BILL ANALYSIS Ó
SENATE JUDICIARY COMMITTEE
Senator Noreen Evans, Chair
2011-2012 Regular Session
AB 2189 (Skinner)
As Amended June 25, 2012
Hearing Date: July 3, 2012
Fiscal: No
Urgency: No
RD
SUBJECT
Vehicles: Rentals: Driver's Licenses
DESCRIPTION
Existing law prohibits a person from renting a motor vehicle to
another unless the person to whom the vehicle is rented is
licensed, as specified, and person renting the vehicle to
another has inspected the driver's license of the person renting
the vehicle and compared the signature on a drivers' license to
the signature of that person as written in his or her presence.
This bill would allow for identification to be verified by
comparison of a photograph to the driver renting the vehicle.
This bill would also create an exemption from this requirement
for a rental company, as defined, that enters into a rental
transaction in which a vehicle that is part of a regional fleet
is available to be rented electronically on either an hourly or
daily basis.
BACKGROUND
Existing law requires any person renting a car, including rental
car companies such as the sponsor of this bill, to verify that
the driver seeking to rent a vehicle is licensed within this
state or the state or country he or she lives in if not a
resident of this state. The party renting out a car must also
inspect the driver's license of the individual seeking to rent
the vehicle and verify his or her identity by comparing the
signature on the license with the signature of the individual
provided at the time of the rental in the presence of the person
(more)
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renting out the vehicle.
These requirements were first enacted into law in 1959. Since
then, photographs have been added to driver's licenses and
advances in technology have increasingly allowed businesses to
conduct more and more of their business electronically. Both
the advent of the Internet and use of mobile phone applications
facilitate more efficient ways of governing and conducting
business, though they also can also make it easier to collect
people's private information in electronic format, which at
times can make that information more vulnerable. At the same
time, business models are evolving to become more "green" or
environmentally friendly. One way in which this has been
witnessed in recent years is through the development of a new
car rental business model knowing as "car sharing." An example
of the car sharing model is the company "ZipCar." A person who
wishes to use the services of ZipCar or other car sharing
program does not have to go into a rental car company's office;
he or she may sign up for ZipCar membership online, and after
the company checks the person's driving record, is provided with
card which is equipped with radio frequency identification. The
vehicles are parked at reserved parking locations throughout the
city, and at any time, a person can sign up to rent a vehicle on
an hourly or daily basis, and unlock the vehicle by scanning
their card on the car's card reader. As such, reservations for
a car can be made by simply going online or using of a mobile
phone application.
This bill would modernize the existing law requirements
described above to allow a rental company agent to verify the
identity of the driver by comparing the driver's license
photograph to the person renting the vehicle, instead of
comparing their signatures, and provide rental companies with an
exemption from this security requirement in order to enable
these traditional companies to compete with car sharing
programs.
CHANGES TO EXISTING LAW
Existing law defines a "rental company" as a person or entity in
the business of renting passenger vehicles to the public. (Civ.
Code Sec. 1936(a).)
Existing law prohibits a person from renting a motor vehicle to
another unless:
the person to whom the vehicle is rented is licensed under
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this code or is a nonresident who is licensed under the laws
of the state or country of his or her residence; and
the person renting to another person has inspected the
driver's license of the person to whom the vehicle is to be
rented and compared the signature thereon with the signature
of that person written in his or her presence. (Veh. Code
Sec. 14608.)
This bill would amend the above Vehicle Code section to allow a
person renting a motor vehicle to another person, in inspecting
the driver's license of the person to whom the vehicle is to be
rented, to compare the photograph on the license with the person
to whom the vehicle is to be rented.
This bill would provide that a "rental company," as defined
above, is not subject to the requirements of Section 14608 of
the Vehicle Code when entering into a rental transaction in
which a vehicle that is part of a regional fleet is available to
be rented electronically on either an hourly or daily basis.
This bill would make other technical, non-substantive changes.
COMMENT
1. Stated need for the bill
According to the author, this bill will modernize existing law
requirements for verifying that a person seeking to rent a car
is properly licensed and also keep California current with
advances in technology by allowing rental car companies to
utilize these innovations.
