BILL ANALYSIS Ó AB 2763 Page 1 Date of Hearing: April 27, 2016 ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE Mike Gatto, Chair AB 2763 (Gatto) - As Amended April 18, 2016 SUBJECT: Transportation network companies: personal vehicles SUMMARY: Defines "personal vehicle" relating to Transportation Network Companies (TNCs), to mean a vehicle that is used by a participating driver to provide prearranged transportation services for compensation, is owned, leased, rented, or otherwise authorized for use for any period of time by the participating driver, meets all inspection and other safety requirements imposed by the California Public Utilities Commission (CPUC), and is not a taxicab or limousine. EXISTING LAW: 1)Establishes the "Passenger Charter-Party Carriers Act," which directs the CPUC to issue permits or certificates to Charter Party Carriers (CPCs), investigate complaints against carriers, and cancel, revoke, or suspend permits and certificates for specific violations. (Public Utilities Code Section 5381 et seq.) 2)Defines "charter party carriers of passengers" as every person AB 2763 Page 2 engaged in the transportation of person by motor vehicle for compensation, whether in common or contract carriage, over any public highway in the state. (Public Utilities Code Section 5360) 3)Defines a "transportation network company" to mean an organization, including, but not limited to, a corporation, limited liability company, partnership, sole proprietor, or any other 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) 4)Defines a "participating driver" or "driver" as any person who uses a vehicle in connection with a TNC's online-enabled application or platform to connect passengers. (Public Utilities Code Section 5431) 5)Requires a TNC and any participating driver to maintain specified insurance coverage, and specifies when the insurance is in effect. (Public Utilities Code Section 5433 and 5434) 6)Requires a participating driver of a TNC to carry proof of TNC insurance coverage with him or her at all times during his or her use of a vehicle in connection with a TNC's online-enabled AB 2763 Page 3 application or platform. Requires, in the event of an accident, a participating driver to provide this insurance coverage information to any other party involved in the accident, and to a police officer, upon request. (Public Utilities Code Section 5442) FISCAL EFFECT: Unknown. This bill is keyed non-fiscal by the Legislative Counsel. COMMENTS: 1)Author's Statement: "The phrase 'personal vehicle' was originally used in the CPUC's Phase I decision addressing [TNCs] in 2013, D. 13-09-045. That decision established TNCs as a subset of [CPCs]. D.13-09-045 did not define personal vehicle. Since 2013, various options have arisen to supply a potential driver with a vehicle. These options include traditional 'ownership,' and leases and rental agreements of various lengths. This bill would not change ANY rules dictating the qualifications or drivers, necessary insurance, or minimum standard for vehicle safety or the ability of the [CPUC] to amend those regulations to reflect the latest trends in the industry ? This bill will provide a definition of a 'personal vehicle' under the regulations governing eligibility to participate as a driver partner with [TNCs]." AB 2763 Page 4 2)Background: California Constitution, Article XII establishes the CPUC and grants it the authority to regulate public utilities. In addition, the CPUC has more limited authority over other corporations, including railroads, rail transit, and CPCs, among others. Beginning as early as 2009, a new model of transportation known as TNCs allowed patrons to prearrange transportation services through an online application on their smartphone or computer. Although TNCs do not neatly fall into the conventional definition of a CPC, the CPUC believes 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 such services. 3)Existing TNC Requirements: In 2014, the Legislature passed AB 2293 (Bonilla), Chapter 389, Statutes of 2014, which established guidelines for insurance coverage for TNCs. TNCs or TNC driver are required to maintain primary liability insurance coverage at the following levels: a) One million dollars for death, personal injury, and property damage from the moment a participating driver accepts a ride request until the driver completes the transaction. b) One million dollars uninsured and underinsured motorist coverage from the moment a passenger enters the vehicle of a participating drive until the passenger exists the vehicle. AB 2763 Page 5 c) Fifty thousand dollars for death and personal injury per person, $100,000 for death and personal injury per incident, and $30,000 for property damage from the moment a participating driver logs on until the driver accepts a request, and from the moment the driver completes the transaction, or the ride is complete, whichever is later, until the driver either accepts another ride request or logs off the TNC application. CPUC regulations also require TNCs to run criminal background checks on all hired drivers. In addition, in order to participate as a TNC driver, most TNCs also require their driver's to register their vehicles and to meet certain vehicle requirements. For example, to participate as a driver in San Francisco or Los Angeles, Uber requires it drivers vehicles to: i) be 2001 or newer, ii) have four or more doors, and iii) not be salvaged. The vehicle requirements vary by city and the type of TNC service the driver wishes to provide. TNCs differ from traditional taxi and public transportation services in that they provide prearranged transportation services and that the TNCs do not own their own fleet of vehicles. Instead, all vehicles used through a TNC are personal vehicles of a participating driver. Although TNCs can direct potential drivers to various options on how to obtain a personal vehicle, such vehicles are ultimately personally authorized by the driver to be used for TNC purposes as long as it meets all insurance, safety, and vehicle requirements to operate under a TNC. AB 2763 Page 6 This bill provides a definition for a "personal vehicle" used by a driver as part of a TNC. This bill defines "personal vehicle" as a vehicle that is used by a participating driver to provide prearranged transportation services for compensation, is owned, leased, rented, or otherwise authorized for use for any period of time by the participating driver, meets all inspection and other safety requirements imposed by the CPUC, and is not a taxicab or limousine. REGISTERED SUPPORT / OPPOSITION: Support None on file. Opposition None on file. Analysis Prepared by:Edmond Cheung / U. & C. / (916) 319-2083 AB 2763 Page 7