Transcript Presentation on "Ride-sharing" Findings and Recommendations

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
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Service entered D.C. without approval (Spring 2013)
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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)
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“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 noncommercial tags driven by untrained, amateur drivers;
black cars and taxicabs are commercial vehicles operated
by trained professionals.” Report at page 3.
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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.
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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”.
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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.
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Driver/owner must maintain personal insurance.
Business must provide “umbrella policy”.
Covered activities under the umbrella (increasing scope):
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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.
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Equipment – Private Vehicles: Enforcement issues
◦ Vehicles not commercially tagged (trade dress)
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Driver/owners – “Little or no training”: Safety issues
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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?
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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.
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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.
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DCTC checks driving record at DMV
Approved drivers receive basic training from the business.
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Business model is similar to black cars
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Existing rules:
◦ No street hails (may require changes to the app)
◦ 100% digital dispatch
◦ 100% digital payment
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Additional requirements:
◦ DCTC decal on vehicle (trade dress optional)
◦ “Light” license limits driver to part-time
◦ DCTC commercial license allows full-time
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How business is organized: uberX vs. Lyft & SideCar.
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The business is not unlike a taxicab company paired with a
single digital dispatch service.
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The business is the only meaningful source of insurance
coverage.
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Unprecedented role in licensing and operation.
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Business must establish its compliance with all
requirements for drivers and vehicles.
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Most important issue is adequacy of insurance policy.
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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.
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The business would play a unique and untested role, requiring a high
level of cooperation with the Commission.
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The business must:
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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.
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Private sedan service creates new challenges for
preserving and enhancing fair competition.
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Taxicabs find it difficult to compete fairly, in part
because many private sedans cruise and take street hails.
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Taxicabs are the main source for wheelchair-accessible
public vehicle-for-hire transportation. A reduction in
taxicabs means fewer options for wheelchair passengers.
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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.
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Study measures to prevent private sedans from
hindering current efforts to increase the availability of
wheelchair-accessible vehicles.
Jacques P. Lerner
General Counsel
Main: (202) 645-6018
Direct Dial: (202) 645-6019
Email: [email protected]