T&E Items 1,2 & 3
January 26,2015
Worksession
MEMORANDUM
I
Councilmembers: please retain this packet and attachments for future worksessions.
TO:
Transportation, Infrastructure, Energy and Environment Committee
FROM: ,&jJosh Hamlin, Legislative Attorney
.....
r:~ichael
Faden, Senior Legislative Attorney
~
SUBJECT:
Worksession:
Expedited Bill 53-14, Taxicabs - Licenses - Vehicle Requirements
- Driver Identification Cards; Bill 54-14, Taxicabs - Transportation Network Service
Requirements; and Bill 55-14, Taxicabs - Centralized Electronic Dispatch System.
Expedited Bill 53-14, Taxicabs - Licenses
Vehicle Requirements
Driver
Identification Cards sponsored by Councilmembers Floreen, Berliner, Riemer, and then Council
President Rice; Bill 54-14, Taxicabs - Transportation Network Service - Requirements,
sponsored by Council members Berliner and Floreen; and Bill 55-14, Taxicabs Centralized
Electronic Dispatch System, sponsored by Councilmember Riemer, were introduced on October
28,2014. A public hearing on all three Bills was held on December 2,2014.
Expedited
BiU
53-14
would:
• permit the holder of a fleet Passenger Vehicle License to grant a sublicense to another
person;
• increase the age limits for vehicles used as taxicabs;
• amend certain requirements for color and markings of vehicles used as taxicabs;
• allow software-based meters to
be
used in taxicabs; and
• amend certain requirements for temporary identification cards for taxicab drivers.
BiU
54-14
would:
require a transportation network application company to obtain a license to operate in the
County;
require a transportation network application company and transportation network
operator to meet certain registration requirements;
require a vehicle used to provide transportation network service to meet certain standards;
require a transportation network application company and transportation network
operator to be insured; and
require a transportation network application company and transportation network
operator to meet certain accessibility standards.
Bill
55-14
would require the County Department of Transportation (DOT) to implement a
centralized electronic taxicab dispatch system, and permit the Director to require certain taxicab
operators to participate in the centralized electronic taxicab dispatch system.
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Background
On October 9, 2014 the Transportation, Infrastructure, Energy and Environment (T&E)
Committee held a worksession to discuss issues surrounding the entry in the Montgomery
County market of transportation network companies (TNCs) such as Uber and Lyft} Chapter 53
of the County Code regulates taxicabs and the provision of taxicab service, but TNCs, which
provide a technology platform for drivers to use their private vehicles to transport passengers, are
not currently regulated in the County. After the October 9 worksession, the Bills that are the
subject of this worksession were drafted and introduced.
Expedited Bill 53-14 is intended to address some of the issues faced by the taxicab
industry in adapting to a market now populated by TNCs as well as regulated taxicab companies.
The Bill would amend the existing law to allow a fleet Passenger Vehicle License (PVL) holder
to grant a sublicense to a vehicle owner to provide taxicab service under the license. This
amendment is an effort to expand the pool of available taxicab drivers. Current law requires that
a license be issued only to the owner of each taxicab. The Bill would also change the age
limitations on vehicles by one year, to no more than five model years when placed in service,
and no more than eight model years when in service. Requirements for vehicle numbering,
markings, colors, and cruising lights would be relaxed under the Bill to permit taxicab service in '
vehicles that look less like "traditional" taxicabs. The Bill would permit taxicabs to be equipped
with software-based metering systems as an alternative to the currently required taximeters.
Finally, the Bill would adjust some of the requirements for obtaining a temporary driver
identification card in an effort to shorten the time required to get qualified taxicab drivers on the
road.
Bill 54-14 creates a separate regulatory framework for TNCs and their drivers, and
addresses the same issues that are addressed by similar laws enacted in jurisdictions across the
United States. These laws all impose requirements related to insurance, driver and vehicle
safety, licensing, and transparency in rates, and many also address accessibility concerns. The
specific provisions of Bill 54-14 are discussed at length below.
Bill 55-14, inspired by similar laws and regulations in Chicago and the District of
Columbia, is intended to assist taxicab companies in operating using a common, centralized
electronic dispatch system which must be established by the Director of Transportation.
The Regulatory Landscape
County Taxicab Law (Chapter 53)
Taxicabs in the County are regulated under Chapter 53 of the County Code.
2
To be
regulated under Chapter 53, a person must be in the business of providing "taxicab service,"
which means carrying passengers for compensation between points chosen by the passenger for a
time- or distance-based fare, or hailed from the street, parking lot, or taxi stand. MCC §53-101.
"Taxicab" is defined as a motor vehicle that:
The packet for the October 9 T&E Committee worksession can be accessed at:
http://www.montgomerycountymd.gov/council/Resources/Files/agendalcrn/20
141
141009120141009 TE2.pdf
2
Executive Regulations have been adopted pursuant to Chapter 53 at COMCOR Chapter 53, Taxicabs
Regulations.
I
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(1)
(2)
(3)
is designed or configured to carry seven or fewer persons, not including the
operator;
is used to provide for-hire taxicab service in the County; and
either:
(A) appears
to
be a taxicab or otherwise for-hire;
(B) displays the words "taxi," ""cab," or ""taxicab" anywhere on the vehicle;
(C) is advertised or held out to the public as a taxicab; or
(D)
is used to respond to an immediate request for passenger transportation.
All taxicab drivers who operate within the County are required to hold a County-issued
passenger vehicle license (PVL). MCC §§53-201 through 53-204. Individual taxi drivers are
required to hold an ""Individual PVL," which authorizes the operation of a single taxicab and
imposes a number of duties on the individual driver. An entity that holds five or more PVLs
meets the definition of a ""fleet" and must hold a ""Fleet PVL" and is subject to additional
operating requirements. In order to obtain a PVL, an individual taxi driver must comply with all
of the requirements contained in Chapter 53, including carrying minimum liability insurance and
maintaining a vehicle less than seven model years old that is in ""clean and safe operating
condition." MCC §§ 53-217 through 53-219, §§53-224 through 53-236. To obtain a Fleet PVL,
the fleet entity must not only meet the requirements for Individual PVLs; it must also, among
other things, submit a customer service plan, provide an adequate number of taxicabs to meet
service demands 24 hours a day, 7 days a week, and meet the requirements regarding the
provision of accessible taxicabs. MCC §§ 53-220 through 53-223. PVLs are valid for one year,
may be renewed, and are subject to revocation for failure to meet the regulatory requirements.
MCC §§53-215 through 53-216, §§ 53-701 through 53-704.
Drivers of taxicabs are required to have ""driver identification cards" MCC §§ 53-301
through 53-310. In order to obtain a driver identification card, a driver must submit to a criminal
and driving record background check, as well as undergo a physical examination, and pass an
examination on traffic laws in the County, the provisions of Chapter 53, and general
qualifications to operate a taxicab.
In addition to the licensing and operating requirements of taxicabs, a key feature of the
County's regulatory regime is the County's role in rate setting. Under Section 53-106 of the
Code, the Executive is required to set rates by regulation. Rates include an initial charge, a
distance-based charge, and various additional charges for additional passengers, ""personal
service," pickup and delivery, and rides during a snow emergency.
Taxicab companies are also subject to annual data reporting requirements. The
requirements are set by regulation (COMCOR 53.00.01.01, Operating Reporting Data), and
require a fleet or unaffiliated trade group to report the following:
• Number of calls received
• Number of cabs in service daily
• Total paid miles driven
• Total number of trips
• Total revenue excluding extras
• Total revenue from extra charges
Transportation Network Companies
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Ride-booking
3
service companies such as Uber and Lyft have faced resistance around the
globe when entering new markets.
4
In
the United States, Uber has been stopped from operating
in New Orleans, Miami, and Portland. Other jurisdictions have struggled to establish a
regulatory framework covering the companies and the services they provide. The term
"transportation network companies (TNCs)" has emerged as a common reference to companies
such as Uber and Lyft. In the Washington, DC metro area, the three jurisdictions are at different
stages
in
the process.
Maryland
Maryland's regulation of for-hire driving services is set forth in Title 10 of the Public
Utilities Article of the Maryland Code. Jurisdiction is split between the State's Public Service
Commission (PSC), which regulates limousine and sedan services, and local jurisdictions, which
primarily regulate
~icabs.
5
The practical distinction between the services appears to be that
taxicab services are obtained in the manner prescribed in State and County law definitions of
"taxicab services,"
i.e.,
advertising as a taxicab or as providing taxicab services, carrying
passengers for compensation between points chosen by the passenger for a time- or distance­
based fare, or providing passenger service after being hailed from the street or other location.
The status of TNCs in Maryland is presently unsettled, with the State alternatively
attempting to establish a new regulatory framework through legislation and asserting regulatory
authority under existing law. Also, the City of Annapolis is seeking to regulate Uber as a
taxicab company under the City's laws.
mcs are a new mode of delivery of for-hire driving services that do not fit neatly into
any of the established categories: limousines, sedans, and taxicabs. The County may assert
jurisdiction over TNC drivers and vehicles under State law inasmuch as the vehicles operating
using the mc application are providing "taxicab services" and are "taxicabs" as defmed under
State and County law. The definition of ''taxicab'' under State law is found in § 1-10 1(ii)(l) of
the Public Utilities Article of the Maryland Code. Under this definition:
Taxicab means a motor vehicle for hire that:
(i)
is designed to carry seven or fewer individuals, including
the driver; and
(ii)
is used to accept or solicit passengers for transportation
between points along public streets as the passengers request."
"Provide taxicab services" is defined in § 10-101(h) of the Public Utilities Article as follows:
These companies have often been referred to as "ridesharing" companies, a term which may have been
appropriate at their origins, but is less accurate as they have evolved into for-profit enterprises. The Associated
Press, in its Stylebook, has recently advised journalists not to use the term in describing such companies. For a
discussion of this issue, see: http://greatergreaterwashington.org!post!25405!the-ap-bans-the-term-ride-sharing­
for-uber-Iyft!
4
http://bits.blogs.nytimes.comJ20
14/04/17
luber-faces-rebukes-in-europel? php=true& !ype=blogs& r=0
5
Taxicab services operated in or from a point in Baltimore City, Baltimore County, the City of Cumberland, or the
City of Hagerstown are regulated by the PSC.
