BILL ANALYSIS                                                                                                                                                                                                    Ó




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                                   THIRD READING 


          Bill No:  AB 2763
          Author:   Gatto (D) 
          Amended:  6/30/16 in Senate
          Vote:     21 

           SENATE TRANS. & HOUSING COMMITTEE:  11-0, 6/21/16
           AYES:  Beall, Cannella, Allen, Bates, Gaines, Galgiani, Leyva,  
            McGuire, Mendoza, Roth, Wieckowski

           SENATE ENERGY, U. & C. COMMITTEE:  9-0, 6/27/16
           AYES:  Morrell, Cannella, Gaines, Hertzberg, Hill, Lara, Leyva,  
            McGuire, Pavley
           NO VOTE RECORDED:  Hueso, Wolk

           SENATE APPROPRIATIONS COMMITTEE:  7-0, 8/8/16
           AYES:  Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen

           ASSEMBLY FLOOR:  75-2, 5/23/16 - See last page for vote

           SUBJECT:   Transportation network companies:  personal vehicles


          SOURCE:    Author


          DIGEST:  This bill defines "personal vehicle" in the context of  
          Transportation Network Companies (TNCs).


          ANALYSIS:  

          Existing law:
          
          1)Defines a "transportation network company" as an organization  
            that provides prearranged transportation services for  








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            compensation using an online-enabled application or platform  
            to connect passengers with drivers using a personal vehicle  
            (e.g., Lyft and Uber). 

          2)Defines a "participating driver" or "driver" as any person who  
            uses a vehicle in connection with a TNC online-enabled  
            application or platform to connect passengers.

          3)Authorizes the California Public Utilities Commission (CPUC)  
            to regulate TNCs.

          4)Requires a TNC and any participating driver to maintain  
            specified insurance coverage, and specifies when the insurance  
            is in effect. 

          This bill defines "personal vehicle" as a vehicle used by a  
          participating driver to provide prearranged transportation  
          services for compensation, that:

          1)Has a passenger capacity of eight persons or less, including  
            the driver.


          2)Is owned, leased, rented for a term that does not exceed 30  
            days, or otherwise authorized for use by the participating  
            driver.


          3)Meets all inspection and other safety requirements imposed by  
            the CPUC.


          4)Is not a taxicab or limousine.
          
          Comments
          
          1)Purpose.  The author believes that this bill is needed to  
            determine the ownership, lease, and rental terms under which a  
            car may be driven by a TNC driver.  This bill will ensure that  
            short-term auto rentals or leases provide all individuals who  
            have an interest in providing TNC services, especially those  
            of low income, the opportunity to do so.








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            In developing its regulations, the CPUC has relied on state  
            law, which uses the term "personal vehicle."  While the  
            definition may seem so obvious as to not need its own  
            definition in the statutes, it is actually not clear.  This  
            bill clarifies that a personal vehicle includes a car that is  
            leased or rented.  On June 6, 2016, the CPUC asked parties for  
            comments on, among other things, defining personal vehicles.   
            That question was raised because the CPUC is considering  
            whether there should be a maximum or minimum period of the  
            rental or lease agreement to qualify a vehicle as personal and  
            therefore prohibit the vehicle from being used by a TNC  
            driver. The effect of this bill is to provide that definition  
            and moot the CPUC's question, thereby allowing the use of  
            leased or rented vehicles by TNC drivers irrespective of the  
            rental or lease duration.  


          2)Making it easy.  Lyft and Uber have programs to help drivers  
            own, lease, or rent vehicles.  Under these programs, the  
            rental/lease payment is deducted from the driver earnings.   
            Third-party companies have also been created which also  
            provide leases/rentals for potential Lyft and Uber drivers for  
            durations as short as an hour.  


          3)Curbing enthusiasm.  Bill supporters enthuse that this bill  
            will make it easier for those of modest means to earn income  
            as TNC drivers by renting or leasing a car.  The driver's  
            profitability will depend on how many rides they provide and  
            how much they make on each ride.  This may well be a  
            win-win-win for the driver, lessor, and TNC, though a driver  
            would be wise to note that he is committing to a fixed payment  
            while his income is variable; he doesn't control the price he  
            charges; competition from drivers is increasing; and he gets  
            paid only after his obligation to the lessor is fulfilled.   
            Caveat emptor.


            Bill supporters also state that this bill will encourage the  
            use of more environmentally friendly and electric vehicles.   








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            That's likely if the rented/leased vehicles are relatively  
            new, as newer vehicles are much cleaner and more efficient  
            than older vehicles.  But while some of the leasing programs  
            are focused on hybrid and electric vehicles, there is no  
            requirement for those.  And the environmental and congestion  
            effects of large numbers of vehicles circulating on streets  
            waiting for rides are unclear.


          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   No






          According to the Senate Appropriation Committee,  
          the 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 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  
          this bill. 


          SUPPORT:   (Verified8/9/16)


          California Chamber of Commerce
          Circulate San Diego
          City of Beverly Hills
          Climate Resolve








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          Electric Vehicle Charging Association
          Enterprise Holdings
          Evercar
          Greenbelt Alliance
          Internet Association
          Lyft
          Nrg
          San Diego Regional Chamber of Commerce
          Silicon Valley Leadership Group
          SPUR
          Planning and Conservation League
          TechNet
          TransForm
          Uber
          Volta


          OPPOSITION:   (Verified8/9/16)


          California Teamsters Public Affairs Council
          San Francisco Taxi Workers Alliance

          ASSEMBLY FLOOR:  75-2, 5/23/16
          AYES:  Achadjian, Alejo, Travis Allen, Atkins, Baker, Bigelow,  
            Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos,  
            Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh,  
            Dahle, Daly, Dodd, Frazier, Beth Gaines, Gallagher, Cristina  
            Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez,  
            Gordon, Gray, Grove, Hadley, Harper, Holden, Irwin, Jones,  
            Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low,  
            Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin,  
            Obernolte, O'Donnell, Olsen, Quirk, Ridley-Thomas, Rodriguez,  
            Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting,  
            Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon
          NOES:  Roger Hernández, Nazarian
          NO VOTE RECORDED:  Arambula, Eggman, Patterson

          Prepared by:Erin Riches / T. & H. / (916) 651-4121
          8/10/16 15:58:36










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