Imagine that your car breaks down on the freeway in one of Texas’ big cities. Mishaps happen all the time, but what you don’t know is that you are about to enter a murky world of renegade towers and legal wreckers. It’s a problem that even the Legislature can’t solve.
The law is deceptively simple: Each tow truck is required to have a $125 permit from the state Licensing and Regulation Department. To qualify, the company must be insured and must prove that its towing equipment meets certain safety standards. But the license merely confirms that a towing service has safe equipment—it doesn’t allow the owner to tow just anywhere. To tow out of town and to other cities, a wrecker business needs a permit from the Railroad Commission. Unfortunately, the highly coveted Railroad Commission permit—a less expensive $100—is so hard to acquire and racks up so many extra costs that only 400 of the state’s 10,000 legal towing companies have it. But being regulated by two agencies doesn’t make the tow truck industry twice as good—quite the opposite. Says Jim O’Donnell, the head of the Texas Independent Towing Association: “It is so difficult to get a license from the Railroad Commission that many companies don’t bother with getting one from either agency.”
All of this means absolutely nothing to you, the stranded motorist. Even if you have phoned for assistance, there is no guarantee that the wrecker summoned will be first on the scene; unlicensed renegade wreckers patrol major highways, on the lookout for disabled cars. If you allow an ill-equipped gypsy truck to tow your car, you run the risk of damaging it, and no insurance will cover the repairs. You also can be fined by the Railroad Commission for allowing an unlicensed wrecker to move your vehicle. If the right tow truck does arrive, the wrecker may not be able to haul you as far as you need to go, depending on the license.
The Legislature tried to consolidate the efforts of the two state agencies last session. Senator Chet Brooks sponsored a bill that attempted to wrest the tow truck industry from the Railroad Commission. Safety and insurance have never been issues with the commission; the permit is simply a form of economic regulation. Tow trucks have been lumped with larger vehicles under the commission’s control since 1929. “We wanted to open the tow truck industry to the free market,” explains Brooks’s aide Jeff Heckler. “It’s the biggest market-protection operation in the state. People who had paid a lot for the Railroad Commission permits fought like dogs to keep the law the way it was.” The bill, which was one of the most heavily lobbied pieces of legislation, passed the House but failed in the Senate by one vote.
Getting a Railroad Commission permit can be a grueling process. An applicant must have proof of financial stability and a Licensing and Regulation permit. But the tough part is receiving permission from competitors, who start protesting the minute the applicants are announced. To fight back, a company usually hires a lawyer or a broker, which can cost more than $10,000. “It’s so expensive that owners end up shopping for someone else’s license—they are transferable, and that’s perfectly legal,” Heckler says.
For the little guy, wheeling and dealing for a permit is out of the question. Take Brad Lewis, who owns B&B Towing, a four-truck operation in Tyler. When he tried to obtain a Railroad Commission permit in 1990, his application ignited protests—from seventeen companies he had never heard of, as far away as Houston and San Antonio. His application was denied twice, and he is now considering closing shop. “They are running me out of business,” he laments.
“The Railroad Commission can go to hell,” announces Mike Raitano, who has run a towing service in Houston for eleven years. “Houston is a towing city; one day or another I’m gonna tow everybody’s car.” Raitano has built up his business from one truck to a fleet of seven. He runs the streets as if he owns them, bullishly charging through red lights and barging over medians. He has an L&R license, but every time he ventures farther than, say, Pasadena, he is breaking the law. He doesn’t care that he can be fined thousands of dollars. “Nobody can afford a Railroad Commission permit, and nobody can get one,” he says.
Of course, towing businesses do get the permits. It just takes a while. Dan Wheeler, who owns probably the biggest wrecker company in Houston, got his permit in 1975—six years after he first applied. Wheeler won’t say how much his attempts finally cost him, but if he had wanted to sell the license before all the controversy over the Brooks bill, it would have garnered about $50,000, he estimates.
Wheeler is a vocal proponent of the Railroad Commission permits: “It gave me the initiative to be a professional—they set prices and they keep unlicensed wrecker drivers from running wild.” He comments that it seems “weird” to get two licenses from the state, and he won’t find much argument there. Larry Kosta heads the Licensing and Regulation Department, which has been regulating tow trucks since 1987. The idea was that smaller trucks had different needs and should be governed by another agency. Kosta bluntly says about the arrangement, “There is duplication.”
The licensing quandary is by no means confined to Houston. Fort Worth’s Steve Moses has been on both sides of the fence. He had a Railroad Commission permit and let it go in 1985, assuming that the law would change. Now he is leasing a permit from the widow of a wrecker service owner for $350 a month, plus a $1,260 administrative fee to the state. “It is so wrong that you can’t go out and service a customer, especially if you pass muster with the Licensing and Regulation Department,” Moses says. But the bottom line for Moses is this: “We are too busy with the Railroad Commission problem to spend our dollars on real problems—like regulating unlicensed wreckers who are out there gouging the public.”