BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 2763


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          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  








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            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  








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            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]." 










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          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. 









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             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. 









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            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








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