Transportation Network Companies in Virginia
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- Jayson King
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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
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