3
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Provide taxicab services" means to operate a motor vehicle for hire
that, in addition to other services:
(1 )
is advertised or held out to the public as a taxicab or as
providing taxicab services;
(2)
regardless of how or when engaged, provides for-hire
service between points chosen by the passenger and for a fare that
is based on the distance traveled, the time elapsed, or both; or
(3)
is engaged by the passenger for service between points
chosen by the passenger that is provided through:
(i)
hail from the street or other location; or
(ii) request made at a taxi stand or other location where
the motor vehicle is standing and waiting for a
request for service.
County law differs from, but is not inconsistent with, State law in its definitions of
"taxicab" and "taxicab service." The County definitions are discussed above in the brief
description of Chapter 53. Vehicles using a mc app to connect with passengers are to be
operating in a manner consistent with these definitions, and are thus subject to County
jurisdiction as taxicabs.
HB 11601SB
919
In
the 2014 legislative session, a bill was introduced in the Maryland General Assembly
to create a new type of transportation service, a "transportation network service," which would
have covered mcs and their drivers. Under the bill, transportation network services would be
regulated under a regulatory framework separate and distinct from the existing law applicable to
for-hire driving services. Generally, the bill would have set up a registration process for
transportation network operators and imposed vehicle safety inspection, driver safety, consumer
protection, and insurance requirements. The bill would have removed mcs from the regulatory
reach of the PSC, and did not include alternative enforcement provisions. HB 1160 received an
unfavorable report in the Economic Matters Committee and
was
withdrawn. To date, no similar
legislation has been introduced in the 2015 session.
August PSC ruling re: Uber Black and Uber SUV
The Maryland Public Service Commission (PSC) ruled on August 6, 2014 that Uber, in
the provision of its UberBLACK and UberSUV services,
6
engages iri the public transportation of
persons for-hire and should be regulated as a non-taxicab, passenger-for-hire service.
7
The order
directed Uber to apply for a motor carrier permit for UberBLACK or UberSUV services within
60 days. The order also directed Commission staff to
draft
new regulations that are applicable to
UberBLACK and UberSUV. The order does not apply to UberX or Lyft, or other mcs, but is
significant in that it signals recognition that the services provided by mcs are subject to
regulation by the' PSC. However, it draws a distinction between the UberBLACK and UberSUV
services and the UberX and Lyft services which more closely resemble services provided by
6
7
UberBLACK and UberSUY drivers are already licensed by the State through the PSc. UberX and Lyft drivers are
not
http://webapp.psc.state.md.us/lntranetisitesearchIWhats new/OrdeflIo20No.%2086528%20­
%20Case%20No.%209325%20-%20Uber%20Technologies,%20Inc.%20-%20Public%20Yersion.pdf
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taxicab companies. More importantly, it leaves, for the time being, a regulatory vacuum in
which the TNCs remain unregulated.
OPC request to investigate UberX and Lyft
On August 5, 2014, the Maryland Office of People's Counsel (OPC) requested that the
PSC investigate compliance by UberX and Lyft with the PSC's licensing requirements. The
PSC has not yet conducted the requested investigation, but in light of the PSC's August 6 ruling,
could conceivably fwd that UberX and Lyft are subject to PSC regulation.
Draft PSC regulations regulating TNCs
PSC staff is currently drafting regulations, pursuant
to
the August ruling, which would
regulate TNCs and TNC "partners" (drivers). These regulations, if adopted, may amount to the
PSC asserting jurisdiction over TNCs statewide as non-taxicab, passenger-for-hire service under
the Public Utilities Article. Additionally, under State law, the PSC may assert jurisdiction over
taxicab regulation in the County notwithstanding the County's laws.
8
However, until the PSC
adopts the regulations, the question of statewide INC regulation remains open, and the above­
mentioned regulatory vacuum persists.
District of Columbia
The Council of the District of Columbia recently enacted the "Vehicle-For-Hire
Innovation Amendment Act of 2014,,,9 creating a new regulatory framework for "private
vehicle-for-hire companies and drivers, separate from the District's regulation of taxicabs. The
District law includes provisions very similar to Bill 54-14, and imposes registration, vehicle and
driver safety, insurance, consumer protection, and accessibility requirements on TNCs and their
drivers. The law also deregulates taxicab fares booked through digital dispatch services.
Following the enactment of the District Law, the District's Taxicab Commission adopted
regulations creating a "District of Columbia Universal Taxicab App" providing a centralized
digital dispatch for all taxicabs.
to
Virginia
In its attempts to regulate TNCs, Virginia has recently reversed course, and appears to be
headed toward a resolution through parallel regulation similar to that which is being considered
in the District and implemented in several state and local jurisdictions which will be explored
below. Initially the Commonwealth issued a Cease and Desist order to Uber and Lyft on June 5,
2014. However, on August 6, the Governor and Attorney General announced that the parties had
agreed upon temporary regulation while a long-term legislative solution is developed. The
"temporary legal framework" includes the familiar safety, consumer protection, and insurance
requirements which are a feature of all such regulation. The Virginia General Assembly is
Section lD-202(b) of the Public Utilities Article provides: "The provisions of this division relating to taxicabs or of
any public local law relating to taxicabs do not limit the jurisdiction of the Commission over a taxicab business as a
common carrier even if the taxicab business operates in a jurisdiction other than Baltimore City, Baltimore County,
the City of Cumberland, or the City of Hagerstown."
9
htt;p:/llims.dccouncil.us/Downloadl31519/B20-0753-Enrollment.pdf
10
http://dctaxi.dc.gov/sites/defaultlfiles/dc/sites/dc%20taxilevent content/attachments/Chapters16and99.pdf
8
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considering mUltiple draft bills related to the regulation of TNCs in the Commonwealth, and on
January 19, state senators agreed on a compromise version following the model emerging in
other jurisdictions (See © 124-126).
Other Jurisdictions
While the jurisdictions in the DC metropolitan area are still trying to figure out how to
regulate TNCs, several jurisdictions have enacted laws or adopted regulations "legalizing" the
ride-booking companies and creating new regulatory regimes applicable to them.
In
March
2014, the Seattle City Council enacted a law regulating TNCs as "for-hire driver services" which
imposed licensing, insurance, and driver and vehicle safety standards, and included a cap on the
number of for-hire drivers, limiting each TNC to 150 active drivers on the road at any given
time.
11
In
July, that law
was
repealed and replaced with a new law that allows all for-hire
companies to continue operating without a cap placed on the number of drivers on the road.
12
In
June 2014, Colorado became the first
state
to pass legislation
13
regulating TNCs. The Colorado
law requires a TNC to be licensed and insured, and imposes driver and vehicle safety standards.
In
July 2014, the Minneapolis, Minnesota City Council passed a law regulating mcs.
At the same time, "the City Council voted to modernize the City's longstanding taxi ordinances
to make them less restrictive to companies while still maintaining safety for passengers."14 Also
in July, Columbus, Ohio enacted its "Peer-to-Peer Transportation Network" law. The
Minneapolisis and Columbus
l6
laws are similar in many respects to the Colorado and Seattle
laws, in that they impose licensing, insurance, driver history, and vehicle inspection
requirements.
As is evident from the preceding discussion, there are a number of common issues
addressed by legislation regulating mcs, generally relating to safety, consumer protection, and
accessibility. While the particulars of the laws differ from jurisdiction to jurisdiction, all impose
requirements related to insurance, driver and vehicle safety, licensing, and transparency in rates,
and many also address accessibility concerns. Broward County, Florida is currently considering
regulation of TNCs, and staff there generated an informative Powerpoint presentation for a
recent workshop of the Board of County Commissioners.
17
The presentation looked at several
recently enacted INC laws from local jurisdictions around the Country (Houston, TX; Seattle,
WA; Austin, TX; Chicago, IL; Washington, DC; and Orlando, FL), and compared how the
different laws treated these common issues (©127-152).
December 2, 2014 Public Hearing
The T&E Committee held a public hearing on all three Bills on December 2,2014. There
were 30 speakers at the hearing, representing a wide range of perspectives on the issues covered
http://www.washingtonpost.comlblogs/govbeatlwp/20 14/03/ 18/seattle-becomes-first-city-to-cap-uber-Iyft­
vehicles!
12
http://www.governing.cominews/headlines/mct-seattle-new-rideshare-rules.html
13
http://legiscan.com/CO/textlSB125/idil 022212/Colorado-20 14-SB125-Enrolled.pdf
14
http://www.ci.minneapolis.mn.us/news/WCMSl P-128522
15
http://www.minneapo lismn.gov/www/groups/public/@regservices/documents/webcontentlwcms I p-1290 14.pdf
16
https://columbus.legistar.com/LegislationDetail.aspx?ID=
1
833098&GUID=D7A215D2-06C4-4F5F-BA3F­
OCF2EAAB6E35&Options=&Search=&FullText=1
17
http:Uwww.broward.org!Commission!Meetings!Documents!TaxiRegulatorylssues010615.pdf
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in the Bills.
Art
Holmes, Director of the Department of Transportation, spoke on behalf of the
County Executive, and urged thoughtful consideration of all perspectives
(~43).
Mr. Holmes
suggested that the three Bills should be evaluated together, rather than individually, and
emphasized the need for any legislation to address accessibility concerns. William S. Morrow,
Executive Director of the Washington Area Metropolitan Transit Commission, spoke of the
relationship of local transportation regulation and the regional Washington Metropolitan Area
Transit Regulation Compact, and recommended amendments to the Bills to aid in mutual
enforcement oflaws
(~44-53).
Much of the remaining testimony focused on how to regulate TNCs, and particularly
whether they should be subject to the same regulation as taxicab companies.
In
addition to
corporate representatives ofUber and Lyft, riders and drivers using each platform, attested to the
positive experience
(~54-63).
The heads of all five taxicab companies operating in the County
all testified in support of Bill 53-14 and against Bill 54-14
(~64-84).
Alfred LaGasse of the
Taxicab, Limousine, and Paratransit Association stated his view that TNCs should be subject to
the same regulatory requirements as taxicab companies,
~85.
Beth Levie of the AFL-CIO spoke generally about the problems taxicab drivers face in
their relations with taxicab companies
(~98-104),
and two Barwood taxicab drivers, Peter Ibek
and Becaye Traore testified about problems they encounter in their relationship with Barwood,
(~105-1O8).
The Greater Bethesda-Chevy Chase Chamber of Commerce supported Bill 53-14 and
opposed Bill 54-14, asserting that all transportation-for-hire companies in the County be subject
to the same safety, pricing, and consumer protection requirements
(~109).
