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:
AB 1422
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Support
Riverside Sheriffs' Association
Uber Technologies Inc.
Opposition
None on file
Analysis Prepared by:Manny Leon / TRANS. / (916) 319-2093