TLPA Mid-Year International Leadership Conference Niagara Falls July 19, 2012

1. TLPA Mid-Year International Leadership Conference Niagara Falls July 19, 2012

2. “Rogue” Smartphone Applications for Taxicabs and Limousines: Innovation or Unfair Competition? – A National Regulatory Review of Safety, Accountability and Consumer Protection Legal Issues.

3. Presented by Professor Matthew W. Daus, Esq. • President, Int’l Assoc. Transportation Regulators (IATR) • Distinguished Lecturer, Transportation Research Center, City University of New York • Partner & Chairman, Transportation Practice Group Windels Marx Lane & Mittendorf, LLP Contact: mdaus@windelsmarx.com 156 West 56th Street | New York, NY 10019 T. 212.237.1106 | F. 212.262.1215

4. Yes, there is an app for that, but…

5. Is it the “Wild West”?

6. Taxi & Livery Technology Go to an app, Take out your phone, Book your car!

7. Smartphone Apps • New apps are constantly entering the market • Apps are used for electronic hailing • Arrange rides or share rides • Expedite payments

8. ALL APPS ARE NOT CREATED EQUAL!

9. Smartphone Booking Applications • Users request a vehicle through a smartphone app. • The driver can accept the fare, paying a small commission, or skip it. • Apps are available on: iPhone, Blackberry, Android, etc.

10. Prearrangement or Electronic Street Hail? • Smartphone apps introduce the “electronic hail.” • An “electronic hail” is similar to a street hail, but through an individual’s smartphone. • Jurisdictions like Chicago, Los Angeles, San Francisco and Washington, D.C. have not addressed this new concept in their regulations……yet. Legal Issues

11. “Rogue” Apps cut out the dispatch companies and deal directly with drivers, some without licenses. • Electronic hails will make it difficult to ensure properly licensed vehicles are picking-up passengers. • Some cities, like Seattle, prohibit third parties from hiring for-hire vehicle services. • NYC has issued an Industry Notice that apps cannot dispatch taxicabs or directly dispatch FHV drivers Legal Issues

12. Safety Concerns • Apps may not be exclusively associated with a specific livery or taxicab business license. • If these new apps continue to avoid regulation, the public may be riding in unauthorized vehicles. Legal Issues

13. Application Name Confusion • An app uses the terms “taxi” or “cab” in its name or content, but is neither licensed nor meets the definition of a taxicab. • By developers using these terms in the name of the app, it creates consumer confusion. • For example, San Francisco responded with a cease and desist letter in one case. Legal Issues

14. Illegal Service Refusals • Many jurisdictions make it illegal to refuse any potential fares. • Apps could allow the driver to accept or decline potential dispatches. • There is the potential for drivers to take advantage of the app by discriminating against consumers; offering service to some, and rejecting others. Legal Issues

15. “Fair” Fares • Fare regulations can serve two purposes: • 1) consumer protection; and • 2) the ability to easily distinguish different types of transportation services. • Some apps operate by charging passengers at the end of their trip, therefore the consumer has no assurance as to the final fare, or whether or not it “IS” fair. • For example, DC conducted a “sting” on a driver who would not provide a set fare for the passenger. Legal Issues

16. Is It a Taximeter? • Taxis are usually required to have a taximeter, and only taxicabs charge fares based on distance and time. • These taximeters are regulated indirectly by the National Institute of Standards & Technology (NIST) via Handbook 44, and are calibrated and inspected in each State. • Apps might use GPS to calculate the fare based on time, mileage and demand – this does not meet taximeter standards. Legal Issues

17. BOTTOM LINE! Many jurisdictions are struggling to understand the operation of these apps.

18. Next Steps?

19. IATR App Committee • The purpose of the App Committee is to: • develop a model code of regulations for potential adoption in each jurisdiction; • to ensure smartphone app technology can exist fairly, safely and with accountability to protect the consumer; • to protect existing businesses against unfair competition; • to obtain input and work with the industry and technology stakeholders.

20. IATR App Committee • Chaired by the IATR President; • IATR Committee is still in formation; • Windels Marx will be drafting model regulations for regulator review; • IATR Board may take clear position on rogue apps and engage in lobbying, media relations and other appropriate activities and research.

21. IATR App Committee Matthew W. Daus, Chair Boston New York City Australia Chicago Philadelphia Montreal Wash., D.C. San Francisco Toronto San DiegoLos Angeles Seattle

22. IATR App Committee • Will produce model regulations for app standards to be presented and unveiled for public comment, input and discussion at the 25th Anniversary IATR Conference in Washington, DC • Technology Day: “There’s an App for That” To be Presented on November 16, 2012