BILL ANALYSIS Ó
SENATE COMMITTEE ON TRANSPORTATION AND HOUSING
Senator Jim Beall, Chair
2015 - 2016 Regular
Bill No: AB 1360 Hearing Date: 6/30/2015
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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
(TNCs) to charge individual fares, rather than a single group
fare, when providing carpool services.
ANALYSIS:
Existing law requires that fares charged by 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.
AB 1360 (Ting) PageB of?
COMMENTS:
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With the advancement of the sharing economy, this outdated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.
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 is changed, as this bill proposes, the
TNC could not offer such a service under that fare structure.
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.
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 would compete based on the
differences in their business models and competence, not on the
differences in how they are regulated.
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<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?
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 its 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 specific changes to law
and, in some cases, can implement changes to its own regulations
to achieve the goal of a level playing field.
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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.
AB 1360 (Ting) PageD of?
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.
The author has agreed to accept amendments to broaden the bill
to apply to all charter-party carriers.
Technical Amendments.
On page 2, line 19, replace "rideshare program" with "service"
On page 3, line 2, delete "single"
Double-referred. This bill has also been 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 this 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,
June 24, 2015.)
SUPPORT:
Bay Area Council
California League of Conservation Voters
Circulate San Diego
City of Los Angeles
AB 1360 (Ting) PageE of?
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:
Airport Ground Transportation Association
California Bus Association
Greater California Livery Association
San Francisco Taxi Workers Alliance
SuperShuttle
Taxicab Paratransit Association of California
One individual
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