Realty Purchasing Co. v. Public Service Commission

CROCKETT, Chief Justice.

This is an original proceeding in this court challenging an order of the Public Service Commission which grants defendant Salt Lake Transportation Company a contract carrier permit to haul passengers between the Salt Lake Airport and downtown Salt Lake City for four principal airlines: United, Western, Frontier and Bonanza.

Plaintiffs are taxicab companies, and hotel and motel operators in Salt Lake City. They voice three objections to the order: (a) that the defendant’s operation is a taxicab service and exempt from regulation by the Commission; and in the alternative, if it is not (b) the Commission erred in issuing a contract carrier permit because defendant’s service is that of a common carrier; and (c) that the order is arbitrary and discriminatory because it designates only three hotels as pickup and delivery points.

Defendant for many years has operated limousine service between the Salt Lake Airport and three leading hotels in downtown Salt Lake: the Utah, the Temple Square and the Newhouse. It presently has contracts with the four major airlines named above in which it agrees to maintain adequate limousine service for the convenience of their approximately 1500 passengers on about 50 daily flights. Its equipment and its schedules of over 80 limousine trips per day are sufficient to provide that service. It further agrees to transport the airline crews and airport employees on a “space available” basis. Its compensation comes from charging each passenger $1 per trip. The only control granted the ail lines is the right to require minimum standards of service and insurance coverage.

As to the charge that the defendant’s operation is a taxicab service and exempt from the regulation by the Commission, we first observe that it seems somewhat paradoxical for the plaintiffs to be so solicitous of the defendant’s rights in that regard, while the latter is quite willing to submit to such regulation. The reason for this paradox is not altogether clear except that it provides plaintiffs with another argument that the permit shoula not have been granted. Whatever their purpose, they here urge that the defendant’s operation is not subject to regulation by the Commission under Section 54-6-12 U.C.A. 1953, which provides that no portion of the Motor Vehicle Transportation Act shall apply to:

“(f) * * * [wreckers] * * * [armored cars] * * * hearses, ambulances, or licensed taxicabs, operating within a fifteen-mile radius of the limits of any city or town. * * * ” (Emphasis added.)

It is true that in addition to the limousine service involved here, the defendant operates taxicabs in Salt Lake City, but it insists that the two operations are separate enterprises. The Public Service Commission adopted that view of the matter based on these several factors which differentiate the airport service from the taxicab operation: that the defendant uses equipment of a special character adapted to this service consisting of seven-passenger limousines with a substantial luggage capacity; that it carries on such operation solely upon its own schedules and routes, including the points of pickup and delivery; and that with respect to such matters it is not subject to the call, direction or control of individual passengers as are taxicabs. These facts provide a basis upon which the Commission could properly determine that the defendant did not fall within the taxicab exemption stated in the statute quoted above, and that the defendant was subject to its regulation.

A more basic question is presented by the contention that defendant’s operation is that of a common carrier and not a contract carrier. The distinguishing characteristic of the former is that it transports all persons who request such service;¹ whereas the latter renders a transportation service only to specific parties with whom it has contracts to do so.²

In support of their position, the plaintiffs argue that the air passengers, in traveling to and from the airport are but part of the general public; and that the airlines have no authority to contract for such further transportation. We know of no reason why they cannot contract with another to render any lawful service to-third persons they desigate as beneficiaries of the contract.³ The passengers and employees they have contracted this service-for are an identifiable group for whom the airlines have a legitimate interest to provide safe, convenient and efficient transportation to and from the airport.

It is to be kept in mind that the contracts, do not purport to endow the defendant with the necessary authority to perform the service. If they did, the attempt to do so-would be futile. They simply require the defendant to furnish the transportation. That reposes upon it the responsibility of' procuring any permit or authority necessary to fulfill its obligation.

A further aspect of the plaintiff’s argument is that even if it be assumed that defendant could so contract to carry these passengers and operate under such a permit, its actual operation is not of that character hut is in fact a common carrier service to the general public. Important on this point is the fact that both common and contract carriers so affect the public interest that the legislature has deemed it proper to subject them to regulation by the Public Service Commission. In addition to the well-known authority of the Commission to supervise the operations of common carriers for the benefit of the public, a generally similar authority is conferred upon the Commission with respect to contract carriers.

The requirements for the granting of a contract carrier permit are set forth in Section 54-6-8, U.C.A.1953:

“If * * * the commission shall determine that the highways over which the applicant desires to operate are not unduly burdened; that the granting of the application will not unduly interfere with the traveling public; and * * * will not be detrimental to the best interest of the people * * * or to the localities to be served, and if the existing transportation facilities do not provide adequate or reasonable service, the commission shall grant such permit.”

