Transportation Network Companies in Virginia

Transcription

1 Transprtatin Netwrk Cmpanies in Virginia

2 Cntents 1 Executive Summary Intrductin Events Giving Rise t this Study Study Objectives, Participants, and Methds Structure f this Reprt Types f Passenger Transprtatin Services Currently Offered in Virginia Mtr Carriers Irregular Rute Cmmn Carriers Regular Rute Cmmn Carriers Cntract Passenger Carriers Emplyee Hauler Carriers Nnprfit/Tax-Exempt Passenger Carriers Sight-Seeing Carriers Nnemergency Medical Transprtatin Carriers Taxicabs Brkers Ridesharing Arrangements Transprtatin Netwrk Cmpanies Regulatin f Transprtatin Netwrk Cmpanies in Other Jurisdictins Califrnia Drivers Vehicles Insurance Nndiscriminatin Other Operating Requirements Clrad Drivers Vehicles Insurance Nndiscriminatin Other Operating Requirements

3 4.3 Seattle Drivers Vehicles Insurance Nndiscriminatin Other Operating Requirements Chicag Drivers Vehicles Insurance Nndiscriminatin Other Operating Requirements Recmmendatins fr the Regulatin f TNCs in Virginia Summary f Regulatry Framewrk; Definitins Licensing f TNCs Screening f Drivers Requirements fr Vehicles Insurance Requirements Operatinal Requirements and Restrictins fr TNCs Operatinal Requirements and Restrictins fr TNC Partners Nndiscriminatin and Access t Service TNC Recrd Keeping and Reprting Requirements Fees Appendix A. Legislatin Implementing the Study Recmmendatins Appendix B. Letters Charging DMV with Leading the Study Appendix C. Legislatin frm the 2014 Sessin f the General Assembly Appendix D. Study Participants Appendix E. Stakehlder Cmments n the Draft Reprt and Legislatin 2

4 1 Executive Summary This reprt dcuments the research, analysis, findings and recmmendatins f a study f transprtatin netwrk cmpanies (TNCs) that was requested by the chairs f the Senate Transprtatin Cmmittee and the Huse Transprtatin Cmmittee and that was led by the Department f Mtr Vehicles (DMV). TNCs, which include cmpanies such as Uber, Lyft, and Sidecar, emply smart phnes and related technlgy t cnnect riders with drivers wh use their persnal vehicles t transprt passengers. 1 The bjective f DMV s study was t determine whether current Virginia law regarding frhire passenger carriers prvided an adequate framewrk t ensure that TNCs wuld prvide a safe and reliable service t the public, r whether the law needed t be amended. In carrying ut the study DMV undertk a cmprehensive review and analysis f current Virginia law regarding taxicabs, limusines, and ther types f passenger carriers. The agency als researched and analyzed the regulatry appraches ther jurisdictins had taken t TNCs, particularly the states f Califrnia and Clrad and the cities f Seattle and Chicag. In additin, DMV s study team met regularly with and slicited input frm a brad range f stakehlders, including representatives frm the TNCs; frm the taxicab, limusine, and mtrcach industrie (bth wners and drivers); frm the Virginia Municipal League, the Virginia Assciatin f Cunties, and several individual lcalities; frm airprt authrities; frm the insurance industry and the State Crpratin Cmmissin s Bureau f Insurance; frm the Virginia State Plice and lcal law enfrcement; frm advcates fr the disabled; frm trial lawyers; and frm ther affected state agencies, including the Department f Taxatin, the Department f Aviatin, and the Department f Rail and Public Transprtatin. As a result f all these effrts, DMV cncluded that Virginia law shuld be amended t address a number f specific features f TNC peratins that raised cncerns abut cnsumer prtectin and public safety. Detailed recmmendatins are presented in the fifth chapter f this reprt, but in summary the highlights f the recmmended regulatry framewrk are as fllws: Licensing f TNCs. TNCs are t be licensed by DMV, prvided they meet certain minimum standards, identical t the standards that apply under current law t ther types f passenger carriers, that demnstrate the TNC s fitness t perate and its cmpliance with the requirements fr licensure (prf f insurance, payment f fees, appintment f agent fr service f prcess, etc.). Screening f drivers. TNCs must ensure that all their drivers are at least 21 years ld and are prperly licensed t drive. TNCs must cnduct cmprehensive criminal backgrund checks and driving recrd checks n every individual applying t wrk as a TNC driver, and at regular intervals after the individual has begun wrking as a TNC driver. The backgrund checks must include checking the individual s status in the Virginia s Sex Offender and 1 Sme cmpanies perating as TNCs als ffer ther services, such as Uber s Uber Black, which brkers passenger transprtatin in prfessinally chauffeured cmmercial vehicles. Such services which are discussed in sectins 2.2 and 3.1 f this reprt already fall within the scpe f current Virginia law and thus lay utside the scpe f the study. 3

5 Crimes Against Minrs Registry and the U.S. Department f Justice s Natinal Sex Offenders Public Website. A criminal recrd that includes a cnvictin, guilty plea, r plea f nl cntendere t any f the fllwing ffenses will bar the individual frm perating as a TNC driver: an ffense invlving fraud, as described in Chapter 6 f Title 18.2 r Chapter 5, Article 4 f Title 18.2 f the Cde f Virginia a sexual ffense as described under Chapter 4, Article 7 f Title 18.2, , r f the Cde f Virginia an act f vilence under Va. Cde cmmissin f any crime that is punishable as a felny in Virginia, in the cmmissin f which a mtr vehicle was used cnspiracy r attempt t cmmit any f the crimes listed abve Anyne required t register as a sex ffender will als be barred frm perating as a TNC driver, as will anyne with a cnvictin fr any felny (beynd thse included in the abve list) in the preceding five years. A driving histry recrd that includes a cnvictin, guilty plea, r plea f nl cntendere t any f the fllwing ffenses in the preceding seven years will bar the individual frm perating as a TNC driver: underage drinking and driving DUI DUI maiming license revcatin resulting frm repeated DUI ffenses In additin, a recrd f any f the fllwing within the preceding three years will bar the individual frm perating as a TNC driver: refusal t submit t a chemical test t determine the alchl r drug cntent f the persn s bld r breath failure f the driver whse vehicle is invlved in an accident t stp and disclse his identity at the scene f the accident escaping r eluding a law-enfrcement fficer Standards fr vehicles. Only persnal vehicles may be used, and they must meet the fllwing standards: must be validly titled and registered either in Virginia r in anther jurisdictin must have a current Virginia state safety inspectin (even if nt registered in Virginia) 4

6 must have a maximum seating capacity f n mre than seven persns, excluding the driver must be insured by a plicy prviding cverage fr cmmercial use f the vehicle must be registered with DMV fr TNC use must display bth (a) an identificatin marker issued by DMV identifying the vehicle as registered fr TNC use and (b) an identificatin marker issued by the TNC that clearly identifies the TNC with which the vehicle is assciated Insurance. TNC drivers must be cvered by a liability insurance plicy that specifically cvers liabilities arising frm a driver s use f a vehicle t prvide TNC services. The liability cverage must meet the fllwing minimums: Frm the mment a TNC driver accepts a ride request until the driver cmpletes the transactin n the TNC s platfrm r until the ride is cmplete, whichever is later, the insurance must prvide at least $1 millin in primary liability cverage, and the same amunt in uninsured and underinsured mtrists cverage. At all ther times when a TNC driver is lgged n t the TNC s nline-enabled applicatin r platfrm, the TNC insurance must prvide primary liability cverage f at least $50,000 per persn/$100,000 per incident fr bdily injury, and at least $30,000 per incident fr prperty damage. In additin, the TNC must maintain insurance that prvides excess cverage insuring the TNC and the driver fr at least $200,000 per ccurrence fr any liability arising frm the driver using a vehicle in cnnectin with a TNC s nline-enabled applicatin r platfrm. The insurance must prvide primary rather than cntingent cverage; in ther wrds, the cverage may nt be dependent n a driver s persnal autmbile insurance plicy first denying a claim. Althugh the insurance requirements may be met with a cmmercial insurance plicy, it may als be satisfied by a persnal autmbile insurance plicy, amendment, r endrsement cvering the use f a vehicle in cnnectin with TNC peratins, r by a cmbinatin f cmmercial and persnal insurance plicies. Other perating requirements. The fllwing are sme f the key additinal requirements fr TNC peratins: The TNC must prvide a credential t each driver, which may be displayed n the TNC s mbile app, that includes infrmatin identifying the driver, the vehicle, and the TNC with which the driver is affiliated. Befre a passenger enters a TNC driver s vehicle, the TNC s app must prvide the passenger with the name and a phtgraph f the driver wh will prvide transprtatin and with the vehicle s license plate number. At the end f the trip, the custmer must be given an electrnic receipt that includes the date and time f the trip, the fare charged, a map f the rute taken, and infrmatin identifying the TNC, the driver, and the vehicle. 5

7 A TNC must make available immediately upn request t authrized representatives f DMV, law enfrcement agencies, and airprt authrities infrmatin abut individual trips arranged thrugh the TNC, including infrmatin identifying the driver, vehicle, rigin and destinatin pints f the trip, and passenger pick-up and drp-ff times. The TNC must disclse t passengers, via its app and website, infrmatin regarding its screening criteria fr drivers, its zer-tlerance plicy regarding drugs and alchl, its methd fr calculating fares, its means f reprting driver miscnduct, and ther matters. The TNC must disclse t its drivers the nature and limits f its insurance cverage, the pssible limits f the driver s persnal autmbile insurance cverage with respect t TNC peratins, and the pssible cncerns f lienhlders regarding cmmercial use f a persnal vehicle, amng ther things. TNCs and their drivers must prvide services t the general public withut discriminatin n the basis f age, race, sex, disability, rigin r destinatin f the trip, r n any ther basis prhibited by law. Amng ther things, this means that they may nt impse additinal charges fr prviding services t persns with physical r mental disabilities because f thse disabilities, and that they may nt refuse passengers with service animals. DMV may deny, suspend r revke the perating authrity r levy civil penalties against a TNC fr failure t cmply with the Americans with Disabilities Act r the Virginians with Disabilities Act. A TNC may prvide service n a prearranged basis nly. Street hails are prhibited. TNC drivers may nly accept riders thrugh the TNC s mbile app r digital platfrm. A TNC driver may nt therwise arrange r accept any fares fr fr-hire transprtatin services. TNCs may nt cnduct any peratins n the prperty f r int any airprt, unless such peratins are authrized by the airprt authrity invlved. Recrd keeping and reprting. DMV will have the authrity t cnduct peridic reviews f TNCs t cnfirm cmpliance with the abve requirements. TNCs must therefre keep and maintain recrds necessary t demnstrate such cmpliance, including the results f criminal histry and driving recrd reprts n TNC drivers, prf f insurance, vehicle safety inspectin recrds, and any ther infrmatin DMV identifies as necessary t cnfirm cmpliance. Fr purpses f cmpliance review, such recrds must be kept and retained fr three years in a manner that permits systematic retrieval. TNCs must als maintain recrds that may be needed by law enfrcement authrities, including ride-specific data. Any f the infrmatin btained by DMV, law enfrcement, r airprt fficials will be cnsidered privileged infrmatin and will nt be subject t disclsure except t ther law enfrcement authrities as needed. Fees. Fees adequate t cver DMV s csts f administering the laws regarding TNCs include (a) an annual per-vehicle fee f $50 fr each vehicle that prvides TNC services, (b) an initial 6

8 TNC license fee f $70,000 t be paid by the TNC, and (c) an annual fee f $3,000 fr renewal f the TNC s license. It is recmmended that this fee structure be reviewed ne year after implementatin t determine if csts are fully recvered r if these fees shuld be adjusted t achieve that bjective. 7

9 2 Intrductin During the 2014 Sessin f the General Assembly, the chairs f the Huse and Senate transprtatin cmmittees called upn the Department f Mtr Vehicles (DMV) t undertake a study f businesses that emply smart phnes and related technlgy t cnnect riders with drivers wh use their persnal vehicles t transprt passengers. 2 These businesses, which include cmpanies such as Uber, Lyft, and Sidecar, are cmmnly knwn as transprtatin netwrk cmpanies (TNCs). 3 The bjective f DMV s study was t determine whether current Virginia law regarding fr-hire passenger carriers prvided an adequate framewrk t ensure that TNCs wuld prvide a safe and reliable service t the public, r whether the law needed t be amended. This reprt dcuments the research, analysis, findings and recmmendatins f the TNC study. 2.1 Events Giving Rise t this Study TNCs are a fairly new phenmenn; the first nes began perating in early 2012 in San Francisc. Three cmpanies launched cmpeting TNC services within a few mnths f each ther: Sidecar. The cmpany was frmed in January 2012 by Sunil Paul and Jahan Khanna. After several mnths f beta testing, Sidecar frmally launched its persnal vehicle sharing prgram in June The prgram allwed individuals t use an ios r Andrid app t request rides frm peple perating their persnal vehicles, and t make a payment (r dnatin, as Sidecar called them) fr the service. Lyft. Lgan Green and Jhn Zimmer funded Zimride in 2007 t prvide a way fr Facebk users t find peple ffering r needing t share a ride, as well as a way t facilitate payment f the driver s csts (Zimride itself did nt set any fares). The fcus f the service 2 The letters charging DMV with leading this study are reprduced as Appendix B t this reprt. 3 The Califrnia Public Utilities Cmmissin (PUC) cined the term transprtatin netwrk cmpany in a 2013 rulemaking that established the peratinal requirements fr cmpanies arranging passenger transprtatin using drivers persnal vehicles. The PUC defined a TNC as an rganizatin... that prvides prearranged transprtatin services fr cmpensatin using an nline-enabled applicatin (app) r platfrm t cnnect passengers with drivers using their persnal vehicles. Califrnia Public Utilities Cmmissin R , Decisin Adpting Rules and Regulatins t Prtect Public Safety While Allwing New Entrants t the Transprtatin Industry, D (September 19, 2013), p. 2. The term has since been widely adpted utside Califrnia, as the TNCs mst f whm als riginated in Califrnia have begun perating in ther states and cities. It shuld be nted that the PUC s definitin f a TNC which is fllwed thrughut this reprt des nt include services such as Uber s Uber Black and ther types f passenger transprtatin invlving prfessinally chauffeured cmmercial vehicles. At least in Virginia, such services clearly fall within the existing regulatry framewrk fr mtr carriers f passengers, and thus lay beynd the scpe f this study s inquiry. 4 Sarah Mitrff, Sidecar Brings the Airbnb Apprach t Yur Car, Wired, 06/sidecar/ (June 26, 2012). Tw years earlier, Sunil Paul had successfully lbbied the Califrnia legislature t amend the state s insurance cde t prvide that the use f a vehicle in a persnal vehicle sharing prgram is nt subject t any livery exclusin cntained in the vehicle wner s persnal autmbile insurance plicy. See 2010 Cal. Stat. ch

10 was n lng trips, such as t r frm a cllege campus, a ski resrt, r sme ther destinatin that the driver and rider had in cmmn. 5 In May 2012 the cmpany annunced the launch f a new service, Lyft, which wuld allw riders and drivers t use mbile devices t arrange n-demand transprtatin ver shrter distances. 6 In July 2013 Zimride changed its name t Lyft and sld its riginal ride-matching service t Enterprise Hldings, parent f Enterprise Rent-a-Car. 7 Uber. Funded by Travis Kalanick and Garrett Camp in 2009 as UberCab, the cmpany launched a service in San Francisc in May 2010 whereby individuals culd use a mbile app r SMS text message t hail a black sedan r luxury vehicle perated by a licensed chauffeur. 8 Rebranding its riginal peratins Uber Black, the cmpany launched a new service in July 2012: Uber X, which expanded the range f vehicles available fr hire t include SUVs and hybrid electric cars. 9 The fllwing February, Uber pened its Uber X platfrm t drivers withut a chauffeur s license, and allwed them t use their wn persnal vehicles t transprt passengers. 10 Frm their rigins in San Francisc these cmpanies peratins quickly spread acrss the United States, including metr Washingtn, DC. By fall 2013 DMV had evidence that Lyft and Uber X drivers were perating in nrthern Virginia; hwever, it was unclear initially whether they were transprting passengers pint-t-pint within the Cmmnwealth, r nly n trips that crssed the Ptmac. In January 2014 tw cmpanin bills were intrduced in the Virginia General Assembly that sught t facilitate TNC peratins within the Cmmnwealth. Senatr Jhn Watkins s Senate Bill 531 and Delegate Rnald Villanueva s Huse Bill 908 prpsed eliminating tw requirements that apply t the services ffered by cntract passenger carriers: the minimum trip duratin f ne hur, and the mandate that each vehicle carry a trip sheet shwing passenger destinatins. 11 After discussing the 5 Andrea Kskey, Website Hks Up Bay Area Drivers, Riders fr Runs t Tahe, San Francisc Examiner, Cntent?id= (December 29, 2011). 6 Kim-Mai Cutler, Zimride s Lyft Is Ging t Give Uber Sme Lwer-Priced Cmpetitin, TechCrunch, (May 22, 2012). 7 Ken Yeung, Lyft Funders Sell Zimride, Their Carpling Startup, t Enterprise Rent-a-Car s Parent Cmpany, The Next Web, (July 12, 2013). 8 Uber s Funding, (December 22, 2010). 9 Alexia Tstsis, Uber Opens up Platfrm t Nn-Lim Vehicles with Uber X, Service Will Be 35% Less Expensive, TechCrunch, (July 1, 2012). 10 Uber SF t Add Mre Drivers t UberX: Mre Cars, Shrter Wait Times, 02/25/uber-sf-t-add-mre-drivers-t-uberx-mre-cars-shrter-wait-times/ (February 25, 2013). 11 Fr a descriptin f cntract passenger carriers and the requirements they must meet under Virginia law, see sectin f this reprt. 9