2. Technological transformations of the traditional rental car
business
This bill would allow a person renting a vehicle to an
individual to verify the identity of the driver by comparing the
driver's license photograph to the person renting the vehicle,
whereas currently law only provides for verification through the
comparison of the driver's license signature to that of the
person as written in the presence of the person renting them the
vehicle. This bill also seeks to provide rental companies with
an exemption from this security requirement in order to enable
traditional rental car companies to offer car sharing programs,
which would compete with existing companies such as ZipCar. The
Hertz Corporation, the sponsor of this bill, argues that these
changes would "update the vehicle code to match existing and
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more efficient ways to process car rentals to customers and
would update California law with evolving rental car
transactions structures."
a. Kiosk model of business
This bill seeks to allow the use of a photograph to verify the
identity of the person who seeks to rent a vehicle and to
ensure that they are in fact licensed to drive, as required
under the law, to both modernize the law to recognize that
driver's licenses now have photographs, and so that car rental
business model can be adapted for technological innovations.
Hertz believes this change would enable them to make use of
electronic innovations to conduct their business, such as
kiosks, where rental car transactions can occur without
requiring the physical presence of a rental agent over a
counter as is traditionally done. "These new kiosks will scan
an ID and retain information currently required under existing
law, charge a credit card, provide face-to-face assistance
from a live operator, and allowÝ] the comparison of the
photograph on the driver's license to the customer by
requesting that a customer hold up the driver's license to the
camera to compare the photo with the customer." Staff
verified with a local Department of Motor Vehicle office and
the sponsor provided an additional pamphlet from the DMV, both
of which confirmed that the magnetic strip of a driver's
license holds and reveals only the information listed on the
front of the license, and nothing else. The photo does not
transmit, either, hence the need to compare the photo as being
held up to the camera-feed.
The sponsor further represents that once the rental is
complete that information is erased automatically, but that
they do have to maintain specified information under existing
law. Namely, the rental company or person renting the vehicle
must maintain a record of the registration number of the motor
vehicle rented, the name and address of the person to whom the
vehicle is rented, his or her driver's license number, the
jurisdiction that issued the driver's license, and the
expiration date of the driver's license. (Veh. Code Sec.
14609(a).)
b. Car sharing model of business
Again, existing law prohibits a person from renting a motor
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vehicle to another unless the person to whom the vehicle is
rented is licensed, as specified, and person renting the
vehicle to another has inspected the driver's license of the
person renting the vehicle and compared the signature on a
drivers' license to the signature of that person as written in
his or her presence. In addition to authorizing the rental
company to meet this verification requirement through the
comparison of a driver's license photograph to the person
renting the vehicle, this bill would exempt from the
requirement altogether, a rental company, as defined, that
enters into a rental transaction in which a vehicle that is
part of a regional fleet is available to be rented
electronically on either an hourly or daily basis.
The sponsor writes that:
In the evolving nature of renting cars and providing
customers with more flexibility and convenience, companies
and organizations are allowing customers to rent cars on an
hourly or daily basis and have the ability to enter the
vehicle at convenient locations where the customer lives or
works. Rental cars can be located throughout a city or
campus and can be accessed by the customer at any parked
location. This car rental structure is often called "car
sharing." In fact, existing state law recognizes the "car
sharing" structure by specifically allowing localities to
adopt an ordinance to designate street or portions of
streets for the exclusive parking privilege to cars
participating in a car share vehicle program. The benefits
of this type of transaction and convenience to customers is
less vehicles miles traveled and not having the burden of
car ownership, which includes having insurance, car
maintenance costs, and parking
A car share vehicle under existing law is defined as a motor
vehicle that is operated as part of a regional fleet by a
public or private car sharing company or organization and
provides hourly or daily service. (Veh. Code Sec.
22507.1(d).)
While the proponents aim to allow traditional rental companies
to compete with this model of business, the way the bill is
currently written, however, appears to exempt the car rental
company from the verification requirement in many other
scenarios-such as when conducting business by way of a kiosk,
as that could easily be described as a "transaction in which a
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vehicle that is part of a regional fleet is available to be
rented electronically on either an hourly or daily basis." To
narrow the exception to ensure that it solely applies when the
rental companies engage in the car sharing-model of business,
the author offers the following amendments:
Author's Amendments:
On page 2, line 5, after "vehicle" insert ", is located
remotely"
On page 2, line 6, before "electronically" insert "through
a membership agreement"
Support : None Known
Opposition : None Known
HISTORY
Source : Hertz Corporation
Related Pending Legislation : None Known
Prior Legislation : None Known
Prior Vote :
Assembly Floor (Ayes 76, Noes 0)
Assembly Transportation Committee (Ayes 13, Noes 0)
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