UBER it! – The Ways Transport and Maritime Have Changed

Neil S. Lerner has practiced maritime and transportation law in Southern California for 30 years and his level of expertise is evident when we speak with him. Below, he discusses how he has seen the maritime and transportation industry develop – touching on the impact of UBER -, and changes he is eager to witness.

You have practiced maritime & transportation law in state and federal court in Southern California since 1987; can you share with Lawyer Monthly the ways in which you have seen these industries develop? How has the legal sector addressed these changes?

This is the most dynamic period in the maritime and transportation industries in my 30-year career.

For ocean carriers, the momentous Hanjin bankruptcy was followed by a consolidation in vessel ownership, with OOCL (Orient Overseas Container Line) and COSCO (China Ocean Shipping Company) joining forces as one example, which was followed by Maersk gobbling up the business impacted by the Hanjin bankruptcy; this was followed by recent news reports that CMA CGM may be purchasing as many as nine new ULCV’s (Ultra Large Container Vessels). As quick as existing players exit the market, new entrants come in, the survivors double down and the giants pick up the pieces. It’s like watching a global chess game play out in real time. In addition, larger and larger vessels are carrying more and more high value cargo, while marine underwriters hold their breath.

For motor carriers, private equity is lining up to acquire majority stakes in well-established trucking companies, Silicon Valley is engaged in a high-stake race to perfect driverless trucks and autonomous vehicles, UBER and Amazon have entered the freight moving industry and NAFTA is being renegotiated.

Change is everywhere and it is very fluid and exciting.

Your emerging practice areas are transportation network companies (TNC) & trucking; how have you seen upcoming transportation services, such as UBER, change the legal issues you see? Has this spurred on any changes in regulations, and/or do you foresee any changes to address the shift in technology and transport?

The expansion of the UBER, Transportation Network Company (TNC) model into other modes of transportation, such as trucking and (initially) coastal shipping is a certainty as is the survival of the TNC model. Before UBER’s management problems came to light, I was told by a colleague at the California Public Utilities Commission, which regulates TNC’s, that UBER’s survival was a certainty because the Governor of California wanted UBER to succeed. One consequence is that private equity money is pouring into the TNC and trucking space. The next interesting development will be the response of the taxi industry to the threat posed by the TNC model. It will be aimed at regaining their lost market share, which estimates peg at 30%, and will be propelled by new technology and evolved business models.

Can you share the challenges you face when acting on unfair competition cases? How do you overcome these challenges?

Unfair competition cases rarely settle because the parties have spent years hating each other and one party is convinced the other is acting unlawfully and stealing customers. These obstacles are generally overcome by taking the case to trial after years of bitter discovery. But even after a trial, one party usually continues to believe – with some basis – that the other is still engaged in unlawful trickery. These cases start as wars and stop as cease fires; they never really end.

Are there any regulation changes in maritime and transportation law that you are eagerly anticipating, and if so, why?

Nationally, in trucking, the FMCA’s December 2017 ELD mandate is being closely watched, truckers are ramping up their compliance plans and purchasing equipment and confusion abounds about the FMCSA’s enforcement plan, which has not yet been detailed for the public.

Locally, states are flexing their muscle by regulating industries (shipping, trucking and, to some extent, air carriage) that were previously thought to be immune from state regulation because they were regulated exclusively by the feds. Consequently, pre-emption of state regulation of interstate and international commerce, primarily in trucking and shipping, has been side-lined as the states cleverly disguised their regulatory intent by labelling it “green” and promising cleaner air and water in return, which, of course, has not happened. Deregulation is, for all intents and purposes, on life support.

Neil S. Lerner
Partner
Cox Wootton Lerner
12011 San Vicente Boulevard, Suite 600
Los Angeles, California 90049
Phone: (310) 440-0020
Email: nsl@cwlfirm.com

A partner at CWL, Neil S. Lerner has been named a Southern California “Super Lawyer” for maritime and transportation law in 2012, 2013 and, recently, for 2014. Prior to joining CWL, Neil was a founding partner at Sands Lerner (1992-2013). He has practiced maritime & transportation law in state and federal court in Southern California since 1987. His CV can be viewed at www.transportationlaw.com.

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