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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