BILL ANALYSIS �
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THIRD READING
Bill No: AB 612
Author: Nazarian (D), et al.
Amended: 8/19/14 in Senate
Vote: 21
SENATE ENERGY, UTIL. & COMMUNIC. COMM. : 8-2, 6/17/14
AYES: Padilla, Block, Corbett, De Le�n, DeSaulnier, Hill,
Pavley, Wolk
NOES: Fuller, Cannella
NO VOTE RECORDED: Knight
SENATE APPROPRIATIONS COMMITTEE : 5-0, 8/14/14
AYES: De Le�n, Hill, Lara, Padilla, Steinberg
NO VOTE RECORDED: Walters, Gaines
ASSEMBLY FLOOR : Not relevant
SUBJECT : Charter-party carriers of passengers:
online-enabled application or platform
SOURCE : Taxicab Paratransit Association of California
DIGEST : This bill requires all charter-party carriers,
including transportation network companies (TNCs), to submit all
of its drivers to a Department of Justice (DOJ) criminal
background check and to participate in the Department of Motor
Vehicle's (DMV's) pull-notice system, as specified.
ANALYSIS :
CONTINUED
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Existing law:
1.Authorizes the Public Utilities Commission (PUC) to regulate
various transportation services, including charter-party
carriers of passengers, defined to mean persons engaged in the
transportation of persons by motor vehicle for compensation on
a prearranged basis over any public highway in California, but
not including taxicabs licensed or regulated by local
agencies.
2.Requires charter-party carriers with seating capacity for up
to seven passengers (limousines) to carry $750,000 commercial
liability insurance effective full-time.
3.Requires personal automobile insurance with minimum liability
coverage of at least $15,000 for death and personal injury,
$30,000 for death or injury of two or more persons, and $5,000
for property damage (15/30/5), and excludes coverage for any
commercial use of a vehicle under a personal automobile
insurance policy.
4.Requires charter-party carriers to enroll in DMV's pull-notice
system to receive automatic notice of adverse entries or
actions on a driver's driving record.
5.Requires a charter-party carrier to provide for a mandatory
controlled substance and alcohol testing certification program
as adopted by the PUC, which includes pre-employment,
post-accident, reasonable suspicion, follow-up, and
return-to-duty testing.
6.Requires a driver who drives a vehicle as specified, shall
participate in a pull-notice system, which is a process for
the purpose of providing the employer with a report showing
the driver's current public record and any subsequent
convictions, failures to appear, accidents, driver's license
suspensions, driver's license revocations, or any other
actions taken against the driving privilege or certificate,
added to the driver's record while the employer's notification
request remains valid. (Vehicle Code Section 1808.1).
Existing PUC decision:
1.Requires each TNC to maintain commercial liability insurance
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policies providing not less than $1 million coverage per
incident involving a vehicle and driver while "providing TNC
services."
2.Requires TNCs to participate in the DMV pull-notice system
once non-employees are allowed, but in the meantime requires
TNCs to check driving records prior to approving a TNC driver
and quarterly thereafter.
3.Requires TNCs to implement a zero-tolerance policy for its
drivers, disclose to riders how to report a driver suspected
of being under the influence of intoxicating substances, and
suspend a driver promptly after a zero-tolerance complaint is
filed.
4.Requires TNCs to conduct criminal background checks for each
applicant before becoming a TNC driver, which must utilize a
national check and sex offender database, with specified
offenses making an applicant ineligible.
5.Requires charter-party carriers to have permanent markings,
registration number, and a PUC-issued decal on vehicles.
6.Requires TNCs to have "trade dress" on each vehicle providing
TNC services that is visible to a passenger or law enforcement
official, although it may be removable.
This bill:
1.Requires that all drivers of a charter-party carrier shall be
subject to DOJ fingerprint images and related information for
a background check.
2.Requires driver be denied employment or have their contract
voided if they are required by any law to register as a sex
offender or have been convicted of any specified felony,
within a seven-year period from the date of his or her
application, and specifies out of state violations will be
considered.
3.Requires DOJ to charge a fee sufficient to cover its costs in
providing the background check.
4.Specifies that a charter-party carrier must participate in
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DMV's pull-notice system in order to fulfill the existing
requirement that it regularly checks the driving records of
all drivers.
