BILL ANALYSIS Ó
SENATE COMMITTEE ON TRANSPORTATION AND HOUSING
Senator Jim Beall, Chair
2015 - 2016 Regular
Bill No: AB 1360 Hearing Date: 6/16/2015
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|Author: |Ting |
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|Version: |5/13/2015 |
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|Urgency: |No |Fiscal: |No |
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|Consultant|Randy Chinn |
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SUBJECT: Charter-party carriers of passengers: individual fare
exemption
DIGEST: This bill allows transportation network companies to
charge individual fares, rather than a single group fare, when
providing carpool services.
ANALYSIS:
Existing law requires that fares charged by transportation
network companies (TNCs) and other similar transportation
companies be computed either on distance traveled or the amount
of time the vehicle is in use.
This bill allows TNCs, when providing prearranged rides for
multiple passengers, to instead charge individual fares,
provided that the following are met:
1)The vehicle seats no more than seven passengers, excluding the
driver.
2)The vehicle is not used to provide public transit services or
to carry passengers over a fixed route.
3)The vehicle is not used to provide pupil transportation
services.
4)The vehicle is not used to provide public paratransit
services.
5)The individual fare is less than the fare that would be
charged for the same ride to a single passenger traveling
alone.
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COMMENTS:
1)Purpose. According to the author, current laws governing
services such as TNCs prevent them from charging passengers
individual fares for split rides. This statute was written in
1961 and has not been updated since 1994, before the advent of
the technology utilized by TNCs, which can now allow consumers
to choose whether they want to share a ride for a reduced
cost. With the advancement of the sharing economy, this
outdated statute needs to be updated in order to allow
flexibility for carpooling services that TNCs want to provide
and customers want to utilize, according to the author. The
author further notes that the carpooling and ridesharing
fostered by this bill will help address California's traffic
congestion problems and reduce greenhouse gas emissions.
2)Need for the bill. The California Public Utilities Commission
(CPUC) has regulatory authority over much of the
transportation industry, including TNCs. (However, the CPUC
does not have regulatory authority over taxis.) In September
2014, the CPUC notified a TNC that state law prohibited it
from offering a shared ride service where each individual was
charged a fixed price. Until that law was changed, as this
bill proposes, the TNC could not offer such a service under
that fare structure.
3)The growing TNC industry. In California the TNC business is
large and growing rapidly. A January 2015 report from
Uber<1>, the largest TNC, reports 20,000 active Uber drivers
in Los Angeles, 16,000 in the San Francisco area, and almost
5,000 each in San Diego and Orange County, up from zero in
July 2012. TNCs are successfully competing with taxi cabs,
limousines, and other regulated transit operators.
4)An unlevel playing field. The different types of
transportation companies (e.g., TNCs, limousines, Super
Shuttles, taxis) are all regulated differently. Rates,
routes, insurance requirements, vehicle inspections, and
driver requirements vary. State law has begun to address the
biggest differences between TNCs, but there's little dispute
that big differences remain. In an ideal world, companies
---------------------------
<1> An Analysis of the Labor Market for Uber's Driver-Partners
in the United States, by Jonathan V. Hall and Alan B. Kreuger;
January 22, 2015.
AB 1360 (Ting) PageC of?
would compete based on the differences in their business
models and competence, not on the differences in how they are
regulated.
5)Creating a level playing field slowly. The laws and
regulations governing the provision of transportation services
are many decades old. These laws and regulations have evolved
slowly, as evidenced by the arcane and complicated carrier
classifications. At least over the last several decades, the
few new laws have focused on safety issues. The rapid growth
of TNCs has disrupted this relatively quiet corner of our
economy, changing the economics of transportation and
challenging the economic models of the traditional
transportation providers. This has upended the lives of many
people in the transportation industry, while at the same time
providing many benefits to transportation consumers.
Regulators are struggling to keep up with the rapidly evolving
transportation industry, a bit hamstrung by laws which never
anticipated the different ways that TNCs operate. In
September 2013, the CPUC, which has regulatory authority over
much, though not all, of the passenger transportation
industry, issued its first set of rules<2> intended to foster
the growth of TNCs, without compromising public safety. These
rules started the process of establishing a level playing
field so that all transportation companies would have similar
regulatory obligations, allowing them to compete based on
their business models. Among the rules were requirements for
obtaining an operating permit from the CPUC, requiring
criminal background checks for drivers, establishing driver
training programs, implementing zero-tolerance policies on
drugs and alcohol, and minimum insurance requirements.
The CPUC has initiated a second phase of their investigation
to look more closely at the regulation of TNCs and the
traditional transportation companies, known as charter party
carriers<3>. A set of issues has been proposed and comments
on the scope of those issues are due in June. As the state's
expert agency over transportation matters, the CPUC is in the
best position to consider whether its current regulations
provide for a fair and competitive market. It can recommend
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<2> D.13-09-045; issued September 23, 2013.
<3> Assigned Commissioner and Administrative Law Judge's Ruling
Amending the Scoping Memo and Ruling for Phase II of Proceeding;
Rulemaking 12-12-011; April 28, 2015.
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specific changes to law and, in some cases, can implement
changes to its own regulations to achieve the goal of a level
playing field.
6)Good for one, good for all? This bill limits the flexibility
to charge individual fares to TNCs; it does not allow other
charter-party carriers (e.g., limousines) that same
flexibility. As there is no policy reason to limit the
flexibility to TNCs, the author and committee may wish to
consider broadening the flexibility in this bill to all
charter-party carriers.
7)Technical Amendments
On page 2, line 19, replace "rideshare program" with
"service"
On page 3, line 2, delete "single"
1)Double-referral. This bill has been double-referred to the
Senate Energy, Utilities and Communications Committee.
Related Legislation:
AB 828 (Low) - exempts vehicles operating in conjunction with
TNCs from the definition of commercial vehicle. This bill is
pending in the Senate Transportation and Housing Committee.
AB 1422 (Cooper) - requires transportation network companies to
participate in the Department of Motor Vehicles program for
notifying employers of the driving records of their drivers.
This bill is pending in the Senate Energy, Utilities and
Communications Committee.
Assembly votes:
Floor:73-7
P&CP:11-0
U&C: 14-1
FISCAL EFFECT: Appropriation: No Fiscal Com.: No Local:
No
POSITIONS: (Communicated to the committee before noon on
Wednesday,
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June 10, 2015.)
SUPPORT:
Bay Area Council
California League of Conservation Voters
Circulate San Diego
City of Los Angeles
Clean Coalition
Climate Resolve
EDF/Coalition for Clean Air
Environment California
Internet Association
Los Angeles Chamber of Commerce
Lyft
Metropolitan Transportation Commission
Orange County Business Council
Natural Resources Defense Council
Planning and Conservation League
San Francisco African American Chamber of Commerce
San Francisco Chamber of Commerce
San Francisco Transit Riders
Sidecar
Silicon Valley Leadership Group
Southern California Association of Governments
SPUR
Tech Net
Transform
Uber
Valley Industry and Commerce Association
OPPOSITION:
Greater California Livery Association
Los Angeles Taxi Workers Alliance
Sacramento Taxi Cab Union
San Francisco Taxi Workers Alliance
San Jose Taxi Drivers Association
United Taxi Workers of San Diego
One individual
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