaving an autonomous car if you
don't, if you have a driver init, but I don't see this
affecting the non emergencymedical transit or limousine
industry anytime soon, peoplelike me are paying for a limo
because I want somebody inthere.
Right.
I'm not, you know, that's the,but, but people, you know, in
certain communities or at Disneyand retirement communities and.

(36:17):
Places like Arizona.
I don't know how, how was your,like, how was your experience?
Can

Ken Lucci (36:22):
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 acontrol perspective, I, I felt
better.
I would feel better to have adragger in the seat.
I didn't, it would seem slow tome.
It definitely seems slow to me.

(36:42):
But it was, it was enjoyable.
You know, they have the dentalchair music playing and it was,
it was Jetson's kind of a thing.
In general, I think it wasbetter than if you had a
recalcitrant driver or you had adriver that you kind of cringed

(37:03):
about how they were driving.
It seemed safe to me.
The funny thing is I was behindheading back to the airport in a
chauffeured car.
I, I was watching four of thesevehicles, right, Matt, literally
within seconds there, the, the,the blinkers are going on within
seconds at the, it was like achoreographed, so the precision

(37:26):
was unbelievable to me.
And when they pulled up.
They all pulled up within inchesof that line the same way.
So I'm with you that I thinkit's going to affect the
limousine aspect of the worldand the NEMT aspects of the
world later, but we have theElon factor.

(37:48):
And, and I have to, what, justfor the audience, what came out
today was the Trumpadministration wants to stop the
mandate that autonomous vehiclesvehicles have to report
accidents on the federal level.
Now, to me, that is the first ofwhat Elon's agenda is.

(38:10):
I'm going to be careful.
I guess I don't.
I, I, I, I believe that thatElon's purpose of saddling up to
our president is to move forwardon the federal level.
autonomous vehicles and his robotaxis.
You know, he has a habit.

(38:31):
If you I've read all thebiographies on this guy, he has
a habit of goosing his stock bytalking about the next thing.
And he's been talking autonomousfor 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 todeliver as the tech is fast, you

(38:55):
know, it stock regulates again.
The other piece of theautonomous thing, Matt, the
front, excuse me, the patentsthat are coming out on the
autonomous technology, the valueof those patents is incredible.
So put a timeline on this.
When do you see this going to 20cities, 25 cities, 30 cities?

(39:19):
And then when do you see ithappening in New York, Boston,
Philadelphia, the old lineeastern, east, eastern cities?

Matt Daus (39:26):
Well, it's already happening in New York.
The testing and the mapping isdone.
And let's just step back and dobig picture.
And I'm glad you enjoyed theride because I was very
skeptical myself until I tookthem myself in.
We did our conference last yearin Scottsdale.
So all the regulators in thecars, I took them in San
Francisco.
At the TRB arts convention, acouple, you know, a year or so

(39:49):
ago.
And, you know, like it'ssophisticated.
I mean, both cruise and Waymohave the most dedicated, best
technology.
Cruise, unfortunately is out ofthe running as of this week.

Ken Lucci (40:01):
Came out, that came out this week that General
Motors is gonna focus theirautonomous tech on their
consumer vehicles and they'redropping the taxicab crews.

Matt Daus (40:10):
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 readabout it in the paper, which,

Ken Lucci (40:23):
that's General Motors.
That's General Motors.

Matt Daus (40:26):
that's the GM way of doing things.
But you know, and it createsless competition in some ways
because the only real robo taximodels that are left in the mix,
when you look at the big pictureare, are way more improves.
And these are sophisticatedcars.
When I got in them, I mean, theywere going around in opposing
traffic when someone was beepingand backing up into us.

(40:47):
Like they are sophisticated.
They, and you could, they haveeyes behind their head and at
every level, like octopi, Imean, basically you could see
things that a driver can't see.
They could see things in theblind spots.