11 legislatin further with industry representatives and with DMV, the patrns agreed t have their bills cntinued t the 2015 legislative sessin, pending the utcme f the DMV-led study f TNCs called fr by the chairs f the transprtatin cmmittees. It shuld be nted that in late June and early July 2014, DMV received requests frm Uber (thrugh its subsidiary Rasier LLC) and Lyft fr temprary authrizatin t prvide TNC services in Virginia. These requests were made pursuant t f the Cde, which authrizes DMV t temprarily authrize a passenger transprtatin service that is immediately and urgently needed and that existing carriers are unable t prvide. After reviewing the cmpanies applicatins and cnsulting the Gvernr s ffice and the Office f the Attrney General, DMV determined that bth Uber and Lyft had met the statutry threshld fr issuance f temprary authrity. As a result f this decisin and the issuance f temprary authrity, bth Uber and Lyft currently are able t prvide TNC services legally in Virginia, s lng as they adhere t the perating guidelines set frth in the authrizing letters and dcuments that DMV issued t each cmpany. The cmpanies temprary perating authrity is effective fr 180 days: frm August 6, 2014, until February 2, If cnditins warrant, then in February 2014 DMV may issue temprary authrity fr a secnd 180-day perid. Neither Uber nr Lyft will be able t cntinue peratins, at least nt as TNCs, beynd the end f that secnd authrizatin withut legislative actin. 2.2 Study Objectives, Participants, and Methds As indicated abve, the principal bjective f this study was t determine whether current Virginia law prvides an adequate framewrk fr TNCs t prvide safe, reliable services t cnsumers. Hwever, DMV determined in part n the basis f cmments frm industry stakehlders indicating an interest in establishing a level playing field fr all types f carriers that study participants nt nly shuld evaluate the apprpriate regulatry respnse t TNCs, but als shuld take a fresh lk at the regulatry requirements currently impsed n ther passenger transprtatin services in the Cmmnwealth, t determine whether any f thse requirements were either inadequate r unnecessary. Evaluating pprtunities fr the refrm f existing passenger carrier laws thus became a secndary bjective f the study. DMV identified a brad range f stakehlders with an interest in this study, including representatives frm the TNCs; frm the taxicab, limusine, and mtrcach industries; frm the Virginia Municipal League, the Virginia Assciatin f Cunties, and several individual lcalities; frm airprt authrities (which have lcal rules n passenger transprtatin); frm the insurance industry and the State Crpratin Cmmissin s Bureau f Insurance; frm the Virginia State Plice and lcal law enfrcement; and frm ther affected state agencies, including the Department f Taxatin, the Department f Aviatin, and the Department f Rail and Public Transprtatin. 12 In April, DMV began meeting with these grups individually, t seek their help in identifying issues relevant t the study s bjectives. At the same time, the agency slicited written cmments and prpsals frm stakehlders. Amng ther things, in February DMV sent an t passenger carriers having an address n file with the agency apprximately 1300 businesses alerting them t the study, asking fr their input, and asking them t share this request with their drivers, their passengers, and any thers wh might 12 Fr a cmplete list f stakehlders participating in the study see Appendix D. 10

12 have an interest in the study. Many f the cmpanies respnded, as did ver 100 drivers and a number f individual passengers. Over the curse f the study, DMV maintained an pen dr t any ther stakehlders, beynd thse the agency had initially identified, wh wished t prvide cmments and suggestins. Representatives f trial lawyers, f the disabled cmmunity, and f an rganizatin f taxicab drivers all stepped frward at varius times while the study was underway, and were welcmed t share their input with the study team. In additin t evaluating stakehlder cmments, the study team undertk a cmprehensive review and analysis f current Virginia law regarding passenger carriers, and researched and analyzed the regulatry appraches ther jurisdictins had taken t TNCs. Drawing upn this research and the feedback and recmmendatins received frm stakehlders, DMV cnvened a secnd series f meetings with individual stakehlder grups in July and August. Discussin fcused n three different appraches t achieving the study s bjectives: (1) a prpsal that had been submitted by the taxicab industry, (2) legislatin recently enacted in Clrad t regulate TNCs, and (3) a cncept prepared by the DMV study team that incrprated elements f the Clrad law but that als included rules mdeled n ther states laws and regulatins and drawn frm Virginia mtr carrier laws, and that prpsed a substantial deregulatin (state and lcal) f existing fr-hire carriers. On the basis f the feedback received at this secnd rund f meetings, the study team drafted a revised regulatry framewrk, which was then submitted fr review t a stakehlder leadership team, cnsisting f representatives selected by the members f each f the stakehlder grups. The stakehlder leadership team met with DMV s study wrking grup in September t discuss the revised prpsal and t make further recmmendatins. Fllwing the September meeting, DMV made its final revisins t the prpsed regulatry framewrk, drafted implementing legislatin, and prepared this reprt dcumenting its wrk. Drafts f the legislatin and f this reprt were submitted t stakehlders fr cmment. All stakehlder cmments DMV received are included in Appendix F t this reprt. 2.3 Structure f this Reprt The remaining chapters in this reprt summarize the bases fr the recmmended legislatin. Chapter 3 digests current Virginia law n fr-hire passenger carriers and nt-fr-prfit ridesharing arrangements, and cmpares TNCs t these ther types f passenger transprtatin. Chapter 4 sets frth the appraches taken by the fur jurisdictins that, as f this writing, have enacted r prmulgated rules regarding TNC peratins: the states f Califrnia and Clrad and the cities f Chicag and San Francisc. 13 Chapter 5 presents a summary and explanatin f the agency s final recmmendatins. The recmmended legislatin itself is cntained in Appendix A. 13 As f this writing, the Cuncil f the District f Clumbia had passed a bill (Legislatin # (engrssed Octber 28, 2014)) regarding the peratin f TNCs, but the legislatin had nt yet been signed by the mayr r reviewed by Cngress. 11

13 3 Types f Passenger Transprtatin Services Currently Offered in Virginia Many different types f passenger transprtatin services perate in the Cmmnwealth. This chapter prvides an verview f tw established types f services recgnized in Virginia law services prvided thrugh cmmercial mtr carriers and thrugh nncmmercial ridesharing arrangements as well as the services ffered by TNCs. 3.1 Mtr Carriers A mtr carrier is defined in Va. Cde as any persn wh undertakes, whether directly r by lease, t transprt passengers fr cmpensatin ver the highways f the Cmmnwealth. In general, anyne wh either prvides r arranges the transprtatin f passengers by mtr carrier n an intrastate basis is subject t state regulatin in Virginia. 14 Taxicabs are als subject t any requirements established by the lcalities in which they perate. The statewide requirements that apply t different types f mtr carriers, which are set frth in Chapter 20 f Title 46.2 f the Cde f Virginia, are summarized belw Irregular Rute Cmmn Carriers An irregular rute cmmn carrier transprts the general public fr individual fees ver any rutes within specified areas f Virginia. (Airprt shuttles are ne example f this type f mtr carrier.) Irregular rute cmmn carriers perate pursuant t a certificate f public cnvenience and necessity, which DMV will issue nly upn satisfactry review f the applicant s experience, qualificatins, character, fitness, financial respnsibility, and cmpliance with the requirements f Virginia law, as well as f the need fr the prpsed service. The carrier s certificate lists the service areas within which it may perate. Other perating requirements and restrictins that apply t irregular rute cmmn carriers include: filing a tariff with DMV that includes all f the carrier s rates and any rules, plicies r guidelines the carrier will impse n its custmers (e.g., cancellatin plicy) charging n mre fr services than the tariff rates n file with DMV prviding bth the public and DMV 30 days advance ntice f any prpsed changes t tariff rates, and receiving DMV s apprval befre actually changing the rates perating nly vehicles that are designed t carry 15 persns r less, including the driver displaying fr-hire license plates n the vehicle 14 Fr exceptins, see Va. Cde

14 nt picking up r delivering passengers t their residence in the City f Nrflk, unless the vehicle is specially equipped t transprt disabled persns btaining written apprval frm DMV prir t discntinuing peratins in any r all f the service areas nt refusing service withut gd cause prviding services t the general public withut discriminatin Irregular rute cmmn carriers must carry liability insurance that ffers bdily injury and prperty damage cverage f at least $350,000, if perating a vehicle designed t carry up t six passengers (including the driver); if perating a vehicle with a seating capacity f seven t fifteen passengers, the insurance must cver lsses f at least $1,500,000. Carriers are als required t keep a $25,000 surety bnd r letter f credit n file with DMV fr three years frm the date the carrier s perating authrity certificate is issued. There is a $50 filing fee fr a certificate f public cnvenience and necessity, and an annual perating authrity registratin fee f $3 per vehicle Regular Rute Cmmn Carriers A regular rute cmmn carrier transprts the general public fr individual fees ver specific rutes. A cmmuter bus is an example f this type f carrier. Like irregular rute cmmn carriers, regular rute carriers perate pursuant t a certificate f public cnvenience and necessity, which DMV will issue nly upn satisfactry review f the applicant s experience, qualificatins, character, fitness, financial respnsibility, and cmpliance with the requirements f Virginia law, as well as f the need fr the prpsed service. The carrier s certificate lists the rutes ver which it may perate. The peratinal requirements and restrictins are generally the same as fr irregular rute cmmn carriers, but with these differences: regular rute cmmn carriers may perate vehicles with seating capacities, including the driver, f 16 r mre (requiring the driver t have a cmmercial driver s license) befre the carrier can change its time schedules (which are filed with DMV, alng with fares and ther infrmatin, as part f the tariff) it must prvide 10 days ntice t the public and t DMV, and must receive written apprval f the change frm DMV the carrier must ntify DMV f all interruptins f service that may last mre than 24 hurs; interruptins due t an act f Gd need nt be reprted unless the interruptin cntinues fr mre than 72 hurs; all interruptins must be prmptly reprted t the carrier s agents n the affected rutes Insurance cverage and surety bnd requirements are the same as fr irregular rute cmmn carriers, althugh carriers wh perate vehicles that can carry 16 r mre passengers must have bdily injury and prperty damage limits f $5 millin. Fees are the same as fr irregular rute cmmn carriers. 13

15 3.1.3 Cntract Passenger Carriers A cntract passenger carrier cntracts t transprt grups f passengers and charges a grup fee. Carriers perate pursuant t a certificate f fitness, which DMV will issue nly upn satisfactry review f the applicant s experience, qualificatins, character, fitness, financial respnsibility, and cmpliance with the requirements f Virginia law. Other perating requirements and restrictins applicable t cntract passenger carriers include the fllwing: the trip must be prearranged under a cntract made with a grup thrugh a representative f the grup even if the trip lasts less than ne hur, the cntract cannt be fr less than a ne-hur perid, and n ther grup may be transprted during the time frame f the cntract a cpy f the cntract r f a trip sheet must be carried in the vehicle during the trip the cntract r trip sheet must cntain the name f the grup being transprted, the rigin and destinatin f the trip, and the date and apprximate time f pickup the cntract r trip sheet must be maintained at the carrier s place f business fr three years, and made immediately available upn request t DMV, law enfrcement, r an airprt authrity the carrier may nt statin its vehicle in frnt f r acrss the street frm a htel r mtel, r within 100 feet f a taxicab stand, withut a cmpleted trip sheet r cntract rder in the vehicle, r a written agreement with an airprt authrity r the htel r mtel wner prviding ffice space fr the carrier s business at the airprt, htel, r mtel the vehicle must display fr-hire license plates Insurance and surety bnd requirements are the same as fr regular rute cmmn carriers. Fees are the same as fr irregular rute and regular rute cmmn carriers Emplyee Hauler Carriers An emplyee hauler carrier transprts emplyees f a business t and frm their place f wrk. Carriers perate pursuant t a permit issued by DMV. DMV des nt assess the applicant s experience, qualificatins, character, fitness, financial respnsibility, r cmpliance with the requirements f Virginia law. Additinal peratinal requirements and restrictins fr this carrier type include the fllwing: in rder t transprt the emplyees f any business nt listed n the permit, the carrier must apply fr and receive an amended permit 14

16 emplyees may nly be transprted frm a predetermined lcatin (hme, bus stp, park and ride, etc.) t their place f business and frm their place f business back t the pick-up lcatin carriers may nt transprt emplyees frm ne wrk lcatin t anther the vehicle must display fr-hire license plates Insurance requirements are the same as fr cmmn carriers and cntract passenger carriers, but a surety bnd is nt required. Permit applicatin fees are the same as certificate applicatin fees fr cmmn carriers and cntract passenger carriers. There is als an annual perating authrity registratin fee f $3 per vehicle, as fr the ther carrier types Nnprfit/Tax-Exempt Passenger Carriers A nnprfit/tax-exempt passenger carrier is a nn-prfit crpratin that uses nly minibuses t transprt its wn members r the elderly, disabled, r ecnmically disadvantaged members f a cmmunity. A minibus is any mtr vehicle having a seating capacity f nt less than seven nr mre than 31 passengers, including the driver, and used in the transprtatin f passengers. Carriers perate pursuant t a permit issued by DMV. DMV des nt assess the applicant s experience, qualificatins, character, fitness, financial respnsibility, r cmpliance with the requirements f Virginia law. Other peratinal requirements and restrictins fr this carrier include the fllwing: the carrier is limited t transprting members f its rganizatin, if the rganizatin is a membership crpratin the carrier is limited t transprting elderly, handicapped, r ecnmically disadvantaged members f the cmmunity it serves, if the carrier s rganizatin is nt a membership crpratin a carrier may nt perate ver the same rute r n an adjacent rute with a similar schedule as a regular rute cmmn carrier r as a public transprtatin authrity the vehicle must display fr-hire license plates Insurance and bnd requirements are the same as fr emplyee hauler carriers. There is n permit fee fr these carriers, just the annual perating authrity registratin fee f $3 per vehicle Sight-Seeing Carriers A sight-seeing carrier transprts the general public t and frm pints f interest in Virginia primarily fr the passengers experience and enjyment and/r t prmte turism. Carriers perate pursuant t a certificate f fitness, which DMV will issue nly upn satisfactry review f the applicant s 15

17 experience, qualificatins, character, fitness, financial respnsibility, and cmpliance with the requirements f Virginia law. Other perating requirements and restrictins include: prviding services t the general public withut discriminatin nt refusing service withut gd cause perating nly n a rund-trip basis ntifying DMV prir t discntinuing peratin n any r all f the service rutes issuing a ticket that must display the pints f interest and the rund-trip fare displaying fr-hire license plates Insurance and surety bnd requirements are the same as fr cmmn carriers and cntract passenger carriers. Fees are the same as fr cmmn carriers and cntract passenger carriers Nnemergency Medical Transprtatin Carriers This type f mtr carrier exclusively prvides nnemergency medical transprtatin and prvides such transprtatin nly thrugh the Department f Medical Assistance Services (DMAS), thrugh a brker perating under a cntract with DMAS, r as a Medicaid Managed Care rganizatin cntracted with DMAS t prvide such transprtatin. Carriers perate pursuant t a certificate f fitness, which DMV will issue nly upn satisfactry review f the applicant s experience, qualificatins, character, fitness, financial respnsibility, and cmpliance with the requirements f Virginia law. Insurance and surety bnd requirements are the same as fr cmmn carriers, cntract passenger carriers, and sight-seeing carriers. Fees are als the same as fr thse carriers Taxicabs A taxicab transprts passengers in vehicles that are designed t carry n mre than six passengers, excluding the driver. Taxicabs perate pursuant t a permit issued by DMV. DMV des nt assess the applicant s experience, qualificatins, character, fitness, financial respnsibility, r cmpliance with the requirements f Virginia law. Other perating requirements and restrictins include: nt perating n a predetermined rute nt picking up passengers at a public transprtatin terminal (such as a bus statin, airprt, train statin, etc.) and delivering them t anther public transprtatin terminal n a regular basis 16

