BILL ANALYSIS Ó
SENATE COMMITTEE ON ENERGY, UTILITIES AND COMMUNICATIONS
Senator Ben Hueso, Chair
2015 - 2016 Regular
Bill No: AB 650 Hearing Date: 6/13/2016
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|Author: |Low |
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|Version: |5/27/2016 As Amended |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Nidia Bautista |
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SUBJECT: Public Utilities Commission: regulation of taxicabs
DIGEST: This bill would enact the Taxicab Transportation
Services Act and provide for the regulation of taxicab
transportation services by the California Public Utilities
Commission (CPUC) as a matter of statewide concern, except
taxicab transportation services originating in the City and
County of San Francisco and at the San Francisco International
Airport, which would continue to be locally regulated. This
bill would enact various provisions relating to insurance,
vehicle inspections, monitoring of taxicab drivers, and other
matters and make conforming changes to other related provisions.
ANALYSIS:
Existing law:
1)Provides that the CPUC may fix rates and establish rules for
the transportation of passengers and property by
transportation companies, prohibit discrimination, and award
reparation for the exaction of unreasonable, excessive, or
discriminatory charges. (Article XII, §4 of the California
Constitution)
2)Establishes the CPUC's authority to regulate, require license
or permit to operate, require insurance and workers
compensation, take appropriate enforcement action and other
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provisions related to passenger stage corporations. (Public
Utilities Code §1031, et seq.) and transportation
charter-party carriers of passengers (Public Utilities Code
§5351), including transportation network company (Public
Utilities Code §5431)
3)Exempts from the CPUC regulatory oversight of charter-party
carriers of passengers provisions taxicab transportation
services which are licensed and regulated by a city or county,
by ordinance or resolution, rendered in vehicles designed for
carrying not more than eight persons excluding the driver.
(Public Utilities Code §5353)
4)Requires every city or county to adopt an ordinance or
resolution to issue permits in regard to taxicab
transportation service provided in vehicles, designed for
carrying not more than nine people with the driver, which is
operated within the city or county. Establishes minimum rules
for drivers, including testing for controlled substances.
(Government Code §53075.5) (Vehicle Code §21100)
5)Authorizes a peace officer and local agency to take
enforcement actions regarding vehicles that are operated as
taxicabs without the required permits. (Government Code
§§§§§53075.6, 53075.6, 53075.7, 53075.8, 53075.9) (Public
Utilities Code §§§5411.5, 5412.2, 5413.5) (Vehicle Code
§21100.4)
6)Requires taxicabs to maintain proof of financial
responsibility of at least 15 thousand for each person injured
or killed, of at least 30 thousand for the injury to, or the
death of, two or more persons in any one accident, and for
damages to property of five thousand and obtaining a bond of a
specified amount. (Vehicle Code §16500)
7)Classifies certain actions related to existing Vehicle Code
requirements of taxicab activities as limited civil cases,
under specified conditions, including a limit of $25,000 in
damages. (Code of Civil Procedure Code §85)
8)Requires specified signage requirements to be placed on all
taxicabs. (Vehicle Code §§27900 and 27908)
This bill:
1)Establishes Taxicab Transportation Services Act and places
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taxicabs under the regulatory authority of the CPUC.
2)States the legislature finds and declares that regulation of
taxicab transportation services throughout the state
constitutes a statewide concern.
3)Exempts taxicab transportation services originating in the
City and County of San Francisco or at the San Francisco
International Airport from most of the provisions of this act.
4)Requires the CPUC to establish six regions, other than the
provisions for the City and County of San Francisco and San
Francisco Airport, for purposes of issuing operating permits
to taxicab carriers.
5)Requires the CPUC to issue permits, or renewals that are
effective for three years, to entities to operate taxicab
transportation services if qualified and requires each permit
to specify the region in which the taxicab may operate, but
does not prohibit a taxicab carrier from holding permits in
multiple regions.