Ken Lucci (41:00):
And that'll be the argument.
That,

Matt Daus (41:02):
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 thanothers.
And we won't, you know, callnames here, but, you know, the
business models are alsodifferent.
There are basically threebusiness models.
There's the robo taxi model, theUberization, which is the Waymo

(41:24):
cruise way now cruises out ofthe picture, Uber was smart to
get out of doing it themselvesand now being more like a
platform.
So their partnership with Waymois where I think the future is
going to be in the next fiveyears is where they start
cropping up in more and morecities.
As using their own app waymo,but also as one of many ways to

(41:46):
get around on the Uber app.
And I think it's going to remainthat way for a long time, but it
is scaling and you will see itin New York.
You will see it elsewhere.
The mayor of New York wantsthis.
I mean, he said that on his thenight he was elected.
There's more legislation andlocal rules that are very strict
in New York City, so it's a lotof hurdles, but Waymo has the

(42:06):
Uber type, you know, on demandmodel Zooks and Beef and you
know, May Mobility, which has anaccessible

Ken Lucci (42:15):
Yeah, Maymobility's up in Michigan, privately held
at this point.

Matt Daus (42:19):
It's a very different business model.
It's more shared mobility,multiple passengers.
You're going to see those atairports retirement communities,
college campuses.
And it's going to be integratedinto transit.
Waymo, Waymo is really the onlycompany left standing with Tesla
has a different business model.
That's the third business model.

(42:40):
And I think there's a lot ofconfusion about where Elon is
going to go with this.
And I think, you know, to yourpoint, we could talk about Elon
for like an entire podcast.

Ken Lucci (42:50):
We're gonna try to get them on, by the way, Matt.
You're gonna be, you're gonna beon that episode when we get
them.

Matt Daus (42:55):
We'll have to go.
We'll just have to go down andhang outside the gate at Mar a
Lago.

Ken Lucci (42:59):
Well, didn't that get, yeah, we gotta be careful
about that.

Matt Daus (43:02):
because you know what you do for clients is kind of
like what Doge is doing, right?
Like, so I love the fact thathim and the bank are going in
there, looking to cut thefederal government because it
is, it is a mess and it

Ken Lucci (43:14):
Oh, it's a total mess.

Matt Daus (43:15):
but like, you know, you do that for your clients.
You're like the Doge for limooperators Cause you go in there,
you tell them how to trim their,their costs and they're, they're
spending money on unnecessarythings.
That's really, really important,but putting his agendas aside
because he's got tons ofagendas, I

Ken Lucci (43:31):
Oh, God, yeah.
Oh,

Matt Daus (43:33):
I gotta tell you, there's a lot of skepticism
about his recent announcements,because he left everybody on the
fence, pushed back hisannouncement from August.
It's just one of these thingswhere they don't engage their
team the way that Waymo does.
Like, Waymo is out on thestreets, Talking to the
regulators and to the publicofficials and you know, when

(43:55):
they're coming, they'recollaborative.
Tesla has probably the most datathat you can imagine because of
the self driving mode.
They have been on the road foryears and their business model
to date has been different withspeculation about the business
model.
Is that, and this is, this issomething that Elon's been

(44:16):
talking about for years.
I even had students doing ahackathon on it in 2015, that
people are going to buy them forthemselves, and then they're
going to lease them out as robotaxis.
And it's going to come back.
So you take it to work.
It goes to pick people up andthen it comes back to pick you
up and take you home.
That, that could be real, buthe, he didn't, in his press

(44:38):
announcement, talk more aboutthat.
Everybody was expecting it to bemore 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 beingraised about what he's planning
to offer it for, you know, he'ssaying that basically in 2026,

(45:00):
he's going to, it's going to besomething like 30, 000 to buy a
cyber cab.
I just don't know how thosenumbers make sense.
I think it's a legitimatequestion to raise.
You know, they didn't talk aboutapps and deployment the way
Waymo is doing it.
He more caught the vehicle, hadsome glitz, you know, like
typical unveiling of a vehicle,but didn't get into a lot of

(45:22):
detail.

Ken Lucci (45:23):
Fell flat.
A lot of the financial analyststhat I've read, it fell flat.

Matt Daus (45:28):
well, you know, but I wouldn't underestimate him.
I think he's got, he's got moredata than anybody else.
He's not using LIDAR, which israising other questions too.
He's got AI and cameras in thevehicles, but he's not using
LIDAR the way way.

Ken Lucci (45:42):
LIDAR for the crowd.

Matt Daus (45:44):
Well, I mean, LIDAR is an imaging technology, which
works with the cameras to kindof really map out the road.
You know,

Ken Lucci (45:51):
And, and identify, and identify what's on the
picture.

