Drive-Away Firms That Move Personal Cars Find the Going Rough
For a generation of young Americans with low incomes and no cars of their own, there was a legitimate way in the 1950s and ‘60s to drive around the country in the comfort of a stranger’s car.
You paid one of the so-called drive-away companies a deposit--perhaps $50 or $100--and received an often-spiffy set of wheels, a full tank of gas and directions to a distant destination. If you slept in the car, the only costs involved in getting from here to there were those of gasoline and food.
During winter, when driving conditions were bad and college students were unavailable, some drive-away companies even offered to pay for the gas.
At the destination, the driver would hand over the car keys and collect the amount of the deposit from the car’s owner. Most often, the customers were elderly people who had taken an airplane, rather than their car, on a long trip to a vacation place or people who had driven together to a new home in one of their cars and needed some way to have the other one delivered.
Persistent Complaints
But in the last decade, small, specialized trucking companies have gained ground on drive-away firms in moving personal cars. Deregulation of the trucking industry, together with rising insurance premiums and a scarcity of eligible college students, have combined to reduce both the availability of trustworthy drivers and the demand for their services.
Persistent complaints and a few lawsuits by consumers who claim that their cars were damaged while being transported have thrown a pall over the industry, as has a protracted campaign by the Interstate Commerce Commission to put one of the nation’s biggest drive-away entrepreneurs, Ralph Zola, out of business.
Zola, in a telephone interview from his office in Englewood, N.J., maintained that both his past and current operations are completely legal. However, he said, “There are some bad apples in the industry.”
Michael J. Falk, regional counsel in the ICC’s Philadelphia office, said the ICC has just finished investigating “numerous” complaints about several auto drive-away companies. He declined to identify the companies and added that no decision has been reached on whether any lawsuits will be filed.
The drive-away business started in the 1950s, when some enterprising New Yorkers paired students and other low-income drivers looking for an inexpensive way to flee the snow of the Northeast with affluent city residents flying to Florida for the winter. Usually late middle-aged or older, the so-called snowbirds wanted to have their cars in Florida during the winter but did not want to drive more than 1,000 miles down the East Coast.
Vans Also Used
“People who had a little insight decided to match up people and cars. It was a service that was needed . . . and it grew and it grew and it grew,” said Stuart B. Robbins, an Interstate Commerce Commission lawyer who prosecutes most of the federal agency’s major cases against drive-away companies.
Estimates of the personal car-moving industry’s current size range upward from $25 million annually, with individual Americans shipping at least 100,000 of their cars last year.
Trailer trucks now carry up to half these cars, whereas “10 years ago, nobody was doing it,” said Richard D. LaForge, president of New York-based Dependable Auto Shippers. Dependable shipped about 5,000 cars last year--about half by truck and half by drive-away, he said. Drive-away services typically cost about a third as much as trucking.
Household moving vans also carry a growing number of personal vehicles. Allied Van Lines, headquartered in Chicago, shipped about 30,000 personal cars last year, up from 10,084 five years ago.
Trucking industry deregulation since 1980 has made it much simpler to obtain ICC approval to run an auto transporting business, producing cutthroat competition.
Seven years ago, Autolog, a trucking firm based in Union, N.J., charged $880 to ship a small- or mid-sized car from Los Angeles to New York, Myron Levine, Autolog’s owner and president, said in an interview. “It was a fair rate,” he said. “Our rate today is $749, which is an absurdly low rate for the distance involved. And the reason is, we have to compete.”
Strict Requirements
Insurance premiums have soared for companies that use so-called casual drivers. The cost of Dependable Auto Shippers’ liability insurance has tripled in the last 10 years, LaForge said.
Insurers now demand that drivers be at least 21 years old, making most college students ineligible and thereby eliminating the industry’s traditional labor source, said John F. Sohl, president and owner of Chicago-based Auto Driveaway, which claims to be the nation’s largest drive-away company. (All of the major drive-away firms are privately held, so their financial information is not generally available.)
Nearly a third of Auto Driveaway’s drivers are European tourists, and 70% of Dependable’s drivers are European. “European guys are very car-conscious. They know automobiles,” said Dependable’s LaForge, who advertises for drivers in European newspapers.
Finding suitable amateur drivers has become so difficult that Coast to Coast Auto Transport, a firm in Isle of Palms, S.C., has not used one in more than a year, President Lynn J. Fragus said. When it does use amateur drivers, the company prefers active-duty military personnel because they are easier to track down if they disappear with a car.
Some applicants are “really weird,” she said. “We had people call--they had no relatives, they had no friends, they had no employer. Really weird.”
Sohl said car theft has not been a problem for Auto Driveaway because the company fingerprints and photographs all of its drivers. However, he added, “98% of the people that come in the front door are honest.”
