BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 2763| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- 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 AB 2763 Page 2 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. AB 2763 Page 3 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. AB 2763 Page 4 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 AB 2763 Page 5 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 AB 2763 Page 6 **** END ****