D.C . TAXICAB COMMISSION panel on industry

1. D.C. TAXICAB COMMISSIONpanel on industry PRESENTATION TO Regional Taxicab Regulators Task Force: d.c. taxicab commission report on “RideSharing” March 26, 2014 Jacques P. Lerner General Counsel (202) 645-6019

2. A Brief History of “Ridesharing” in D.C. • Service entered D.C. without approval (Spring 2013) • Unlicensed public vehicles-for-hire operated by unlicensed drivers. D.C. Code: vehicles impounded and drivers arrested by MPD • DCTC creates the Panel on Industry to study current issues in the industry and make non-binding recommendations (August) • Emergency legislation allows “ridesharing” while the Panel concludes its work (September-December) • Panel studies “ridesharing” businesses, meets with industry stakeholders, and drafts the report • Report issued (January 2014) • Rulemaking process expected to begin (April)

3. What is the Service? “Marketing impels passengers to believe the only relevant difference between a trip by black car and a trip by a “ridesharing” vehicle is a higher payment for a more luxurious ride. But that is not true. [So-called] “[r]idesharing” vehicles are personal cars with non-commercial tags driven by untrained, amateur drivers; black cars and taxicabs are commercial vehicles operated by trained professionals.” Report at page 3.

4. Findings 1: The New Service is Not “Ridesharing” The word “ridesharing” is not fair and accurate and “legally has no place describing a service that falls within the authority of the Commission.” The Commission could not license or regulate this activity if its self-styled name were accurate. The term “ridesharing” confuses the consumer and lends legitimacy to an otherwise unlawful activity. Other jurisdictions have not focused on this issue.

5. Recommendations 1:Establish an accurate name • Define “ridesharing” as “an activity in which passengers are grouped for a non-commercial purpose, such as defraying costs, reducing road congestion, decreasing fuel use, protecting the environment, and increasing ridership, in which no person has a for-profit interest.” • Definition is for the Commission’s regulations only. • Define the new service as “a public vehicle-for-hire service that uses digital dispatch to connect passengers with non-professional drivers operating their own personal vehicles”. Report at page11. • The proposed rules will use the term “private sedan”.

6. Findings 2:The Need for Insurance • The No. 1 issue for regulation. • Adequate liability coverage must be available to cover claims by passengers and members of the public injured when vehicles are involved in accidents. • Claims do not fall within the coverage of ordinary personal motor vehicle policies(consider pizza delivery). • Existing “excess liability” policies provided by the businesses may not be adequate to ensure coverage. • These policies pay at $1 “if” personal policy refuses to pay. • No coverage for driver or vehicle. • Terms of service are misleading and may be incompatible with insurance requirements.

7. Recommendations 2:Require Adequate Insurance At All Times • Driver/owner must maintain personal insurance. • Business must provide “umbrella policy”. • Covered activities under the umbrella (increasing scope): • Whenever a driver has a passenger in the vehicle • Whenever a driver is signed into the app (not the same as a “shift”) • Whenever a driver is providing service (e.g. cruising for street hails) • Whenever a driver is signed up (i.e. 24/7 until the relationship ends) • Terms and conditions must not disclaim liability.

8. Findings 3:Concerns re Non-Commercial Drivers & Vehicles • Equipment – Private Vehicles: Enforcement issues • Vehicles not commercially tagged (trade dress) • Driver/owners – “Little or no training”: Safety issues • Criminal background and driving records • “Zero tolerance” policies but no screening • Policies against taking street hails but the apps allow it (cruising) • No “shift” limits • Licensing: Who decides which drivers and vehicles are on the road?

9. Recommendations 3:Driver & Vehicle: Licensing • Licensing process (both the business and the Commission): • Business pre-qualifies driver and vehicle, sends application to DCTC. • DCTC completes the process, issues “light” license and vehicle decal. • Pre-qualification by business: • Third party screens driver for criminal background • Third party screens driver for drug use • Driver signs “owner’s agreement” to obey regulations, maintain insurance, etc. (excludes leasing) • Vehicle receives safety inspection. • DCTC checks driving record at DMV • Approved drivers receive basic training from the business.

10. Recommendations 3:Licensed Drivers & Vehicles: Operating Rules • Business model is similar to black cars • Existing rules: • No street hails (may require changes to the app) • 100% digital dispatch • 100% digital payment • Additional requirements: • DCTC decal on vehicle (trade dress optional) • “Light” license limits driver to part-time • DCTC commercial license allows full-time

11. Findings 4:The Private Sedan Business • How business is organized: uberX vs. Lyft & SideCar. • The business is not unlike a taxicab company paired with a single digital dispatch service. • The business is the only meaningful source of insurance coverage. • Unprecedented role in licensing and operation.

12. Recommendations 4:The Private Sedan Business: Licensing • Business must establish its compliance with all requirements for drivers and vehicles. • Most important issue is adequacy of insurance policy. • The digital dispatch service (which may be a separate company) must be registered for approval of its app, to provide quarterly trip data, and submit the passenger surcharge.

13. Recommendations 4:Licensed Businesses: Operating Rules • The business would play a unique and untested role, requiring a high level of cooperation with the Commission. • The business must: • Maintain insurance coverage (if lost, operations must be immediately suspended). • Maintain zero tolerance policy for drug and alcohol use. • Maintain requirements for drivers (drug screening, training, etc.). • Maintain an inventory with DCTC for enforcement purposes. • The digital dispatch service must: • Modify its app to prevent street “dispatches” and hold “light” drivers to part-time. • Collect passenger surcharge and make quarterly payments to the District. • Provide quarterly trip data to assess patterns of service and reconcile surcharge.

14. Findings5:Effects on the Taxicab Industry • Private sedan service creates new challenges for preserving and enhancing fair competition. • Taxicabs find it difficult to compete fairly, in part because many private sedans cruise and take street hails. • Taxicabs are the main source for wheelchair-accessible public vehicle-for-hire transportation. A reduction in taxicabs means fewer options for wheelchair passengers.

15. Recommendations 5:Effects on Taxicab Industry • Level the playing field between taxicabs and private sedans: • Allow drivers with DCTC commercial licenses to operate private sedans full-time. • Allow dispatched taxicabs to go “off-meter”, with rates set only by the dispatch service, like black cars and private sedans. • Study measures to prevent private sedans from hindering current efforts to increase the availability of wheelchair-accessible vehicles.

16. Contact Information Jacques P. Lerner General Counsel Main: (202) 645-6018 Direct Dial: (202) 645-6019 Email: jacques.lerner@dc.gov