Kimberly Jordan­
Gaskins, Ms. Wheelchair Maryland, stated that "Uber and Lyft do not provide adequate service
to people with disabilities." Ms. Jordan-Gaskins urged that a County law regulating TNCs
require TNCs to have wheelchair-accessible vehicles, as is required of the taxicab companies
(~11O-111).
Issues for Committee Discussion
The Bills collectively address a number of issues of common concern to the owners and
operators of "traditional" regulated taxicabs and the TNCs and drivers that Bill 54-14 would
regulate. Councilmember Berliner requested additional information from both Uber and Lyft.
To determine the way forward, Council staff believes it would be useful to look at these issues of
overlap, considering what the legislation before the Council proposes, what current law provides,
and feedback or suggestions from the regulated entities (See
~1l2-114
and
~1l5-123).
A brief
look at -the business models of most taxicab companies in the County and TNCs will provide a
context for the consideration of many of the issues.
The Taxicab model
Most County taxicab companies lease their vehicles to drivers by the day or the week,
and it's up to the driver to meet his expenses and make a living. Taxicab leases are often upward
of $100 per day, and the driver keeps his vehicle full time. Under this model, the company has
little direct interest in how much business the driver
turns
over, but if
it
has many drivers making
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good money, demand to lease its vehicles will increase, and it may collect more money in lease
fees. Under a lease system, the driver typically pays for the gas, while the company pays for any
repairs. Taxicab companies that run on a lease arrangement make their money on how many
vehicles are being used -- in effect turning them into car rental companies that provide dispatch,
insurance, and credit card payment processing services.
The
TNe
model
TNCs are not in the taxi business, at least in the conventional sense. They do not own
vehicles, and do not employ cab drivers. They operate by matching a driver/car with a customer
looking for a ride, and take a percentage of the fare for providing the service. See ©153. The
service that a TNC provides is the screening that it does of the drivers/cars (to ensure both safety
and comfort), its pricing/payment system, and its convenience (the ability to track the car that is
coming to pick you up on your smartphone). A key difference between INCs and most of the
taxicab companies in the County is that TNCs make their money directly from the transport of
passengers (in the form of the percentage of each fare), rather
than
by leasing a PVL-licensed
vehicle to a driver, as do taxicab companies. Also, unlike taxicabs, TNC vehicles are personal
vehicles that a driver uses as a for-hire vehicle on a part-time basis. Finally, because of the
technology platform on which they operate, TNCs use a system of ratings of drivers and vehicles
to provide a quality control mechanism.
General provisions
Bill 54-14 would define the terms "transportation network application company
(TNAC),,18 and "transportation network operator (INO)" to cover companies such as Uber and
Lyft and their drivers, and would define "digital dispatch" to mean a network-based dispatch
system which may be used by TNCs or current Passenger Vehicle License (PVL) holders.
Insurance
Should TNC vehicles be subject to difforent insurance requirements than taxicabs?
Bill
54-14
would require a TNC or
rno
to carry insurance coverage of at least
$1
million per occurrence for accidents involving a INO at all times when the INO is engaged in a
prearranged ride.
It
would also require a TNO, or a TNC on the TNO's behalf, to maintain
primary insurance coverage for the time period when a INO is logged onto a TNC's digital
dispatch showing that the TNO is available to pick up passengers but is not engaged in a
prearranged ride. See lines 222-305 at ©25-28 of Bill 54-14.
A unique aspect to insurance coverage for INC's is the shift made by a driver/vehicle
from "personal" travel to "for-hire" travel when the INC application is turned "on." This shift
creates a gray area in insurance coverage, but has been accommodated by the concept of
"contingent" coverage. For example, when a driver is on a "personal" trip and the TNC
application is inactive, their personal insurance applies. When the TNC application is active but a
driver has not yet accepted a ride, the TNC provides contingent liability coverage if a driver's
Bill 54-14 refers to what are commonlycalled TNCs as TNACs. For clarity and consistency in this memorandum,
the term TNC will be used, understanding that this term encompassed what are referred to as TNACS in Bill 54-14.
18
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personal insurance does not. When a driver has accepted a ride and though the end of the trip, the
TNC's liability coverage becomes the primary coverage and covers liability for bodily injury and
property damage for both passengers and/or third parties. This model has been adopted by the
vast majority of, if not all, jurisdictions that have enacted laws regulating TNCs. Uber has
posted the insurance policy carried by Rasier, LLC, an Uber subsidiary, online.
19
Chapter 53 requires an applicant for a PVL to submit proof of insurance or self· insurance
for the vehicle that covers bodily injury or death to any passenger or other person, and property
damage, in amounts required by applicable regulations. The insurance must be provided by an
insurer licensed to do business in the State or, alternatively, under a self-insurance program
approved and administered by the state motor vehicle agency.20 COMCOR 53.40.01.01 requires
coverage in the following amounts: $100,000 bodily injury or death each person; $300,000
bodily injury or death each accident; $25,000 property damage.
• Uber:
Uber generally supports the structure and coverage amounts of Bill 54·14' s
insurance requirements, while requesting some amendments, most of which are technical
in nature.
• Lyft:
Lyft generally supports the structure and coverage amounts of Bill 54-14's
insurance requirements, but raised concerns about a requirement that a TNC be the
primary
insurer when a TNO has turned on the app, but has not accepted a ride. Lyft
submitted
an
explanation of how its insurance works ©154-155, and a letter from the
company's insurance counsel explaining the interplay between a driver's personal
coverage and a TNC's commercial coverage in this period ©156-159. Bill 54-14 requires
the primary liability coverage during this period be maintained by "each TNO or a TNC,
on the TNO's behalf." See lines 230-231 at ©25 of Bill 54-14.
• CCTI: CCTI's proposal would subject taxicabs and TNC vehicles to identical insurance
requirements that are identical to the existing insurance requirements under Chapter 53.
The question of what is appropriate insurance coverage for vehicles using TNC platforms
burst into the public consciousness with the New Year's Eve 2013 death of 6 year-old Sofia Liu
in San Francisco. A driver using the Uber app, but not carrying a passenger, struck and killed
Sofia as she walked in a crosswalk with her mother. The incident sparked a lawsuit, along with a
great deal of public debate about this new mode of transportation service, and exactly who is
responsible when accidents happen. 21
It
is unquestionable that in regulating TNCs and their
drivers, provision must be made for insurance coverage at all times when a driver is using the
app. Bill 54-14 reflects the model that has emerged in the dozens of jurisdictions that have
passed laws regulating TNCs, in that it allows for a sort of hybrid coverage using the driver's
personal liability insurance and commercial liability coverage carried by the TNC.
With the recent leak of an internal GEICO training document instructing its agents to
reject customers involved in "ridesharing," questions arose as to whether TNC drivers would be
19
https://www.scribd.com/doc!234 793312!Ridesharing-lnsurance-Policy-7-14-14
20
County Code,
§
53-225.
21
http:Uwww.theverge.com!2014/1!28/5350660!lawsuit-uber-accident-death-girl-liabilitv-insurance
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able to obtain personal coverage at all, potentially rendering the emerging model unworkable.
22
Since that time, however, both USAA
23
and Fanners Insurance
24
have rolled out insurance
policies which would cover mc drivers, and it is likely that other large insurers will follow suit.
In view of the move of insurers toward accommodating the hybrid model embodied in
most of the enacted laws regulating mcs, and in Bill 54-14, the question remains for the
Committee to consider whether this model provides adequate protection for passengers and the
general public. The Committee may also consider whether the differences in the business
models of mcs and taxicab companies justifies the use of such a model or, in the alternative,
whether all vehicles should be subject to identical insurance requirements as currently regulated
taxicabs. The fact that personal vehicles are used, and often part-time, to provide service on a
mc platform could warrant different means to ensure proper coverage.
FareslRatesetting
Should taxicab rates be deregulated as proposed in Bill
54-14,
or further? Should surge
pricing be regulated beyond declared states ofemergency?
Bill 54-14 would not regulate the fares charged by mcs.
It
would amend the current
law concerning taxicab rates to provide that fares for rides booked through digital dispatch, by
either a mc or a PVL holder, are not subject to the existing rate structure.
It
would also limit
"surge pricing," a fare structure that bases a rate on time and distance factors, increased by a
multiplier related to consumer demand, during a declared state of emergency. See lines 32-65 at
©18-19 of Bill 54-14. Chapter 53 requires the County Executive to set taxicab rates by
regulation. MCC § 53-106. These rates are set in COMCOR 53.17.01 ©160-162.
• Uber:
Uber has raised no substantive issues with the provisions ofBil154-14.
• Lyft:
Lyft has raised no substantive issues with the provisions of Bill 54-14.
• CCTI:
CCIl's proposal regarding rates is generally consistent with existing law and the
provisions of Bill 54-14, with one key exception. Under CCIl's proposal, multipliers
used in surge pricing would require advance approval by the Director.
There appears to be near agreement about the setting of fares booked through a digital
dispatch. The justification for maintaining fixed fares for taxicab rides not booked through a
digital dispatch is the need for predictability and uniformity when a customer gets a ride via
street-hail or telephone. CCIl does propose to require advance approval of surge pricing
multipliers. While this would arguably provide for protection of consumers from exorbitant
fares at high-demand times and locations, it might also suppress the number of mc drivers
available at these times and places. Also, with appropriate notice and fare estimate requirements,
a passenger could presumably refuse a ride at a surge price, and call a taxicab instead.
21
23
24
http:Uwww.sfgate.com!business!article!Leaked-transcript-shows-Geico-s-stance-against-5910113.php
http:Uwww.carriermanagement.com!news!2015!01/08!133917.htm
http://www.carriermanagement.com!news/2015/01!15!134182.htm
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Driver Background Checks
Should TNOs and taxicab drivers be subject to different background check standards?
Bill 54-14 would require TNOs,
i.e.,
drivers, to be registered by TNCs. In order to be
registered, a TNO would be have to apply, and would be subject to a local and national criminal
background check, a national sex offender database background check, and a full driving history
check. A TNO applicant would be subject to disqualification for the same reasons that an
applicant for a PVL or driver identification card is subject to disqualification under current law.
Bill 54-14 would require a third party that is accredited by the National Association of
Professional Background Screeners or a successor accreditation entity to conduct the checks.
See lines 164-209 at ©23-24 of Bill 54-14.
The background checks required of taxicab drivers under Chapter 53 differ from the
proposed TNO background checks primarily in the entity that must conduct them. In order to
receive a driver identification card, the driver-applicant must have undergone a background
check, conducted by the
appropriate state agency,
showing that the applicant is not disqualified
under the provisions of the law.