The above statute manifests recognition of the fact that contract carriers have a definite relationship to other carrier services. Under the authority granted thereby the Commission also properly maintains supervision over such carriers as to the routes traveled, the rates charged, and generally over the nature and extent of the services offered. We do not agree with the argument that the record here compels a conclusion that the defendant is engaging in a common carrier operation under the guise of a contract carrier; nor that the Commission improperly acquiesced in such a subterfuge by granting the permit. Neither the nature of defendant’s operation nor the fact that the Commission exercises supervisory control over it compels such conclusion. The question as to the character of the operation and its classification is primarily for the Commission with its expertise in this field. It has the responsibility to the public of supervising and regulating carrier services in general. It found that the defendant met the requirements and authorized it to perform the service, which it deemd a proper one in the over-all transportation picture. It does hot seem too important by what title it is called.

If the defendant exceeds or abuses the authority granted in the contract carrier permit by hauling the public indiscriminately, as plaintiffs charge, it is subject to the controls and disciplines administered by the Commission; or if the plaintiffs have a legitimate interest to protect, there may be other remedies against the defendant for infringing upon their rights. But that is not the purpose of this proceeding, which is to determine whether, under the facts shown, the Public Service Commission had authority to grant the contract carrier permit.

The final contention of the plaintiffs is that the designation of the three hotels as the points of pickup and delivery is unjustly discriminatory and violates their rights under the Federal and State Constitutions,⁴ because there is no reasonable basis for selection of those particular hotels to the exclusion of others in the city. We appreciate that there are difficulties inherent in this problem. It is not our purpose or desire to give approval to any particular route, but to confine this opinion to an expression of general principles. Inasmuch as the service is rendered under the aegis of public authority the Commission has the responsibility of seeing that no improper intrigue or collusion exists to favor certain businesses to the exclusion of others and that there be the highest degree of accessibility to all hotels and motels these passengers might desire to patronize consistent with practical and efficient operation of the transportation service. Unless it is quite impractical to do so, it would seem fair and proper to all concerned for the limousines to pick up or deliver passengers at any hostelry requested by them upon the route of the limousine or in the downtown area. But there must be a limitation somewhere as to the stops required. Obviously there cannot be individual service to every hostelry in the city. Therefore the convenience of the passengers and the hotels have to be sacrificed to some extent in the interest of the economy and expedition of operation of the carrier. It is appreciated that such limitations will seem arbitrary to those excluded.

Dealing with this practical problem is in the first instance for the carrier involved, whose proper motivation is to best meet the needs of those who use its service; and secondly, for the Commission to see that the purposes hereinabove mentioned are fulfilled. It appears that the hotels indicated are among the leading hotels of the city; are in competition with each other; and are located at opposite ends of the downtown area of Salt Lake City. We do not view the order made as being so capricious or arbitrary in failing to meet the purposes herein discussed as to warrant interfering with it.⁵

Affirmed. Costs to defendant.

WADE, HENRIOD and McDON-OUGH, JJ, concur. CALLISTER, J., having disqualified himself does not participate herein.

1 . U.C.A. 54-6-1; State ex rel. Public Utilities Commission of Utah v. Nelson, 65 Utah 457, 238 P. 237, 42 A.L.R. 849; McCarthy v. Public Service Commission, 111 Utah 489, 184 P.2d 220; Garkane Power Co., Inc. v. Public Service Commission, 98 Utah 466, 100 P.2d 571, 573; 13 C.J.S. Carriers § 530; Moore on Carriers, 2d Ed., p. 4, 9 Am.Jur., Carriers, Sec. 4, Sec. 10.

2 . Our statute simply employs the catchall method of definition: “Contract motor carrier of passengers” means any person engaged in the transportation by motor vehicle of persons for hire, and not included in the term common motor carrier of passengers as hereinbefore defined. U.C.A. 54-6-1; 13 C.J.S. Carriers § 530; 9 Am.Jur., Carriers, Sec. 10; Moore on Carriers, 2d ed., p. 3.

3 . Williston on Contracts, Revised Edition, Sec. 347; Corbin on Contracts, Sec. 774.

4 . U.S.Const. Amend. XIV; Utah Const. Art. 1, § 24.

5 . Lake Shore Motor Coach Lines v. Welling, 9 Utah 2d 114, 339 P.2d 1011.