BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 2763


                                                                    Page  1


          CONCURRENCE IN SENATE AMENDMENTS


          AB  
          2763 (Gatto)


          As Amended  June 30, 2016


          Majority vote


           -------------------------------------------------------------------- 
          |ASSEMBLY:  |75-2  |(May 23, 2016) |SENATE: |38-0  |(August 16,      |
          |           |      |               |        |      |2016)            |
          |           |      |               |        |      |                 |
          |           |      |               |        |      |                 |
           -------------------------------------------------------------------- 


          Original Committee Reference:  U. & C.


          SUMMARY:  Defines "personal vehicle" relating to Transportation  
          Network Companies (TNCs).


          The Senate amendments:


          1)Add the following additional requirements to the definition of  
            "personal vehicles" relating to TNCs:


            a)  Has a passenger capacity of eight persons or less,  
              including the driver; and


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








                                                                    AB 2763


                                                                    Page  2




          EXISTING LAW:  


          1)Establishes the "Passenger Charter-Party Carriers Act," which  
            directs the California Public Utilities Commission (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 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) 


          3)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)


          4)Requires a TNC and any participating driver to maintain  
            specified insurance coverage, and specifies when the insurance  
            is in effect.  (Public Utilities Code Sections 5433 and 5434)


          FISCAL EFFECT:  According to the Senate Appropriations  
          Committee, the CPUC estimates costs of approximately $140,000  
          (PUC Transportation Reimbursement Account) for one personnel  
          year (PY) 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.  









                                                                    AB 2763


                                                                    Page  3



          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.


          COMMENTS:  


          1)Author's Statement:  According to the author, "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]." 


          2)Background:  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. 










                                                                    AB 2763


                                                                    Page  4


          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 drivers are required to maintain primary liability  
            insurance coverage at specific levels.  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.  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. 


            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 that meets all of the following requirements:  a)  
            has a passenger capacity of eight persons or less, including  
            the driver; b) is owned, leased, rented for a term that does  
            not exceed 30 days, or otherwise authorized for use by the  
            participating driver; c) meets all inspection and other safety  
            requirements imposed by the commission; and d) is not a  
            taxicab or limousine.


          Analysis Prepared by:                                             
                          Edmond Cheung / U. & C. / (916) 319-2083  FN:  
          0003887









                                                                    AB 2763


                                                                    Page  5