• Uber: Uber supports Bill 54-14's allowance of third-party driver background checks, but
requests deletion of several of the grounds for disqualification of a driver. 25
• Lyft: Like Uber, Lyft supports the allowed use of third-party background checks
currently contained
in
Bill 54-14.
• CCTI: CCTI proposes to require TNOs and taxicab drivers to the same background
checks - using fmgerprints and conducted by the appropriate
state agency,
as is currently
required for taxicab drivers under Chapter 53.
As drafted, Bill 54-14 allows for third-party background checks for TNOs, while
requiring taxicab drivers to submit to a governmental check using fmgerprints. As stories of
TNC drivers being accused of crimes continue to emerge,26 it is difficult to find a distinction
between the two types of drivers when considering the need for accurate and complete
background checks. The more appropriate question is likely: "which method of background
checks provides the greatest level of safety for the public?"
The differences between the background check process used by Uber and a fingerprint­
based, state-perfonned background check are discussed in the complaint filed against Uber by
the District Attorneys of San Francisco and Los Angeles on December 9, 2014 (See ©163­
:as
The grounds for disqualification that Uber requests be deleted include: "has a charge pending;" "violation of any
gaming law;" pattern of reasonably verifiable complaints;" poor driving record; false statement or answer on
application; generally unable to safely operate a vehicle; substantial delinquent debts; and general record of
violations.
26
In the last month, there have been widely reported accusations of criminal conduct by TNC drivers in Boston and
Chicago, See: http:Uwww.bostonglobe.com!metro!2014112!24!uber!LxoYKB2YcYzj4gVYMhYlnUstory.htmland
http://www.chicagotribune.com/news/locallbreaking!chi-former-uber-driver-charged-in-november-sexual­
assault-of-customer-20141229-story.html.
II
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174).27 The use of fingerprints, a unique biometric identifier, as opposed to personal identifying
information such as name, address, driver's license number, and social security number, appears
to offer more protection against fraud.
As with the type of background check conducted, the items in a driver's background that
are the basis for disqualification should
be
consistent between the types of drivers. As drafted,
Bill 54-14 provides this consistency, though both the lNCs and CCTI have requested changes to
the list of disqualifiers.
Licensing
Should TNOs be licensed at the County level?
If
so, should the number o/licensed TNOs
be limited, or should the number o/TNOs logged on to a TNC's digital dispatch be limited?
Bill 54-14 would require a INC to obtain a license to operate in the County. To obtain a
license, a lNC would have to supply proof that it: 1) is licensed to do business in the State; 2)
has a resident agent in the County; 3) maintains a website containing certain information; and 4)
has the required insurance coverage. See lines 6S-S4 at ©19-20 of Bill 54-14. INOs would not
be licensed separately at the County level under Bill 54-14, but would have to register with the
lNC after undergoing a background check as described above. The lNC would be required to
maintain and supply to the Department a current registry of lNOs and vehicles registered with
the lNC. See lines 90-91 at ©20 of Bill 54-14.
The licensing scheme for taxicabs under Chapter 53 is essentially a two-tiered system, as
discussed on page 3, above. Taxicab vehicles are licensed through the issuance ofPVLs, and the
driver identification card system is a de facto licensing of drivers.
Bill 53-14 would alter the existing law related to taxicab licensing in two key ways. The
Bill would amend the existing law to allow a fleet PVL holder to grant a sublicense to a vehicle
owner to provide taxicab service under the license. See lines 7-33 at ©2-3. This amendment is
an effort to expand the pool of available taxicab drivers. Current law requires that a license be
issued only to the owner of each taxicab. Also, the Bill would adjust some of the requirements
for obtaining a temporary driver identification card in an effort to shorten the time required to get
qualified taxicab drivers on the road. See lines 105-lS0 at ©5-S.
• Uber:
Uber requests deletion of the requirement to "provide to the Department" a current
registry of INOs and vehicles registered with the lNC. Uber asserts that this is
confidential business information, and its disclosure would put the company at a
competitive disadvantage. However, lack of this information would severely impair
enforcement, as the Department would have no way of knowing how many INOs and
lNC vehicles are on the road, and would not have an effective way to determine if any
given lNO or vehicle is registered as required under the law.
The complaint alleges Uber has misled the public about the effectiveness of its background checks on drivers it
hires, along with fraudulent airport fees and customer fare calculations that haven't been approved by the state.
The DAs are seeking a permanent injunction against these practices. The full complaint is at:
https:llwww.scribd.com!doc!249694449!Uber-Complaint-Filed
27
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• Lyft:
Lyft also requests an amendment to delete Bill 54-14's requirement that the
company provide a TNO and vehicle registry to the Department, for the reasons offered
by Uber. As an alternative, Lyft has submitted alternative language which would: (1)
require a TNC to provide within 72 hours, upon request, to the police chief or designee
"information relevant to" a "formal, non-criminal complaint" regarding a TNO or
vehicle; (2) permit the Department to conduct an annual audit of a TNC's background
check processes; and (3) require the County to take certain steps when responding to
public records requests for records obtained from a TNC, including giving the TNC
notice of the request prior to releasing any records. See
©
175.
• CCTI:
CCTI proposes to retain the TNC licensing provisions, but also to license TNOs
individually (using the term "TNC License"), and provides for an initial issuance of 100
TNC Licenses in 2015, with provisions for additional issuances in future years. As an
alternative
to
this cap on the number of TNC Licenses, CCTI has developed a
technological means to limit the number ofTNOs operating on a TNC app to 100 at any
given time. See © 176-177. CCTI also proposes to require TNC vehicles have a "Class
B"
registration with the State Motor Vehicle Administration
(MY
A), and to subject
TNOs to the same Driver Identification Card requirements as taxicab drivers.
Three key sub-issues make up the licensing question for Committee consideration:
potential County licensing of TNOs; a potential cap on the number of such licenses; and the
registration ofTNC vehicles as "Class
B"
with the
MYA.
County licensing of TNOs as taxicab drivers.
State law requires all operators of motor
vehicles for hire to have a for-hire driver's license issued by the PSC, unless the operator is
licensed by a county or municipal corporation as a taxicab driver, after the conduct of criminal
record and driving record checks by the county or municipal corporation. See
§
10-103 of Public
Utilities Article of the Maryland Code. In light of this provision, it would appear that all TNC
drivers would need a PSC-issued license unless the County licenses the drivers as taxicab
drivers. Such a license would require the County to conduct the background checks of the
drivers.
Limit on the number ofCounty licenses.
As mentioned above, CCTI has requested a limit
on the number of licenses issued to TNOs in 2015 to 100, or in the alternative, a system setting
up a virtual queue under which no more than 100 TNOs could be on the road at any given time.
In considering this sub-issue, the Committee should look to the different business models of
TNCs and taxicabs. Council staff is not aware of any jurisdiction regulating TNCs that has
placed a cap on the number permitted to operate. As discussed on page 7, Seattle passed a law
that included a cap, but repealed
it
and replaced it with a law that did not include a limit on TNC
vehicles.
"Class B" registration.
The "Class
B"
registration in Maryland is the State's taxicab and
sedan registration. A key feature of this registration is that issuance requires an inspection by the
appropriate regulatory body (in this case, the County as taxicab regulator).28
Bill
54-14 does not
require this registration for TNC vehicles, while CCTI requests that it be a requirement. The fact
28
http://www.mva.marvland.gov!about-mva!info!27300!27300-26T.htm#Taxi
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that 'INC vehicles are typically private vehicles, often used as for-hire vehicles on a part-time
basis warrants consideration in determining whether to require "Class B" registration.
Vehicle Standards
Should TNC vehicles and taxicab vehicles be subject to different appearance and
maintenance standards?
Under
Bill
54-14's provisions, vehicles used to provide transportation network service
would be subject to age limits and initial and annual safety inspection requirements. Each
vehicle must have a manufacturer's rated seating capacity of 8 persons or fewer, have at least 4
doors and meet all applicable federal motor vehicle safety standards for vehicles of its size, type,
and proposed use; and be no more
than
10 model years old at entry into service and no more than
12 model years old while in service. See lines 210-217 at ©24-25 of
Bill
54-14. Additionally, a
TNC must certify that each vehicle have an annual state-required safety inspection; or an initial
safety inspection within 90 days before entering service by a licensed mechanic in an inspection
station authorized by the State of Maryland, the District of Columbia, or the Commonwealth of
Virginia to perform vehicle safety inspections, and must annually verifY the safety inspection
status of each vehicle after the initial verification is conducted. See lines 102-110 at ©20-21 of
Bill
54-14.
Under the provIsIOns of Chapter 53, taxicab vehicles are subject to a number of
requirements. Prior to obtaining a PVL, an applicant must provide a mechanical inspection
certificate from a state-certified inspection station that shows that the vehicle is mechanically
safe. MCC § 53-224. Each taxicab must be registered as a "Class B" for-hire vehicle with the
Maryland Motor Vehicle Administration. MCC § 53-226. Taxicabs are subject to a "continuous
operation" requirement, and PVLs for inactive taxicabs may be revoked for lack of use. MCC §§
53-227,53-228. A taxicab must not be more
than
four model years old when placed in service,
and must not be more than seven model years old when used to provide taxicab service in the
County. MCC §§ 53-228, 53-229. A licensee must maintain the vehicle in generally clean and
safe operating condition. MCC § 53-230. Specific lettering, marking, and vehicle number
display requirements apply
to
taxicabs, as does a uniform fleet color requirement. MCC §§ 53­
231
through
233.
Taxicabs must have "an accurate, properly installed and connected taximeter
which has a security seal affixed by the Department." MCC
§
53-235. Each taxicab must
undergo an inspection of its mechanical condition every six months at a time and place
designated by the Department, and each licensee must permit reasonable inspections by the
Director. MCC
§
53-236.
Expedited
Bill
53-14 would make a number of changes to the vehicle requirements
applicable to taxicabs. It would change the age limitations on taxicabs by one year, to no more
than five model years when placed in service, and no more than eight model years when in
service. See lines 36-47 at ©3.
It
would also make the numbering, lettering, and color
requirements less restrictive. See lines 49-90 at ©3-5. Finally, it would allow taxicabs, as an
alternative to the current "hard" meter requirement, to be equipped with "a reliable,
independently verifiable software-based metering system, approved by the Department." See
lines 91-103 at ©5. All of these changes are intended to allow currently licensed taxicabs to
operate and deliver services in a manner similar to TNC vehicles.
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• Uber:
No substantive issues with the provisions of Bill 54-14.
