BILL ANALYSIS Ó AB 2790 Page 1 ASSEMBLY THIRD READING AB 2790 (Nazarian) As Amended April 13, 2016 Majority vote ------------------------------------------------------------------ |Committee |Votes|Ayes |Noes | | | | | | | | | | | | | | | | |----------------+-----+----------------------+--------------------| |Business & |12-2 |Salas, Brough, Bloom, |Gatto, Jones | |Professions | |Campos, Chávez, | | | | |Dahle, Dodd, Gomez, | | | | |Holden, Mullin, Ting, | | | | |Wood | | | | | | | |----------------+-----+----------------------+--------------------| |Transportation |14-0 |Frazier, Linder, | | | | |Baker, Bloom, Brown, | | | | |Chu, Daly, Dodd, | | | | |Gomez, Kim, Mathis, | | | | |Medina, Nazarian, | | | | |O'Donnell | | | | | | | |----------------+-----+----------------------+--------------------| |Appropriations |18-0 |Gonzalez, Bigelow, | | | | |Bloom, Bonilla, | | | | |Bonta, Calderon, | | | | |Chang, Daly, Eggman, | | | | |Gallagher, Eduardo | | AB 2790 Page 2 | | |Garcia, Roger | | | | |Hernández, Holden, | | | | |Obernolte, Quirk, | | | | |Santiago, Weber, Wood | | | | | | | | | | | | ------------------------------------------------------------------ SUMMARY: Requires the California Research Bureau (CRB) conduct a study, on or before September 1, 2017, on the necessity and feasibility of licensure for taxicab drivers. FISCAL EFFECT: According to the Assembly Appropriations Committee, "negligible state fiscal impact. CRB prepares reports for members of the Legislature upon request." COMMENTS: Purpose. This bill will require the CRB to conduct a study regarding the necessity and feasibility of licensure for taxi cab drivers. This bill is author sponsored. According to the author, "unlike other drivers and professions, taxi cab drivers face overlapping licensure requirements. Overall, [this bill] simplifies the licensure of the taxicab profession, protects consumers and ensures a competent and fair marketplace for taxicab professionals by creating the [Commission], under the [DCA]." Taxicab Regulation and Local Control. Under current law, taxicab businesses and taxicab drivers are regulated through various local ordinances. Each local jurisdiction can and does create its own requirements for taxis to operate, unlike other models of passenger carriers, who are regulated under one statewide requirement, established by the Public Utilities AB 2790 Page 3 Commission (PUC). Government Code Section 53075.5 requires cities and counties to protect the public health, safety, and welfare by adopting an ordinance or resolution in regard to taxicab transportation services. Each ordinance or resolution must include a policy for entry into the business of providing taxicab services, the establishment or registration of rates, and a mandatory controlled substance and alcohol testing certification program. Local jurisdictions may include additional requirements for taxicab businesses and drivers, many of which do. The San Francisco Municipal Transportation Agency requires taxicab drivers to be a legal resident, maintain personal hygiene, be free of disease, possess a current California driver's license, be 21 years of age, speak, read and write the English language, get fingerprinted, attend and complete a taxi school training program, have an offer from a taxi company to drive and pay an application fee, among others. In the City of Los Angeles, an applicant for a taxicab driver license, must be sponsored by one of LA City's franchised taxicab companies, provide a driving history record, pass an examination, and pay a fee. According to information obtained from the Senate Energy, Utilities, and Communications Committee and the Senate Transportation and Housing Committee background paper for their February 17, 2016 joint informational oversight hearing, Ride-hailing Disruption: Establishing a Level Playing Field in the Transportation-for-hire Market, "Taxicab Service Unlike services regulated and licensed by the [PUC], taxicab service in California is regulated by cities and counties. Taxis are the only transportation for-hire service explicitly allowed to pick up passengers via a street hail. Taxicab owners, fleets, and drivers are often subjected to extensive regulations, particularly in large cities, and generally less extensive regulations in mid-sized and smaller cities. Therefore, the range of regulations varies across jurisdictions, including among neighboring cities. In general, taxi fares are regulated. AB 2790 Page 4 Additionally, cities often cap the number of taxis to protect against an oversupply that could result in excessive competition that undermines public safety with unsafe vehicles, drivers, and driving practices? The cities and counties restrict the number of taxis by limiting the supply of permits, or medallions (named for the metal ornament affixed to the vehicle)." Other Vehicle Transportation Service Providers. California law regulates different modes of passenger transportation for compensation, in addition to taxi services, which are regulated at the local level; there are charter-party carriers and passenger stage corporations, and transportation network companies (TNCs). TNC's are defined as 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, as specified in the Public Utilities Code Section 5431(a). The license to operate ride-hailing services has been provided at the state level by the PUC, whereas taxis are permitted exclusively by individual local cities and counties. Occupational Licensing. The issue of occupational licensing and its impacts on the ability to enter the labor market and mobility within have been raised at both the state and federal level. Currently, The Little Hoover Commission, which is a statutorily created independent agency that conducts research studies about state government operations, is currently in the process of conducting a study on occupational licensing. The study will partly explore the impact of occupational licensing on upward mobility for various groups, as well as the effect of licensing regulations on consumers and the economy. The Little Hoover Commission's study will have a broad policy perspective, and will not place emphasis on licensing testing, education, and other requirements for specific professions. AB 2790 Page 5 Analysis Prepared by: Elissa Silva / B. & P. / (916) 319-3301 FN: 0003162