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Transportation Network Companies (TNCS) – The Response of Regulators AIRPORT GROUND TRANSPORTATION ASSOCIATION. Phoenix, Arizona September 14 - 17, 2014. Professor Matthew W. Daus, Esq. IATR President. Professor Matthew W. Daus, Esq.
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Transportation Network Companies (TNCS) – The Response of Regulators AIRPORT GROUND TRANSPORTATION ASSOCIATION Phoenix, Arizona September 14 - 17, 2014 Professor Matthew W. Daus, Esq. IATR President
Professor Matthew W. Daus, Esq. • Former Commissioner/Chair, NYC Taxi & Limousine Commission • President, International Association of Transportation Regulators • Distinguished Lecturer, US DOT Transportation Research Center City University of New York, The City College of NY (Region 2) • Partner & Chairman, Transportation Practice Group Windels Marx Lane & Mittendorf, LLP Contact: mdaus@windelsmarx.com or mdaus@iatr.org 156 West 56th Street | New York, NY 10019 T. 212.237.1106 | F. 212.262.1215
TTP,TNC,TNP… • No matter the term you use - it is safe to say that the advent of “booking technology” in the transportation space has disrupted the industry, and does not seem to be slowing down. • TRANSPORTATION TECHNOLOGY PROVIDERS • TRANSPORTATION NETWORK COMPANIES • TRANSPORTATION NETWORK PROVIDERS
What is a TNC? • The CPUC defines TNCs as: an organization whether a company, partnership, sole proprietor, or other form, [operating in California] that provides transportation services for compensation using an online-enabled application (app) or platform to connect passengers with drivers using their personal vehicles.
PINK FLOYD or FRAUD? • TNCs entered the market in 2011. • Members of the public, industry, and the regulatory community have reacted fiercely.
Litigation & Legislation • TNC related issues and business practices are being litigated around the country. • Local and state regulators have also introduced rulemaking proceedings and taken legislative action in an attempt to deal with the proliferation of TNCs.
Litigation & Legislation • Recently, jurisdictions like Colorado, California, Seattle, Washington and the District of Columbia have made legislative efforts to further address TNCs.
New Legislation & Regulations • New TNC legislation and regulations vary from imposing light licensing requirements and self-reporting standards to none at all. • Primary issues: • Insurance coverage • Driver criminal background checks • Accessibility
Insurance California • Assembly Bill 2293 requires TNCs to provide commercial insurance once the driver activates the app. Primary policy must have at least $750K coverage; lower primary coverage in the “App On-to Match” timeframe to: $50K/$100K/$30K with excess coverage of $200K. Colorado Senate Bill 14-125 • TNCs must maintain liability insurance providing a minimum of $1M coverage which applies all times a driver is logged onto the app. • Must disclose to passengers and drivers that personal policies may not provide coverage for these commercial transactions.
Insurance Seattle TNC Agreement • TNCs must provide $100K/$300K/$25K liability coverage while drivers are active on the app and/or looking for hailing customers • Proposed amendment to require that TNC insurance be “exclusive” during all times a driver is active on the app was voted down in a 5-4 vote. DC Transportation Network Services Innovation Act of 2014 • Maintain a commercial policy of at least $1M per incident for accidents which applies from the time a driver accepts a trip request until the completion of the trip. • Lower minimums when app is on, but no match made: $50K/$100K per accident/$25K for property damage (not primary).
Driver Background Checks California • TNC must conduct national criminal background checks on all of its driver-applicants using the applicant’s social security number. • One-year driving history from TNC drivers, and quarterly thereafter; TNCs must perform driver record checks through the DMV. Colorado • TNC drivers must pass a criminal background and driving history check. • Drivers will be required to obtain a criminal history check every five years while serving as a driver.
Driver Background Checks Seattle • TNC drivers will undergo background checks but details have not yet been released. District of Columbia • TNC shall conduct, or have a third party conduct, a local and national criminal background and driving record check driver-applicants going back 7 years.
Accessibility California • TNCs must endeavor to provide equal access to all consumers. • Public hearings scheduled in September and October to discuss how TNCs are serving the disabled community. Colorado • TNC “shall provide services to the public in a nondiscriminatory manner, regardless of…disability, or other potentially discriminatory factor that could prevent customers from accessing transportation.” • TNC cannot impose additional charges for providing services to persons with physical or mental disabilities. • If a ride with physical or mental disabilities requires the use of mobility equipment, a driver shall store the mobility equipment in the vehicle during a prearranged ride.
Accessibility Seattle • TNCs must impose a ten-cent per ride surcharge to go towards the City’s accessibility fund. • TNCs must provide passengers requesting accessibility service with contact information for an accessible taxi dispatch. District of Columbia • Proposed Bill does not address accessibility.
IATR Model Regulations In 2013, the IATR prepared model regulations to address transportation technology apps: • These regulations promote direct or indirect licensure. • The model regulations have either been adopted or introduced by regulators in rulemaking proceedings in Cambridge, MA; Austin, TX and others. • The model regulations are available at http://www.windelsmarx.com/resources/documents/IATR%20Model%20Regulations%20(10890808).pdf
New IATR Model Regulations for Accessibility This year, the International Association of Transportation Regulators drafted Model Regulations for Taxi & For-Hire Vehicle Accessibility: • TNCs are to be held legally to the same exact standards as taxis & FHVs; • TNC's would be required to contribute funding to an "accessibility lockbox“; • Creates a funding mechanism by which municipalities would designate a single agency to manage the funding and dedicate it towards accessible transportation initiatives; • Additional funding would be provided by a per trip surcharge and cost savings from integration of taxis in paratransit. Model Rules available at: http://bit.ly/YH50xA
Litigation Over thirty lawsuits nationwide -- • Personal injury litigation and insurance coverage issues; • Labor law violations and worker misclassification claims; • False advertising, unfair business practices & consumer protection claims; • Racketeering; • Antitrust violations; • Disability discrimination; • Government actions; • Constitutional challenges; • Environmental law violations.
Litigation Regulators are suing illegal TNCs for violating FHV requirements: • City of St. Louis, MO. Metropolitan Taxicab Commission v. Lyft, Inc. • Preliminary injunction awarded. • City of Columbus, OH v. Uber Technologies, Inc.and Lyft, Inc. • Preliminary injunction denied but case ongoing. • The People of the State of New York, et al. v. Lyft • TRO awarded and Lyft forced to comply with NYC regulations.
Litigation • More information on TNC litigation across the country may be found in the report: “The Disruptive Transportation Technology Movement: A Litigation Primer & Roadmap” Available at www.windelsmarx.com