Dozens of limousine companies in the Denver metro area have had their permits revoked by state regulators in recent years for lacking proof of insurance and other required records.
Yet a handful of such companies without insurance continue to operate, and their customers could be without coverage if involved in a crash, said Terry Bote, a spokesman for the Public Utilities Commission.
“That’s the key part of the regulation: to protect the passengers,” Bote said.
The PUC regulates taxi and limousine companies. It sets the prices for taxi fares, but limo companies are free to set their own fares.
Bote said the PUC has started to investigate SouthWest Limousine, based in Morrison, following a profile of the company by The Denver Post on Monday.
Ray Derani, the owner of SouthWest, has been working as recently as New Year’s Eve. His company’s permit was revoked by the PUC in August, Bote said.
“We have assigned an investigator to look into the matter,” Bote said of SouthWest.
Derani did not return calls Tuesday from The Post.
A business associate and customer of SouthWest spoke highly of his experience with Derani.
“His customer-service commitment is pretty darn high,” said Eric Levine, publisher of the Denver SportsGuide.
Levine said his guide publishes ads for Derani’s SouthWest Limousine in exchange for limousine services.
In Monday’s Post story, Derani said he more than doubled his fares – to $150 an hour – during the recent snowstorms, based on demand.
Bote said Derani has told the PUC that SouthWest is acting as a broker, connecting people with other limousine companies.
Such a business would not require expensive commercial insurance, which averages about $5,000 per year, per vehicle, according to Kirk Lewis of 303 Limousine in Denver.
Like many limo companies with revoked permits, SouthWest’s permit was yanked because of a lack of proof of insurance, said Bote. The company’s permit had been revoked before, in January 2005, with a new one being granted in November of that year, records show.
Bote said operating a limo service without a valid permit can result in a fine of up to $1,000 a day. The fine is up to $11,000 a day for operating a limo service without insurance.
“It’s not unusual for the companies to not pay those fines,” Bote said.
If that happens, the case is turned over to a state-run collections department.
Denver-based Wild West Luxury Limos has a revoked permit, according to PUC records. When contacted Tuesday by The Post, a person who answered the phone at Wild West said the company acts as a broker. When asked to name a limo company for which it supplies customers, the person hung up the phone.
Kevin Harrold, general manager of Denver-based 5th N’ Diamond Limousine Service, said the industry needs additional regulation in Colorado.
He pointed out that the state better regulates taxicab companies, including setting fares and controlling new entrants. He said those regulations should be considered for the limousine industry.
Harrold, whose company has an active permit, said that limo companies that operate without insurance, and therefore without a valid permit, can undercut prices.
Staff writer Will Shanley can be reached at 303-954-1260 or wshanley@denverpost.com.
