BILL ANALYSIS Ó
AB 828
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ASSEMBLY THIRD READING
AB
828 (Low and Chang)
As Amended April 20, 2015
Majority vote
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|Committee |Votes |Ayes |Noes |
|----------------+------+------------------------+--------------------|
|Transportation |14-0 |Frazier, Achadjian, | |
| | |Baker, Bloom, Daly, | |
| | |Dodd, Eduardo Garcia, | |
| | |Gomez, Kim, Linder, | |
| | |Medina, Melendez, | |
| | |O'Donnell, Santiago | |
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SUMMARY: Excludes motor vehicles operating in connection with a
transportation network company (TNC) from being required to
register as a commercial vehicle if certain conditions are met.
FISCAL EFFECT: Unknown. This bill is keyed non-fiscal by the
Legislative Counsel.
COMMENTS: Existing law requires the California Public Utilities
Commission (PUC) to regulate various transportation services,
including charter-party carrier of passengers ( CPCs). CPCs
perform various types of transportation services including, but
not limited to, a limousine with seating capacity up to eight
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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
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, the PUC began regulating TNCs by
creating a distinct new category of CPCs. The 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.
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On January 5, 2015, the California Department of Motor Vehicles
(DMV) issued an advisory memo due to a number of dealers and
customers seeking clarification on how to register a vehicle that
would be used to provide TNC services. These inquiries were
derived from purchasers buying new vehicles through financing
programs offered by TNCs. The memo stated that "any passenger
vehicle used or maintained for the transportation of persons for
hire, compensation, or profit is a commercial vehicle. Even
occasional use of a vehicle in this manner requires the vehicle to
be registered commercially." DMV ultimately retracted the
advisory memo clarifying that further analysis is warranted.
Existing law requires a vehicle to be registered as a passenger or
commercial vehicle based on how the vehicle is used and/or
designed. Registration for a passenger vehicle typically includes
several vehicle-related fees including registration fees, vehicle
licensing fees, and locally imposed county/district fees (e.g.
vehicle abatement, air quality, Service Authority for Freeway
Emergencies). Vehicles registered as commercial are required to
pay an additional fee based on the weight of the vehicle which is
generally assessed based on the gross vehicle weight and number of
axles. Overall, the weight fee is designed to offset the
additional wear and tear that a commercial vehicle causes on the
state's roads and highways. Additionally, commercial license
plates defer from passenger vehicle license plates in order to
ensure law enforcement has the ability to easily identify
commercially operating vehicles.
The author introduced this bill in response to DMV's advisory
memo. Advocates claim that commercial registration requirements
are outdated and do not adequately address new services provided
through advancements in technology. Respectively, this bill
attempts to develop an exclusion for TNC drivers using their
passenger vehicles while ensuring that other types of commercial
vehicles continue to be subject to commercial registration
requirements. The author notes, "TNCs are the cutting edge of
transportation innovation and are a large part of the rapidly
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increasing 'sharing' economy model. With the convenience of TNCs
many more people are starting to use them which cuts down on
traffic and emissions from cars. Many TNC drivers are part-time
or occasional drivers, working an average of 22.69 hours per
month, driving to supplement their income. To that end, mandating
TNC drivers to register their personal vehicle as a commercial
vehicle needlessly increases business costs and curtails growth
and innovation."
Please see the policy committee analysis for a full discussion of
this bill.
Analysis Prepared by:
Manny Leon / TRANS. / (916) 319-2093 FN: 0000216