5.Expands Vehicle Code Section 1808.1 to include TNCs in DMV's
pull-notice system.
6.Provides that drivers hired or initially retained by a
charter-party carrier on or after January 1, 2015, shall be
subject to background checks and mandatory drug and alcohol
testing prior to enrollment or retention. Drivers hired or
initially retained before January 1, 2015, shall complete a
background check and drug and alcohol test before January 1,
2016.
Background
Smartphones transform how to get a ride . The Internet and
proliferation of smartphones have transformed many aspects of
life and commerce, including how to get a ride. Instead of
hailing a cab, or calling a reservation car service, a growing
number of consumers are using new app-based services that
connect drivers with passengers. With GPS and geolocation
technology as the foundation of the business model, companies
such as Uber, Lyft, and RideShare enable customers to download
an app that alerts participating drivers in the area of the need
for a ride. Drivers with their TNC app turned on get a signal
on their smartphones and can accept or reject the ride request.
The customer can see photos of responding drivers and their
vehicles, as well as customer ratings of each driver and accept
or reject the driver. When a passenger and driver make a match,
the ride is provided, and payment is made electronically on the
smartphone, with drivers getting a portion.
App-based ride services were born in California and began
operation in the Bay Area in 2012. Uber, the largest ride
service company, is now available in more than 100 cities in 35
countries and was recently valued at about $17 billion.
Drivers with these new services use their own vehicles and most
have other jobs. Lyft reports that 54% of its drivers have a
full-time job, 30% work part-time, with more than a third
driving less than five hours a week, and only 10% driving more
than 30 hours per week. Some drivers turn on their app and
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accept riders in their spare time or focus on weekends and
evenings in busy entertainment districts when "surge" fares are
in effect. Uber has two models - Uber drivers who are licensed
limousine drivers, and UberX drivers using their own vehicles.
Many taxi drivers also are signing up with the new services to
supplement taxi income or switching fulltime to the new model.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee:
One-time costs of $185,000 from the PUC Reimbursement Account
(special) and the PUC Transportation Reimbursement Account
(special) to the PUC costs to oversee new requirements and to
update the general order regarding charter-party carriers.
Costs of $219,000 in FY 2014-15, $367,000 in FY 2015-16, and
$187,000 in subsequent years (special) to DOJ for background
checks. These costs will be fully reimbursed by fees charged
to the charter-party carrier.
SUPPORT : (Verified 8/13/14)
Taxicab Paratransit Association of California (source)
Association for Los Angeles Deputy Sheriffs
California Airports Council
California Association of Highway Patrolmen
California Fraternal Order of Police
California Labor Federation
Consumer Attorneys of California
Greater California Livery Association
Long Beach Police Officers Association
Los Angeles County District Attorney's Association
Los Angeles County Professional Peace Officers Association
Los Angeles Police Protective League
Riverside Sheriffs' Association
Sacramento County Deputy Sheriffs Association
San Diego County Regional Airport Authority
San Francisco International Airport
Santa Ana Police Officers Association
OPPOSITION : (Verified 8/13/14)
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Legal Services for Prisoners with Children
ARGUMENTS IN SUPPORT : According to the author, this bill
applies basic consumer safety requirements that currently apply
to other entities that transport people for hire to
online-enabled transportation companies, including commercial
liability insurance that covers the driver, passengers, and the
public in all situations; drug testing and LiveScan criminal
background checks of drivers; DMV pull notices that send alerts
of drivers driving under the influence and moving violations;
and permanent vehicle markings to aid enforcement against
violations.
ARGUMENTS IN OPPOSITION : Legal Services for Prisoners with
Children state, "AB 612 requires fingerprinting to examine the
lifetime criminal history of each driver. It requires that any
person who has been convicted at any point in their lifetime of
unrelated offenses including credit card fraud, forgery, or drug
offenses would never in their lifetime be allowed to become a
driver using an online enabled platform. This blanket exclusion
would prevent otherwise qualified drivers from access to an
important economic opportunity. There are also racial
discrimination considerations, as arrest and incarceration rates
for these offenses are markedly higher for persons of color."
JG:e 8/19/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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