6)Maintains the current requirement on taxicab services to
include the number of its permit every written, oral, or
electronic advertisement of the services it offers and
requires it complies with signing requirements in the Vehicle
Code.
7)Requires the CPUC to ensure all applicants meet specified
requirements prior to issuing a taxicab service permit to an
entity, including: ensuring the financial and organizational
capacity of the entity, compliance with the rules and
regulations of the Department of the California Highway Patrol
relating to safe operating vehicles, commitment to observe
hours of service regulations of state and federal law, an
inspection program in effect for its motor vehicles,
participation in the pull notice program, safety education and
training program for all drivers, provides a mandatory
controlled substance and alcohol testing certification
program, and others.
8)Requires every taxicab carrier to furnish a list to the CPUC
of all motor vehicles used by the carrier in taxicab services
since the last inspection.
9)Authorizes the CPUC to suspend or revoke the carrier's permit
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and/or impose a fine if the carrier's insurer informs the CPUC
that the carrier has failed to obtain insurance coverage for
any vehicle on the list.
10)Requires the CPUC to investigate any entity that advertises
or holds itself as providing services that may be considered
to be taxicab transportation services without the required
permit and issue civil or criminal proceedings as warranted.
11)Establishes grounds by which the CPUC may cancel, suspend, or
revoke a taxicab carrier permit, including conviction of a
misdemeanor or felony for specified actions, failure to
operate and perform reasonable service and other violations
and authorizes the CPUC levy a civil penalty of up to $7,500.
12)Requires a taxicab carrier to make available for inspection
by the CPUC, upon request, a certificate of workers
compensation coverage, a consent to self-insure issued by the
Department of Industrial Relations or a statement under
penalty of perjury.
13)Requires a taxicab carrier to operate a motor vehicle with
the CPUC required trade dress.
14)Requires any city or county to forward to the CPUC licensure
information for each taxicab transportation service licensee
within its jurisdiction by December 31, 2016.
15)Requires the CPUC to require the taxicab carrier to procure
liability insurance capped at no more than $100,000 for death
and personal injury per person, $300,000 for death and
personal injury per incident, and $50,000 for property damage,
and provides that these requirements shall only apply to motor
vehicles while providing taxicab services.
16)Prohibits a city, county, city and county, or any other local
agency to require insurance in a manner different from that
required by this article.
17)Prohibits the CPUC from regulating fares or fees charged by
taxi cab carriers and the type of device used by taxicab
carriers to calculate fares, including global positioning
system metering as a form of calculating fares.
18)Authorizes the CPUC to adopt rules requiring taxicab carriers
to disclose fares, fees, and other pricing structures for
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taxicabs.
19)Requires individuals who wish to be a driver providing
taxicab services to first obtain a taxicab driver permit from
the CPUC which shall be valid in any region and specifies
necessary requirements, including: 18 years or older, Class C
driver's license, passes a CPUC prescribed written exam, and
background check through the Department of Justice's live scan
system.
20)Requires a taxicab carrier to participate in the pull-notice
system, provide for a mandatory controlled substance and
alcohol testing certification program equivalent to that
required by the CPUC of transportation network companies.
21)Prohibits a taxicab carrier from employing or contracting
drivers who have been convicted during the preceding seven
years of any offense relating to use, sale, possession, or
transportation of narcotics, any act involving violence, any
sexual offense, fraud, or felony offense, or offense involving
possession of a firearm, and other actions.
22)Requires taxicab carriers to inspect each of its motor
vehicles or have each vehicle inspected at a facility licensed
by the Bureau of Automotive Repair and requires the inspection
to cover 19 specified components of the vehicle.
23)Preempts all other regulation of taxicab transportation
services subject, including those by local agencies.
Specifically, prohibits airports from imposing licensing,
insurance requirements, and a fee that is based on the gross
receipts of the taxicab carrier.
