BILL ANALYSIS Ó
AB 2763
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CONCURRENCE IN SENATE AMENDMENTS
AB
2763 (Gatto)
As Amended June 30, 2016
Majority vote
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|ASSEMBLY: |75-2 |(May 23, 2016) |SENATE: |38-0 |(August 16, |
| | | | | |2016) |
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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.
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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.
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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.
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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
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