BILL ANALYSIS Ó AB 1360 Page 1 ASSEMBLY THIRD READING AB 1360 (Ting) As Amended May 13, 2015 Majority vote ------------------------------------------------------------------- |Committee |Votes |Ayes |Noes | | | | | | | | | | | |----------------+------+---------------------+---------------------| |Utilities |14-0 |Rendon, Patterson, | | | | |Achadjian, Bonilla, | | | | |Burke, Dahle, | | | | |Eggman, Cristina | | | | |Garcia, Hadley, | | | | |Jones, Quirk, | | | | |Santiago, Ting, | | | | |Williams | | | | | | | |----------------+------+---------------------+---------------------| |Privacy |11-0 |Gatto, Wilk, Baker, | | | | |Calderon, Chang, | | | | |Chau, Cooper, | | | | |Dababneh, Dahle, | | | | |Gordon, Low | | | | | | | | | | | | ------------------------------------------------------------------- SUMMARY: Exempts ridesharing programs operated by transportation AB 1360 Page 2 network companies (TNC) that arrange rides among multiple passengers who share the ride, in whole or in part, from transportation charges computed and assessed on charter-party carriers. Specifically, this bill: 1)Exempts a ridesharing program operated by a TNC that arranges a ride on a prearranged route among multiple passengers who share the ride, in whole or in part, from offering passengers charges computed and assessed on a vehicle mileage or time of use basis, or on a combination of the two. 2)Specifies that the exemption applies provided that: a) The vehicle seats no more than seven passengers, including the driver; b) The driver is a participating driver, as defined; and c) The individual fare for each passenger is less than the fare that would be charged for the same ride to a single passenger traveling alone. 3)Specifies that TNCs may not use vehicles to provide transit service or to carry passengers over a fixed route, provide school pupil transportation services, or provide public paratransit services. 4)Specifies that the insurance requirement and limitations, as specified, for a TNC and any participating driver does not change. FISCAL EFFECT: Unknown. This bill is keyed non-fiscal by the Legislative Counsel. COMMENTS: AB 1360 Page 3 1)Author's Statement: "The primary cause of traffic congestion originates from nearly 80% of commuters traveling to work alone. Traffic results in 5.5 billion hours of productivity at a cost of $818 to the average commuter, with increased congestion generating nearly 4 billion gallons of excess fuel wasted and 56 billion pounds of greenhouse gasses. This contributes to California's transportation sector functioning as the greatest source of pollution, accounting for 40% of the state's greenhouse gas emissions. TNC's such as Lyft, Uber, and Sidecar have been extremely innovative in creating models that empower consumers and allow more ease and access to transportation alternatives. They have recently started services that allow riders with similar pick up locations and destinations to share a driver and carpool for a decreased fare. Shared rides such as carpooling decrease traffic and congestion, and ultimately cut pollution." 2)Background: California law regulates different modes of passenger transportation for compensation, including taxi services, which are regulated by cities and/or counties, and charter party carriers (CPC) and passenger stage companies, which are regulated by the California Public Utilities Commission (CPUC). 3)What are CPCs? CPCs are services that charter a vehicle, on a prearranged basis, for the exclusive use of an individual or group. Charges are based on the mileage, or time of use, or a combination of both. The CPUC does not regulate the level of charges for CPCs. Types of CPCs include limos, tour buses, sightseeing services, and charter and party buses. 4)What are TNCs? Beginning as early as 2009, a new model of transportation service began springing up in cities across the United States. Known as TNCs, these companies work by allowing AB 1360 Page 4 patrons to prearrange transportation services through an online application on their smartphone or computer. Patrons would request a ride to a predetermined location and the application would connect 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. The TNC takes a commission on each trip. Although TNCs do not neatly fall into the conventional definition of either taxis or limousines, the CPUC does believe that TNCS are currently providing passenger's transportation for compensation, and reasonably concludes that TNCs are CPCs, therefore, falling under the CPUC's existing jurisdiction over these services. 5)CPUC Letter to TNCs: In September 2014, the CPUC sent letters to the three major TNCs, Uber, Lyft, and Sidecar, regarding their intent to add carpooling service to their transportation service. The CPUC stated that this model is in violation of existing law that prohibits CPCs from calculating charges on an individual-fare basis. The CPUC found that CPCs "cannot change an individual fare when carrying multiple persons in a vehicle, and therefore, a person chartering a [CPC] vehicle must have exclusive use of the vehicle." This bill would permit a rideshare program operated by a TNC to charge individual fares, provided that the individual fare for each passenger is less than the fare that would be charged for the same ride to a single passenger traveling alone. Analysis Prepared by: Edmond Cheung / U. & C. / (916) 319-2083 FN: 0000386 AB 1360 Page 5