24)Repeals a number of sections of the Government Code that
provide local agencies specified authorities related to
taxicab services, including:
a) Section 53075.5 of the Government Code that provides
authority for cities and counties to establish policy for
entry into taxicab transportation service, including
employment as a taxicab driver, establishment of rates,
mandatory drug and alcohol testing, and other
authorities.
b) Section 53075.6 of the Government Code that provides
law enforcement authority to impound vehicles operating
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as taxicabs without the proper certificate; repeals
Section 53075.61 of the Government Code which provides
local transportation inspectors authority to impound a
vehicle operating without the proper permit or license.
c) Section 53075.7 of the Government Code which
requires a local agency to investigate a business that
advertises or operates a taxicab transportation service
upon receipt of a complaint.
d) Section 53075.8 of the Government Code which
authorizes a local agency to seek the termination of the
telephone service for a taxicab transportation service
which has operated in violation of the local agency's
ordinance related to taxicab service.
e) Section 53075.9 of the Government Code which
requires every taxicab transportation service to include
the number of its certificate, license, or permit in
every written or oral advertisement of the service it
offers and authorizes a local agency to impose a fine of
not more than $5,000 for each violation.
f) Section 830.7 of the Penal Code to remove reference
to authority of local agency transportation inspectors to
enforce taxicab license violations.
g) Makes clarifying amendments to remove references to
local authority of taxi cab licensing, including in
Sections 5353, 5411.5, 5412.2 and 5413.5 of the Public
Utilities Code.
25)Establishes the Legislature finds and declares that
regulation of taxicab transportation services throughout the
state constitutes a matter of statewide concern.
Background
Since its inception in 1911 (then as the Railroad Commission),
the CPUC has regulated private companies and individuals that
own, operate, control or manage transportation of people and
property. However, taxicabs have been regulated by local cities
or counties for most of the CPUC's one hundred year history.
Currently, the CPUC's remaining authority is limited to non-rail
passenger carriers and household goods movers. Under state law,
the CPUC is required to license carriers, and investigate and
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enforce safety and consumer protection laws for the following
surface transportation carriers:
Passenger Stage Corporations (PSCs) - for-hire carriers
transporting passengers over public highways on an
individual-fare basis. Examples include: airport shuttles.
Transportation Charter-Party Carriers (TCPs) - operate
under the direction and control of their chartering party
that arranges the transportation, on a prearranged basis.
Examples include tour buses, limousines, and transportation
network companies, including Uber, Lyft, and Sidecar.
Private Carriers of Passengers (PCPs) - includes
not-for-hire motor carrier transporting passengers in buses
(vehicles seating 10 or more) that are required to obtain a
"CA number" from CHP.
Household Goods Carriers - includes for-hire moving
companies.
The rapid growth of a new transportation for-hire service, known
as transportation network companies (TNCs), have dramatically
disrupted the existing transportation for-hire market, including
reducing taxicab use in many cities. The development of the
TNCs has made the ability for passengers seeking transportation
for compensation more readily available to the general public,
but also raised questions about the fairness of the existing
regulations between the services with taxicabs experiencing many
regulatory requirements as compared to competitors in
transportation network companies which have many fewer
requirements. Some have argued to level the playing field, TNCs
services should be regulated at the local level, not by the
CPUC.
Taxicabs. An essential distinction of a taxicab from other
transportation services is the ability to have the service
hailed from the street. However, the bill does not include this
activity in the definition included in the bill. The author and
committee may wish to amend this bill to include the ability to
hail a vehicle from the street as part of the definition of a
taxicab.
Removing entry caps. Currently, many cities manage the number
of taxicab permits that are distributed within their
jurisdiction. The local cities and counties often manage the
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supply of taxicabs in order to mitigate against the failures of
market oversupply which has in the past led to driver
confrontations, poor service and undermined public safety. On
the other hand, TNCs receive licenses at the CPUC with no
restriction on the number of vehicles and drivers they can place
on the roads and no limitations to operate in a given city or
county. This bill would largely mimic the current licensing of
TNCs and remove all entry caps on taxicabs to enter the market.