Matt Daus (45:56):
correct what I think Elon is going from, at least
what I believe from his publicstatements is, you know, He's
investing in general in AI andpredictive technology.
So, you know, like what thesecompanies are going to end up
doing is making predictionsabout what's going to happen
next on the road as a publicsafety matter, which really
makes it even safer, much moresafe than a human.

(46:18):
Cause now we're talking about.
You know, not only what they'vemapped the road, they know what
the road looks like.
They know what things happen onthe road.
So it's not just what'shappening in real time.
But you know, a school buscrosses this intersection every
day at this time.

Ken Lucci (46:31):
Every day between 3.
And do you think most peopleunderstand that every Tesla on
the road is sending the databack?
Does everybody know that?

Matt Daus (46:43):
I mean, I don't I don't know if people are really
cued into it.
using lasers and creating 3Dmodels you know, this technology
does all that.
It's really sophisticated.
I believe it's been developed bycertain companies better than
others.
But one thing I think themovement is playing catch up on
is that there's been such afocus on road safety and getting

(47:06):
the technology to be safe.
And deploy it to save lives, butnot enough focus on the
socioeconomic issues and thepolitical issues,

Ken Lucci (47:14):
Oh,

Matt Daus (47:14):
know, so, you know, they're going to be stopped in
their tracks if they don't havean accessible vehicle, they're
going to be stopped in theirtracks in certain cities.
Because the Teamsters is verypowerful, and they, you know,
they've already been successfulin throwing it out of the
trucking industry to someextent.
So, so I think, you know, toanswer your question, I think in
the next 3 to 5 years, we'regoing to see more and more of

(47:35):
them in more cities and states,more, more so in the areas that,
you know, that have lesslicensing requirements, you
know, like, I mean, every statehas a deployment and testing law
for the most part, some areeasier to get into than others.
You know, you know, Connecticut,D.
C., Hawaii Massachusetts, forinstance, they restrict.

(47:55):
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 themost part, the law allows
testing and deployment.
If you go through certain hoops,some states don't even have
licensing requirements likeColorado, Tennessee and Texas.
Right?
So, You know, we're going to seemore and more states and cities
doing it.

(48:16):
You're going to see more andmore of these vehicles being
normalized.
When I went back after ourconference this year to to the
Phoenix area it's becomenormalized and I

Ken Lucci (48:25):
100 percent normalized.

Matt Daus (48:27):
it's like, oh, you know, I would ask the person,
the concierge, what about thesevehicles are oh, yeah, they,
sometimes they, they come here,they pick up our passengers and
you know, they stop and they geta little confused, but they come
in and there's never any issue.
It's like normalized.
I think that's important thatthese vehicles people see them
they get used to them it's not anovelty anymore, but it's is it
going to take over the worldovernight?

(48:49):
No, I I think it's going to bejust one of many ways to get
around.
It's going to become niche aniche industry for many years to
come I mean will there be apoint where everything's driving
itself probably in the future?
But there's a lot of mysterysurrounding elon's business
model.
I would not underestimate himfor one second You

Ken Lucci (49:08):
No.

Matt Daus (49:09):
He definitely has agendas floating all

Ken Lucci (49:12):
He never disappoints.
Never disappoints.

Matt Daus (49:15):
again, there are three business models, and this
is.
This is great news because whenI first started in this
movement, there wasn't abusiness model.
People were, I went to aconference in Brussels.
I was, the U S governmentappointed me to go to this thing
where we're working with theEuropean union and people were
off their chairs saying,everybody's going to buy five
driverless cars and we're goingto have congestion.

(49:37):
Well, that didn't happen.
You know, it's basically theUber model, the shuttle model,
and Elon is selling to themasses.
It's So, like the way most ofthe cruises of the world, they
bought the vehicles and controlthem themselves.
A lot of people at the beginningof the movement just thought
that people are gonna buy them,which is what Elon's been doing.
But I wouldn't count him outyet.

(49:58):
I think he's got a lot moresurprises that will come.
Obviously, there's beeninvestigations and things that
have saddled down the company.
So,

Ken Lucci (50:06):
On the accident side?