18 equipping each vehicle with a rf sign and marking the exterir f the vehicle with the wrd r wrds taxicab, taxi, r cab, permanently attached in letters at least three inches high, such that the rf sign and markings, taken tgether, clearly reflect that the vehicle is perating as a taxicab r perfrming a taxicab service cmplying with the rdinances f all cities and cunties in which the taxicab perates It bears repeating that taxicabs differ frm ther types f passenger carriers in that they are subject t lcal regulatin, and thus must meet lcal requirements in additin t thse set frth in state law. Specific requirements vary in number, scpe, and rigr depending n the jurisdictin. At the state level, taxicabs are required t carry liability insurance cvering $125,000 in bdily injury and prperty damage per incident. There is n surety bnd requirement. In line with mst ther carriers, taxicabs must pay a $50 permit fee and an annual perating authrity registratin fee f $3 per vehicle Brkers A brker arranges fr the transprtatin f passengers by mtr carriers authrized by DMV, but is nt itself a mtr carrier r an emplyee r agent f a mtr carrier. Brkers are required t btain a license frm DMV, which authrizes the brker t arrange transprtatin f passengers fr trips within Virginia. There is a $50 filing fee fr the license. Brkers may nly arrange fr the transprtatin f passengers with mtr carriers that have been authrized by DMV t cnduct such peratins. A brker must btain and maintain a cpy f the certificate f public cnvenience and necessity issued t thse carriers. Each brker is required t keep a surety bnd r letter f credit in the amunt f $25,000 n file with DMV. 3.2 Ridesharing Arrangements Althugh sme TNCs have ccasinally referred t their business as ridesharing, this term has a specific meaning in Virginia law, ne that excludes fr-prfit transprtatin services. Sectin f the Cde f Virginia defines a ridesharing arrangement as the transprtatin f persns in a mtr vehicle when such transprtatin is incidental t the principal purpse f the driver, which is t reach a destinatin and nt t transprt persns fr prfit. The term includes ridesharing arrangements knwn as carpls, vanpls, and bus pls. Participants in a ridesharing arrangement may pay fr the service, but payments cannt exceed the expenses f perating the vehicle; therwise, the service is subject t cmmercial mtr carrier laws. 15 Ridesharing arrangements ften riginate in casual agreements amng friends r acquaintances, but they als take ther frms. Fr instance, in nrthern Virginia many drivers cmmuting t and frm wrk will pick up and drp ff annymus riders at designated lcatins, s that their vehicles will be 15 Va. Cde (5). 17

19 eligible t use HOV lanes. This practice, knwn as slugging, generally des nt invlve any payment fr service; drivers prvide riders with transprtatin, and in exchange the riders enable the drivers t use travel lanes that will shrten their cmmuting times. A number f lcal and reginal transprtatin authrities als facilitate ridesharing arrangements by ffering services that help t match up drivers with riders. The Department f Rail and Public Transit maintains an nline database f these cmmuter services in lcalities acrss Virginia Transprtatin Netwrk Cmpanies Fr purpses f its study and this reprt, DMV has fllwed the substance f the Califrnia PUC s definitin f a TNC: an rganizatin... that prvides prearranged transprtatin services fr cmpensatin using an nline-enabled applicatin (app) r platfrm t cnnect passengers with drivers using their persnal vehicles. 17 As reflected in this definitin, TNCs differ frm ther types f passenger transprtatin prviders in their unique cmbinatin f fur characteristics: TNCs prvide prearranged transprtatin. Riders use apps n smart phnes and ther mbile devices t summn drivers either t their current lcatin identified, in many cases, via GPS technlgy in the mbile device r t anther pick-up pint. This is similar t arranging a limusine r taxicab ride thrugh a dispatch service; hwever, TNCs differ frm mst taxicabs in that TNCs nly authrize rides that are arranged thrugh the mbile app, which precludes street hails and slicitatin f rides at taxi stands and ther fixed pints. 18 TNCs prvide transprtatin fr cmpensatin. In this respect they mre clsely resemble taxicabs, limusines, and ther fr-hire passenger carriers than they d carpls r ther nt-fr-prfit ridesharing arrangements Cmmuter Service Assistance Service Prviders, allprviders.aspx?type=1. 17 Califrnia Public Utilities Cmmissin R , Decisin Adpting Rules and Regulatins t Prtect Public Safety While Allwing New Entrants t the Transprtatin Industry, D (September 19, 2013), p. 2. Nte that the PUC s definitin is at dds with hw TNCs have ften represented themselves. In particular, TNCs have frequently cntended that they are nt transprtatin cmpanies and d nt prvide transprtatin, but instead are merely technlgy cmpanies that have develped a slutin that is used by thse wh prvide transprtatin. See, fr example, Califrnia Public Utilities Cmmissin R , Applicatin f Uber Technlgies, Inc. fr Rehearing f Decisin (Oct. 23, 2013), p. 4 (Uber perates n vehicles, and des nt hld itself ut r advertise itself as a transprtatin service prvider.... On the cntrary, Uber is a technlgy cmpany that licenses the Uber App t transprtatin service prviders). Similar language is cntained in the terms f service fr Uber ( (last updated May 17, 2013)), Lyft ( (last updated May 22, 2014)) and Sidecar ( (last updated April 22, 2014)). 18 A driver wh had n scruples abut vilating the TNC s terms f service culd f curse slicit and accept riders ff the app. TNCs prhibit such practices because they receive n prtin f the fare fr rides that are arranged ff the app, withut their knwledge. 19 It shuld be nted hwever that nt all rides ffered by all TNCs are fr cmpensatin. Lyft, fr example, cllects discretinary dnatins in sme lcalities generally new markets where it is trying t 18

20 TNCs use mbile apps and ther nline platfrms t cnnect riders and drivers. Althugh TNCs have been innvative in the use f mbile apps and GPS t arrange transprtatin quickly and efficiently, there are similar mbile apps fr dispatching taxis and limusines (such as Curb and Hail) and fr arranging carpls (e.g., Carma, Zimride). Mrever, Uber and Lyft, the tw leading TNCs, als ffer services fr transprtatin in licensed fr-hire carriers (Uber Black, Uber Taxi, Lyft s service in New Yrk City) and fr carpling (Uber Pl, Lyft Line). TNC drivers use persnal vehicles. Like carpls and ther ridesharing arrangements, TNCs use persnal vehicles belnging, in mst instances, t drivers wh d nt have a chauffeur s license r ther prfessinal training r experience. The fact that these persnal vehicles are nt dedicated t cmmercial activity, but are als used perhaps a majrity f the time fr persnal transprtatin cmplicates their status fr insurance purpses, as Virginia persnal aut plicies livery exclusin generally will rule ut cverage fr incidents arising while the vehicle is used cmmercially, while the cmmercial insurance currently available t TNC drivers generally will nt cver incidents arising frm persnal use f the vehicle. It may als create issues if the vehicle was financed by a lender wh was nt infrmed that the vehicle wuld be used fr cmmercial purpses. Althugh the transprtatin services arranged thrugh TNCs are nt dissimilar t the services ffered by sme types f mtr carriers particularly irregular rute cmmn carriers and taxicabs the differences are such that subjecting TNCs t the same requirements and restrictins as thse f ther carriers wuld prbably destry TNCs ability t perate under their current business mdel. One imprtant feature f that business mdel is its dependence upn the TNC attracting a critical mass f drivers in rder t be able t prvide timely service t riders. This is especially imprtant since, in cntrast t mst ther fr-hire passenger transprtatin, TNC drivers generally are free t set their wn hurs and t wrk as infrequently as they wish. TNCs depend upn a rbust supply f part-time and ccasinal drivers using their persnal vehicles t transprt passengers. Rules that create additinal regulatry hurdles and csts fr ptential drivers, r that encumber drivers persnal use f their vehicles, impair TNCs ability t recruit wrkers. Nevertheless, public safety and cnsumer prtectin require TNCs and their drivers t adhere t at least sme f the same standards fr fitness and financial respnsibility that ther cmmercial peratrs must meet. The challenge is thus t develp a set f rules that adequately prtects passengers and prmtes safety, but that des nt effectively regulate TNCs business mdel ut f existence. establish a user base. On its web site Lyft states that in cities where drivers cllect dnatins, there is nt a set amunt fr what a ride shuld cst, but rather a suggestin f what the ride shuld be. It is at the passengers [sic] discretin t leave the dnatin amunt f their chsing. Dnatins vs. Charges, article/ If a passenger chses nt t make a dnatin, then bviusly the ride is nt fr cmpensatin. A Lyft representative explained t the study team, hwever, that drivers are able t view the payment histry f every custmer wh slicits a ride, and may chse nt t pick up smene wh has repeatedly declined t make a dnatin. 19

21 4 Regulatin f Transprtatin Netwrk Cmpanies in Other Jurisdictins Over the past fur years TNCs have established peratins in cities acrss the United States and arund the wrld. Like Virginia, many f these ther jurisdictins have cmpared the services ffered by TNCs t thse ffered by ther types f passenger carriers, and have tried t determine hw TNCs ught t be regulated. The study team s research discvered nly ne jurisdictin that had evidently cncluded n regulatin at all was the best apprach: Nrth Carlina. 20 All the thers either had established r had prpsed establishing standards fr TNC services. This chapter details the rules in the fur jurisdictins that have, as f this writing, prmulgated regulatins r enacted laws gverning TNCs: Califrnia, Clrad, Seattle, and Chicag. 21 The rules adpted in each f these jurisdictins have much in cmmn; all require, amng ther things, TNCs t be licensed r permitted, drivers t have criminal backgrund and driving recrd checks, vehicles t be inspected fr safety and t fall within certain size and seating capacity limits, custmers t be served in a nndiscriminatry manner, and insurance t cver incidents that arise during peratins. Even s, as the fllwing summaries reveal, there are significant differences in the number and rigr f the rules frm ne jurisdictin t the next. 4.1 Califrnia Rules adpted pursuant t Decisin f the Califrnia Public Utilities Cmmissin (PUC) were the first t use the term transprtatin netwrk cmpany t refer t Uber, Lyft, and thse ffering similar services. 22 The rules establish the PUC s jurisdictin ver TNCs, 23 require TNCs (but nt their drivers) t btain a permit frm the PUC befre perating, and set frth standards that TNCs must meet regarding driver and vehicle safety, insurance, nndiscriminatin, and ther peratinal matters. Additinal insurance rules were later set frth in statute. 24 A TNC that fails t adhere t the state s requirements may have its permit revked r therwise be subject t sanctins by the PUC. 20 Sessin Law amended N.C.G.S. 160A-194 t prhibit lcal regulatin f digital dispatching services fr prearranged transprtatin services fr hire. The act did nt prvide fr the regulatin f such services by the state. 21 As f this writing, the Cuncil f the District f Clumbia had passed a bill (Legislatin # (engrssed Octber 28, 2014)) regarding the peratin f TNCs, but the legislatin had nt yet been signed by the mayr r reviewed by Cngress. 22 Califrnia Public Utilities Cmmissin R , Decisin Adpting Rules and Regulatins t Prtect Public Safety While Allwing New Entrants t the Transprtatin Industry, D (September 19, 2013). 23 The PUC classifies TNCs as a type f passenger charter-party carrier, which are subject t the agency s regulatry authrity pursuant t Chapter 8 f the Califrnia Public Utilities Cde. 24 See 2014 Cal. Stat. ch

22 4.1.1 Drivers TNCs must cnduct criminal backgrund checks fr each applicant befre the applicant may becme a driver. The backgrund check must be a natinal criminal backgrund check, including the natinal sex ffender database, and be based n the applicant s name and scial security number. Cnvictins within seven years fr vilent crimes, DUI, fraud, use f a mtr vehicle t cmmit a felny, sexual ffenses, acts f terrr, r crimes invlving prperty damage r theft will bar applicants frm becming TNC drivers. TNCs must implement and disclse a zer-tlerance plicy with respect t drivers use f intxicating substances. TNCs must disclse t riders hw t reprt a driver suspected f being under the influence f intxicating substances, and must suspend a driver prmptly after a zer-tlerance cmplaint is filed. TNC drivers must pssess a valid Califrnia driver s license, must be at least 21 years f age, and must prvide at least ne year f driving histry befre prviding TNC services. TNCs must check each driver s driving recrd prir t allwing a driver n the platfrm, and quarterly thereafter. 25 Drivers with cnvictins fr reckless driving, driving under the influence, hit and run, r driving with a suspended r revked license may nt be permitted t wrk as TNC drivers. Drivers may have a maximum f tw pints n their driving recrds fr lesser ffenses, e.g., equipment prblems, speeding, r child safety seat vilatins. TNCs are required t establish a driver training prgram t ensure that all drivers are safely perating the vehicle prir t the driver being able t ffer service. This prgram is t be filed with the PUC, and TNCs must reprt t the agency n an annual basis the number f drivers that became eligible and cmpleted the curse. TNCs are required t file an annual reprt with the PUC s Safety and Enfrcement Divisin shwing the number f drivers wh were fund t have cmmitted a vilatin and/r suspended, including a list f zer-tlerance cmplaints and the utcme f the investigatin int thse cmplaints. TNCs must als submit an annual reprt that shws the average and mean number f hurs and miles each TNC driver spent driving fr the TNC Vehicles Prir t perating, and annually thereafter, vehicles used t prvide TNC services must pass a 19-pint safety inspectin. TNCs may nly use street-legal cupes, sedans, r light-duty vehicles including vans, minivans, sprt utility vehicles (SUVs) and pickup trucks. Hatchbacks and cnvertibles are acceptable. Hwever, vehicles may nt be significantly mdified frm factry specificatins (hence n stretch vehicles, etc.). TNC drivers are prhibited frm transprting mre than 7 passengers n any given ride. 25 The PUC regulatins cntemplate that Califrnia law may be amended t allw TNCs t enrll in the Califrnia Department f Mtr Vehicles Emplyer Pull Ntice (EPN) prgram, under which mtr carriers receive autmatic ntice f adverse entries r actins n an emplyee driver s driving recrd. In that event, enrllment in EPN wuld take the place f the quarterly recrd check. 21

23 4.1.3 Insurance Under the regulatins currently in effect in Califrnia, TNCs must prvide cmmercial liability insurance cverage f at least $1 millin per incident fr incidents invlving vehicles and drivers while prviding TNC services. This cverage must be available t cver claims regardless f whether the driver maintains insurance adequate t cver any prtin f the claim. TNC drivers must prvide prf f bth their persnal insurance and the cmmercial insurance in case f an accident. In July 2014 the PUC issued a prpsed decisin seeking t clarify the meaning f TNC services and the levels f insurance cverage that apply under varius circumstances. 26 Hwever, legislatin enacted in September 2014 addressed these matters in statutry rules that will becme effective July 1, The legislatin requires TNC drivers t be cvered by transprtatin netwrk cmpany insurance ( TNC insurance ) defined as a liability insurance plicy that specifically cvers liabilities arising frm a driver s use f a vehicle in cnnectin with a transprtatin netwrk cmpany s nlineenabled applicatin r platfrm. In particular, the legislatin prvides fr tw levels f cverage under TNC insurance: Frm the mment a TNC driver accepts a ride request until the driver cmpletes the transactin n the TNC s platfrm r until the ride is cmplete, whichever is later, the TNC insurance must prvide at least $1 millin in primary liability cverage, as well as at least $1 millin in uninsured and underinsured mtrists cverage. Either the TNC r the driver may prvide the plicy, but if the driver prvides the insurance then the TNC must verify cverage, and must prvide cverage n a first-dllar basis in the event the driver s plicy has lapsed r ceased t exist. The TNC insurer has the duty t defend and indemnify the insured. At all ther times when a TNC driver is lgged n t the TNC s nline-enabled applicatin r platfrm, the TNC insurance must prvide primary liability cverage f at least $50,000/$100,000 per incident fr persnal injury, and at least $30,000 per incident fr prperty damage. The plicy may be maintained either by the TNC r by the driver (subject t the same cnditins that apply t insurance cverage during the perid the driver is engaged). If it is maintained by the TNC then the insurance need nly prvide cverage in the event the driver s TNC insurance has ceased t exist r has been canceled, r if the driver des nt therwise maintain TNC insurance. In additin t this TNC insurance, the TNC must maintain insurance that prvides excess cverage insuring the TNC and the driver fr at least $200,000 per ccurrence fr any liability arising frm the driver using a vehicle in cnnectin with a TNC s nline-enabled applicatin r platfrm. The legislatin further stipulates that the insurer prviding insurance cverage under these laws is slely respnsible fr defending any liability claim arising frm an accident ccurring within the perid the cverage is in effect. 26 Califrnia Public Utilities Cmmissin R , Prpsed Decisin f Cmmissiner Peevey Mdifying Decisin , Agenda ID # (Rev. 1) (July 10, 2014), pp Cal. Stat. ch