• Lyft:
No substantive issues with the provisions of Bill 54-14.
• CCTI: The CCTI proposal adopts the increase of age limits for taxicabs by one year,
and proposes to limit the age of mc vehicles to 10 years. The proposal also would
require identical mechanical and maintenance standards to mc vehicles and taxicabs.
There does not appear to be any dispute as to whether mc vehicles should be required to
have the lettering, numbering, and marking requirements applied to taxicabs. In fact, CCTI is
seeking the relaxation of some of these requirements. With regard to vehicle inspection and
maintenance standards, there is some divergence in the positions of the mcs and CCTI. As
with driver packground checks, it is difficult to find a clear distinction
in
the need or justification
for different inspection, maintenance, and age standards for mc vehicles versus taxicabs. Two
characteristics of the mc model may provide justification for different standards: (I) the fact
that mc vehicles are personal vehicles often used part-time to provide for-hire driving services
may support a different age limit for the vehicles; and (2) the rating systems used by mcs such
as Uber and Lyft, that perfonn a sort of self-regulation that is not present
in
the taxicab model,
may obviate the need for identical inspection standards.
Accessibility
Should TNC vehicles/drivers be subject to the same accessibility standards as taxicabs?
If
not, should a surcharge (in the form ofa per-trip charge to the passenger or annual charge to
the TNC) be imposed to subsidize the maintenance and expansion ofthe accessible vehicle stock
in the County?
Under Bill 54-14, a mc would be required to have its digital dispatch interface be
accessible to the blind and visually impaired and the deaf and hard of hearing. A mc would be
required to submit an accessibility improvement plan to the Director of MCDOT, and would be
prohibited from imposing additional charges on individuals with disabilities. Finally, a mo that
accepts a ride request through digital dispatch from a passenger with a disability who uses
mobility equipment, upon picking up the passenger the mo must stow the passenger's mobility
equipment in the vehicle if the vehicle is capable of stowing the equipment.
If
the passenger or
rNO decides that the vehicle is not capable of stowing the equipment, the company that provides
digital dispatch must not charge a trip cancellation fee or, if any fee was charged, must provide
the passenger with a timely refund. See lines 318-339 at ©29 of Bill 54-14.
The current provisions of Chapter 53 require a fleet or association to have a Customer
Service Plan that includes a phased
in
plan for service improvements to senior citizens, people
with disabilities, and underserved populations. Section 53-506(a) requires that the overall
number of accessible taxicab licenses be at least 5% of the total of available County taxicab
licenses. By regulation, a fleet or association is required to maintain a level of at least 8%
accessible vehicles.
A
taxicab fleet or association holding 30 or more PVLs must participate in
user-side subsidy programs such as Call-n-ride. Specific standards for accessible taxicabs.
• Uber:
No substantive issues with the provisions of Bill 54-14. Uber has indicated that it
would be open to discussion about a surcharge to support accessibility programs.
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• Lyft: No substantive issues with the provisions of Bill 54-14. Lyft has indicated that it
would not object to a legislated requirement that it either collect a per-ride fee or pay a
flat-fee surcharge to support the expansion of wheelchair accessible options in the
County. See ©178-181.
• CCTI: CCTI proposes to require mc vehicles to participate in user-side subsidy
programs such as Call-n-Ride, unless they opt out by paying a fee to the County, and
would subject mcs to the same accessibility standards as taxicabs, including Americans
with Disabilities Act compliance and a requirement that a participating mc provide an
adequate number of vehicles to meet service demand.
Accessibility standards have been a major issue in jurisdictions that have thus far
engaged in regulating mcs. Houston includes mc vehicles in its requirement that 3% of the
entire vehicle-for-hire fleet in the city be wheelchair accessible vehicles. Seattle and Austin
impose 10 cent per ride surcharges to fund subsidies for expanding the number of wheelchair
accessible vehicles in those cities. Minneapolis imposes a flat $10,000 surcharge on Uber and
Lyft to fund a program aimed at increasing the availability of wheelchair accessible vehicles
(©180).
Bill 54-14, includes some accessibility provisions, described above, but does not include
any specific requirements as to the availability of wheelchair accessible mc vehicles or any
charges or fees aimed at expanding the availability of wheelchair accessible vehicles-for-hire in
the County. The Committee may wish to consider the approaches taken by other jurisdictions in
detennining how best to maintain or improve levels of service for County residents requiring
wheelchair accessible transportation. The Committee may also wish to consider other measures
strengthening the accessibility provisions in the Bill.
Data/Trip Records
Should TNCs and taxicabs be subject to different data reporting requirements?
Bill 54-14 would require mes to provide certain information about drivers, trips, and
vehicles to the Department. As mentioned previously, a mc must maintain and provide a
current registry of each mo and vehicle registered with the me. Also, a mc must maintain
any records required by the Department to enforce this Section, and as required by the
Department or regulation, the mc must transmit aggregate trip data collected by a digital
dispatch or taxicab meter system to the Department for all trips. See lines 155-160 at ©22-23 of
Bi1l54-14.
As noted on page 3, above, taxicabs are required to compile and submit to the
Department annually certain trip data. The data required is related to the number of trips, the
number of vehicles, and revenue.
• Uber: Uber requests deletion of language allowing requirement by the Department or
regulation to transmit aggregate trip data. Uber claims this data is proprietary, and that is
concerned about protecting its passengers' privacy.
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• Lyft: Lyft also objects to the required transmittal of trip data for essentially the same
reasons stated by Uber.
• CCTI:
CCTI proposes to codify, generally, the reporting requirement applicable to
taxicabs by regulation, and also apply it to mcs. Specifically, the CCTI proposal would
require an annual report containing the following information:
o Total number of trips requested;
o Total number of trips serviced;
o Total paid miles driven;
o Total revenue from trips originating or terminating in the County;
o Total revenue derived from Surge Pricing; and
o Average number of vehicles providing Taxicab Service by month
It
has been widely observed that the information compiled by mcs could be of great
value to governments in improving vehicle-for-hire service and transportation planning generally
(©182-186). However, mcs have been traditionally resistant to turning over trip data
to
regulating governments. However, recently Uber has
begun
sharing anonymized data
concerning trips using the service (©187-188).
In
Boston, Uber will provide quarterly reports
with trip logs showing the date and time each ride began and ended, the distance traveled and the
zip codes where people were picked up and dropped off. By removing customer-identifying
information, the mcs can protect their customers' privacy, while still providing valuable
information to the County. The Committee may wish to consider imposing anonymized trip data
reporting requirements on mcs similar to the reports Uber will be submitting in Boston.
. Customer Service
Bill 54-14 does not impose specific customer service standards on mcs. The rating
systems utilized by mcs function as a sort of self-regulation in that area.
29
The effectiveness of
the ratings system is evidenced by the high levels of satisfaction expressed by mc users.
30
Existing mcs are known to be protective of their brand, with stories of drivers being
deactivated because of low ratings.
31
In order to ensure that customer complaints are addressed
in a timely manner, the Committee may wish to consider requiring a mc to have a local office
with
customer service agents available by telephone or in person.
In contrast, Chapter 53 requires customer service standards for taxicabs to be set by
Executive regulation. MCC
§
53-110 (©189-190). Since this requirement was enacted in 2004,
these regulations have not been approved.
• Uber:
No substantive issues with the provisions of Bill 54-14.
• Lyft: No substantive issues with the provisions of Bill 54-14.
A description of Lyft's rating system can be accessed at https:/Iwww.lyft.com/help/article/1453135. A brief
discussion of Uber's rating system is at hrtp:/Iblog.uber.com/feedback
30
There is significant dissatisfaction expressed about surge pricing, which has been addressed earlier in this
memorandum. The focus of this part of the discussion is customer satisfaction with the driver and vehicle.
31
See the testimony of Hal "Cory" Druskin at the public hearing on the Bills at ©96-97.
29
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• CCTI:
CCTI proposes to eliminate the customer service requirements section in its
entirety.
By most accounts, TNCs have been successful in the marketplace in large part because
they deliver a superior customer experience. The Committee may wish to consider whether
additional customer service safeguards are necessary, or whether it is necessary to legislatively
require a rating system or other sort of self-regulating mechanism.
It
is possible to conceive of a
circumstance where TNCs are the dominant mode of for-hire transportation, and the competitive
need to maintain high customer service standards wanes.
,
With regard to CCTI's requested deletion of the existing, though unimplemented,
customer service requirements, the Committee may consider general satisfaction or
dissatisfaction with taxicab service in the County. If existing customer service is acceptable and
has reached and attained that level in the absence of the regulations, then perhaps the
requirement is not necessary.
Centralized Digital Dispatch
Bill
55-14
represents an effort to adopt a program being pursued in Chicago and the
District of Columbia
(©191-195),
and considered in New York City
(©196-197),
to create a
digital dispatch system for all taxicabs. The intent of the Bill is twofold: (1) create a mechanism
by which currently regulated taxicabs can deliver taxicab services in a manner competitive with
TNCs; and
(2)
be a part of a uniform regional dispatch system that would better serve the
transportation needs of passengers in the Washington, DC metropolitan area.
The D.C. regulations require the establishment of a taxicab cooperative,32 while Bill
55­
14
merely requires the establishment of a centralized electronic dispatch system. Creating a
workable system will require extended Committee discussion, and is closely related to some of
the concerns raised by taxicab drivers, and such discussion would be appropriate as part of that
larger conversation.
Company-Driver Relations
Since the Bills were introduced, several taxicab drivers affiliated with the Montgomery
County Professional Drivers Union (MCPDU) have communicated with Councilmembers
concerning problems in their relationships with the fleets for whom they drive. The drivers
described a situation in which they must pay to the taxicab company what they perceive as an
exorbitant daily lease rate for a taxicab with a PVL, a charge for insurance far above market
rates, an elevated credit card processing fee, and myriad others charges related to their operation
of a fleet taxicab. Drivers also expressed dissatisfaction with the dispute resolution and decision­
making processes in the industry. See
©198-202.
In
response to information provided by the
drivers and testimony at the public hearing. Councilmember Berliner, by letter, requested certain
relevant information from the five taxicab companies operating in the County. All companies
but Sun Cab have responded, providing varying amounts of information. This letter and the
responses received to date are at
©203-230.
32
http://dctaxi.dc.gov/sites/default/files/dclsites/dc%20taxilevent content/attachments/Chapters16and99,pdf
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It should
be
noted that mc drivers are not universally happy with their respective mcs.
In October, groups of Uber drivers around the Country organized a protest to air various
grievances about the company's operations.