Matt Daus (50:11):
Well, yes, and also, you know, the self driving mode,
you know, there's, NITS has beeninvestigating you know, I think
people you know, there'stheories that it's political and
there's a lot of politicsinvolved.
So I actually think his forayinto politics.
Was a brilliant move because hewas being, you know, killed by
politics.

Ken Lucci (50:30):
Oh, masterful.

Matt Daus (50:32):
he doubled down.
He, he, he won the bet.
The aligned himself with Trumpand now he's at Mar a Lago all
day.
But

Ken Lucci (50:39):
Now look, that could have gone another way.
Matt.
That could have gone another wayand he'd be moving more money
offshore.
Uh,

Matt Daus (50:47):
He's a risky guy.
I

Ken Lucci (50:49):
he does.
Yeah.

Matt Daus (50:51):
any, any reinvestments, like a gambler
that just doubles down all theirwinnings.
But he's been on top and right alot of times.
So he's very smart.
I wouldn't count him out

Ken Lucci (51:01):
No way.

Matt Daus (51:02):
Constructive criticism his team needs to
engage more With cities like youcan't really have a new
disruptive technology like thisand not talk to the government
people and have a good PR andgovernment relations strategy.
Waymo has successfully done thatand look at them.
They launched in San Francisco,L.

(51:23):
A.
Miami.

Ken Lucci (51:24):
And they have the data.
They have the data.
They have

Matt Daus (51:27):
They have an

Ken Lucci (51:28):
data.

Matt Daus (51:29):
amazing government relations and media team, Elon,
the Tesla, everything's beenshrouded in secrecy,

Ken Lucci (51:38):
Like, like the skunk works back in the day, right?
The skunk works of, of newaeronautic technology.
I agree with you.
I think that's one of his modesof operation is secrecy.

Matt Daus (51:50):
That's his M.
O.
I agree with you on that.
That's his M.
O.
And then strategically, thingsare announced and stock prices
go up, but we all know how thatgame works, right?
But ultimately, I think thetechnology has proven itself.
SpaceX, Tesla.
He's ahead of the curve, but Ithink what, where he's got the
edge and is a threat to a lot offolks in this movement is number
one, he's got a tremendousamount of data, remember he's

(52:14):
had this self driving mode foryears now, and it kept getting
more and more sophisticated andmore and more vehicles are out
there.
And this he's got internallysuch tremendous data that has
not been shared.
Number two, he is doubling downon AI.
AI plays a significant portionof how a robo taxi works.
And the fact that he's actuallydoing, you a bus is very

(52:37):
interesting.
Right?
But do I think it's going toaffect the limousine industry
anytime soon?
No, because the reality is, isthat look, I just made
arrangements to my, my, my, mydaughter's birthday to have her
go to Atlantic City.
You know, I don't want adriverless bus, you know, I want
somebody who's going to be likea chaperone Look out for the
girls when you go down there Youknow Just turn 21 and and and

(53:02):
you know, we also have like, youknow the the ability to on the
big picture, the customerservice side like even if limos
were Driverless people are goingto expect someone to take their
luggage To tell them where to goto talk to.

Ken Lucci (53:16):
meet them at the meet them in the meet and greet at
the airport.
Handle the logistics conciergeaspect.
I 100 percent agree with you.
You know,

Matt Daus (53:24):
not going to happen anytime soon.
And in any the risks are sogreat for not having somebody
with disabled people and peoplethat are our senior citizens
getting in the vehicles to go todoctor's appointments.
I don't see those 2 industriesbeing affected the taxi
industry.
And the industry will beaffected to a certain extent
over the next five years, butit's going to be just one of

(53:45):
many ways to get around.
And it also, not everyone'sgoing to want to use it.
It's going to be more of theforward 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

(54:05):
to the people,

Ken Lucci (54:06):
And put it on a platform.
If you want to put it on aplatform is what you're saying.

Matt Daus (54:11):
I still think that's in play.
He had, he didn't mention it athis last announcement, but It
was their idea and I thinkthat's the direction that
they're going to go.