24 As nted, cverage under TNC insurance is primary under all circumstances while the driver is lgged n; the new law underscres this pint by prviding that cverage under the TNC plicy is nt... dependent n a persnal autmbile insurance plicy first denying a claim nr shall a persnal autmbile insurance plicy be required t first deny a claim. Califrnia s legislatin addresses a number f issues regarding drivers persnal aut insurance plicies. The new law authrizes persnal autmbile insurers, at their discretin, t ffer plicies, amendments, r endrsements cvering the use f a vehicle in cnnectin with TNC peratins. Hwever, the law expressly prvides that private passenger autmbile insurance plicies are nt required t prvide primary r excess cverage while a driver is engaged in TNC peratins. The law als explicitly states that the persnal insurance shall nt prvide any cverage while the driver is n the TNC s netwrk, unless the plicy (r an endrsement r amendment t the plicy) expressly prvides fr such cverage, nr shall the persnal insurer have a duty t defend r indemnify fr the driver s activities while wrking fr the TNC, absent express plicy terms t the cntrary. TNCs are required under the new law t disclse in writing t their drivers, as part f their agreement with thse drivers, the insurance cverage and limits f liability that the TNC prvides. In additin, TNCs must advise drivers in writing that their persnal autmbile insurance plicies will nt prvide cverage because the driver uses a vehicle in cnnectin with a transprtatin netwrk cmpany s nline-enabled applicatin r platfrm, and will nt prvide cllisin r cmprehensive cverage fr damage t the vehicle that ccurs while the driver is n the TNC s netwrk Nndiscriminatin TNCs must allw passengers t indicate whether they require a wheelchair-accessible vehicle r a vehicle therwise accessible t individuals with disabilities. TNCs are required t file an annual reprt with the PUC s Safety and Enfrcement Divisin that details the number and percentage f custmers wh requested accessible vehicles, and hw ften the TNC was able t cmply with requests fr accessible vehicles. They are als required t file an accessibility plan with the PUC, which must include the fllwing: a timeline fr mdifying apps s that they allw passengers t indicate their access needs, including the need fr a wheelchair accessible vehicle a plan fr hw the TNC will prvide apprpriate vehicles fr passengers wh specify access needs, including a plan t prvide incentives fr individuals wh wn accessible vehicles t becme TNC drivers a timeline fr mdifying apps and TNC websites s that they meet accessibility standards a timeline fr mdifying apps s that they allw passengers t indicate that they are accmpanied by a service animal, and fr adpting a plicy that service animals will be accmmdated a plan fr ensuring that drivers review f custmers will nt be used in a manner that results in discriminatin, including any plicies that will be adpted and any mnitring that will take place by the TNC t enfrce this requirement 23

25 Althugh TNCs are allwed t prvide platfrms that enable drivers and passengers t rate each ther, TNCs must ensure that such ratings are nt based n unlawful discriminatin, and that drivers d nt discriminate against passengers r ptential passengers n the basis f gegraphic endpints f the ride, race, clr, natinal rigin, religin, sex, disability, age, r sexual rientatin/identity. TNCs are required t file an annual reprt with the PUC s Safety and Enfrcement Divisin that details, amng ther things, the number f rides requested and accepted by TNC drivers within each zip cde where the TNC perates, and the number f rides that were requested but nt accepted by TNC drivers within each zip cde where the TNC perates Other Operating Requirements TNCs must clearly disclse, n their app and website, that TNCs facilitate rides between passengers and private drivers using their wn persnal vehicles. Additinally, the disclsure must state that each TNC is required t maintain insurance plicies prviding a minimum f $1,000,000 per incident cverage fr incidents invlving vehicles and drivers while they are prviding TNC services. TNC drivers may nly transprt passengers n a prearranged basis. Fr the purpse f TNC services, a ride is cnsidered prearranged if the ride is slicited and accepted via a TNC digital platfrm befre the ride cmmences. Upn request f law enfrcement r ther fficials a driver must prduce a physical r electrnic recrd f a ride in prgress sufficient t establish that it was prearranged. TNC drivers are strictly prhibited frm accepting street hails. They als are prhibited frm cnducting any peratins at airprts unless such peratins are authrized by the airprt authrity. The app used by a TNC t cnnect drivers and passengers must shw the passenger a picture f the driver and a picture f the vehicle the driver is apprved t use, including the license plate number identifying the vehicle. In additin, TNC vehicles must display cnsistent trade dress (i.e., distinctive signage r displays n the vehicle) when prviding TNC services. The trade dress shuld allw a passenger, gvernment fficial, r member f the public t readily assciate a vehicle with a particular TNC. Magnetic r remvable trade dress is acceptable. TNCs are required t file a phtgraph f their trade dress with the PUC s Safety and Enfrcement Divisin. On a quarterly basis, the PUC may cllect, as part f verall fees, ne-third f ne percent f the ttal revenues frm TNC services in Califrnia. Each TNC must keep recrds f all trips made by its drivers, and must make thse recrds available t the PUC n demand. 4.2 Clrad Legislatin enacted in 2014 amended Clrad law t establish specific peratinal requirements fr TNCs and t exempt them frm the rules gverning ther types f cmmercial passenger transprtatin. 28 Pursuant t this legislatin, TNCs are subject t the regulatry authrity f Cl. Sess. Laws, Chap Althugh the legislatin excludes TNCs frm state rules applicable t ther passenger carriers, it is unclear whether lcal regulatin is precluded. 24

26 the Clrad Public Utilities Cmmissin (PUC), which issues permits t TNCs (nt drivers) authrizing them t prvide service, fr an annual fee f $111, Drivers A TNC must cnfirm that every persn applying t wrk as a TNC driver is at least 21 years ld and has a valid driver s license, prf f autmbile insurance, prf f vehicle registratin in Clrad, and prf (pursuant t PUC rules) that he r she is medically fit t drive. Befre beginning wrk as a TNC driver, and every five years after beginning such wrk, an individual must btain a criminal histry recrd check, either thrugh a law enfrcement agency as prvided under Clrad law r thrugh a privately administered natinal criminal histry recrd check, including the natinal sex ffender database. The individual must then prvide a cpy f the criminal histry recrd check t the TNC. An individual will be disqualified frm driving fr the TNC if the criminal histry recrd check reveals that the persn has ever been cnvicted f r pled guilty r nl cntendere t certain felny ffenses invlving fraud, vilence against a persn, r crimes invlving prperty. Thse wh have been cnvicted f r pled guilty r nl cntendere t any ther felny within the previus five years are als ineligible, as are thse wh have been cnvicted f r pled guilty r nl cntendere t driving under the influence f drugs r alchl in the past seven years. Befre permitting an individual t act as a driver, a TNC must btain and review a driving histry research reprt fr the individual. Anyne with the fllwing mving vilatins is disqualified frm serving as a driver: mre than three mving vilatins in the three-year perid preceding the individual s applicatin t serve as a driver; r a majr mving vilatin in the three-year perid preceding the individual s applicatin t serve as a driver, including eluding a law enfrcement fficer, reckless driving, and perating a mtr vehicle in vilatin f the terms f a restricted license. Each TNC must implement an intxicating substance plicy fr a driver that disallws any amunt f intxicatin while the driver is prviding services. The TNC must include n its web site and mbile applicatins a ntice cncerning this plicy. hurs. Drivers are prhibited frm ffering r prviding TNC services fr mre than twelve cnsecutive 29 It is the study team s understanding that Clrad authrities expected nly tw TNCs Uber and Lyft t be issued permits, and that the annual fee was priced s that each cmpany wuld pay half f the estimated annual csts f regulating TNCs. 25

27 4.2.2 Vehicles Persnal vehicles must have at least fur drs and be designed t carry n mre than eight passengers, including the driver. They must have initial and annual safety inspectins, perfrmed either by the TNC r by a certified mechanic. Each TNC must require that each persnal vehicle prviding TNC services display an exterir marking that identifies it as a vehicle fr hire Insurance TNCs are required t file with the PUC evidence that either the TNC r the driver has secured primary liability insurance cverage f at least $1 millin per ccurrence fr incidents invlving the driver during a prearranged ride. Fr the perid f time when a driver is lgged int a TNC s platfrm but is nt engaged in a prearranged ride, the Clrad legislatin put in place bth an interim standard (effective thrugh January 15, 2015) and a lng-term standard (effective thereafter). The interim standard requires either the TNC r the driver t maintain cntingent liability insurance i.e., cverage that applies nly if the driver s insurer fr persnal autmbile insurance validly denies cverage... r the driver therwise des nt have persnal autmbile insurance cverage that meets Clrad s statutry minimums fr a persnal aut liability plicy: $25,000 per persn and $50,000 per incident fr bdily injury and $15,000 per incident fr prperty damage. The lng-term standard dubles these limits t $50,000/$100,000 fr bdily injury and $30,000 fr prperty damage and makes the cverage primary rather than cntingent. Hwever, the legislatin als directs the Clrad Divisin f Insurance t study whether the levels f cverage prvided fr under the lng-term standard are apprpriate fr the risk invlved with transprtatin netwrk cmpany services, and t present its findings and recmmendatins t the legislature by January 15, The lng-term standard set frth in the legislatin may thus prve shrt-lived. If the TNC prvides the insurance required fr TNC peratins, then it must submit dcumentary evidence f cverage t the PUC. If respnsibility is placed n a driver t purchase the insurance, then the TNC must verify that the driver has purchased the plicy. TNCs must make the fllwing disclsure t prspective drivers in the terms f service: While perating n the transprtatin netwrk cmpany s digital netwrk, yur persnal autmbile insurance plicy might nt affrd liability cverage, depending n the plicy s terms. While the Clrad law authrizes cverage fr TNC-related activities under a rider r endrsement t the driver s persnal liability plicy, the law als stipulates that nthing in statute requires a persnal autmbile insurance plicy t prvide cverage fr the perid f time in which a driver is lgged int a TNC s netwrk. If mre than ne insurance plicy prvides valid and cllectible cverage fr a lss arising ut f an ccurrence invlving a mtr vehicle perated by a driver, Clrad rules require respnsibility fr the claim t be divided n a pr rata basis amng all f the applicable plicies. This equal divisin f 26

28 respnsibility may nly be mdified by the written agreement f all f the insurers and the wners f the plicies Nndiscriminatin TNCs must prvide services t the public in a nndiscriminatry manner, cnsistent with the prvisins f Clrad human rights laws and withut regard t the gegraphic lcatin f the departure pint r destinatin, nce the driver and rider have been matched. A driver may nt refuse t transprt a passenger unless: the passenger is acting in an unlawful, disrderly, r endangering manner; the passenger is unable t care fr himself r herself and is nt in the charge f a respnsible cmpanin; r the driver has already cmmitted t prviding a ride fr anther rider. TNCs may nt impse additinal charges fr prviding services t persns with physical r mental disabilities because f thse disabilities. TNC drivers must permit a service animal t accmpany a rider n a prearranged ride. If a rider with physical r mental disabilities requires the use f the rider s mbility equipment, the driver must stre the mbility equipment in the vehicle during a prearranged ride if the vehicle is reasnably capable f string the equipment. If the driver is unable t stre the rider s mbility equipment, the driver must refer the rider t anther driver r transprtatin service with a vehicle that is equipped t meet the rider s needs. Vilatins f the nndiscriminatin rules are subject t a civil penalty up t ne thusand dllars. TNCs are nt liable fr a driver s vilatin f the rules unless the driver s vilatin has been previusly reprted t the TNC in writing, and the TNC has failed t reasnably address the alleged vilatin Other Operating Requirements TNC drivers may nt prvide services unless the TNC has matched the driver t a rider thrugh its digital netwrk. Street hails are prhibited. TNCs must make available t prspective riders and drivers the methd by which the cmpany calculates fares r the applicable rates being charged and an ptin t receive an estimated fare. The passenger must then be given a detailed receipt upn cmpletin f the prearranged ride. TNCs must make the fllwing disclsure t prspective drivers in the terms f service: If the vehicle that yu plan t use t prvide transprtatin netwrk cmpany services fr ur transprtatin netwrk cmpany has a lien against it, yu must ntify the lienhlder that yu will be using the vehicle fr transprtatin services that may vilate the terms f yur cntract with the lienhlder. TNCs are required t make a custmer supprt telephne number available n its digital netwrk r web site fr rider inquiries. 27

29 TNCs are prhibited frm disclsing t a third party any persnally identifiable infrmatin cncerning a user f the TNC s services, unless: the TNC btains the user s cnsent t disclse persnally identifiable infrmatin; disclsure is necessary t cmply with a legal bligatin; r disclsure is necessary t prtect r defend the terms and cnditins fr use f the service r t investigate vilatins f the terms and cnditins. This limitatin n disclsure des nt apply t the disclsure f aggregated user data and ther infrmatin abut the user that is nt persnally identifiable. The PUC is authrized t prmulgate regulatins requiring prf f TNCs financial respnsibility. The Clrad Divisin f Wrkers Cmpensatin is t determine whether TNCs have an bligatin t prvide r ffer fr purchase wrkers cmpensatin insurance cverage t TNC drivers. 4.3 Seattle Seattle first enacted an rdinance regulating TNCs in March 2014, 30 but implementatin and enfrcement were suspended shrtly thereafter pending the utcme f stakehlder meetings t develp new rules. Thse new rules fr TNCs were apprved by City Cuncil n July 14, 2014, and signed by Mayr Murray the fllwing day. 31 Althugh the new rules depart frm the ld nes in a number f respects, perhaps the mst significant difference is that they ablish any cap n the number f TNC drivers that may perate in Seattle. Seattle s set f rules is far mre detailed and extensive than Califrnia s r Clrad s, and includes numerus imprtant changes t the laws gverning taxis and ther fr-hire passenger carriers as well. Many f these changes create a unifrm set f standards r at least substantively similar sets f requirements fr all passenger carrier types n matters such as insurance, vehicle inspectins, driver backgrund checks, recrdkeeping, and reprting. Other changes such as creating a medallin system fr Seattle s taxicabs, and allwing ther fr-hire carriers (except TNCs) t accept street hails alter the cmpetitive landscape in ther ways. Given the scpe and scale f Seattle s TNC rdinance, even a selective survey f its main prvisins requires mre space than the summaries f ther jurisdictins rules Drivers Drivers must be affiliated with a TNC that has been licensed by the city, and must themselves hld a fr-hire driver s license issued by the city. The initial and annual renewal applicatin fr the frhire driver s license must include the fllwing: 30 City f Seattle Ordinance N (March 19, 2014). 31 City f Seattle Ordinance N (July 15, 2014). 28

30 driver s name, aliases, residence and business address, residence and business telephne numbers driver s place and date f birth (must be at least 21 years ld), height, weight, clr f hair and eyes driver s Washingtn State driver s license number (Scial Security number is ptinal) prf that the driver is authrized t wrk in the United States driver s cnsent t a fingerprint-based criminal backgrund check thrugh Washingtn State Patrl and Federal Bureau f Investigatin criminal databases cnducted by the city, r t have a cpy f a criminal backgrund check prvided directly frm a city-apprved thirdparty vendr (apprved vendrs must, at a minimum, include lcal, state, and natinal databases; access at least five years f database histry; and demnstrate cmpetency in prviding accurate infrmatin) infrmatin indicating whether r nt the driver has ever had a fr-hire r driver s license suspended, revked, r denied and fr what cause a cpy f the driver s driving abstract frm the Washingtn State Department f Licensing r a signed statement authrizing the Directr t btain a current cpy f the driver s driving abstract frm the Washingtn State Department f Licensing a statement listing all reprtable accidents and all mving vilatins the driver was invlved in during the previus three years cmpletin f a driver educatin curse and assciated tests, which driver training prgram must include cmpletin f the Natinal Safety Cuncil s Defensive Driving Curse, and cmpletin f at least ne additinal driving training prgram apprved by the city (a refresher curse may be required if requested by the TNC r if the city has reasnable grunds, based n dcumented cmplaints and/r vilatins, t believe that such a curse is necessary) a statement under penalty f perjury f the driver s physical and mental fitness t act as a fr-hire driver (the city may at any time require any licensee r applicant t be medically examined if it appears that the licensee is r has becme physically r mentally unfit t be a fr-hire driver) TNCs must ntify the city within tw wrking days f the TNC having knwledge f any f the fllwing (amng ther things): a cnvictin, bail frfeiture r ther adverse finding received by a TNC driver fr any criminal ffense r traffic vilatin that ccurs during r arises ut f the driver s peratin f the vehicle while active n any TNC dispatch a cnvictin, bail frfeiture r ther adverse finding received by a TNC driver fr any ther criminal ffense directly bearing n the driver s fitness t perate a vehicle r the affiliated 29

