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…
• TRANSPORTATION
TECHNOLOGY PROVIDERS
• TRANSPORTATION
NETWORK COMPANIES
• TRANSPORTATION
NETWORK PROVIDERS
• 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.
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.
What is a TNC?
Coke Anyone?
What is a TNC?
Regulation light or
zero regulation?
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 selfreporting 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%20Re
gulations%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 -•
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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
IATR 2014 CONFERENCE
Q&A