BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 1422


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          Date of Hearing:  April 27, 2015


                        ASSEMBLY COMMITTEE ON TRANSPORTATION


                                 Jim Frazier, Chair


          AB 1422  
          (Cooper) - As Amended April 22, 2015


          SUBJECT:  Transportation network companies


          SUMMARY:  Requires a transportation network company (TNC) to  
          participate in the Department of Motor Vehicle's (DMV) employer  
          pull-notice system (EPN).


          EXISTING LAW: 





          1)Establishes the "Passenger Charter-Party Carriers Act," which  
            directs the California Public Utilities Commission (PUC) to  
            issue permits or certificates to charter-party carrier of  
            passengers (CPCs), investigate complaints against carriers,  
            and cancel, revoke, or suspend permits and certificates for  
            specific violations.

          2)Defines CPCs as every person engaged in the transportation of  
            persons by motor vehicle for compensation, whether in common  
            or contract carriage, over any public highway in the state.  

          3)Defines transportation network company as an organization,  








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            including, but not limited to, a corporation, limited  
            liability company, partnership, sole proprietor, or any entity  
            operating in California that provides prearranged  
            transportation services for compensation using an  
            online-enabled application or platform to connect passengers  
            with drivers using a personal vehicle.

          4)At the regulatory level, establishes TNCs as a category of  
            CPCs.
           
          5)Establishes the EPN system administered by the DMV that  
            provides the employer of a driver who drives a specified type  
            of vehicle with a report showing the driver's current public  
            record and any subsequent convictions, driver's license  
            revocations, failures to appear, accidents, driver's license  
            suspensions, driver's license revocations, or any other  
            actions taken against the driving privilege.  

          6)Requires employers of drivers of specified vehicles such as  
            commercial truck drivers, school buses, farm labor vehicles,  
            tow trucks, youth buses, paratransit vehicles, ambulances,  
            vehicles that transport hazardous materials, to show EPN  
            reports, during regular business hours, upon the request of  
            the California Highway Patrol.  

          7)Requires employers of drivers of certain vehicles as described  
            above to obtain EPN reports from DMV at least every 12 months,  
            as specified. 

          FISCAL EFFECT:  Unknown 


          COMMENTS:  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  








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          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, PUC began regulating TNCs by  
          creating a distinct new category of CPCs.  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.   

          This bill would require TNCs to participate in DMV's EPN system.  
           DMV's EPN was established as a voluntary program in 1983 to  
          provide employers and regulatory agencies with a means of  
          providing driver safety through the ongoing review of driver  
          records.  By 1998, the EPN system had expanded to require  
          participation by most commercial drivers, including drivers  
          transporting property, passengers, and household goods.  The  
          current EPN system is designed to automatically generate a  
          report of a driver's record and electronically send the report  
          to the employer under specific circumstances including:  upon  
          enrollment of a driver, annually from the date of employment, or  
          whenever a driver commits certain moving violations (e.g.  
          accidents, driving under the influence, suspended driver's  
          license).  Presently, approximately 1.6 million commercial  
          drivers are enrolled in the EPN system and while specific types  
          of CPC drivers are currently required to be enrolled in EPN, due  
          to their status as independent contractors, TNC drivers are not  
          subject to the same requirement.  









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          AB 1422 will provide the necessary clarifications to require  
          TNCs to enroll their drivers into the EPN system.  The author  
          notes that AB 1422 "promotes driver and public safety by  
          authorizing TNCs to participate in the DMV pull notice program  
          and helps improve the safety of passengers utilizing these  
          transportation services." 

          Double-referred:  This bill passed out of the Assembly Utilities  
          and Commerce Committee on April 20, 2015, with a 14-0 vote.  


          Related legislation:  AB 24 (Nazarian) requires CPCs and TNCs to  
          participate in EPN and requires TNCs to submit their drivers to  
          mandatory drug and alcohol testing.  AB 24 passed out of the  
          Assembly Utilities and Commerce Committee on April 20, 2015 with  
          an 8-2 vote and is scheduled to be heard by this committee on  
          April 27, 2015.  


          AB 828 (Low) excludes from the definition of "commercial  
          vehicle," any motor vehicle operated in connection with a TNC.   
          AB 828 is scheduled to be heard by this committee on April 27,  
          2015.     


          Previous legislation:  AB 612 (Nazarian) of 2014, required CPCs,  
          including TNCs, to participate in DMV's EPN and submit all  
          drivers to a Department of Justice criminal background check.   
          AB 612 was held in this committee.  





          REGISTERED SUPPORT / OPPOSITION:












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          Support


          Riverside Sheriffs' Association


          Uber Technologies Inc. 




          Opposition


          None on file




          Analysis Prepared by:Manny Leon / TRANS. / (916) 319-2093