31 driver s fitness t be licensed, including but nt limited t theft, fraud, rbbery, burglary, assault, sex crimes, alchl, drugs, r prstitutin a vehicle accident required t be reprted t the State f Washingtn invlving any TNC driver any restrictin, suspensin r revcatin f a State f Washingtn driver s license issued t a TNC driver In additin, TNCs must ntify the city within five wrking days f any revcatin f a TNC driver s access t the TNC dispatch applicatin, fr-hire license r TNC vehicle endrsement. TNCs must emply a zer-tlerance drug and alchl plicy with respect t TNC drivers. The TNC must include a ntice n its website, dispatch system applicatin, and passenger trip cnfirmatins f its zer-tlerance plicy and the methds t reprt a driver the passenger reasnably suspects was under the influence f drugs r alchl during the trip. The website and applicatin dispatch system must include cntact infrmatin fr reprting a cmplaint, including reprting it t city fficials. TNCs must review criminal backgrund checks and driving recrds n every driver and maintain recrds theref. Drivers cnvicted f any traffic and/r criminal ffense directly bearing n the driver s fitness including but nt limited t theft, fraud, rbbery, burglary, assault, sex crimes, alchl, drugs, r prstitutin may nt be permitted t prvide TNC services. Drivers with cnvictins within the last 7 years fr any alchl r drug related ffense, reckless driving, hit and run, r driving with a suspended r revked license may nt be permitted t prvide TNC services. Knwledge examinatins may be administered t drivers by the City f Seattle and/r King Cunty r by an apprved TNC r third-party vendr. Examinatin prcedures and cntent must be apprved by the city and must test the applicant s knwledge f applicable cdes and regulatins; ability t speak and understand ral and written English sufficient fr fulfilling the minimum acceptable standards fr a fr-hire driver; knwledge f vehicle safety requirements; knwledge f lcal gegraphy and f lcal public and turist destinatins and attractins; and knwledge f risk factrs fr crimes against fr-hire drivers, emergency prcedures, and equipment fr drivers persnal safety. Drivers may nt be in cntrl f a fr-hire vehicle fr mre than 12 hurs spread ver a ttal f 15 hurs in any 24-hur perid. Thereafter, the driver may nt drive any fr-hire vehicle until ten cnsecutive hurs have elapsed. Drivers must use mbile phnes in hands-free mde, cnsistent with state law. The city will revke a driver s fr-hire license fr any f the fllwing ffenses cmmitted while active n the TNC dispatch system: the driver receives a bail frfeiture, cnvictin, r ther final adverse finding fr crimes pertaining t hit-and-run, r fr crimes pertaining t DUI while perating a TNC endrsed vehicle the driver s Washingtn State driver s license expires r is revked the driver has cmmitted a serius ( Class C ) vilatin in any ne-year perid 30

32 the driver, while driving a TNC endrsed vehicle, picks up a street hail, cruises, r therwise slicits trips whether active n the TNC dispatch system r nt the driver, while driving a TNC endrsed vehicle, prvides a ride that is nt bked thrugh the TNC applicatin dispatch system the driver drives a vehicle while n the TNC applicatin that is nt affiliated with the TNC the driver drives a vehicle while n the TNC applicatin that is neither a fr-hire vehicle nr a taxicab licensed under this city rdinance nr a vehicle with a TNC vehicle endrsement In additin, the city may revke the driver s fr-hire license if: the driver is fund t be in pssessin f illegal drugs r an pen cntainer f alchl while in cntrl f r while perating any taxicab r fr-hire vehicle the driver has received a cnvictin, bail frfeiture, r ther final adverse finding invlving crimes pertaining t prstitutin, gambling, physical vilence, Unifrm Cntrlled Substances Act, fraud, theft, rbbery, larceny, burglary, extrtin and/r crimes directly related t the driver s ability t perate a fr-hire vehicle Vehicles Prir t prviding TNC services and annually thereafter, a TNC must require every affiliated vehicle t underg a unifrm vehicle safety inspectin, apprved by the city, that utilizes an apprved mechanic wh certifies in writing that the vehicle is mechanically sund and fit fr driving. The apprved mechanic must als certify in writing that the plates, decals, and custmer ntices required and supplied by the city are legible and prperly displayed. TNCs must maintain vehicle inspectin recrds. A vehicle that is used t prvide service thrugh a TNC must: either be a taxicab r ther fr-hire vehicle licensed by the city, r a persnal vehicle with a TNC vehicle endrsement issued by the city be affiliated with a TNC licensed by the city be affiliated with a driver wh hlds a fr-hire driver s license issued by the city have passed the vehicle safety inspectin described abve be n mre than 10 years ld Either the driver r the TNC, acting n the driver s behalf, may apply fr the required vehicle endrsement. In either case, the applicatin must include the fllwing: the driver s name, aliases, residence and business address, residence and business telephne numbers the driver s place and date f birth (must be at least 21 years ld), height, weight, clr f hair and eyes 31

33 the driver s Washingtn State driver s license number (prviding a Scial Security number is ptinal) prf that the driver is authrized t wrk in the United States evidence f vehicle insurance as required by rdinance evidence that the driver has a fr-hire driver s license prf that the driver s vehicle has passed the unifrm vehicle safety inspectin prf that the driver s vehicle is n mre than 10 years ld The endrsement applicatin must be cmpleted and the abve infrmatin prvided during any annual license renewal. Upn apprval f the applicatin, the city issues a TNC vehicle endrsement, which takes the frm f a certificate that includes the vehicle identificatin number, the registered wner s full legal name, the vehicle s license plate number, the endrsement s expiratin date, and a unique certificate number that crrespnds t the number n a TNC vehicle endrsement sticker affixed t the fr-hire driver s license and t the number n a decal affixed t the affiliated vehicle. The city will deny a TNC vehicle endrsement applicatin if it determines that: the applicant has failed t submit a cmplete, satisfactry applicatin the applicant has failed t affiliate with a licensed TNC the applicant has made any material misstatement r missin in the applicatin fr an endrsement the applicant fails t meet certain vehicle requirements set frth in the municipal cde within three years f the date f applicatin, the applicant has had a cnvictin, bail frfeiture r ther final adverse finding f criminal fraud, larceny, theft, prstitutin, extrtin, racketeering, rbbery, r vilatin f the Unifrm Cntrlled Substances Act where such crime invlved the use f the endrsed vehicle In additin, the city may deny any TNC vehicle endrsement applicatin if it determines that: within five years f the date f applicatin, the applicant has had a cnvictin, bail frfeiture, r ther final adverse finding invlving crimes reasnably related t the applicant s ability t perate a fr-hire business, including but nt limited t prstitutin, gambling, fraud, larceny, extrtin, incme tax evasin within tw years f the date f applicatin, the applicant has been fund, either thrugh a criminal cnvictin, bail frfeiture r ther final adverse finding (including in a civil suit r administrative prceeding) t have exhibited past cnduct in driving r perating a fr-hire vehicle which wuld lead the city t reasnably cnclude that the applicant will nt cmply with the city s prvisins related t vehicle requirements and the safe peratin f the vehicle 32

34 within tw years f the date f applicatin, the applicant has engaged in the business f perating any taxicab r fr-hire vehicle within the city withut a current valid license frm the city within 12 mnths f the date f applicatin, the applicant has vilated King Cunty r Prt f Seattle rdinance r regulatin pertaining t the peratin f taxicabs while in thse jurisdictins, if such vilatin wuld cnstitute grunds fr license revcatin r denial if ccurring within the city within 12 mnths f the date f applicatin, the applicant has had its Seattle fr-hire vehicle license revked Befre beginning a shift, a driver must check the lights, brakes, tires, steering, seat belts, and ther vehicle equipment listed n the vehicle safety checklist as prescribed by rule t see that they are wrking prperly. The driver must als ensure that the vehicle license, vehicle registratin and prf f insurance card are in the vehicle. Althugh signage r ther trade dress may be placed n the vehicle bdy, it cannt exceed fur square feet, r be put n the rf, r cver any windws r vehicle lights, r bscure the view f any mirrrs Insurance Seattle requires TNC drivers t maintain a persnal aut insurance plicy. In the event the insurance plicy lapses r is canceled, r a vehicle is deleted frm the plicy, prf f a new plicy including the vehicle must be filed with the city befre the vehicle is canceled r deleted frm the previus plicy. The situatin with cmmercial insurance is mre cmplicated. After sme debate, the City Cuncil cncluded that state law wuld have t be amended in rder t effect fundamental changes t insurance cverage requirements fr fr-hire vehicles. 32 Accrdingly, the rdinance establishes rules that will apply during a prvisinal perid, which will last either until the effective date f changes t State insurance requirements fr fr-hire transprtatin services, r until tw weeks after the end f the 2015 Washingtn State legislative sessin, whichever cmes first. During the prvisinal perid, either the registered wner f a vehicle with a TNC endrsement, r the TNC n behalf f the registered wner, must file with the city evidence that each vehicle has liability insurance in an amunt n less than the minimum required by state law ($100,000 per persn and $300,000 per incident fr persnal injury and $25,000 per incident fr prperty damage) 33 and underinsured mtrist cverage f at least $100,000 per persn and $300,000 per incident fr persnal injury at any time the driver is active n the TNC dispatch system. Active n the TNC dispatch system, as explained in the rdinance, includes but is nt limited t: when the driver is lgged nt the transprtatin netwrk cmpany (TNC) applicatin shwing that the driver is available t pick up passengers; when a passenger is in the vehicle; when TNC 32 Taylr Sper, Seattle Legalizes Uber, Lyft t Operate Withut Caps, GeekWire (July 14, 2014), 33 RCW

35 recrds shw the vehicle has been cnnected with a passenger; r when the driver has been cnnected with a passenger and is en rute t prvide transprtatin services t the passenger. The plicy must als: be issued by either an admitted carrier in the State f Washingtn with an A.M. Best Rating f at least B VII, r a surplus line insurer with an A.M. Best Rating f at least B+ VII name The City f Seattle as an additinal insured prvide that the insurer will ntify the city, in writing, f any cancellatin and/r nnrenewal at least 30 days befre that cancellatin and/r nnrenewal takes effect By the first business day immediately fllwing the end f the prvisinal perid, the driver r the TNC must have n file with the city evidence that the vehicle has an insurance plicy that cmplies with state insurance requirements effective at that time. If there is n change t state insurance requirements by the cnclusin f the prvisinal perid, then the insurance requirements fr TNCs will be the same as in the prvisinal perid, except fr the fllwing: If the plicy is nt issued by an admitted carrier, there must be evidence that an exemptin has been met allwing fr the use f a surplus line insurer. The city may, hwever, temprarily suspend this requirement if n ther viable insurance ptins are available t the industry. The plicy may nt include any aggregate limits, r named driver requirements r exclusins. Other limitatins r restrictins beynd the standard insurance services ffice (ISO) business aut plicy frm are subject t apprval by the city Nndiscriminatin Drivers are required t prvide custmers with prfessinal and curteus service at all times. They may nt refuse t transprt any persn except when: the driver has already been dispatched n anther call the driver arrives at the place f pick-up and upn arrival the passenger is acting in a disrderly r threatening manner, r therwise is acting in a manner that wuld cause a reasnable persn t believe that the fr-hire driver s health r safety, r that f thers, may be endangered the passenger cannt, upn request, shw ability t pay the fare Drivers are prhibited frm making any discriminatry charges t any persn, r make any rebate r in any manner reduce the charge t any persn, except in cnfrmity with the discunts r surcharges cntained in the filed rates. TNCs must allw passengers t indicate whether they require a wheelchair-accessible vehicle and cnnect passengers t thse services via a web link, applicatin, r phne number. TNCs (alng with taxicab and fr-hire vehicle licensees) are assessed a $0.10 per ride surcharge fr all rides riginating in the city, which is t be used t ffset the higher peratinal csts f 34

36 wheelchair accessible taxi (WAT) services fr wners and peratrs. Funds are t be distributed by reimbursement fr dcumented, itemized csts. Fllwing the first year f cllecting the surcharge, the city may adjust the rate, depending upn reimbursed csts fr purchasing and retrfitting accessible vehicles, the actual need fr purchasing and retrfitting accessible vehicles in the upcming year, ttal number f WAT rides, and ther factrs. Within tw years f the effective date f the rdinance, the Directr f Finance and Administrative Services, with input frm the Seattle Cmmissin fr Peple with Disabilities, will prmulgate rules t determine the need fr additinal wheelchair accessible taxicabs r fr-hire vehicles and hw t fund ptential new retrfits frm the wheelchair accessible services fund Other Operating Requirements TNCs may nly perate under a license issued by the city. The TNC s initial and annual renewal applicatin fr a license must include, amng ther things: the TNC s name and cntact infrmatin the frm f business entity under which the TNC will perate (e.g., crpratin, partnership) verificatin that the TNC uses nly ne applicatin dispatch system, as apprved by the city the trade dress, if any that the TNC intends t use t help passengers and thers identify its vehicles the name and cntact infrmatin f the TNC s representative evidence that all vehicles affiliated with the TNC are cvered by insurance as required by law vehicle registratin fr each vehicle affiliated with the TNC certificatin f a unifrm vehicle safety inspectin fr each vehicle affiliated with the TNC any ther infrmatin required by regulatins adpted pursuant t this chapter the abve applicatin and infrmatin must be cmpleted fr each annual license renewal The TNC must infrm the city in writing within seven days if any f this infrmatin changes, ceases t be true r is superseded in any way by new infrmatin. The city will revke a TNC s license under any f the fllwing circumstances (amng thers): the TNC, r any persn emplyed t manage Seattle peratins, receives a bail frfeiture, cnvictin r ther final adverse finding fr crimes f fraud, theft, larceny, extrtin, embezzlement, racketeering, Unifrm Cntrlled Substances Act, prstitutin, alchl and/r narctics where the cmmissin f such crimes invlved r used a TNC r fr-hire vehicle; hwever, the license may be reinstated if the emplyee is remved immediately frm all peratinal r management duties r authrity and is divested f all wnership in the TNC as sn as pssible the TNC, r any persn emplyed t manage Seattle peratins, receives a bail frfeiture, cnvictin r ther final adverse finding invlving crimes directly related t the applicant s 35

37 ability t perate a TNC, including but nt limited t prstitutin, gambling, fraud, larceny, extrtin, incme tax evasin; hwever, the license may be reinstated if the emplyee is remved immediately frm all peratinal r management duties r authrity and is divested f all wnership in the TNC as sn as pssible the TNC knwingly permits an affiliated vehicle t be active n the TNC dispatch system that has nt undergne the required vehicle safety inspectin the TNC has failed t meet the insurance requirements impsed upn it an affiliated driver is active n the TNC dispatch system withut the required vehicle insurance the TNC fails t pay all penalties impsed by the city that are either nt cntested r are upheld after review In additin, the city may revke a TNC s license if the TNC: dispatches t an unlicensed r unaffiliated driver dispatches t an unaffiliated vehicle dispatches t a vehicle that is neither a fr-hire vehicle r taxicab, nr a vehicle with a TNC vehicle endrsement knwingly permits a third party t use the TNC dispatch system knwingly permits a TNC endrsed driver driving a TNC endrsed vehicle t pick up hails, cruise, r therwise slicit trips knwingly allws a TNC driver driving a TNC endrsed vehicle t take trips nt dispatched by the TNC fails t review driving recrds f TNC drivers and maintain recrds as required knwingly permits TNC drivers with a disqualifying cnvictin t cntinue affiliating with a TNC and/r perating as a TNC driver TNCs are assessed a fee f $0.10 per ride fr all trips riginating in Seattle t cver the estimated enfrcement and regulatry csts f TNC licensing, vehicle endrsements and driver licensing. After six mnths r any time thereafter, the city may adjust this based n the number f new TNC licenses, fr-hire driver s licenses and vehicle endrsements issued, and ttal TNC trips riginating in Seattle. The purpse f any adjustment is t ensure that the per-ride fee cvers the estimated enfrcement and regulatry csts f TNC licensing, vehicle endrsements and driver licensing. Ttal TNC industry fees may nt exceed $525,000 in year ne. TNCs must prvide the city with dcumentatin explaining r demnstrating that their rate structure is transparent t the rider prir t cnfirming the ride. TNC drivers are prhibited frm accepting cash payment fr fares. Payment may nly be made electrnically via the TNC applicatin dispatch system. 36

38 Drivers must prvide each passenger an electrnic r paper receipt. Drivers must use the mst direct available rute n all trips unless the passenger specifically requests t change the rute. While active n a TNC s dispatch system, a driver may nt perate a vehicle that is unaffiliated with a TNC t transprt passengers. Failure t abide by this requirement will result in revcatin f the driver s fr-hire license. TNC drivers driving with a TNC endrsed vehicle may nt pick up, cruise r therwise slicit trips. Vilatin f this rule will result in revcatin f the fr-hire license. TNCs are required t maintain accurate and cmplete peratinal recrds fr the trailing tw years, including, but nt limited t: ttal number f rides prvided percentage r number f rides picked up in each zip cde pick up and drp ff zip cdes f each ride percentage by zip cde f rides that are requested but unfulfilled number f cllisins, including the name and number f the affiliated TNC driver, cllisin fault, injuries, and estimated damage number f requested rides fr an accessible vehicle crimes against driver reprts passenger cmplaints any ther data identified by the city t ensure cmpliance Drivers are required t reprt the required infrmatin t TNCs n a weekly basis, and TNCs must submit cmplete data t the city electrnically n a quarterly basis. 4.4 Chicag Chicag s rdinance regarding TNCs was enacted May 28, 2014, and became effective August 26, The city s rules include sme interesting appraches t addressing differences between TNCs and taxicab services such as the impsitin f less stringent requirements fr cmpanies whse drivers average n mre than 20 hurs per week ( Class A ) than fr thse with a higher average amng drivers ( Class B ) althugh sme details may be preempted by state legislatin. 35 Fr instance, the legislatin that is pending in the Illinis legislature wuld require every individual driver wh wrks fr a TNC mre than 18 hurs per week t btain a chauffeur s license. Under Chicag s rdinance, whether 34 City f Chicag SO (May 28, 2014) th General Assembly, Huse Bill 4075 (enrlled July 14, 2014). The bill was veted by the Gvernr n August 25, As f this writing, the Illinis General Assembly has nt taken a vte t verride the vet. 37

