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