33
The drivers were unhappy with Uber's reduced
fares, tipping policy, and five-star rating system, and expressed concerns about driver safety.
Earlier in the year, Uber drivers protested Uber policies at the company's New York office,
saying that under Uber's pricing structure, drivers could not make a living working only for
Uber.
34
A story by PBS Newshour's "Making Sense" in October 2014, entitled "What It's
Really
Like
to
be
an Uber Driver," also offers some insight into the relationship of Uber and its
drivers.
35
The issues raised by the drivers warrant a separate discussion by the Committee, and will
be
discussed fully in a future worksession on the Bills.
This packet contains:
Expedited Bill 53-14
Legislative Request Report, Expedited Bill 53-14
Fiscal and Economic Impact statement, Bill 53-14
Bill 54-14
Legislative Request Report, Bill 54-14
Fiscal and Economic Impact statement, Bill 54-14
Bill 55-14
Legislative Request Report, Bill 55-14
Fiscal and Economic Impact statement, Bill 55-14
Public Hearing Testimony
Art
Holmes
William S. Morrow
Zuhairah Washington
Dana Evan Jones
Jim Aaron
Elgasim Fadlalla
DarioArana
Circle #
1
9
10
16
30
31
36
38
39
43
44
54
57
58
59
60
61
Bridget Frances
Brandon Lyons
Kim Burton
Lee Barnes
Dwight Kines
David Mohebbi
RezaRaoofi
Robert Alexander
Alfred LaGasse
Glenn Gilliam
Elaine Bastide
62
63
64
73
75
80
83
85
88
91
http:Uwww.businessinsider.com!uber-drivers-across-the-country-are-protesting-tornorrow--heres-why-2014-10
34
http:Uwww.businessinsider.com/uber-new-york-citv-office-protests-2014-9
35
http:Uwww.pbs.org!newshour!rnakin
g-sense/wh
at-its-really-Ii ke-to-be-an-u ber-driver!
33
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Bruce Block
Jaynul Islam
Hal "Cory" Druskin
Beth Levie
Peter Ibek
Becaye Traore
Ginanne M. Italiano
Kimberly Jordan-Gaskins
Synopsis of Chapter 53 revisions offered by CCTI
Berliner letter to Uber, December 19, 2014
Uber letter to CM Berliner, January 9,2015
Rachel Weiner on Washington Post.com, "Uber and Lyft closer ... "
Case studies of six jurisdictions' TNC laws
Uber business model graphic
Explanation ofLyft's insurance policy
Letter from Lyft's insurance counsel re: "match mode"
COMCOR53.17.01, Taxicab Rates
California Uber complaint, selected sections
Lyft suggested language re: driver and vehicle information
CCTI "Potential Enforcement Mechanism"
Email from Lyft re: Bill 54-14
Karen Boros, MINNPOST.com, "New Program ... "
Emily Badger on Washingtonpost.com, "Uber's Data ..."
Wall Street Journal Article, "Uber Offers Trip Data to Cities ..."
County Code, § 53-110
Lori Aratani, Washingtonpost.com, "D.C. Taxi Commission ..."
Mike Isaac, NYTimes.com, "Chicago and New York Officials ..."
Letter outlining driver issues
Letter from CM Berliner to Robert Alexander
Regency Taxi response to CM Berliner letter
Barwood response to CM Berliner letter
Action Taxi response to CM Berliner letter
Orange Taxi response to CM Berliner letter
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Expedited Bill No.
53-14
Concerning: Taxicabs - Licenses ­
Vehicle Requirements - Driver
Identification Cards
Draft No. 2
Revised:
10/10/2014
Introduced:
October 28.2014
Expires:
April 28, 2016
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _ _ _
~-:--
_ _ _ __
Sunset Date:
--'1'-'-/1....,.,/2=0:...:1..:.6---:-_ _ __
Ch. _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Councilmembers Floreen, Berliner, Riemer, and Council President Rice
AN EXPEDITED ACT
to:
(1)
permit the holder of a fleet Passenger Vehicle License to grant a sublicense to
another person on certain conditions;
(2)
increase the age limits for vehicles used as taxicabs;
(3)
amend certain requirements for color and markings of vehicles used as taxicabs;
(4)
allow software-based meters to be used in taxicabs;
(5)
amend certain requirements for temporary identification cards for taxicab drivers;
and
(4)
generally amend the laws governing the licensing and regulation of taxicabs.
By amending
Montgomery County Code
Chapter 53, Taxicabs
Sections 53-201, 53-228, 53-229, 53-231, 53-232, 53-233, 53-235, 53-306, 53-307 and
53-308
By adding
Section 53-204A
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
* * *
Heading or defined term.
Added to existing law by original bill.
Deleted from existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unaffected by bill.
The County Council for Montgomery County, Maryland approves the following Act:
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EXPEDITED BILL No. 53-14
I
2
Sec.
1.
Sections 53-201, 53-228, 53-229, 53-231,53-232,53-233,53-235,
53-306,53-307,
and
53-308 are amended,
and
Section 53-204A is added, as
follows:
53-201.
(a)
Required.
A person must not provide taxicab servIce without possessmg a
license as required under this Chapter.
(b)
[A]
Except as provided in subsection (c)(3),
~
3
4
5
6
7
license must be issued
8
only to the owner of each taxicab.
(c)
A [licensee] person must not operate a taxicab or provide taxicab
service unless the [licensee] person either:
(1)
9
lO
11
12
holds a fleet license; [or]
holds one or more individual licenses and is affiliated with an
association or a fleet[.l;. or
(2)
13
14
15
16
ill
(d)
53-204A.
holds
~
sublicense granted
Qy
~
holder of
~
fleet license under
Section 53-204A and is affiliated with that fleet.
A licensee must hold a license for each taxicab.
Sublicenses.
The holder of
~
fleet license may grant
~
sublicense to another person
under this Section.
17
18
19
ill
.Q:ll
20
21
22
23
A sublicense may be granted only if:
ill
the holder of
~
tleet license notifies the Department in writing
of the proposed grant not less than 30 days before the date of
the proposed grant, specifying all terms and conditions of the
proposed grant and the identity of the proposed grantee;
24
25
ill
the Director finds that the proposed grantee meets all
requirements for
regulations; and
~
26
27
licensee under this Chapter and applicable
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EXPEDITED BILL No. 53-14
28
29
30
ill
(f)
the Director approves the grant of the sublicense.
~
The Director must not approve
grant of
~
sublicense if the grantee
already holds, or would then hold, more than 40% of the total number
of licenses then in effect.
31
32
33
34
@
53-228.
The holder of
~
sublicense is subject to all of the requirements of this
Chapter that apply to
~
licensee.
Procedure when vehicle placed in or removed from service.
35
*
(g)
model years old.
53-229.
(a)
Age of vehicles.
*
*
36
37
Any vehicle placed in service as a taxicab must not be more than [4]
38
39
40
A licensee must not use any vehicle that is more than [7]
~
model
years old to provide taxicab service in the County. As used in this
Chapter, the "model year" of a vehicle is the year designated by the
vehicle manufacturer, as indicated on the vehicle or in the
manufacturer's records. A licensee may maintain a vehicle in service
until the next December 31 after its [seventh] eighth model year ends
if the vehicle passes a comprehensive safety inspection performed
during the preceding August by a state-certified inspector in good
standing.
41
42
43
44
45
46
47
48
49
50
51
*
53-231.
(a)
*
*
Vehicle numbering, lettering, and markings; rate chart.
When a license for a taxicab is issued under this Chapter, the
Department must assign a license number to the taxicab. The licensee
(or the fleet, if the vehicle is affiliated with a fleet) must assign a
vehicle number to each taxicab.
The vehicle number must be
52
53
54
permanently applied[,] and plainly visible[, and not less than 3 inches
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EXPEDITED BILL No. 53-14
55
56
high, on each of the 2 sides, on each of the 2 rear door roof columns,
and on the rear of each taxicab1.
57
58
*
53-232.
(a)
*
*
Doors; lettering; color; special equipment.
59
Each taxicab operated in the County must have at least 3 doors. All
doors must operate safely.
60
61
62
63
(b)
A licensee or driver must not operate a taxicab unless the taxicab
bears markings in letters plainly distinguishable [and not less than 3
inches high,1 on each of the 2 sides of the taxicab, showing the
approved name [and telephone number1 of the fleet or association by
whom the taxicab is owned or operated[, and the word "taxicab,"
"taxi" or "cab."1.:.
64
65
66
67
68
69
70
(c)
[All taxicabs in a fleet or association1 Each fleet or association must
[be uniform in color] register its colors with the Department. A fleet
or association may register one or more color combinations, and any
fleet or association may register black as one of its colors. A fleet or
association must not use colors that are similar to those of another
neet or association so that the public can readily identify taxicabs
operated
Qy
that fleet or association. [However, the1 The Director
may approve advertising in different colors or markings as long as the
public can still readily identify taxicabs operated by that licensee, or
the use of a set of different colors and markings to identify a
specialized service provided by or geographic area served by a fleet or
association.
Any color or color combination approved by the
71
72
73
74
75
76
77
78
79
Department.,. other than black, must be reserved for the exclusive use
of that fleet or association when the fleet or association is operating
taxicabs in the County.
80
81
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EXPEDITED BILL No. 53-14
82
83
(d)
Each licensee must insure that each fleet or association uses only the
approved name of the fleet or association in advertising or listing its
service to the public.
84
85
53-233.
Cruising lights.
86
87
88
89
Each taxicab [must) may, but is not required
!Q,.
have cruising lights that
operate electrically as a sign or insignia mounted on the forward portion of the roof
of the taxicab. [These] Cruising lights must not be used until approved by the
Department[. These lights].,. and must be designed so that the vehicle can be easily
identified as a taxicab.
90
91
92
53-235.
(a)
Taxicab meters.
Each taxicab must be equipped
with~
93
94
95
ill
an accurate, properly installed and connected taximeter which
has a security seal affixed by the Department[.]; or
ill
(b)
f!
reliable, independently verifiable software-based metering
96
97
98
system, approved
Qy
the Department.
In addition to regular inspections, the Department may conduct
periodic tests of these meters or metering systems. Upon successful
completion of the tests, [the]
f!
taximeter must be affixed with a
security seal.,. and
f!
software-based metering system must be marked
in
f!
manner acceptable to the Department. These tests should be
scheduled in a manner that minimizes interruption of taxicab service
to the public.
99
100
101
102
103
104
105
106
*
53-306.