39 a chauffeur s license is required depends nly n which class f TNC the driver wrks fr, nt n hw many hurs the individual driver actually wrks (all drivers fr Class B TNCs must pssess a chauffeur s license). Als, the state legislatin requires lcalities t impse the same requirements n TNCs as they d n ther lcally licensed passenger carriers with respect t prviding wheelchair-accessible vehicles. Chicag s rdinance, which places primary respnsibility n taxicabs t prvide wheelchair-accessible vehicles (and establishes a surce f funds t help them meet that respnsibility), cnflicts with this requirement Drivers Class A TNCs must fllw a prcess apprved by the city fr determining that a prspective driver meets the fllwing qualificatins: has had a valid driver s license fr at least ne year prir t applying t becme a TNC driver is at least 21 years ld has nt been cnvicted f reckless driving, hit and run, r driving with a suspended r revked license has nt been cnvicted f r placed n supervisin fr tw r mre mving vilatins within the preceding five years, has nt been fund guilty, been held in custdy, r been n parle fr the cmmissin f a felny, a crime invlving mral turpitude, the illegal sale r pssessin f a cntrlled substance, the indecent slicitatin f a child r any criminal sexual abuse r similar crime, r driving under the influences has nt had an Illinis driver s license suspended r revked within the preceding 12 mnths has nt had a public chauffeur license r restricted public chauffeur license suspended, revked r nn-renewed by the city within the preceding 5 years has successfully cmpleted a TNC driver s training prgram that has been apprved by the city, that has been cnducted by the TNC r ther authrities apprved by the city, and that, amng ther things, has cvered tpics related t services fr peple with disabilities has nt been listed by the city (due t a cmplaint filed with city authrities) as ineligible t be a transprtatin netwrk driver Class A TNCs must perfrm a criminal backgrund check n each applicant t be a TNC driver, btain each applicant s driving recrd, and ascertain that all the abve requirements are met befre engaging the applicant as a driver. The TNC must repeat this prcess annually fr each driver, and keep recrds f its determinatins fr three years. TNCs must maintain and enfrce a zer-tlerance plicy, apprved by the city, fr intxicating substances. Infrmatin cncerning the plicy, and the methds fr reprting vilatins, must be included n the TNC s web site, mbile applicatin, and passenger receipts. Prmptly after a cmplaint is filed, the TNC must suspend the driver pending further investigatin. Thse wh knwingly make a false zer-tlerance cmplaint are subject t penalties under the city s law prhibiting false statements. 38

40 N alchlic beverage may be transprted in a TNC vehicle unless it is in its riginal package with an unbrken seal. TNCs must prvide drivers with identificatin cards shwing each driver s name and phtgraph. The driver must display this identificatin card at all times while lgged n t the TNC netwrk, and must als display a cpy f the city s grund transprtatin tax registratin emblem fr the vehicle, and the distinctive emblem that has been issued t the vehicle (see the sectin n vehicles, belw). The driver must carry prf f insurance in the vehicle at all times, as well as an electrnic r paper cpy f the agreement r terms f service between the driver and the TNC. TNCs must implement prcesses t ensure that n driver perates a TNC vehicle fr mre than 10 hurs within a 24-hur perid. N driver, and n vehicle, may perate fr mre than 10 hurs within a 24-hur perid. The rdinance vids as cntrary t public plicy any terms r cnditins in the agreement between the TNC and the driver that wuld prhibit the driver frm wrking fr anther TNC Vehicles TNC vehicles must be kept clean at all times they are used t prvide service. Vehicles must: be rated by the manufacturer t carry fewer than 10 persns, including the driver nt be used t transprt mre than seven passengers have at least tw drs be a cupe, sedan, r light-duty vehicle, including a van, minivan, sprt utility vehicle, pickup truck, hatchback r cnvertible meet applicable Federal Mtr Vehicle Safety Standards fr vehicles f its size, type and prpsed use nt have been issued the title class f salvage, rebuilt, junk, ttal lss, r any equivalent classificatin in any jurisdictin nt be licensed as a taxi r public transprtatin vehicle in any jurisdictin nt have any cmmercial advertisements displayed n the exterir r in the interir Vehicles used in Class A netwrks must be inspected accrding t standards apprved by the cmmissiner, and must pass such inspectin. Vehicles used in Class B netwrks must be n mre than six years ld (althugh the city may by regulatin authrize an lder vehicle fr up t tw years if the vehicle passes inspectin by the city). All Class B vehicles must pass a cmprehensive annual inspectin at a city-licensed mtr vehicle repair shp r at a facility designated by the city. If the vehicle is wheelchair-accessible, it must als be inspected fr cmpliance with legally required safety standards. 39

41 TNC vehicles must display cnsistent and distinctive signage while prviding services. The signage must be readable at a distance f at least 50 feet in daylight, and must identify the particular vehicle as assciated with a particular TNC. TNCs are required t file an illustratin f their distinctive signage with the city. In additin, TNC vehicles must display a cnsistent and distinctive emblem while prviding services. The city may regulate the manner f display, methd f issuance, design and cntents f this emblem. Emblems displayed n wheelchair-accessible transprtatin netwrk vehicles must specify r mark that such vehicles are wheelchair-accessible Insurance TNCs must prvide the city with prf that they pssess bth f the fllwing: Cmmercial general liability insurance t cver claims up t $1 millin against the TNC r its emplyees. The insurance must be primary and nncntributry, must name the city as an additinal insured; and must include a prvisin requiring 30 days advance ntice t the city prir t cancellatin, lapse, r any change t the plicy. Cmmercial autmbile liability insurance t cver claims against the TNC r its drivers. Minimum cverage must be $1 millin fr incidents ccurring frm the time the TNC driver has accepted a ride until the cmpletin f the ride. At any ther time the driver is lgged nt the TNCs app and is available t pick up passengers, the cverage must meet the minimum required under Illinis law fr passenger vehicle liability insurance ($20,000/$40,000 bdily injury, $15,000 prperty damage). The TNC must prvide 30 days advance ntice t the city prir t cancellatin, lapse, r any change t the plicy. These insurance plicies must cver claims regardless f whether the TNC driver maintains insurance adequate t cver any prtin f the claim. TNCs must disclse n their apps and websites that they are required t maintain insurance plicies as prvided abve. They must als prvide drivers with prf f the insurance Nndiscriminatin TNCs and their drivers must cmply with all federal, state and city nn-discriminatin laws, and may nt discriminate against any ptential r existing emplyee, driver, r passenger n accunt f race, clr, sex, gender identity, age, religin, disability, natinal rigin, ancestry, sexual rientatin, marital status, parental status, military discharge status r surce f incme. TNCs have an affirmative duty t respnd t requests fr service in underserved areas and t insure drivers cmpliance with this duty. TNCs must immediately reprt t the city any driver wh fails t cmply. All TNC drivers must accept, withut extra charge, riders with service animals. By January 1, 2015, TNCs apps must be accessible t custmers wh are blind, visually impaired, deaf and hard f hearing. Apps must als prvide custmers with an pprtunity t indicate whether they need a wheelchair-accessible vehicle. TNCs must accmmdate these passengers either by cnnecting them 40

42 with TNC drivers wh perate wheelchair-accessible vehicles, r by entering int a service agreement with ther parties wh will then dispatch wheelchair-accessible vehicles thrugh the TNC s app. In additin t ther fees, Class A TNCs are required t pay $0.10 per vehicle per ride accepted t the city s accessibility fund fr each vehicle in the TNC s netwrk that is nt wheelchair-accessible. Class B TNCs pay $ per vehicle per year t the fund fr each vehicle that is nt wheelchair-accessible. The accessibility fund is used t imprve the services f bth taxicabs and TNCs fr peple with disabilities. Chicag s rdinance requires taxicab services with 10 r mre vehicles t make at least 10% f their fleets wheelchair-accessible by January 1, 2018, if sufficient revenue has been cllected in the accessibility fund. The rdinance authrizes the mayr t frm a grund transprtatin vehicles underserved areas task frce, t cnsider which areas f the city are underserved and the rle new technlgies may play in prviding efficient services, and t recmmend measures t imprve service delivery Other Operating Requirements TNCs must be licensed by the city, and n driver may perate as a TNC driver unless affiliated with a TNC that has been licensed by the city. Any vehicle used t prvide TNC services in vilatin f this requirement may be impunded. Initially, a TNC may chse t apply fr either a Class A r a Class B license; hwever, after six mnths f peratins, thse issued a Class A license must present satisfactry evidence t the city that its drivers wrk, n average, n mre than 20 hurs per week. The TNC must als present such evidence when applying fr renewal f a Class A license. As part f the applicatin fr an riginal license r a renewal, a TNC als must prvide the fllwing infrmatin: the full name, driver s license number and address f drivers registered with the TNC the license plate number, registered wner and the vehicle identificatin numbers f the vehicles registered with the TNC, with a dcument attesting that each vehicle meets the inspectin and vehicle standard requirements a list f wheelchair-accessible vehicles registered with the TNC evidence f the insurance plicies required under the city rdinance In additin, sle prprietrs and the authrized agents f TNCs rganized as crpratins, limited liability cmpanies, and partnerships must submit t fingerprinting and prvide their phtgraphs. Chicag s rdinance vids as cntrary t public plicy any terms r cnditins in the agreement between the TNC and the driver, r between the TNC and any custmer, that wuld act as a waiver f the TNC s liability t the driver, the custmer, r the public, r that wuld prhibit the driver frm engaging as a transprtatin netwrk driver with ther licensees. TNCs and their drivers are prhibited frm sliciting ptential passengers, and frm accepting street hails. TNC vehicles may nly be used t prvide prearranged transprtatin service. TNC drivers 41

43 are prhibited frm picking up passengers at designated taxicab stands r lading znes. Pending review by the city, they are als prhibited frm taking n passengers at O Hare Internatinal Airprt, Midway Internatinal Airprt and the McCrmick Place cnventin center. TNC vehicles may nt be parked n any public way fr lnger than is reasnably necessary t accept passengers wh have prearranged transprtatin services. A TNC s mbile app r ther platfrm must shw the passenger the driver s identificatin card, as well as a picture f the TNC vehicle the driver is apprved t use (including the license plate number). If the app allws drivers t rate their passengers, it must have a feature that allws passengers t pt ut frm being rated by drivers. TNCs may charge fares based n distance travelled r time elapsed, r based n distance travelled and time elapsed, r a flat prearranged fare, r a suggested dnatin. In any case, the TNC must display its fare rate n the digital platfrm that it uses t cnnect drivers and passengers. The platfrm must include a buttn fr displaying a fare qute fr any requested trip. Nt nly TNCs but als taxicabs and ther passenger carriers licensed by the city are authrized under the rdinance t charge rates that are higher than the standard rates displayed n a digital platfrm, but nly if the fllwing cnditins are met: custmers are ntified, either thrugh the website, app, ther digital platfrm, r , f the time perid when the higher fare rate will apply custmers requesting a trip have the ptin f btaining, via the digital platfrm, a reasnable fare estimate (expressed as a price range), in additin t any applicable rate multiplier the fare charged des nt exceed the estimate by mre than 20%, unless the custmer changes the destinatin r rute frm the ne initially requested the custmer requesting the ride expressly agrees t the fare estimate The city may adpt regulatins regarding the allwable amunts f fare increases. TNCs are required t keep recrds fr a minimum f three years and make them available t the city fr inspectin. TNCs must als prvide peridic reprts t the city that include the fllwing infrmatin: the number and percentage f custmers wh requested wheelchair accessible vehicles and the number f filled requests the number and percentage f rides requested and accepted, and the number f rides requested and nt accepted, by the TNC s drivers, rganized accrding t the gegraphic parameters and time frames specified by the city infrmatin n any f the TNC s drivers wh were alleged t have cmmitted a vilatin f the rdinance r their terms f service r wh have been suspended r banned frm driving fr the TNC, including any zer-tlerance cmplaints and the utcme f the investigatin int thse cmplaints 42

44 detailed infrmatin n any accident r ther incident that invlved the TNC s driver and that was reprted t the TNC, including the cause f the incident, and any amunt paid as cmpensatin t any party in the incident the average and mean number f hurs and miles each f the TNC s drivers spent driving fr the TNC In additin, fr law enfrcement and emergency respnse purpses, TNCs must prvide at the city s request access t real-time tracking f drivers and vehicles, including access t the driver s identifying infrmatin, GPS lcatin data, and whether the driver is engaged with a passenger. If specialized hardware r sftware is required fr real-time tracking, the TNC must prvide it t the city. The city may seek all applicable penalties against TNCs that vilate the city s rules, including fines, license suspensin, license revcatin, and restitutin r ther equitable relief. Specific penalties are t be set frth in regulatins. If the city is infrmed by a law enfrcement agency r a curt that a TNC has been charged with a felny arising in cnnectin with the TNC s business, the TNC s license will be suspended until final adjudicatin is made with respect t the charges. In additin t license applicatin fees ($10,000 fr Class A, $25,000 fr Class B) and the $0.10 per ride cllected fr the accessibility fund, the city levies a TNC tax f $0.20 per ride. TNCs are respnsible fr cllecting the tax frm vehicle wners and remitting it t the city. If the TNC fails t d s, then the driver is respnsible fr paying the tax directly. 43

45 5 Recmmendatins fr the Regulatin f TNCs in Virginia In preparing the recmmendatins set frth in this chapter, the study team cnsidered the applicability and adaptability f existing rules regarding ther types f passenger transprtatin in the Cmmnwealth (described in third chapter f this reprt), as well as regulatrs respnses t TNCs in ther jurisdictins (described in the furth chapter). The team als cnsulted stakehlders and slicited their suggestins as t hw best t regulate TNCs in Virginia. As described abve in sectin 2.2, stakehlder invlvement in the study was nging and invlved vigrus exchanges f ideas, drafts, suggestins, and revisins, all the way thrugh the publicatin f this reprt. It wuld vertax the reader t relate a full histry f these dialgues; the back and frth cmpelled all sides t retreat frm sme f the mre radical regulatry and deregulatry prpsals that were initially put frward, and t agree fr the mst part n the basic issues that the Cmmnwealth needed t tackle, if nt n the details f particular slutins t address them. In particular, there was a cnsensus, r at least a cncessin, that TNCs shuld nt be frced int the same regulatry mld as taxicabs, and a recgnitin that lcal deregulatin f taxis wuld be a thankless task, even if such deregulatin wuld level the playing field between taxis and TNCs. Abve all, there was a general agreement that the prtectin f cnsumers and the prmtin f public safety dictated a need fr prper rules, as well as a rle fr gvernment versight f TNC peratins. What fllws is a descriptin f the DMV study team s final recmmendatins fr the regulatin f TNCs in Virginia, alng with an explanatin f the reasning behind specific prvisins. While the study team believes that nearly all the recmmendatins have sme stakehlder supprt, the team als recgnizes that few are supprted unanimusly. Legislatin implementing the fllwing recmmendatins is attached as Appendix A t this reprt. Stakehlders respnses t the recmmendatins and draft legislatin have been cllected in Appendix E. 5.1 Summary f Regulatry Framewrk; Definitins In brief, the recmmendatin is t amend the Cde f Virginia t establish transprtatin netwrk cmpanies as a distinctive type f passenger transprtatin service that is issued its wn type f perating authrity and that is subject, like ther prviders f fr-hire passenger transprtatin, t its wn particular requirements and restrictins. As with cntract passenger carriers, nn-prfit tax exempt passenger carriers, sight seeing carriers, and nnemergency medical transprtatin carriers, DMV wuld authrize a TNC s peratins by issuing a certificate f fitness, rather than a certificate f public cnvenience and necessity. The TNC s perating authrity will be valid thrughut the Cmmnwealth. Current law authrizing lcal regulatin f existing types f passenger carriers (in particular, Va. Cde ) wuld remain unchanged. Hwever, lcalities wuld be precluded frm regulating TNCs, as well as the drivers and vehicles prviding transprtatin thrugh TNCs. The prpsed new laws wuld define a number f new terms related t TNC peratins. Sme f the key terms, which will be used in the fllwing pages, wuld be defined as fllws: Operatin f a TNC partner vehicle means ffering, making available, r using a TNC partner vehicle t prvide prearranged rides, including (i) any time a TNC partner is lgged 44

