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Thread: How to place value on existing PUC

  1. #1
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    Default How to place value on existing PUC

    Hello all just wanted to see if anybody here could give me some advice on what a state-wide PUC might be worth. I'm looking at acquiring an existing company in PA that has a state-wide PUC, (which I don't believe is available anymore; I think its only by County). I don't know whether to fork over the $$$ to try to obtain the existing state-wide PUC or just go ahead and file my own PUC app and wait for the protests to come in. (there have been a number of "pink moustache" sightings in town lately and the PA PUC has publicly stated they need to change their old ways of thinking and open up the application process.) I'm really only concerned about the value of the PUC license for this particular operator, not the vehicles as they are not worth much imo.

    Or if this question is to vague is there somewhere/someone I should be speaking with as a consultant to put a value on this company? I used to read a lot about Tom Mazza and some of the great work he had done, but don't know if there is somebody out there doing this kind of work? ANY ideas, thoughts, suggestions are greatly appreciated. I know this forum has some of the who's-who in the industry with a ton of experience; I'm looking to build long term relationships; any help is GREATLY appreciated.

    Also my first posting so my apologies if I'm in the wrong area.

    Thank you

  2. #2
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    It really just boils down to supply and demand. It's best to just have them give you a price and go from there. How much money can you make by obtaining this or how much would you lose by not having it?

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    I agree it seems to be a business 101 question. Just didn't know if I should just go for it and apply myself, ($350) vs his asking price plus some vehicles which are near the PA 8 year rule. (I think that even a "transfer" of PUC can be protested so maybe I am just better off applying myself and get ready to litigate if protests come in? I refuse to be a gypsy; just was thinking the talent pool on here might have some suggestions. Anybody want to take this conversation off line, i'm open to that as well. Thanks for the reply brandon 1, I appreciate it.

    Jim

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    What do you mean by 'protests'? Can other operators try to keep you from getting permitted?

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    absolutely. Depending on the class of PA PUC (about the only exception is Group and Party over 16 pax), all PUC apps (limo, taxi, paratransit, etc) get advertised for comment in the weekly "Pennsylvania Bulletin" Existing operators can protest your request for PUC authority based on "financial and operational fitness" That's why I posted my original question; spend the $350 and just send in the app and see what happens or try to purchase an existing authority, (2 in the area that I know of) I've seen them go from $7500 to $20K just for the authority; not including vehicles. (depending on the trip origination counties or state-wide) Its a real dilemma. Would never go the route of being a gypsy, I want to be 100% legitimate, insurance, etc, but some of these operators have law firms on retainer that just look for new applicants and automatically protest them. Then your in for $20K litigation. We have a news article from a couple years ago; a new entrant wanted authority; he was protested; they finally gave him limited authority after some extended negotiation but he couldn't go to the airport for 3 years as part of the settlement.

  6. #6
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    Quote Originally Posted by Legacy Limousine LLC View Post
    absolutely. Depending on the class of PA PUC (about the only exception is Group and Party over 16 pax), all PUC apps (limo, taxi, paratransit, etc) get advertised for comment in the weekly "Pennsylvania Bulletin" Existing operators can protest your request for PUC authority based on "financial and operational fitness" That's why I posted my original question; spend the $350 and just send in the app and see what happens or try to purchase an existing authority, (2 in the area that I know of) I've seen them go from $7500 to $20K just for the authority; not including vehicles. (depending on the trip origination counties or state-wide) Its a real dilemma. Would never go the route of being a gypsy, I want to be 100% legitimate, insurance, etc, but some of these operators have law firms on retainer that just look for new applicants and automatically protest them. Then your in for $20K litigation. We have a news article from a couple years ago; a new entrant wanted authority; he was protested; they finally gave him limited authority after some extended negotiation but he couldn't go to the airport for 3 years as part of the settlement.
    And I thought I was the only one here who had to go through a process like that... In my market $,7500 to $20,000 wold be great. I would buy that in a second.

    I am not giving advice I am just sharing my experience in my market.
    Nick Groat
    Las Vegas, Nevada
    Nick@BellaVitaLimos.com
    Bella Vita Limousines

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    As for determining valuation if the protests are not allowed under the transfer that would be the way to go. Get straight on that before anything.

    Then what you are talking about is similar to a Taxi medallion and you know how much those go for. Yours seems like a bargain.

    But yes the PUC playing around with Lyft and Uber makes me nervous about the future of regulation. Hate to see you splurge just to find out anyone can be a limo if they have an app on their phone.

    We went through it here in CA. Now the last regulators standing are the airports who have refused to let people with personal insurance on their property. Not sure how long they can hold out against the public and political pressure.

    Tough call, but if you see a opportunity take it and run with it. No on's going to fault you for that. That's business after all, risk.
    Steve Walker ppvsteve@gmail.com

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    all good points gents, I appreciate the experience. From what I'm being told even the transfers of PUC's in PA can be protested, (but I have some digging to do) as far as the airport goes out here, you have a better chance of sneaking in and out of north korea. they are REAL sticklers. Your ducks better be in a row. I've done my homework, I understand the permitting process, insurance, etc. I have good knowledge of the local market and opportunities. I'm going for it. With success comes risk; you have to know that going in and try to mitigate it as much as possible. I have some great relationships with some local operators; hopefully I can leverage that. Thanks again for all the input I appreciate it!!

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