(a)
*
*
Application; temporary card.
A person who holds a valid identification card must apply for a
renewal card not less than 30 days before the current card expires.
107
108
*
*
*
o
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EXPEDITED BILL No. 53-14
109
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111
(c)
(1)
An applicant who has not held an identification card, or who
held a card that has expired, may apply for a short-term
temporary identification card under applicable regulations.
112
113
(2)
The Director must not issue a temporary identification card
unless the applicant has:
(A)
(B)
properly verified his or her identity;
a valid driver's license issued by Maryland or a bordering
state (including the District of Columbia);
(C)
submitted his or her driving records, as compiled by the
appropriate state motor vehicle agency, for the previous 3
calendar years from any jurisdiction where the applicant
held a license to drive a motor vehicle; and
. (D)
undergone a criminal background check, conducted by
the appropriate state agency, showing that the applicant is
not disqualified because of a criminal conviction, receipt
of probation before judgment in lieu of a conviction, or
pending criminal charge from operating a taxicab[; and]
[(E) passed the examination required under Section 53-308].
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127
(3)
[After August 31, 2007, the] The Director must not issue a
temporary or annual identification card unless the applicant has
shown, through a complete criminal background check, that the
applicant is not disqualified for any reason mentioned in
Section 53-309(a).
128
129
130
131
132
133
134
(4)
Any temporary identification card issued under this subsection
must differ conspicuously in style and color from the annual
identification card.
135
(5)
A temporary identification card expires [on the earlier of:
t6J
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EXPEDITED BILL No. 53-14
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(A)
5 days after the Department receives the results of the
nationwide criminal background check; or
(B)
(6)
90] 45 days after the card was issued.
The holder of a temporary identification card must return it to
the Department, without further proceedings, on the earlier of:
(A)
the day the Department issues the holder an annual
identification card under this Chapter;
(B)
(C)
the [90th] 45th day after the card was issued; or
1 business day after the Department notifies the holder
that the card has expired under subsection (c)(5)[(A)].
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(7)
By accepting a temporary identification card, the holder by
operation of law waives any cause of action against the County
or any officer, employee, or agency of the County for
improperly issuing a license to the holder. By employing or
leasing a taxicab to any person who holds a temporary
identification card, a taxicab licensee by operation of law
waives any cause of action against the County or any officer,
employee, or agency of the County for improperly issuing a
license to that person.
(d)
The Director inay extend the expiration date of an identification card
[(including a temporary identification card issued under subsection
(c))] up to 60 days if:
(1)
(2)
the applicant has submitted all required documentation; and
processing of required state or federal criminal background
checks has been delayed through no fault of the applicant.
53-307.
Physician's certificate.
a
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EXPEDITED BILL No. 53-14
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186
(a)
Before the Director issues an identification card, [including] other
than a temporary card issued under Section 53-306(c), the applicant
must furnish a physician's certificate, issued within the previous 30
days, which certifies that:
(l)
the applicant has been given a physical examination, including
an initial tuberculosis test and any other test required by
applicable regulation; and
(2)
the applicant is free from any communicable disease, and is not
subject to any physical or mental impairment that could:
(A)
(B)
adversely affect the applicant's ability to drive safely; or
otherwise endanger the public health, safety, or welfare.
*
53-308.
Examination of applicant.
*
*
~
Before issuing an identification card, other than
temporary card issued
under Section 53-306(c), the Director must require the applicant to show that the
applicant is able to:
(a)
(b)
perform the duties and responsibilities of a taxicab driver; and
pass an examination on knowledge of traffic laws, duties under this
Chapter, and general qualifications to operate a taxicab in the County.
Sec. 2.
Expiration.
This Act and any regulation adopted under it
expires on January 1, 2016. Any taxicab modified as authorized by this Act may
continue to be used as modified as long as
it
remains in service.
Sec. 3.
Expedited Effective Date.
The Council declares that this
legislation is necessary for the immediate protection of the public interest. This
Act takes effect on the date when it becomes law.
t8\
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Taxicabs-Licenses-Vehicle Requirements\BilI4.Doc
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LEGISLATIVE REQUEST REPORT
Taxicabs
-
Licenses
Expedited Bill 53-14
Vehicle Requirements
-
Driver Identification Cards
DESCRIPTION:
Expedited Bill 53-14 would address some of the issues faced by the
taxicab industry in adapting to a market now populated by
transportation network companies (TNCs) such as Uber and Lyft in
addition to regulated taxicab companies. The Bill would amend
current requirements related to the sublicensing of Passenger Vehicle
Licenses (PVLs); vehicle age limits, meters, numbering and
markings; and the issuance of temporary driver identification cards.
The regulated taxicab industry is faced with new competition from
TNCs and must adapt to the changing marketplace.
Ensure a competitive market for the delivery of transit services while
maintaining high standards of public safety, convenience, and
comfort.
MCDOT
To be requested.
To be requested.
To be requested.
To be researched.
Josh Hamlin, Legislative Attorney
To be researched.
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITHIN
MUNI CIPALITIES:
PENALTIES:
N/A
f:\law\bills\1453 taxicabs-licenses-vehicle requirements\lrr.doc
rJ)
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ROCKV£LLE,
MARYLAND
MEMORANDUM
],mU31'Y
20, 2015
TO:
George Leventhal, President, County Council
Jennifer A. Hughes, Director, Office of
Joseph F. Beach,
Director,
Department of 'm n
FElS
f o r " /
Ii:
I=-=-_Jlft~
BiB 54-14, Taxicabs -
Transportation
Network
Service- Requirements;
Bill 55-14, Taxicabs - Centrali7..ed Electronic. Dispatch
System
FROM:
SUBJECT:
Please find
attached
the fiscal
and economic
impact
statements for
the
nbove-referenced
legislations.
JAH:fz
co: Bonnie Kirkland, Assistant Chief Administrative Officer
Lisa
Austin,
Offices
of the
County
Executive
Joy
Numli,
Special
Assistant to the County
Executive
Patrick Lacefield, Director, Public Information Office
JosephF.
Beach,
Director.
Department of
Finance
Michael Coveyol.l,
Department
of Finance
Kevin Mayer, Department of Finance
AI
R.
Roshdieh. Acting Director, Department ofTransportation
Alex
Espinosa,
Office
()f
Management and Budget
Brady Goldsmith,
Office
of
Management
and Budget
Nacem Mia, Office of Management and Budget
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Fiscal Impact Statement
Council
Bm 53-14.
Taxicabs - Licenses - Vehicle Requirements - J)river Identification
Cards
1. Legislative Summary.
Expt.~di
ted
hi U 53-14 would allow
the
permit
holder
of
11
Heel. Passenger V!,}hicle
(PVL)
to
grant a sublicense
to
another person. increase the age limits fhr
vehicles
u~ed
as
taxicabs. amend
certain requirements
for color and 111arkings of vehicles used as taxicabs,
allow
software based meters to
b~
used in tuxkabs.l.lnd amend
certain
requirements
for
tempnrsry identiftcation cards for
taxicab dtivers.
2, An estimate of changes in County revenues and expenditures regardless of whether
the
revenues
or
expenditures
are
assumed in
the
recommended
or
approved bucl&lCt.
Inch.
ldes
.
source of information, assumptions, and
methodologies
used.
The proposed legislation does not
alJect
County
reV(;'!1ues.
Managing the potential changes to
Chapter ofrhe
1\1ontgomery
County ('ode \-\-Quld
require 'One
addiiional
Code Enfi)fcemcnt Inspector, one vehicle. and associated
op~~rating
costs,
16 costs are estimated
at
$180,369.
3. Reve11ue and expenditure
estimates covering
at lea.'\t the next 6 t1scal years.
Expenditures over the next six
yl~ars
are
estimated
to
$754, 174.
4. An actuadal ,maiysis
through
the entire amortization period
tor
each hiB that would affect
retiree
pension or group insunmce costs.
5. Later actions
that may affect future revenue
and
expenditures
if
the bill authorizes future
spending.
wm
n::qllest
suhlicense to <'mother
how many permit bolders of
6.
An estimate
of
the struT time
needed to implement
the
bill.
to
implement the proposed bill
should
not increase signifIcantly. The increase
of workload wili come from
the
enfhrce:ment
of
the
pmposed legislation.
Current
fbr this bill is one additional full tim.e Code Enforcement Inspector.
7. An explanation of how the addition of
new
stair
responsibilities would affect other duties,
to
enforce
'rhe
additional
hIll
time Code Enfbrcem.cnt lnspcc!()[
c()rnpliarll.:<'~
of the proposedlcgislalioll.
8. An estimate of costs when an additional appropriation is needed.
N/A
9. A description of any variable tbat could
affect
revenue and cost estimates.
that could
impal't
State Puhlic
Commission (PSC) has proposed
legislation.
the
@
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J
O. Ranges ofrevcnue or expenditures that are uncertain or difficult to project.
It
is unknown how many permit
holders
of PVL's
will
request sublicense
to
another
person.
1L If a bill is likely
to
have
110
fiscal impact, why that is the case.
12. Other fiscal impacts or comments.
13. The following
contributed to
and
concUlied
with this analysis: James
Ryan
MCDOT,
Darlene FiynnMCDOT, and Brady Goldsmith OMR
@
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B1II53~14
FY16 costs
Expenditures:
FY17 costs
FY18
costs
fY19 costs
FY20costs
FY21 costs
1 Inspector SWB
1 Vehicle
&
M/P
Laptop/Software
Cell
Phone/charges
Supplies/printing
and Misc.
exp
Printing of
new
code book.s
Office
phone
Marketing
Total
94,291.00
30,770.00
1,283.00
1,300.00
2,500.00
2,475.00
750.00
47,000.00
94,291.00
6,670.00
1,300.00
500.00
94,291.00
6,670.00
1,300.00
500,00
94,291.00
6,670.00
1,300.00
500.00
94,291.00
6,670.00
1,300.00
500.00
94,291.00
6,670.00
1,300.00
500.00
12,000.00
12,000.00
12,000.00 ___}2,OOO.00
12,000.00
Total
Costs (6 yrs)
565,746.00
64,120.00
1,283.00
7,800.00
5,000.00
2,475.00
750.00
107,000.00
$
180,369.00
$
Revenues:
114,761.00
$
114,761.00
$
114,761.00
$
114,761.00
$
114,761.00
754 174.00
j
o
None
assumed
Note:
Marketing including
website development! educational materials
@
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Economic Impact Statement
BiD 53-14, Taxicabs - Licenses VchieleRcquircments - Driver Identification Cards
Background:
This legislation amends several sections ofChapter 53 ofthe County Code related
to
licensing and operation of taxicabs in Montgomery County. Specifically, Bill 53-14
\vould permit the holder ofa Passenger Vehicle License
(PVL)
to grant a sublicense
to
another person. The legislation would change the age limitations on vehicles by one
year, to no more than five model years when placed into service, and no more
than
eight
model years when
in
service. The legislation would also
relax
current requirements on
vehicle numbering, markings, colors, special equipment, and cntising lights.