46 int a TNC platfrm shwing that the TNC partner is available t pick up passengers; (ii) any time a passenger is in the TNC partner vehicle; (iii) any time the transprtatin netwrk cmpany s dispatch recrds shw that the TNC partner vehicle has been dispatched; and (iv) any time the TNC partner has accepted a ride request thrugh the TNC platfrm and is en rute t a passenger. Persnal vehicle means a mtr vehicle that is nt used t transprt passengers fr cmpensatin except as a TNC partner vehicle. Prearranged ride means passenger transprtatin fr cmpensatin in a TNC partner vehicle arranged thrugh a TNC platfrm. The term includes the perid f time that begins when a TNC partner accepts a ride requested thrugh a TNC platfrm, cntinues while the TNC partner transprts a passenger in a TNC partner vehicle, and ends when the passenger exits the TNC partner vehicle. TNC insurance means a liability insurance plicy that specifically cvers liabilities arising frm a TNC partner s use f a vehicle in cnnectin with a transprtatin netwrk cmpany s TNC platfrm. TNC partner means a persn authrized by a transprtatin netwrk cmpany t use a persnal vehicle t prvide prearranged rides n an intrastate basis in the Cmmnwealth. TNC partner vehicle means a persnal vehicle authrized by a transprtatin netwrk cmpany and used by a TNC partner t prvide prearranged rides n an intrastate basis in the Cmmnwealth. TNC platfrm means any nline-enabled applicatin r digital platfrm ffered r utilized by a transprtatin netwrk cmpany that enables prearrangement f rides with TNC partners. Transprtatin netwrk cmpany means a persn wh prvides prearranged rides using a TNC platfrm that cnnects passengers with TNC partners. Nte that these definitins d nt encmpass any peratin invlving prfessinally chauffeured cmmercial vehicles (e.g., Uber Black), which will remain subject t current mtr carrier laws. 5.2 Licensing f TNCs Like existing types f passenger carriers, TNCs shuld have t: Maintain a registered agent in the Cmmnwealth fr service f prcess. File a $25,000 perfrmance bnd r letter f credit fr the first three years f peratin. These bnds are intended t help cver lsses incurred by TNC custmers as a result f fraud, breach f cntract, r ther vilatins f law in the cnduct f the business. In additin, DMV has fund that the perfrmance bnd requirement helps t ensure the financial fitness f a cmpany applying t perate as a mtr carrier. 45

47 File a standardized frm with DMV t demnstrate cmpliance with insurance requirements. Pay the fees assciated with granting and renewing authrity (see sectin 5.10, belw). As with thers t whm DMV issues a certificate f fitness, TNCs shuld have t cmplete a fitness examinatin, which wuld include a criminal backgrund check and driver recrd check f cmpany principals, and a review f the cmpany s recrds with the Better Business Bureau, the Cnsumer Prtectin sectin f the Office f the Attrney General, and DMV Mtr Carrier Services. DMV wuld als review any prtests related t the applicant s fitness that had been filed with the agency regarding the TNC s applicatin fr perating authrity. 5.3 Screening f Drivers Althugh TNCs already cnduct backgrund checks n prspective TNC partners, it is recmmended that Virginia fllw ther jurisdictins in statutrily requiring the TNCs t cnduct these backgrund checks, in specifying hw the checks are t be perfrmed, and in cdifying which ffenses will disqualify an individual frm wrking as a TNC partner in Virginia. Specifically, TNCs shuld be required t apply the fllwing standards t TNC partners: Criminal histry. Prir t authrizing an individual t act as a TNC partner in Virginia, and every tw years after such authrizatin, the TNC must review that individual s criminal histry. The criminal histry recrd check must be perfrmed in ne f tw ways: In cases where the TNC meets the individual in persn and verifies the individual s identity, the TNC may select a vendr t perfrm the criminal histry recrd check. (Sme TNCs, in at least sme cases, fllw an nline nbarding prcess, in which the TNC des nt meet the prspective TNC partner in persn.) In cases where the TNC des nt meet the individual in persn, the TNC must use a fingerprint-based criminal histry recrd check perfrmed by a law enfrcement agency. The study team arrived at this particular apprach after reviewing TNCs current practices with representatives frm Virginia State Plice. Althugh the criminal histry recrd checks TNCs were perfrming were generally satisfactry, it was discvered that nt every TNC reviewed individuals identity dcuments in persn. Law enfrcement strngly recmmended a fingerprint-based criminal histry recrd check in such cases, as a means f verifying identity and ensuring that the criminal histry recrds were matched t the crrect individual. The study team nted that the requirement shuld nt be unduly burdensme, since LiveScan fingerprinting technlgy enables fingerprints t be taken at mst DMV lcatins and frwarded t law enfrcement. Alng with each criminal histry recrd check, the TNC must check an individual s status in the Virginia s Sex Offender and Crimes Against Minrs Registry and the U.S. Department f Justice s Natinal Sex Offenders Public Website. 46

48 Driving histry. TNCs may nt allw anyne t act as a TNC partner in Virginia unless that individual is at least 21 years ld and hlds a valid driver s license. Prir t permitting an individual t act as a TNC partner, and every six mnths after an individual has becme a TNC partner, the TNC must check the individual s driver s license recrds in his r her state f licensure. The six-mnth review requirement is waived fr any TNC partner the TNC elects t have mnitred thrugh Driver Alert, DMV s driver recrd mnitring prgram, r a similar prgram ffered by anther state. Barrier ffenses. A transprtatin netwrk cmpany shall nt authrize an individual t act as a TNC partner in Virginia if that individual: is a persn fr whm registratin with the Sex Offender and Crimes Against Minrs Registry is required under Virginia law, r is listed n the U.S. Department f Justice s Natinal Sex Offenders Public Website; has ever been cnvicted f r has ever pleaded guilty r nl cntendere t any f the fllwing ffenses under Virginia law r under the cmparable law f anther jurisdictin: (i) a crime invlving fraud, as described in Chapter 6 f Title 18.2 r Chapter 5, Article 4 f Title 18.2; (ii) a sexual ffense under Chapter 4, Article 7 f Title 18.2, , r ; (iii) an act f vilence under ; (iv) any crime punishable as a felny in Virginia in the cmmissin f which a mtr vehicle was used; r (v) cnspiracy r attempt t cmmit any f the freging ffenses; within the preceding seven years has been cnvicted f r has pleaded guilty r nl cntendere t an ffense invlving DUI r underage drinking and driving; within the preceding five years has been cnvicted f r has pleaded guilty r nl cntendere t any felny invlving an ffense ther than thse enumerated in the secnd bullet; r within the preceding three years has been cnvicted f r has pleaded guilty r nl cntendere t any f the fllwing ffenses under Virginia law r the cmparable law f anther jurisdictin: (i) three r mre mving vilatins ; (ii) eluding a lawenfrcement fficer; (iii) reckless driving; (iv) perating a mtr vehicle in vilatin f the terms f a restricted license; (v) refusal t submit t a chemical test t determine the alchl r drug cntent f the persn s bld r breath; r (v) failure t stp and disclse identity at the scene f an accident. In additin t fllwing these statutry screening requirements, it is recmmended that TNCs be required t publish n their websites and digital platfrms all f the barrier ffenses listed in the Cde f Virginia, as well as any ther disqualifying ffenses and screening criteria that the TNC may have fr TNC partners. 47

49 5.4 Requirements fr Vehicles TNCs shuld be required t assciate each TNC partner with a TNC partner vehicle that meets the fllwing criteria: The vehicle must be a persnal vehicle. The vehicle must nt have been issued a certificate f title, either in Virginia r in any ther jurisdictin, branding the vehicle as salvage, nnrepairable, rebuilt, r any equivalent classificatin. The vehicle must be legally registered in the state where it is titled. The vehicle must have a seating capacity f n mre than seven passengers, excluding the TNC partner. This maximum seating capacity is slightly higher than the maximum allwed fr taxicabs (six passengers, excluding the driver), but wuld allw fr the peratin f sme minivans and SUVs that might therwise be excluded. The vehicle must be insured by a plicy r plicies prviding cverage fr cmmercial use f the vehicle. All vehicles registered fr TNC purpses and perating in the Cmmnwealth must have valid Virginia safety inspectin and display a valid Virginia safety inspectin decal. This includes any vehicles that are titled and registered in anther jurisdictin. The vehicle must be registered fr TNC use with DMV, regardless f whether r nt the vehicle is plated in Virginia r anther jurisdictin, and must display a uniquely numbered identificatin marker issued by DMV specifically fr that vehicle. The vehicle wner r lessee is respnsible fr this registratin, and must cmplete the registratin prcess nline if and when DMV makes nline registratin available. If at any time DMV receives ntice that the TNC insurance cvering the vehicle has been canceled, the agency will revke the identificatin marker. In additin, DMV may deny, suspend r revke an identificatin marker fr any f the fllwing reasns: the vehicle is nt prperly registered the vehicle is sld the TNC partner is using the vehicle fr invalid peratins (e.g., transprting passengers fr cash fares). The DMV registratin and identificatin marker requirements prvide a way fr law enfrcement t verify that a vehicle has been authrized t perate as a TNC partner vehicle, and fr DMV t cllect and disclse infrmatin fr lcal gvernments and insurance cmpanies, cnsistent with the prvisins f f the Cde f Virginia. The identificatin marker als serves as anther indicatr fr the cnsumer that a vehicle is a legitimate TNC partner vehicle. 48

50 In additin t the DMV-issued identificatin marker, the vehicle must display a TNC-issued identificatin marker while perating as a TNC partner vehicle. This identificatin marker must identify the TNC with which the vehicle is assciated and must be displayed in a manner that cmplies with Virginia law (i.e., its size and lcatin must nt interfere with the safe peratin f the vehicle). The identificatin marker must be f such size, shape and clr as t be readily visible during daylight hurs frm a distance f 50 feet while the vehicle is statinary. Althugh the identificatin marker may be remvable, it must remain visible at all times while the vehicle is perating as a TNC partner vehicle. 5.5 Insurance Requirements Recgnizing that Califrnia has had the mst experience with regulating TNCs generally, and has labred lng and hard in particular t craft a cmprehensive slutin n the matter f insurance, the recmmended insurance requirements are largely the same as thse enacted in 2014 Cal. Stat. ch. 389 (summarized abve in sectin 4.1.3), with nly the fllwing mdificatins: Sme clarifying language has been added t make it cnsistently clear that TNC insurance may be prvided either thrugh a cmmercial plicy r thrugh prvisins in, r amendments r endrsements t, a persnal autmbile liability plicy. The primary effect f this clarificatin is t add a caveat t the disclsures TNCs must make t TNC partners abut what their persnal insurance will nt cver: cverage fr certain lsses ccurring during the peratin f a TNC partner vehicle may nt be cvered by the TNC partner s persnal insurance plicy, unless that persnal insurance plicy expressly prvides such cverage. It shuld be nted that, at the present time, TNC insurance is nt available thrugh any persnal autmbile liability insurance plicy; hwever, the intrductin f such plicies in the near term des appear likely. A prvisin has been added in respnse t cncerns that several stakehlders raised abut waivers f liability cntained in several TNCs terms f service and ther cntracts f adhesin with TNC partners and passengers. That prvisin, mdeled n Va. Cde , stipulates that n cntract, receipt, rule, r regulatin shall exempt any TNC frm the liability which wuld exist had n cntract been made r entered int and n such cntract, receipt, rule, r regulatin fr exemptin frm liability fr injury r lss ccasined by the neglect r miscnduct f such TNC shall be valid. The law further stipulates that liability here means the liability impsed by law upn a TNC fr any lss, damage, r injury t passengers in its custdy and care as a TNC. While representatives frm the TNC industry accepted the basic liability limits fr TNC insurance ($1 millin during a prearranged ride; at all ther times during a prearranged ride, $50,000 per persn and $100,000 per incident bdily injury and $30,000 prperty damage, with crrespnding limits fr uninsured and underinsured mtrists), they strngly urged Virginia nt t fllw Califrnia in requiring TNCs t prvide an additinal $200,000 in excess liability insurance. The study team nevertheless was mved by the fllwing cnsideratins t recmmend that Virginia als require TNCs t prvide excess liability insurance cverage f at least $200,000 during thse times when nly the lwer limits f the TNC insurance plicy ($50,000/$100,000 bdily injury and $30,000 prperty damage) are in effect: 49

51 A 2012 study by the U.S. Department f Transprtatin s Jhn A. Vlpe Transprtatin Systems Center assessed the adequacy and effectiveness f the current levels f financial respnsibility in meeting carrier liabilities. 36 The study weighed the benefits f imprved cmpensatin fr crash victims, internalizatin f freight and passenger transprtatin csts, and reductin in crashes invlving trucks and buses, against the csts impsed n cmmercial vehicle peratins, the insurance industry, and ther relevant cnsideratins. The study fund: that catastrphic mtr carrier related crashes are relatively rare, but csts fr severe and critical injury crashes can easily exceed $1 millin; that insurance premiums have declined in real terms since the 1980s; and that current insurance limits d nt adequately cver catastrphic crashes, mainly due t increased medical csts. These findings have prvided preliminary supprt fr increasing minimum insurance requirements frm their current levels. As required under the mst recent federal surface transprtatin reauthrizatin, MAP- 21, 37 FMCSA is currently evaluating the apprpriate level f financial respnsibility fr mtr carriers and has placed this rulemaking amng their tp pririties. The cst benefit evaluatin that FMCSA will undertake in determining whether t increase the financial respnsibility requirements will include an examinatin f the fllwing impacts: Reductin in the exprting f crash csts nt the general public. Remval f unsafe carriers frm the industry. Imprve the behavir f mtr carriers that cntinue t perate. Reduce industry wide crash csts by remving unsafe carriers and encuraging safer behavir amng remaining carriers. Imprve efficiency f insurance market by screening ut carriers at risk fr highcst crashes and imprving industry s ability t match cst t risk. Lss f beneficial service if safe carriers are driven ut by higher insurance rates. 5.6 Operatinal Requirements and Restrictins fr TNCs T prmte public safety, prtect cnsumers frm fraud, and ensure that passenger transprtatin services are prvided in a nndiscriminatry manner t all Virginians, TNCs shuld be required t bserve the fllwing additinal peratinal requirements and restrictins: 36 U.S. Department f Transprtatin, Federal Mtr Carrier Safety Administratin, Financial Respnsibility Requirements fr Cmmercial Mtr Vehicles, FMCSA-RRA (2012). 37 Mving Ahead fr Prgress in the 21st Century Act, Pub. L. N , 126 Stat. 405 (2012). 50

52 A TNC platfrm must include the fllwing infrmatin: the TNC s screening criteria fr TNC partners as well as the barrier crimes described abve under sectin 5.3; the TNC s zer-tlerance drug/alchl plicy; the methd by which the TNC calculates fares r the applicable rates being charged and an ptin fr the custmer t receive an estimated fare; the standards and maintenance plicies that apply t TNC partner vehicles; the training and testing plicies that apply t TNC partners; the methd fr reprting a TNC partner the passenger reasnably suspects was under the influence f drugs r alchl while perating the TNC partner vehicle; and cntact infrmatin and methds fr reprting cmplaints. A TNC must ntify its TNC partner f the pssibility that cmmercial use f the TNC partner vehicle may vilate the terms f a vehicle financing agreement. A TNC must prvide (via the TNC platfrm r therwise) its TNC partners with prf f any applicable insurance plicy and must require each TNC partner t carry evidence f any cmpany plicy. The TNC must require the TNC partner t present such prf t law enfrcement r an airprt authrity upn request. A TNC must prvide a credential t each TNC partner, which may be displayed as part f the TNC platfrm, that includes the fllwing: the TNC s name r lg; the name and a phtgraph f the TNC partner; the identifying number issued by the TNC t the TNC partner; and the make, mdel and license plate number f the TNC partner vehicle. A TNC must require the TNC partner t present this credential t law enfrcement, an airprt authrity, r a rider upn request. A TNC platfrm must prvide a persn prearranging a ride with the fllwing infrmatin, befre the passenger enters the TNC partner vehicle: a phtgraph f the TNC partner wh will prvide transprtatin; the TNC partner s name; and the TNC partner vehicle s license plate number. A TNC must prvide markings fr each TNC partner vehicle that meet the criteria utlined abve in sectin 5.4, and must require each TNC partner t display the marking at all times while perating a TNC partner vehicle. 51