This bill proposes to establish six regions, in addition to one
for the City and County of San Francisco. However, the
licensing would be handled by the CPUC and there with be no
limits on the number of vehicles that can be permitted within a
given region. Unless the local regions are overseeing the
licensing, there doesn't seem to be any reason to maintain the
proposed regions as currently drafted. The author and committee
may wish to amend this bill to remove the references to the six
regions.
Taxicab service - statewide concern? This bill declares that
taxicab service is of statewide concern and preempts local
agencies from adopting regulations on taxicab service. However,
this bill also exempts taxicab service originating in the City
and County of San Francisco and San Francisco Airport from CPUC
regulations, and preserves local authority. San Francisco
maintains the only medallion system for taxicab service in the
state, whereby a medallion is owned as property with the ability
to lease the service to other drivers. Due to the issues
related to handling property rights and values, although not
ideal, it seems reasonable that San Francisco merits this
proposed separate treatment. In order to provide consistency in
language and action, the author and committee may wish to amend
this bill to remove references to taxicab service being of
statewide concern and prohibitions on San Francisco's ability to
adopt its own insurance requirements, or airports to impose
their own fee structures.
Is the CPUC the right agency? The sponsors of this bill attempt
to level the playing field among the competing transportation
for-hire services, by shifting regulatory licensing and
enforcement from local cities and counties to the CPUC. In light
of the many areas of oversight the CPUC oversees - electric and
natural gas investor-owned utilities, telephone services, water
agencies, and others - and the identified shortcomings of the
agency's existing oversight of the transportation for-hire
program, as noted in a recent State Auditor's report, the
question must be raised whether the CPUC is the appropriate
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agency to also handle taxicab services. Unfortunately, these are
all compelling reasons to not include taxicab services under the
regulatory umbrella of the CPUC. However, a compelling reason
to include taxicab services may be to better align the existing
transportation for-hire services and better respond to the lack
of fairness. Additionally, the CPUC has constitutional power to
fix rates. This bill proposes to prohibit the CPUC from
exercising this power. The author and committee may wish to
amend this bill to remove the prohibition on the CPUC's ability
to regulate fares or fees.
CPUC enforcement. The work to license, enforce and ensure safety
of transportation for hire services regulated by the CPUC is
done through the CPUC's Transportation Enforcement Bureau (TEB)
with approximately 45 authorized staff positions. The CPUC is
responsible for issuing operating permits and certificates
(operating authority) to qualified applicants for authority to
operate as passenger stage corporations, charter-party carriers
of passengers, and household goods carriers, and for denying,
suspending and revoking operating authorities of such carriers
that fail to meet statutory and regulatory requirements. This
work is performed by the Transportation License Section, the
Transportation and Enforcement Section. The 45 authorized staff
positions in TEB are spread evenly between licensing (14 staff),
enforcement section-north (15 staff) and enforcement
section-south (15 staff).
Type of Carrier No. Permitted
Charter-party carriers of passengers8,942
Private carrier of passengers 1,310
Household goods carriers 1,077
Passenger stage corporations 262
Among the powers of the CPUC, the agency has the ability to
inspect books and records, access a carrier's property and issue
telephone disconnects for violations related to advertising
unlicensed services. However, many of these powers are currently
missing from this bill. The author and committee may wish to
amend this bill to ensure these powers also apply to CPUC
regulation of taxicab services.
However, the agency has been challenged to adequately enforce
the many carriers operating in the state, including the over one
hundred thousand TNCs vehicles on California's streets and
roads. After a scathing State Auditor's review of the agency's
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transportation program, the legislature passed legislation to
authorize local law enforcement to work with the agency on
enforcement of buses and limousines, SB 541 (Hill, Chapter 718,
Statutes of 2015). The author and committee may wish to amend
this bill to include taxicab services among the services that
locals are authorized to take enforcement action on and require
the CPUC to issue general orders of its regulations of taxicabs
which are a necessary tool for law enforcement.
