BILL ANALYSIS Ó
AB 24
Page 1
Date of Hearing: April 27, 2015
ASSEMBLY COMMITTEE ON TRANSPORTATION
Jim Frazier, Chair
AB 24
(Nazarian) - As Amended April 22, 2015
SUBJECT: Transportation network companies: public safety
requirements
SUMMARY: Requires charter-party carriers (CPC) and
Transportation Network Companies (TNC) to participate in the
Department of Motor Vehicle's (DMV) Employer Pull Notice System
(EPN) and submit TNC drivers to a mandatory drug and alcohol
test. Specifically, this bill:
1)Prohibits the California Public Utilities Commission (PUC)
from issuing or renewing a permit or certification to a CPC or
TNC unless the applicant, in addition to existing
requirements, participates in the DMV's EPN.
2)Requires TNCs to provide a mandatory controlled substance and
alcohol testing certification program.
3)Requires TNCs to register any vehicle used in the
transportation of passengers for compensation with the PUC.
4)Requires TNC vehicles to display a distinctive identifying
symbol as prescribed by PUC.
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5)Specifies that drivers hired or initially retained by TNC on
or after January 1, 2016, are subject to mandatory drug and
alcohol testing prior to employment or retention. Drivers
hired or initially retained before January 1, 2016, are
required to complete a drug and alcohol test before January 1,
2017.
EXISTING LAW:
1)Establishes the "Passenger Charter-Party Carriers Act," which
directs the PUC to issue permits or certificates to CPCs,
investigate complaints against carriers, and cancel, revoke,
or suspend permits and certificates for specific violations.
2)Defines charter-party carrier of passengers as every person
engaged in the transportation of persons by motor vehicle for
compensation, whether in common or contract carriage, over any
public highway in the state.
3)Requires CPCs to operate on a prearranged basis. Further
defines "prearranged basis" to mean that the transportation of
the prospective passenger was arranged with the carrier by the
passenger, or a representative of the passenger, either by
written contract or telephone.
4)Defines transportation network company as an organization,
including, but not limited to, a corporation, limited
liability company, partnership, sole proprietor or any other
entity operating in California that provides prearranged
transportation services for compensation using an
online-enabled application or platform to connect passengers
with drivers using a personal vehicle.
5)Requires DMV to establish and administer EPN, which provides
the employer of a driver who operates a specified type of
vehicle with a report showing the driver's current public
record and any subsequent convictions, driver's license
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revocations, failures to appear, accidents, driver's license
suspensions, driver's license revocations, or any other
actions taken against the driving privilege.
6)Requires employers of drivers of specified vehicles, such as
commercial truck drivers, school buses, farm labor vehicles,
tow trucks, youth buses, paratransit vehicles, ambulances,
vehicles that transport hazardous materials, to show EPN
reports during regular business hours upon the request of the
California Highway Patrol.
7)Requires employers of drivers of specified vehicles as
described above to obtain EPN reports from DMV at least every
12 months, as specified.
FISCAL EFFECT: Unknown
COMMENTS: Existing law requires PUC to regulate various
transportation services, including CPCs. CPCs perform various
types of transportation services including, but not limited to,
a limousine with seating capacity up to eight passengers, a bus
providing prearranged services with capacity up to 15
passengers, or buses providing round-trip sightseeing trips. In
order to obtain an operating permit or certificate from PUC,
CPCs must meet a number of requirements including providing
sufficient proof of financial responsibility, maintaining a
preventative maintenance program for all vehicles, possessing a
safety education and training program, and regularly checking
the driving records of all persons operating vehicles used in
transportation for compensation.
Approximately five years ago, a new model of transportation
service began to take place in cities across the United States.
Known as TNCs, these companies allow patrons to prearrange
transportation services through an online application on their
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smartphone or computer. Patrons request a ride to a
predetermined location, and the application connects them with a
TNC driver. Payment is processed through the application so
that no physical financial transaction occurs during the trip
itself between the patron and the driver. Under this model
drivers are considered independent contractors and TNCs take a
commission on each trip.
In a September 2013 decision, PUC began regulating TNCs by
creating a distinct new category of CPCs. PUC tailored specific
new rules in response to the introduction of this new technology
into an existing industry. The decision requires TNCs to obtain
a permit from the PUC, conduct criminal background checks on
drivers, check driver's records, establish a driver training
program, implement a zero-tolerance policy on drugs and alcohol,
conduct vehicle inspections, and obtain authorization from
airports before conducting any operations on or into airport
property. PUC is currently in the process of rolling out the
second phase of the September 2013 decision which will include
an evaluation of the original set of regulations and also
consider any modifications to existing regulations relative to
other CPC categories.
