(Source: MIRS.news, Published 09/06/2024) A state government contract for a third-party towing management system (meant to help Michigan State Police (MSP) troopers clear wrecks) was pulled at the last minute, but still spawned a lawsuit and a bill.

The $750,000 contract was set to be awarded to Vehicle Management Systems (VMS), but was pulled from the State Administrative Board on Aug. 20 after a letter, sent by Rep. Alabas A. Farhat (D-Dearborn) and 22 Republican and Democratic representatives, urged that the process be stopped before the “Uber for towing” pilot was set up in a three-county area of southeast Michigan.

“It was canceled by MSP while we continue to review future options for towing,” said MSP Communications Director Shanon Banner.

VMS CEO Kevin Corcoran said the company had worked with MSP to get together everything they wanted in a management system and were ready to go live with the pilot, but the rug was pulled out from under them 'literally' four days days before the Ad Board was set to approve the contract.

“We’re not angry, we’re just really disappointed that we weren’t able to bring a solution to the Michigan citizens and police departments,” Corcoran said.

He said the biggest disappointment was that they were given no explanation as to why the contract was pulled from the pilot program.

Corcoran said the app, which he described as “the Uber for towing,” would allow MSP to customize how it would call for tow trucks.

“We worked directly with the Michigan State Police on their needs . . . and that’s kind of where our direct involvement came from, because they were the agency looking for assistance,” he said.

He said his company's service would have required an administrative fee being added to towing bills, but that the transparency and efficiencies that would have come from the app would have reduced the price of the tows themselves, particularly on night and weekend dispatch services.

“There is obviously a cost for technology and management that comes into play here. Our solution is it doesn’t cost the agency anything. They don’t have to create a budget line for this,” he said.

Corcoran said the Illinois-based company was in several cities and managed two states, Utah and Colorado, and those areas all saw initial resistance from the towing industry.

“They think this is going to take away their business,” Corcoran said. “Our goal is to keep everything consistent with the volume-driven business. We just come in to provide a safety response improvement and, like a report card, that goes back to the agencies and the towers and their performance.” 

VMS and LG Solutions LLC were the two companies that put in bids to create the system. LG Solutions LLC is also suing the Department of Technology, Management, and Budget after VMS was selected (See “Unsuccessful Bidder Questions DTMB’s Practices,” 8/23/24). 

The Michigan State Police haven’t had an overall rules system in place to deal with how towing contracts are dealt with, and Michigan Towing Association President Joel Ballor said he wants to see the agency sit down at the table and work out a rules system instead of going to a third-party management system.

Ballor said, while the rules and regulations should end up being consistent across the state, each region should be left up to the process of how it deals with contracting with the towing companies.

“The Upper Peninsula, you have a vast area, so you might need to work your towing program in a different way than you would in Southeast Michigan versus even mid-Michigan,” he said.

Ballor said they were never consulted by Vehicle Management Systems when the company was talking with MSP, but Corcoran said they did talk with some towing companies. 

“We just couldn’t understand why they were not meeting with anybody. No tower knew of any kind of issue that was going on, nor were they approached by MSP. So we were just kind of left with a lot of unanswered questions,” Ballor said.

Ballor also said they sent several questions that were never answered. The questions they sent were sent to DTMB in 2023, and not Vehicle Management Systems, according to a letter provided by Ballor.

He said the towing association has been trying to come to the table with MSP to create a contracting solution since a rule about how towing for the various highways was handled was voided by the Court of Claims in 2020. Since that time, there has been no formal rule about towing on Michigan roads.

He said he didn’t understand why the state would pay a company $350,000 a year just to manage towing operations for the state when it was already being done by MSP.

He also said the $35 fee per tow would have an impact on the amount being charged to customers.

“We were adamantly opposed to that,” Ballor said.

He scoffed at the transparency being a selling point of the third-party management system and pointed to the questions sent to DTMB that were not answered. Corcoran said they never saw any questions.

He said ultimately that MSP wanted the towers to deal with a third-party system and not have interactions with law enforcement.

“There’s just no way that they can take a hands-off approach when their troopers and our towers are out there on the roadways, day in, day out, and you know that doesn’t make any sense to put a wedge in between them,” Ballor said.

To prevent any wedge, Farhat introduced a bill that would ban third-party management systems from dealing with towing, which would directly impact Vehicle Management Systems and LG Solutions LLC from taking over for MSP calling who shows up to tow the vehicles.

“I think it’s a mistake for MSP to remove themselves from the equation,” Farhat said.

He said he believes that Michiganders would end up being exploited by the company, and he didn’t agree with the privatization of that part of MSP’s responsibility. 

Farhat agreed there were major problems with the towing industry in Michigan and pointed to price gouging that happened during flooding in Detroit where people were charged $10,000 to pull their vehicle out of the water.

“There are conversations happening right now, I can tell you. There’s been increased focus around finding a solution. I can tell you that, right now, we’ve recently started working as partners with some folks in Lansing and the state agencies to come up with that solution,” he said.

However, he disagreed that the Uber-of-towing method was the way to fix the problem.

“I can’t remember the last time somebody bragged about an Uber ride,” Farhat said.