Accessibility services. It is unclear how accessibility
services for the disabled population would be addressed. Taxicab
services often provide services to disabled residents, including
the non-foldable wheelchair assistance. This bill is currently
silent on the issue of these existing services, whether by
contract agreements or as vehicle and driver requirements. The
author may wish to amend this bill to ensure accessibility
services are addressed.
Addressing additional local needs. The League of Cities raises
concerns about the timing of the bill and the need for cities to
transfer licensure information to the CPUC in under such a quick
timeframe. The author may wish to amend this bill to provide
more time for carriers, cities/counties and the CPUC to prepare
appropriately for a successful transition. Additionally, local
cities and counties are tasked with managing traffic on their
city streets and roads. Yet, CPUC licensing decisions and data
information is not available to local cities. The author may
wish to require the CPUC to address data sharing with local
agencies.
Other issues. This bill merits further amendments to address a
number of areas that may have been overlooked or need
clarification:
Insurance requirements - need to include carrier
commercial liability coverage which augments the
requirements in this bill for drivers.
Ensure the driver requirements in Article 7 are shifted
to carrier requirements of their drivers.
Vehicle inspection - remove the option to conduct
self-inspections.
Airports - remove the prohibitions on airports to impose
fees and other requirements.
Double Referral. Should this bill be approved by this
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committee, it will be re-referred to the Senate Committee on
Transportation and Housing for its consideration.
Prior/Related Legislation
SB 541 (Hill, Chapter 718, Statutes of 2015) proposed a suite of
requirements of the CPUC in an effort to strengthen the agency's
overall program and enforcement of for-hire transportation
carriers. The bill also expanded enforcement authority to other
peace officers in addition to the California Highway Patrol for
bus and limousine licensing activities.
FISCAL EFFECT: Appropriation: No Fiscal
Com.: Yes Local: Yes
SUPPORT:
Taxi Paratransit Association of California (Source)
American Cab
CityWide
Fiesta Taxi
Silicon Valley Cab Company, Inc.
Yellow Cab of Los Angeles
Yellow Checker and Cab Company, Inc.
17 Individuals
OPPOSITION:
California Regional Council Taxi Workers Alliance (AFL-CIO)
USA Cab LTD
An Individual
ARGUMENTS IN SUPPORT: According to the author, "California's
current taxi regulation process is antiquated and extremely
onerous. Taxis are the only for-hire transportation model that
is fully regulated at the local level, while other for-hire
transportation models have one set of statewide requirements
governing their operation. This disparity places taxis at a
severe competitive disadvantage. The laws and regulations
governing the provision of transportation services are many
decades old and have evolved slowly. As with many new
technologies, the rapid growth of TNCs has created a disruption
in the taxi's archaic model of transportation. While this change
has created many benefits to transportation customers, it has
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also created an unfair disadvantage for taxis to compete in the
market. In order to compete in the changing for-hire
transportation ecosystem, taxis should be regulated by one
statewide set of standards because the current system restricts
competition by setting different, more onerous rules for taxis."
ARGUMENTS IN OPPOSITION: The Taxi Workers Alliance argues "it
would be a grave mistake to place taxi regulation in the hands
of the CPUC, an agency that doesn't want it and even more
importantly lacks the resources to assume it? the rest of the
bill aims to gut all standards in the taxi industry, including
insurance, metered fare, inspections and airport requirements.
Such deregulation of the industry will create a race to the
bottom to the detriment of the public as well as taxi drivers."
They argue that taxi regulation should be moved over to the
county level which would eliminate the need for permits for each
city but not ignore legitimate local concerns. They also state
that the insurance requirements are inadequate and unclear.
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