Ken Lucci (54:19):
That's in a couple of analysts.
That's

Matt Daus (54:23):
is

Ken Lucci (54:24):
Yep.
That's in a couple of analystreports that I read.
Let me just not identify them.
But the rumor that I'm hearingis The, the Uber is going to be
in the beginning, they're goingto really try to put everybody
in the platform, includingWaymo.
Why wouldn't they?
Right.
But at the end of the day, Ithink that this whole self

(54:46):
driving, this ownership of aself driving vehicle and the
ability to, if you want todeploy 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 toliterally, you know, almost at

(55:07):
some point Autonomize some ofthe older teslas in some sort of
a retrofit model But I I thinkthat that business model of I
own it, but i'm going to put iton the uber platform during the
day Right to mitigate my cost Iagree with you.
I think that that That's wherehe's heading.

(55:27):
So

Matt Daus (55:28):
There's no secret like if he says it's going to be
thirty thousand dollars I don'tbelieve that he he could be
profitable at thirty thousanddollars, but let's not forget
uber when they started theysubsidized Driver pay and
passenger fares for years.
I can see a world where Elonwants to get a massive scale of

(55:52):
these vehicles out there forpeople to use them as if they're
their own fleet owners.
And he will possibly subsidizeit to make it affordable for a
period of time so that he canscale quickly by offering the
robo taxis, the cyber cabs for30, 000.
Even, even though like theactual costs may be.
70 or 100, 000, whatever it

Ken Lucci (56:13):
whatever it ends up being,

Matt Daus (56:14):
get them out there.
And then people will startbecoming their own
entrepreneurs.
If that, if that can be donefrom a regulatory standpoint,
you're giving power to thepeople.
Number one, number two, look atToro for an example, Toro
started out as something whereit's like sharing economy, like
Airbnb, I just want to let myvehicle go out there.
People in Florida and Arizona,all sorts

Ken Lucci (56:37):
They have fleets of them.

Matt Daus (56:39):
It's it is now a business model.
So I could see like somebodysaying, I'm going to buy 10
Teslas

Ken Lucci (56:46):
Yes.
And put them on the Uberplatform.

Matt Daus (56:49):
and it could be done just like they're doing with
Toro.
Like if I go rent, like a luxuryvehicle in Miami, you know, I
realized that when I had aproblem with one of the people I
rented from that, that personowned like, you know, like half
of the fleet in Miami, you know?
So, so I realized that this hasbecome almost like a, like a de
facto franchise

Ken Lucci (57:09):
Yes.
And then for those that don'tknow, Turo is an independent
rental platform that Turo putsyou on their platform and you as
an individual, Can supply fivevehicles.
I mean, we've done some pro fromsome financial and analysis for
these churro guys, when they'vesaid, Hey, I want to, what do

(57:29):
you think about putting a RollsRoyce in my fleet?
I'm like, you're out of yourmind, 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 goesto, to a Uber and says, I want a
revenue share on this, right?
And it's a mathematical equationof how many trips it takes to

(57:49):
reach that.
But you, you, to your point, hecan afford to subsidize these
autonomous taxis for a period oftime.
Just to test the waters.

Matt Daus (58:01):
And going back to the first question you raised about
insurance, though, when we talkabout the Toro model, That's a
perfect example of how the limoindustry could come up with.
They can, first of all, you canprobably use Toro start, you
know, renting vehicles anddriving people around, but
wouldn't it be great if like theNLA, like, or the Florida
limousine association had anapp, you know, where people can

(58:24):
list all their limos and othercompetitors 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 useit as an app just like toro did
where if if you're You'restrapped and all of your
connections in your neighborhoodthe five vehicle companies that

(58:44):
you work with the five limocompetitors You know, sometimes
they you need a vehicle and youcan't get it Like there needs to
be a platform where the limoindustry can go to get these
Vehicles without you know,because sometimes especially
when there's peak traffic Supplyand demand times, you know, like
prom season or there's a, youknow,

Ken Lucci (59:03):
an event, an event.

Matt Daus (59:06):
event that needs to be another way to tap into
vehicles that are insured andready to go that drivers can
just get behind the wheel.
And that is something that weshould seriously be looking at,
in terms of a solution to theinsurance crisis, because if
remember, Uber and Lyft did thisalready, and it's been
successful.
Okay, drivers don't even buy orinsure vehicles anymore in a

(59:26):
large number of states.
They just go and they rent thevehicle.
You know, it has to be a nichething because obviously you're
not going to have like theseluxury little operators renting,
like, you know, like a Priusnecessarily, or going, you know,
to, to get one of these rentalvehicles that you would get at

Ken Lucci (59:46):
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 operatorsconnected capacity to me is the
first order, meaning the firststep is, and the technology in
our industry, I'm just going tosay it flat out.
It sucks.
Even the best software outthere.

