BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 2763 (Gatto) - Transportation network companies: personal
vehicles
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|Version: June 30, 2016 |Policy Vote: T.&H. 11 - 0, |
| | E.,U.,& C. 9 - 0 |
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|Urgency: No |Mandate: No |
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|Hearing Date: August 8, 2016 |Consultant: Mark McKenzie |
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This bill does not meet the criteria for referral to the
Suspense File.
Bill
Summary: AB 2763 would define "personal vehicle" as a vehicle
used by a transportation network company (TNC) driver that: (1)
has a maximum passenger capacity of eight persons; (2) is owned,
leased, or rented for a term of up to 30 days; (3) meets all
specified inspection and safety requirements; (4) and is not a
taxicab or limousine.
Fiscal
Impact: The California Public Utilities Commission (CPUC)
estimates costs of approximately $140,000 (PUC Transportation
Reimbursement Account) for 1PY of staff for additional
regulatory oversight, assuming the explicit authorization of
short-term rental and leasing of vehicles as TNC vehicles
results in a significant increase in vehicles subject to CPUC
AB 2763 (Gatto) Page 1 of
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oversight.
Staff notes that the CPUC is currently considering a proposal to
allow TNCs to use leased and rented vehicles. As such, this
bill could be perceived as simply providing legislative guidance
in the existing proceeding. Assuming leased and rented vehicles
would be authorized for use by TNCs in both cases (through the
bill or the existing proceeding), any costs related to oversight
of additional vehicles may be incurred by CPUC regardless of the
bill.
Background: Existing law grants the CPUC the authority to supervise and
regulate charter-party carrier of passengers, which includes
licensing, safety, and insurance requirements, as well as
enforcement actions. Taxicabs are excluded from the definition
of charter-party carrier and are instead regulated at the local
level by cities and counties. Existing law defines a TNC as a
type of charter-party carrier that is a specified organization
or 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. Existing law also imposes specified
insurance requirements on TNCs and their drivers.
The CPUC issued a decision in 2013 requiring TNCs to obtain a
permit to operate from the CPUC, 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. The CPUC has continued to examine and modify
TNC regulations, issuing a Phase II decision in June of this
year, and announcing the initiation of a Phase III investigation
to explore further changes and clarifications. One question
under consideration is the definition of "personal vehicle" and
whether there should be a minimum or maximum period of rental or
lease agreement to qualify the vehicle for use by a TNC driver.
There is a growing market of companies who provide participating
TNC drivers with vehicle leases and rentals. Some existing car
rental companies have established exclusive relationships with
given TNCs and offer car lease or rental packages that are
specifically tailored for TNC drivers. These vehicle rental and
AB 2763 (Gatto) Page 2 of
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lease arrangements range from months-long leases to an hourly
rental arrangement.
Proposed Law:
AB 2763 would define a personal vehicle as a vehicle that is
used by a participating driver to provide prearranged
transportation services for compensation that meets all of the
following requirements:
Has a passenger capacity of eight persons or less, including
the driver.
Is owned, leased, or rented for a period of up to 30 days, or
otherwise authorized for use by a TNC driver.
Meets all inspection and other safety requirements imposed by
the CPUC.
Is not a taxicab or limousine.
Related
Legislation: AB 828 (Low), which is currently on this
Committee's Suspense File, would exclude TNC vehicles from the
definition of "commercial vehicle" for vehicle registration
purposes, including the payment of weight fees, until January 1,
2018. The bill would also require the CPUC to conduct an
investigation on the existing statutes and regulations relating
to for-hire passenger transportation services, as specified.
AB 650 (Low), which is set for hearing in this Committee, would
deregulate the taxicab industry and transfer regulatory
jurisdiction to the CPUC.
AB 2293 (Bonilla), Chap. 389/2014, requires specified levels of
insurance coverage for TNCs and their drivers. That bill also
established definitions of TNCs and participating drivers.
Staff
Comments: CPUC assumes this bill would result in more TNC
vehicles being subject to regulatory oversight. In addition,
the leasing and rental model would require staff review of TNC
contracts with partner entities, periodic audits, and ensuring
the agreements comply with CPUC requirements, particularly those
AB 2763 (Gatto) Page 3 of
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related to vehicle inspections. CPUC estimates a need for one
additional PY of staff related to the additional workload. As
noted above, however, any CPUC costs may be incurred regardless
of the bill because the Commission is currently considering TNC
drivers using leased and rented vehicles.
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