Soar with Eagles or Flock with Turkeys? The Case for Higher Standards in the Towing Industry

By Brian J. Riker

A recently circulated email proposing that towers should be excluded from Federal Motor Carrier Safety Administration regulation, or at least placed into a special category, raises some interesting points to ponder. While it is unclear if creating a special category within the US Department of Transportation’s regulatory scheme would solve much, the thought process behind this deserves some consideration.

Currently, all towing companies are lumped into the general transportation market, no different than any other trucking company in the eyes of the regulators. This does pose some unique challenges related to compliance, especially around hours of service; however those are not insurmountable when managed properly.

Extreme caution must be exercised when asking to be regulated as a separate type of entity. This could potentially restrict many of the ancillary services currently offered by many towers, especially the heavy-duty providers.

One must ask, before deciding if this is a good idea or not, if your towing services were to be conducted under a separate US DOT registration, as some have proposed, would that mean you now need to have two registrations with the US DOT? One for towing, and one for all the non-emergency work you do like hauling equipment, moving toolboxes or even doing secondary tows?

After all, secondary tows really are not tows at that point, because the emergency nature of the request for service is gone; instead they are simple transports, that likely would be treated no differently than hauling a front end loader or having a car carrier trailer full of auction cars.

This is not just speculation. Until 2015, the US DOT allowed motor carriers to share work freely among other duly authorized motor carriers without any special registration, bond or other regulatory hurdles. Then, at the request of the trucking industry, in an effort to cut down on brokerage fraud, US DOT tightened the regulations around brokering. This change ultimately required a trucking company to register a separate entity, as a freight broker, to share work with other motor carriers in most cases.

This same dual entity concept would most surely apply to towing if towers were granted a special class of registration with the US DOT. P.S, towers, if you are currently sharing non-exempt calls with friendly competition or even sister companies, you may want to look into the regulations that came about after the MAP-21 Highway Bill in 2013. You may be a broker and subject to extreme penalties for just trying to cover your overflow work!

As for the merits of the concept of treating towing operation differently and raising the barrier to entry, both will help the industry survive long-term. Currently the towing industry is facing an insurance crisis, a rate crisis and a surplus of service providers that are resulting in extreme rate depression in most parts of the country.

Tougher entry requirements, such as mandatory training for company owners and individual operators, higher equipment standards, drug testing and special licensing will slow down the growth and weed out unprofessional operations. Mandatory special licensing requirements, such as those found in Texas, are necessary to create towing as a career, not just a job. Higher training and licensing standards also will reduce the potential for insurance claims, and we all know how bad the insurance market is right now, so that is a huge benefit.

If this concept is looked at through the lens of trucking prior to deregulation, i.e., the Motor Carrier Act of 1980, trucking was extremely profitable because there were limits on how many companies could service any given area and their rates had to be set at a level allowing for safe, legal and compliant operation plus a fair profit. Through this lens, more regulation is a good thing, as it will force the customers, law enforcement agencies and insurance companies to pay a fair and equitable rate.

As for insurance premiums skyrocketing, this type of higher barrier to entry would help tremendously because the loss ratios would decline when the professional towers were no longer being compared to the fly-by-night operators. This is the same concept as insurance captives, which must be very selective of their members to keep their operating costs low enough to be sustainable.

Everyone jumps on their fellow tower whenever something idiotic, illegal or just plain unsafe is posted on social media. The usual responses include “you drive your truck and I’ll drive mine” or “worry about your own business, let them do it their way”; however these are very shortsighted statements. If we, as an industry, don’t police ourselves and weed out the incompetent, unsafe and unprofessional operations, we will all pay the price for their failures as we are all lumped into the same group in the eyes of the public, regulators and insurance underwriters.

This industry is changing, and you can either lead the way or get left behind. If we, as towers, don’t take responsibility for raising our own standards—by supporting tougher entry requirements, improved training, and stronger regulatory oversight—we’ll continue to be judged by the worst among us. The choice is ours: do we soar with the eagles by embracing professionalism and reform, or flock with the turkeys by defending the status quo and tolerating unsafe, unqualified operators? The future of towing depends on which direction we choose.