(01:00:07):
I'm not naming name.
It sucks because connected,

Matt Daus (01:00:11):
we've been through that Ken with the integration
and getting the differentcompanies to integrate, but.
Remember, the greatest exampleof a sharing economy is the limo
industry.
The industry is built uponsharing clients, sharing you
know, making it an ecosystem.
So why can't we just translatethat to the vehicle side, like
grid technologies, and theyautomate the affiliation effort.

(01:00:34):
Why you do that with thevehicles, that it's, it's a
great,

Ken Lucci (01:00:38):
it's the vehicle and the driver.
The connected capacity isknowing right now that who's
dropping off at JFK.
Right.
Whether it's Empire, Bostoncoach, any of the bigs dropping
off and knowing that that guyhas two hours, two or three
hours before his next scheduledtrip.
Connected capacity is the firststep.

(01:00:58):
And we have to get that so thatan operator in LA knows what's
on the road today in New Yorkand has an idea.
The, and it falls back to labor.
If we have to pay this person aneight hour minimum, or we have
to pay them for being.
You know, it's tough to put themdown and they've got a two hour
gap.
How do you maximize the use ofthat piece of equipment and that

(01:01:21):
driver?
And to your point, why don't thebig companies get together and
say, you know what, let's, let'screate a contract with a leasing
company, a common leasingcompany that, that owns the
vehicles, trains the drivers toyour point and, and deploys that
connected capacity.
Okay.
So I think at the end of theday, that's where our hamstring

(01:01:45):
has been from a techperspective.
And there needs to be again,more cooperation and a
collegiate mentality, both onthe insurance side and the
capacity side.

Matt Daus (01:01:57):
and I may be missing stuff on the insurance side.
It'd be good to really get likea you know, a podcast going
maybe like Tim and.
Or Steve, even Andrew fromresearch and Tom get them all
here and talk about, you know,like how this could work
because, you know, there'salways a concern about, you
know, underwriting and how itworks.
It's a mystery name driversversus corporate policies, loss

(01:02:17):
runs.
Like, how do you ensuresomething like this?
And, and, and also adhere toexisting regulations that at the
insurance side.
So the

Ken Lucci (01:02:25):
right.
And the, but to your point, themodel is there.
The model is there.

Matt Daus (01:02:33):
So why not look into it?
I think it's a better endeavorthan looking.
I mean, Rick is still lookinginto captives and it could still
happen, but it's very hard toask an industry like the limo
industry to pony up hundreds ofthousands of dollars to
capitalize a captive.

Ken Lucci (01:02:49):
Trust me, I see their balance sheets.
They don't have it.

Matt Daus (01:02:53):
but it's also hard to get them together.
I think, and try to do somethinglike this too.
I almost feel like it cries outfor a dealership or a separate
entity.
That does rental to expand like

Ken Lucci (01:03:04):
Absolutely.

Matt Daus (01:03:06):
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 thecountry.
They're already in Mexico City,but they should expand around
the country in the limoindustry.
There are other companiesthinking about this, but there
would need to be probablysomebody that comes in and does
it because I think it's going tobe very difficult.
For like the limo industry toget organized to do this, but

(01:03:27):
once it gets going and there's aplatform list of vehicles, there
will be an app and there'd becompanies that do all this
stuff.
And then they could offer, likeyou said, ancillary things like
training and say things thatthat independent contract
operators be concerned aboutdoing.
But again, bringing it back tothe Rick Versace model.
I take his vehicles like everyother week.

(01:03:47):
His drivers are independentcontractors.
You would never notice thedifference in other states.
I noticed the difference rightaway.
And

Ken Lucci (01:03:55):
But yep,

Matt Daus (01:03:56):
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 away 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 ofbusiness or a customer is going

(01:04:17):
to be so pissed that they fireme and I lose my biggest account
versus the risk of having alabor lawsuit against you.
You have to balance those risks.
You know, David Eckstein fromValera Global years ago, balance
those risks.
And he ended up on top and savedthis company.
And he could.
Come on here and tell you allabout that, that experience.
You might forget them on here,but at the

Ken Lucci (01:04:38):
to the franchise model,

Matt Daus (01:04:40):
end of the day, I always tell our clients, you
need a good human resources anddriver management person.
Because nine out of 10 times,I've seen companies and clients
of mine go under from theseworker classification suits nine
out of 10 times, it's becausethe drivers are being treated
like crap by the people that runthe business.
And

Ken Lucci (01:04:58):
team.