53 A TNC must make the fllwing infrmatin available thrugh the TNC platfrm at all times that a TNC partner vehicle is in peratin: the name f the TNC; the name and TNC-issued identifying number f the TNC partner; the TNC partner vehicle s license plate number; and the date, apprximate time, and lcatin where the passenger will be picked up. This infrmatin must be made available immediately upn request t authrized representatives f DMV, law enfrcement agencies, and airprt authrities. The TNC must retain the infrmatin and make it available fr inspectin as prvided by law. A TNC platfrm must prvide the persn prearranging a ride with an electrnic receipt that includes the fllwing: a map f the rute taken; the ttal fare; the date and time f trip; the TNC partner s pht, name, and TNC-issued identifying number; and TNC partner vehicle infrmatin, including the vehicle s make, mdel, year, and license plate number. A TNC s service plicy must nt discriminate n the basis f age, race, sex, disability, rigin r destinatin f the trip, r n any ther basis prhibited by state r federal law. DMV may deny, suspend r revke the perating authrity r levy civil penalties against a TNC fr failure t cmply with the Americans with Disabilities Act f 1990, 42 U.S.C et seq. r the Virginians with Disabilities Act, Va. Cde et seq. A TNC may nt impse additinal charges fr prviding services t persns with physical r mental disabilities because f thse disabilities. A TNC platfrm must nt allw a TNC partner t refuse service withut gd cause and in accrdance with the requirements described belw in sectin 5.7. A TNC may nly dispatch rides t a TNC partner/tnc partner vehicle cmbinatin that has been apprved by the TNC as part f the TNC partner s applicatin prcess with the TNC. TNCs may prvide service n a prearranged basis nly and nly thrugh a TNC platfrm. Street hails and all ther arrangements fr services are prhibited. TNCs may nt cnduct any peratins n the prperty f r int any airprt, unless such peratins are authrized by the airprt authrity invlved. In additin, DMV shuld be authrized t treat a TNC s failure t abide by any f the prvisins listed abve as grunds fr suspensin r revcatin f the TNC s perating authrity, and as grunds 52

54 fr the impsitin f criminal r civil penalties as prvided in Va. Cde and Operatinal Requirements and Restrictins fr TNC Partners The fllwing recmmendatins regarding TNC partner peratins mirrr and cmplement the recmmendatins set frth abve in ther sectins. A TNC partner must carry prf f all insurance plicies that may apply and present that prf t law enfrcement, an airprt authrity, r a passenger upn request. A TNC partner must carry prf f the vehicle s registratin fr use as a TNC partner vehicle and f a valid Virginia safety inspectin and present that prf t law enfrcement r an airprt authrity upn request. A TNC partner must carry the TNC-prvided identificatin credential described abve in sectin 5.6 and display the credential t law enfrcement, an airprt authrity, r a passenger upn request. A TNC partner must display the TNC-issued vehicle marking described abve in sectin 5.4 at all times while perating a TNC partner vehicle. A TNC partner must make the fllwing infrmatin available thrugh the TNC s nlineenabled applicatin r platfrm at all times that a TNC partner vehicle is in peratin: the name f the TNC; the name and TNC-issued identifying number f the TNC partner; the TNC partner vehicle s license plate number; and the date, apprximate time, and lcatin where the passenger will be picked up. This infrmatin must be made available immediately upn request t authrized representatives f DMV, law enfrcement agencies, and airprt authrities. The TNC must retain the infrmatin and make it available fr inspectin as prvided by law. A TNC partner must prvide services t the general public withut discriminatin n the basis f age, race, sex, disability, rigin r destinatin f the trip, r n any ther basis prhibited by state r federal law. A TNC platfrm must allw passengers t indicate whether they require a wheelchairaccessible vehicle r a vehicle therwise accessible t individuals with disabilities. (This requirement must be met n later than July 1, 2016.) A TNC partner must permit a service animal t accmpany a rider n a prearranged ride. A TNC partner may nt refuse t prvide service t a passenger unless: the individual is acting in an unlawful, disrderly, r endangering manner; 53

55 the individual is unable t care fr himself r herself and is nt in the charge f a respnsible cmpanin; r the TNC partner has already cmmitted t prviding a ride fr anther passenger. A TNC partner may nly perate a TNC partner vehicle authrized by DMV and nly in a TNC partner/tnc partner vehicle cmbinatin that has been apprved by the TNC. TNC partners may prvide service n a prearranged basis nly and may nly accept arrangements fr services with TNC riders thrugh a TNC platfrm. A TNC partner may nt therwise arrange r accept any cmpensatin fr fr-hire transprtatin services. TNC partners are prhibited frm accepting payment fr fares. Payments may nly be made electrnically via the TNC platfrm. A TNC partner must access the TNC platfrm in a manner cnsistent with Virginia traffic laws. A TNC partner may nt perate a mtr vehicle mre than 13 hurs in any 24-hur perid, as prvided in Va. Cde A TNC partner must infrm the TNC f any f the fllwing: a change in the TNC partner vehicle s registratin; a change in the status f the TNC partner s driver s license; a change in the insurance cvering the TNC partner vehicle; r any mtr vehicle mving vilatins, r arrests r cnvictins fr criminal ffenses, that culd bar the TNC partner frm acting as a TNC partner. DMV shuld be authrized t treat a TNC partner s failure t abide by any f the abve prvisins as grunds fr the revcatin r suspensin f the TNC partner vehicle registratin, and as pssible grunds fr criminal r civil penalties as prvided in Va. Cde and Nndiscriminatin and Access t Service Apart frm the peratinal requirements and restrictins described abve in sectins 5.6 and 5.7, n ther steps regarding nndiscriminatin and access t service are recmmended at the present time. It shuld be nted hwever that nne f the recmmendatins set frth in this chapter affects lcalities authrity t regulate the taxicab industry, r their authrity t establish lcal requirements fr vehicles that service thse with disabilities r t subsidize such services. If evidence emerges ver time that the availability f wheelchair-accessible r ther transprtatin ptins has decreased, a fee culd be levied n TNCs, TNC partner vehicles and/r TNC rides and distributed t lcalities t help fund alternatives fr prviding transprtatin services t underserved ppulatins. 54

56 5.9 TNC Recrd Keeping and Reprting Requirements Much f the regulatry apparatus recmmended abve invlves TNCs actively screening and mnitring drivers and ensuring that vehicle, insurance, and ther requirements are met. T ensure that the TNCs meet their respnsibilities under the prpsed new laws, the fllwing recrdkeeping and reprting requirements shuld be enacted: DMV shuld be authrized t cnduct peridic reviews f TNCs t cnfirm cmpliance with: partner screening requirements and peratinal regulatins; vehicle screening requirements and peratinal regulatins; requirements t disclse certain infrmatin t partners; and ther peratinal requirements. TNCs must be required t keep and maintain the fllwing recrds t demnstrate such cmpliance: TNC partner criminal histry reprts; TNC partner sex ffender registry checks; TNC partner driving recrd checks, including any recrds assciated with participatin in an nging TNC partner mnitring prgram such as DMV s Driver Alert Prgram; prf f required primary insurance cverage as prvided abve under sectin 5.5; prf that TNC partners age and driving status were checked and cnfirmed; prf that TNC partner vehicles are validly registered and have a current Virginia safety inspectin; prf that TNC partners were ntified f ptential lien interest vilatins and f TNC insurance cverage and limits; and any ther data identified by DMV as necessary t cnfirm cmpliance. Fr purpses f cmpliance review, such recrds must be kept and retained fr three years in a manner that permits systematic retrieval. Such recrds must be made available t DMV representatives upn request fr the purpse f evaluating cmpliance, and must be presented t DMV in a frmat acceptable t the Cmmissiner. DMV, tgether with lcal, state, and federal law enfrcement and airprt authrities, is charged with uphlding the law. TNCs shuld be required t cperate with law enfrcement fficials in the perfrmance f their fficial duties, and t keep and maintain the fllwing recrds fr that purpse: data n TNC partner activity while lgged int the TNC platfrm, including ride-specific data regarding the rigin, destinatin, date, and time f travel; 55

57 any actins taken against a TNC partner; any cntracts r agreements between the TNC and TNC partners; data identifying TNC partners (name, date f birth, driver s license number and issuing jurisdictin); data identifying TNC partner vehicles (make, mdel, mdel year, vehicle identificatin number (VIN), license plate number and issuing jurisdictin); and summary data regarding the number f TNC partners and TNC partner vehicles. Any f the abve infrmatin btained by DMV, law enfrcement, r airprt fficials shuld be cnsidered privileged infrmatin and shuld nt be subject t disclsure except as fllws: On written request f a DMV, law enfrcement r airprt fficial, such infrmatin may be released t the requesting fficial if the infrmatin is required t carry ut fficial functins and the infrmatin will nly be used by such fficial fr the perfrmance f their fficial duties. Infrmatin btained by DMV in the curse f peridic cmpliance reviews will nt be subject t disclsure thrugh a curt rder. Hwever, this will nt prevent a party frm seeking such infrmatin directly frm a TNC. Failure t abide by any f the recrdkeeping prvisins described abve shuld be grunds fr DMV t suspend r revke a TNC s perating authrity. In additin t cmpliance review and law enfrcement, there are valid insurance reasns fr TNCs t meet certain recrd-keeping standards. Like Califrnia, Virginia shuld require TNCs and their insurers, in a claims cverage investigatin, t cperate with insurers that are invlved in the claims cverage investigatin t facilitate the exchange f infrmatin, including the prvisin f dates and times f an accident invlving a TNC partner and the precise times that the TNC partner lgged n and ff the TNC platfrm Fees The study team estimated the first year csts f implementing the abve recmmendatins at apprximately $632,000 and the annual recurring csts at $310,000. Nearly tw thirds f the annual recurring csts ($192,000) reflects the expense f hiring an additinal three full-time emplyees in DMV s law enfrcement divisin t review TNCs cmpliance with the law. Additinal licensing, cmplaint-handling, insurance mnitring, and ther expenses accunt fr the balance f the ttal annual cst. The fllwing schedule f fees is designed t allw the csts f the TNC prgram t be fully cvered: An annual fee f $50 fr each vehicle registered as a TNC partner vehicle. The fee may be paid either by the TNC partner r by the TNC n the TNC partner s behalf. 56

58 An initial license fee f $70,000 t be paid by the TNC. The fee fr renewal f the TNC s certificate will be $3,000. The adequacy f these fees is based n the study team s estimates that five TNCs wuld apply fr a certificate t perate in Virginia (generating $350,000 in initial license fee revenue and $15,000 in annual revenue frm annual renewals) and that 5,900 vehicles 38 wuld be registered fr use as TNC partner vehicles (generating $295,000 in registratin fees). It is recmmended that this fee structure be reviewed ne year after implementatin t determine if csts are fully recvered r if these fees shuld be adjusted t achieve that bjective. Virginia: 5, The estimate was based n adding 500 t the apprximate number f taxicabs currently perating in 57

59 Appendix A. Legislatin Implementing the Study Recmmendatins

60 Appendix B. Letters Charging DMV with Leading the Study

61 Appendix C. Legislatin frm the 2014 Sessin f the General Assembly

62 Appendix D. Study Participants

63 David Dunstn Patrick Harrisn Je Hill DMV Study Team Janet Smt Prject Manager Rena Hussey Barbara Kltz Andrew Owens Thmas Penny Judy Petersen Rbert White Craig Whitham Je Alberti Capital Regin Airprt Cmmissin Chris Arabia Department f Rail and Public Transprtatin Jhn Ayers Marks & Harrisn Jhn Bailey State Crpratin Cmmissin Mary Bannister State Crpratin Cmmissin Laura Bateman City f Hamptn Dnald Beatty State Crpratin Cmmissin Rbert Becker Natinwide Insurance Try Bell Capital Regin Airprt Cmmissin Other Participants Jhn Swansn Office f Gvernr Terence R. McAuliffe Nichlas Dnhue Office f the Secretary f Transprtatin Terry Bellamy Washingtn Metrplitan Area Transit Cmmissin Angela Bezik Williams Mullen B. R. Blevins III Virginia Assciatin f Cunties Rbert Bradshaw Independent Insurance Agents f Virginia Aarn Brand Arent Fx LLP Lawrence Brenner Washingtn Metrplitan Area Transit Cmmissin Randall Burdette Department f Aviatin Craig Burns Department f Taxatin Lynwd Butner Butner Cnsulting James Campbell Virginia Assciatin f Cunties Patricia Carrll Arlingtn Cunty Bernard Catn City f Alexandria Rbert Catrn Alcalde & Fay Annabel Chang Lyft Rachelle Chng Sidecar Michael Cper Metrplitan Washingtn Airprt Authrity Angie de la Barrera Arlingtn Cunty Thmas Depasquale Curb Maria Diaz Access Independence, Inc. Julianna Dime Williams Mullen

64 Nelle Dminguez Fairfax Cunty Dug Duglas Virginia Mtrcach Assciatin Charles Duvall Lindl Crpratin Hazem El Bagdadi Dulles Airprt Taxi Craig Feister Federal Mtr Carrier Safety Administratin Jeff Fisher Dulles Airprt Taxi Eric Fiske Office f the Attrney General Clnel W. Steven Flaherty Virginia State Plice Gus Fuldner Uber Dennis Gallagher Virginia Taxicab Assciatin Captain Frank Glick Virginia State Plice Vicki Harris State Farm Insurance Cmpany Kelly Hickk Resurces fr Independent Living, Inc. Paul Hicks Fairfax Cunty William Hdges City f Virginia Beach Chief Stephen Hll Metrplitan Washingtn Airprt Authrity Maureen Hwell Virginia Assciatin f Centers fr Independent Living Jseph Hudgins Independent Insurance Agents f Virginia C. C. Hundley Henric Cunty Plice Divisin Katie Jhnsn State Crpratin Cmmissin Sctt Jhnsn Lindl Crpratin Jhn Jnes Virginia Sheriffs Assciatin Skip Jnes FlranceGrdnBrwn Anne Leigh Kerr Trutman Sanders Strategies Spencer Kimble Alexandria Yellw Cab Dwight Kines Velia Transprtatin Charlie King Red Tp Cab Cmpany Justin Kintz Uber Nami Klaus Metrplitan Washingtn Airprt Authrity Kevin Kzil disability Resurce Center f the Rappahannck, Inc. J. Christpher LaGw Law Offices f J. Christpher LaGw, Virginia Jseph Lala Gergetwn Insurance Dnna Leaman United Services Autmbile Assciatin A. T. Tm Leary III Henric Cunty Plice Divisin Je Lerch Virginia Municipal League Jn Liss Virginia Taxi Drivers United Gerge Lyle State Crpratin Cmmissin S Jhn Massud Dulles Airprt Taxi, Arlingtn Blue Tp Cabs Faruz Massud Dulles Airprt Taxi Lieutenant Rnald Maxey Virginia State Plice Margaret McKeugh Metrplitan Washingtn Airprt Authrity Karen Michalski Virginia Assciatin f Centers fr Independent Living Jennifer Mitchell Department f Rail and Public Transprtatin William Mrrw Washingtn Metrplitan Area Transit Cmmissin Rss Muggler Cmmissiner f Revenue, City f Hamptn Edward Mullen ReedSmith LLP Rebecca Nichls State Crpratin Cmmissin Mitchell Nuckles Cmmissiner f Revenue, City f Lynchburg Jseph Okpaku Lyft Dennis Paddeu Rappahannck Area Agency n Aging

65 Jeffrey Palmre ReedSmith LLP Steven Pearsn Law Office f Steven W. Pearsn PC Tripp Perrin Lindl Crpratin Lieutenant Archie Pllard Fairfax Cunty Plice Department Jhn Ptter Metrplitan Washingtn Airprt Authrity Thmas Rakwski Arlingtn Cunty Plice Department Dris Ray ENDependence Center f Nrthern Virginia Jack Rlfe Gergetwn Insurance Service, Inc. Richard L. Savage Eckert Seamans Cherin & Melltt, LLC Dana Schrad Virginia Assciatin f Chiefs f Plice Curtis Sctt Uber JAnne Sctt State Crpratin Cmmissin Ellen Skgsberg Ludun Cunty Disability Services Bard Glenn Staffrd Lve Limusine Beth Stevens Sidecar Stephen Stry James River Transprtatin Kyle Summers Alexandria Yellw Cab Judy Swystun Black & White Cars, Inc. Sam Tatevsyan Hlland & Knight Richard Van Damme Richmnd Internatinal Airprt Paul Walsh Superir Executive Transprtatin Zuhairah Washingtn Uber Rbert Werth Diamnd Transprtatin Janet Westbrk Office f the Attrney General MPO Dwayne Whitehead Virginia Beach Plice Department Lieutenant Cmmander Jimmie Wideman City f Hamptn Plice Divisin Larry Williams L W Transprtatin Melinda Willis State Crpratin Cmmissin Jerri Wilsn City f Newprt News Michael Wds Trutman Sanders Strategies Steve Yaffee Fairfax Area Disability Services Bard Lesa Yeatts City f Hamptn

66 Appendix E. Stakehlder Cmments n the Draft Reprt and Legislatin