AB 24 is the author's second attempt to remedy inconsistent
requirements between TNCs and other categories of CPCs.
Specifically, AB 24 requires all CPCs, including TNCs, to
participate in the EPN system and requires TNCs to administer
mandatory alcohol and controlled substance testing. AB 24 also
requires TNC vehicles to display a distinctive identifying
symbol as prescribed by PUC and for TNCs to register any vehicle
used by its driver's to transport passengers for compensation
with PUC.
DMV's EPN was established as a voluntary program in 1983 to
provide employers and regulatory agencies with a means of
providing driver safety through the ongoing review of driver
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records. By 1998, the EPN system had expanded to require
participation by most commercial drivers, including drivers
transporting property, passengers, and household goods. The
current EPN system is designed to automatically generate a
report of a driver's record and electronically send the report
to the employer under specific circumstances including: upon
enrollment of a driver, annually from the date of employment, or
whenever a driver commits certain moving violations (e.g.
accidents, driving under the influence, suspended driver's
license). Presently, approximately 1.6 million commercial
drivers are enrolled in the EPN system and while specific types
of CPC drivers are currently required to be enrolled in EPN, due
to their status as independent contractors, TNC drivers are not
subject to the same requirement. AB 24 will expand the EPN
system by clarifying that all CPC drivers, including TNC
drivers, are required to enroll in EPN.
Additionally PUC currently requires certain categories of CPCs
to implement a zero-tolerance alcohol and controlled substance
use policy, as well as requiring drivers to undergo mandatory
and periodic alcohol and controlled substance testing. PUC's
September 2013 decision required TNCs to implement a zero
tolerance policy and to suspend a driver promptly after a zero
tolerance complaint is filed. However, PUC's regulations toward
TNCs did not require TNC drivers to undergo mandatory and
periodic alcohol and controlled substance testing like other
CPCs. AB 24 would require TNCs to provide for a mandatory
controlled substance and alcohol testing certification program
and require its drivers to undergo a mandatory drug and alcohol
testing prior to employment or retention for drivers hired or
initially retained on or after January 1, 2016. TNC drivers
hired or initially retained prior to January 1, 2016, would be
required to undergo testing before January 1, 2017.
The author notes, "overall, AB 24 ensures the public is safe and
closes the gaps that currently exist when transporting people
for hire. AB 24 sets minimum safety standards that do not go
beyond current regulations of transportation companies while not
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overbearing an innovative industry."
Writing in support, the California Labor Federation asserts "AB
24 will level the playing field for all transportation companies
regulated by the PUC regardless of the technology used to book
the service. AB 24 sets reasonable standards to ensure public
safety and a fair market for transportation services."
In opposition, Lyft writes "AB 24 continues to ignore the PUCs
extensive work designing an appropriate regulatory system for
TNCs by rejecting it entirely and imposing unnecessary drug
testing, additional burdensome vehicle registration requirements
and a Department of Motor Vehicle Pull Notice requirement that
will hinder Californians from participating in the sharing
economy."
Double-referred: This bill passed out of the Assembly Utilities
and Commerce Committee on April 20, 2015, with a 8-2 vote.
Related legislation: AB 828 (Low) excludes from the definition
of "commercial vehicle," motor vehicles operated in connection
with a TNC if specific conditions are met. AB 828 is scheduled
to be heard by this committee on April 27, 2015.
AB 1422 (Cooper) requires TNCs to participate in DMV's EPN. AB
1422 passed out of the Assembly Utilities and Commerce Committee
on April 20, 2015 with a 14-0 vote, and is scheduled to be heard
by this committee on April 27, 2015.
Previous legislation: AB 612 (Nazarian) of 2014, required CPCs,
including TNCs, to participate in DMV's EPN and submit all
drivers to a Department of Justice criminal background check.
AB 612 was held in this committee.
REGISTERED SUPPORT / OPPOSITION:
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Support
California Airports Council
California Association of Highway Patrolmen
California Labor Federation
California Conference of Machinists
California Conference Board of the Amalgamated Transit Union
San Francisco Taxi Workers Alliance
Teamsters
Opposition
California State Lodge, Fraternal Order of Police
Lyft
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Long Beach Police Officers Association
Los Angeles County Professional Peace Officers Association
Orange County Business Council
Riverside Sheriffs' Association
Sacramento County Deputy Sheriffs' Association
Santa Ana Police Officers Association
The Greenlining Institute
Uber Technologies Inc.
Analysis Prepared by:Manny Leon / TRANS. / (916) 319-2093
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