BILL ANALYSIS Ó
AB 1422
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CONCURRENCE IN SENATE AMENDMENTS
AB
1422 (Cooper)
As Amended July 16, 2015
Majority vote
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|ASSEMBLY: |78-0 |(June 2, 2015) |SENATE: | 37-0 |(August 27, |
| | | | | |2015) |
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Original Committee Reference: U. & C.
SUMMARY: Requires transportation network companies (TNC) to
participate in the Department of Motor Vehicles (DMV) Employer
Pull Notice System (EPN). Specifically, this bill provides that
a TNC is eligible and required to participate in the DMV EPN to
regularly check the driving records of a participating driver
regardless of whether the participating driver is an employee or
an independent contractor of the TNC.
The Senate amendments make non-substantive clarifying changes.
EXISTING LAW:
1)Establishes the "Passenger Charter-Party Carriers Act" (CPC),
which directs the California Public Utilities Commission
(CPUC) to issue permits or certificates to charter party
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carriers (CPC), investigate complaints against carriers, and
cancel, revoke, or suspend permits and certificates for
specific violations. (Public Utilities Code Section 5387)
2)Defines a "transportation network company" to mean an
organization, 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. (Public Utilities Code
Section 5431)
3)Establishes the EPN 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. (Vehicle Code Section 1808.1)
4)Defines an employee as anyone that renders a service for
another, other than as an independent contractor. (Labor Code
Section 3357)
FISCAL EFFECT: According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS:
1)Author's Statement: "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."
2)Background: California law regulates different modes of
passenger transportation for compensation, including taxi
services, which are regulated by cities and/or counties, and
CPCs and passenger stage companies, which are regulated by the
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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 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 passengers
transportation for compensation, and reasonably concludes that
TNCs are CPCs, therefore, falling under the CPUC's existing
jurisdiction over these services.
5)DMV EPN: The DMV EPN was created as a means for employers and
regulatory agencies to ensure driver safety through the
ongoing review of driver records. The system is designed to
generate a report of a driver's record and electronically send
the report to the employer under specific circumstances, such
as upon enrollment of a driver, annually from the date of
employment, or whenever a driver commits certain moving
violations. Most commercial drivers, including drivers
transporting property, passengers, and household goods are
required to participate in the EPN.
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Specific types of CPC drivers are required to be enrolled in
the EPN so that employers may receive automatic notice of an
adverse entry or action on a driver's driving record.
However, current law limits enrollment in the EPN to
employees. Although TNCs are required to check each driver's
driving record prior to allowing a driver on the TNC platform,
and quarterly thereafter, the DMV does not permit TNCs with
nonemployees from enrolling in EPN. There has been a growing
debate over whether or not TNC drivers are considered
employees or independent contractors of the TNC. This issue
is currently pending litigation in United States District
Court. This bill, however, would provide that a TNC is
eligible and required to participate in the DMV EPN regardless
if a participating driver is an employee or an independent
contractor.
Analysis Prepared by: Edmond Cheung / U. & C. / (916) 319-2083
FN: 0001461