Matt Daus (01:04:59):
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 youtreat them with respect.
And dignity, they don't getpissed because it's usually that
driver that feels that they gotwrong.
They got shortchanged onsomething miscommunication.
They get their friends riled upand they bring these labor
lawsuits against you and havethem a B.
S.

(01:05:19):
sometimes right?
But they'll give you a hardtime.
And these plaintiffs lawyerscome in just like the personal
injury plaintiff where they geta contingency fee.
So they're not going to leaveuntil they like, like a sexual
harassment case.
Mhm.
They're not going to leave untilthey get a certain amount of
money.
So this is part of the problemis the contingency fees, tort

(01:05:39):
reform extends into the laborfield.
But like, if you're doing thatbalancing act, you pick someone
who's really good with people tomanage these drivers and keep
them happy.
You know, I, I referred to that.
I don't know if you remember thecheers episode, you know, when,
when Norm.
Was involved in firing people inthe back of the bar and the guy

(01:06:00):
who was doing the firing normfrom shears would come out
crying And the employee that wasbeing fired fired his patting
him on the back saying it'sgoing to be okay You need
somebody like that who's goingto be able to be compassionate
and connect with the drivers Andthat's 90 of solving your
problem with morale and theindependent contractor issue if

(01:06:21):
drivers feel disrespected Andthey feel like they're being
taken advantage of and there'spoor communication.
That's what leads to the laborlawsuits.
And it's just, it's a, it's afact.

Ken Lucci (01:06:31):
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'sanother, that's another episode
that we're going to have, and Ithink 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 Lancerbecause Tim reached out to me

(01:06:55):
and I'm like, this guy, this guyis an advocate for our industry,
but we also have to advocate forourselves.
Matt, this episode to me hascrystallized why you're not just
a transportation attorney.
You are the.
transportation attorney for theindustry because of the vast
knowledge that that you have andwe both live at 50 60 hours a

(01:07:19):
day.
I mean a week.
You live it across the world.
The regulatory side.
There's nobody.
You are the unicorn as far astransportation lawyers.
We need to definitely do thismore often.
And, and we also need tocollaborate more.
I mean, look, I view this as mysecond act in the industry.
As far as the MNA side, we tryour hardest.

(01:07:43):
to get people's babies lookingbeautiful before we sell them.
Sometimes it's difficult becausethey're pretty ugly going in and
we try to get people moreprofitable so that they can
afford to absorb any cost driverthat goes up and insurance is
the big one.
I am so glad to have you onbecause I've been worried about
this autonomous thing.

(01:08:04):
I have my own suppositions onit.
I agree with you.
That limousine industry, thechauffeur industry, the luxury
side of the industry is going tobe affected last.
I think we're probably rightbefore any, any MT.
I do think the taxi issueindustry is going to be further
disrupted by these thingsquicker than we possibly, then
we're going to know.

(01:08:25):
So, thank you for coming on ourlittle podcast again, Matt, tell
everybody how to reach you byemail.
So that if they have anyquestions or have any legal
needs, how do we reach you?

Matt Daus (01:08:36):
Well, yeah, you can get me at M D a U S at Wendell's
marks.
com.
You can always call me on mycell six, four, six, two, six,
one.
I'm my team and I are ready andavailable 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 kindwords.

Ken Lucci (01:08:58):
Look, you are officially going to be our first
frequent guest because I loveinteracting with you.
I think that when you and I geton 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 abusiness survival.

(01:09:19):
All of our subjects are, arethose are, are of that ilk.
I appreciate you coming on morethan I can say.
This was a coup for our audienceand it's a highlight of my week.
And I know I'll see you soon.

Matt Daus (01:09:33):
Same here.
Happy holidays to you, yourlisteners.
And uh, let's get excited about2025.
I think we're going to have agreat year and let's, let's get
this industry rocking and roll.