Other kinds of problems can arise when cars are moved on trailer trucks. For instance, because the cars are stacked two or three high, corrosive fluids may drip onto cars on the lower levels, an industry executive said. Few of the companies own and operate their own trucks and must rely on independent truck owner-contractors to hose down cars being carried on long trips to prevent the accumulation of corrosive deposits, he said.
Lawsuits Rare
Industry executives say that the actions of a handful of drive-away companies have done most of the damage to the reputation of the auto transport industry. Most companies are legitimate, LaForge said, but a few “have given the business a lousy name.”
Lawsuits are rare because of the difficulties car owners face in filing suits once they have left the state in which they negotiated the deal or in which the company is based. But arguments are numerous over the condition of cars when they arrive. A $211,000 lawsuit filed in March against one of California’s biggest drive-away operators, Barry Levine, headquartered in Los Angeles, gives some idea of the kind of dispute that dogs the industry. (Barry Levine and Myron Levine of Autolog are not related.)
Jeffrey and Stephanie Wilson, who moved from Ontario, Calif., to Marietta, Ga., late last summer, allege in the suit that Levine and two of his three auto transport companies, Affiliated Auto Shippers and Shippers Index, damaged and misused the Wilsons’ black 1985 Chevrolet Corvette and gray 1985 Honda Prelude. The third Levine company, Allied Auto Shippers, was not named in the suit.
The suit charges that employees of Shippers Index kept the Corvette for nine days and drove it around Los Angeles rather than ship it by truck across the country, as they had been paid to do. The suit says that after the Wilsons had spent $1,500 to recover the car, still in Los Angeles, they discovered that the odometer had been tampered with and there was damage to the dashboard, rear bumper and exterior paint that cost $561 to repair.
The Wilsons also said in the suit that the Prelude suffered $1,971 worth of damage to the left front fender, front bumper, roof and trunk lid when an amateur driver for Affiliated drove it across the country. The suit asks reimbursement for the costs of the repairs and of recovering the Corvette, plus $7,500 in lost use and enjoyment of the vehicles and $200,000 in punitive damages.
“I was very disappointed and very angry and upset and frustrated--all the things you feel when you’re on one side of the country and your car is on the other and you don’t know what is going on,” recalled Jeffrey Wilson, a certified public accountant.
Barry Levine declined to comment for this story.
Claims Source of Controversy
Claims involving damaged and stolen cars are an old source of controversy in the business. Although the ICC says drive-away companies are fully responsible for all goods they transport, some of the companies have sought to insert language in their contracts that transfers liability to the car owner’s insurance company.
In 1976, the ICC ordered Zola’s New York-based AAACon Auto Transport, then the nation’s largest drive-away company, to do a better job of screening and controlling its drivers and to pay for damage to transported cars instead of telling car owners to collect from their insurance firms.
On Oct. 8, 1984, the commission revoked AAACon’s license, after an ICC administrative law judge ruled that AAACon had, “ ‘thumbed its nose’ at the commission’s (1976) order: and it has made more sophisticated its methods of delaying, discouraging, denying, and decreasing the claims filed by dissatisfied customers, even in those situations when the customers’ automobiles are totally wrecked or stolen by the AAACon driver.”
AAACon’s appeal was rejected by a federal appeals court in June, 1986, and the Supreme Court subsequently turned down the company’s request that it intervene.
Zola immediately bought another New York-based drive-away and trucking company, North American Transport, which operates through an agent named Auto Caravan. An ICC administrative law judge ruled in December that North American is actually AAACon under another name and should have its license revoked, and that Zola should be barred permanently from all transportation industries regulated by the commission. That decision is under appeal to the full commission.
Zola maintains that he has sold his stake in North American to his wife, that his only position with the company now is chief counsel, that North American caters mainly to industrial customers who file fewer complaints, that Congress has not given the ICC the authority to bar individuals from industries and that a 1980 law has legalized his efforts to limit liability on customers’ claims. “The AAACon wrongdoing had stopped years before, yet they were out to get us.”
Matter of Self-Interest
Consumers who want to ship a car--by whatever means--are best advised to ask the carrier for the names of previous customers and should consult their own insurance companies, advised Lorelei Echeverri, a senior investigator with the Los Angeles County Department of Consumer Affairs.
Zola said clients should demand a contract and read every word of it before they hand over the keys to their cars. “Get the contract in advance and read the damn thing from top to bottom. And if you don’t read the contract, then you’re a damn fool. . . . If you’re investing in something you don’t know about, then you’re asking to get taken.”
Asked how he would move his 1985 Cadillac Sedan de Ville across the United States, Zola said: “Knowing everything I know, I would ship it with a professional driver or a truck.”