Bm
53-14
also amends certain requirement tor temporary identification card for taxicab drivers, and
allows for software-based met.ers to be used in taxicabs.
Bill 53-14 addresses the economic impact oftr'ansportation netvvork companies (TNC),
such as Uber and Lyft,
on
the County's taxicab industry. SpecifIcally,
lNCs
are not
regulated by the County, and, as such, TNes allow customers to use their
smart
phones
from any location
to
secure transportation and thereby providing a competitive advantage
by increasing the supply ofdrivers and cars in the market.
To address the increase in the supply of drivers from TNCs, Bill 53-14 allows
a
pennit
holder ofa PVL to grant a sublicense to another person thereby increasing the number of
PVL
drivers and by increasing
the
age limit of vehicles
used
by taxicabs it would
increase the supply ofvehicles and total
taxi
service in the County, and ensure a
competitive market for the delivery oftaxicab services.
1.
The sources of information, assumptions, and methodologies used.
Source of information
is
the Montgomery County Department of Transportation
(lYfCDOT),
The assumptions are that increasing the supply of drivers and
the
supply of vehicles
by PVLs will enhance transit services in the County and ensure a competitive market
for
the
delivery of
transit
services. According to MeDOl', the Cmmty current has
issued 770 PVLS of which ot'which
it
is estimated
that
550 are held by operating
taxicabs and 220 are
assignt~
to
taxicabs
that
are currently idle and nonwoperating.
As stated above, Bill 53-14 would allow the
pennit
holder
of
the fleet
oc
individual
PVL to &rranta sublicense to another individuaL Since there are an estimated 220
idle/unused taxicabs in the County, the holder of the
PVt,
either fleet or individual,
could receive revenues from either of two methods: 1) sell the used taxicab as a used
car or
cab~
or
2)
sublicense the vehicle (or both).
Under
option
2,
the direct license
holder, e.g., a current cab company would receive an estimated $230 per week from
the holder of the sublicense. Therefore, the holders of the PVLs could receive up to
an estinmted $46,000 per week (220 x $230) from sublicensing all idle vehicles
<;vithout incurring operating costs. The sublicense holder would pay for
the
operating
expenses for that vehicle including insurance and the fee for the PVL.
Page
1
of2
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F4wnomic Impact Statement
BiU 53-14, Taxicabs - Licenses Vehicle Requirements - Driver Identification Cards
2. A deseription
of
any variable that could affect the economic impact estimates.
The variables that could affect the economic impact estimates is the number of
sublicenses issued, the pricing impact of increasing the
supply
of taXi services, and
the effect ofcurrent supply oftaxicabs by increasing the age limit ofta.x.icabs.
3. The Bill's positil'c or negative effect,
if
arty on employment, spending, saving,
investment, incomes,
and
property values in
the
County.
It
is
ullceliain with
any
specificity to determine the economic impact on employment,
spending, saving, investment, incomes, and property values
in
the County. Bi1153 14
w
would increase the number of drivers of taxicabs and thetefore have a positive impact
on employment. The changes would address the current competitive advantage
experienced
by
TNCs
and,
due
to
the greater competition, benefit customers with
better
and
faster service at potentially lower prices.
By
permitting software-based
meters in taxicabs, Bill 53-14 addresses another competitive
advantage
by TNCs by
providing
passengers
of
taxicabs precise information on travel cost.
4.
If
a
Hillis likely to have no economic impact, why is that the case?
Bill 53-14 could have a positive economic impact on PVLs
but 'without
actual
data,
it
is difficult
to
precisely estimate the impacts
on employment, business income, and
investment.
5.
The
following contributed to or concurred with
this
analysis;
David
Platt and
Rob
Hagcdoom, Finance;
Howard
Beml
and
James Ryan,
(MeDOT).
Department
of Finance
h,
Director
Page 2
of2
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Bill No.
54-14
Concerning: Taxicabs - Transportation
Network Service - Requirements
Draft No.
L
Revised:
10/24/2014
Introduced:
October 28, 2014
Expires:
_---'~~::<.t....::.:;..:..;=--
_ __
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ _ __
Sunset Date:
~=
Ch. _ _, Laws of Mont. Co. _ __
______
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Councilmembers Berliner and Floreen
AN
ACT to
(1)
(2)
(3)
(4)
(5)
(6)
require a transportation network application company to obtain a license to
operate in the County;
require a transportation network application company and transportation network
operator to meet certain registration requirements;
require a vehicle used to provide transportation network service to meet certain
standards;
require a transportation network application company and transportation network
operator to be insured;
require transportation network application company and transportation network
operator to meet certain accessibility standards; and
generally amend the laws governing the licensing and regulation of taxicabs.
By amending
Montgomery County Code
Chapter 53, Taxicabs
Sections 53-101and 53-106
By adding
Sections 53-801,53-802,53-803,53-804,53-805, and 53-806
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
* * *
Heading or defined term.
Added to existing law by original bill.
Deletedfrom existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unaffected by bill.
The County Council for Montgomery County, Maryland approves the following Act:
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BILL No. 54-14
1
Sec.
1.
Sections 53-101 and 53-106 are amended, and Sections 53-801,
53-802, 53-803, 53-804, 53-805, and 53-806 as follows:
53-101.
Definitions.
2
3
4
5
In this Chapter, unless the context indicates otherwise:
*
*
*
6
7
Digital dispatch
means the hardware and software applications and
networks, including mobile phone applications, which passengers and
operators use to obtain and provide taxicab or transportation network
servIce.
8
9
10
11
12
*
*
*
Dispatch
means the traditional methods of pre-arranging vehicle-for-hire
service, including through telephone or radio.
13
14
15
*
Surge pricing
means
~
*
*
~
fare structure that bases
rate on time and distance
factors, increased
Qy
~
multiplier related to consumer demand.
16
17
*
operating in the County that:
*
*
~
Transportation network application company (TNAC)
means
company
18
19
ill
uses
~
digital network or software application to connect
~
20
21
passenger to transportation network services provided
Qy
!!
transportation network operator; and
22
23
ill
does not accept rides hailed on the street.
Transportation network operator (TNO)
means an individual who operates
~
motor vehicle that is:
24
25
26
27
ill
ill
ill
owned or leased
Qy
the individual;
not licensed as
~
taxicab; and
used to provide transportation network service.
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BILL No. 54-14
28
Transportation network service
means transporting
~
passenger between
~
29
points chosen
Qy
the passenger and that is prearranged
Qy
network application company.
transportation
30
31
32
*
53-106.
(a)
Rates.
*
*
33
34
The County Executive must set taxicab rates for trips other than those
scheduled through
~
digital dispatch service by regulation to promote
35
36
37
38
the public interest after holding a public hearing and considering the
recommendations of the Committee.
*
(£)
*
~
*
Each rate charged for
trip booked scheduled through a digital
39
40
41
42
dispatch service must comply with either:
ill
ill
@
applicable rate regulations; or
~
time-and-distance or surge pricing rate set
Qy
the service.
If
~
licensee or transportation network application company that uses
digital dispatch charges
~
43
44
fare other than the metered taxicab rate,
~
before the customer books
disclose to the customer:
vehicle the licensee or company must
45
46
47
48
49
ill
ill
ill
the fare calculation method;
the applicable rate being charged; and
the option for the customer to receive an estimated fare.
~
The licensee or TNAC must review any customer complaint about
50
fare that exceeds the estimate provided under this subsection
Qy
20%
or $25, whichever is less.
51
52
53
54
W
During
~
state of emergency declared
Qy
the County Executive,
~
licensee or TNAC that provides digital dispatch and engages in surge
pricing must limit the multiplier
Qy
which its base fare is multiplied to
a1LLS\1454 Taxicabs - Transportation Network Service\Bi1I3.Doc
@
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BILL No. 54-14
55
56
the next highest multiple below the
J
highest multiples set on different
days in the 60 days before the declaration of !! state of emergency for
the same
~
of service in the County.
[(c)](t) The Director may approve rates other than those set in the
regulations as provided in a contract filed with the Department if the
Director finds that the alternative rates will not result in a significant
reduction of service to the general public. Any alternative rates that
are higher than the rates set by regulation under subsection (a) must
also be set by regulation.
[(d)](g) A person must not charge for taxicab service except as allowed
under applicable regulations or [subsection (c)] this Section.
57
58
59
60
61
62
63
64
65
66
67
68
69
*
53-801.
(ill
*
*
Article 8. Transportation Network Application Companies.
Transportation network application company license; required.
A transportation network application company must obtain !! license
issued Qy the Director in order to operate in the County.
70
71
(hl
A TNAC may obtain!! license Qy applying to the Director on !! form
provided Qy the Department that, at !! minimum, requires the applicant
to provide:
72
73
74
75
76
ill
ill
ill
(A)
proof that the TNAC is licensed to do business in the State;
proof that the TNAC maintains !! registered agent in the
County;
proof that the TNAC maintains !! website that includes the
information required Qy subsection 53-802(c);
!! written description of how the TNAC's digital dispatch
system operates; and
77
78
79
80
~W\BILLS\I454
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BILL No. 54-14
81
ill
(£)
proof that the TNAC has secured all insurance policies required
Qy
this Article.
82
83
84
Any fee for
~
license issued under this Section must be set under
Section 53-107.
85
86
53-802.
Requirements for transportation network application companies.
Each transportation network application company must:
87
88
89
90
91
92
93
W
{hl
obtain
~
TNAC license required under Section 53-801:
create an application process for
TNO;
~
person to apply to register as
~
(£)
maintain and provide to the Department
~
current registry of each
TNO and vehicle registered with the TNAC;
@
maintain
~
website that contains:
ill
ill
ill
the TNAC's customer service telephone number or electronic
mail address;
the TNAC's zero tolerance policy established under subsections
(h)-(i);
the procedure for reporting
~
94
95
96
97
98
99
100
101
102
103
] 04
complaint about
~
TNO who
~
passenger reasonably suspects violated the zero tolerance policy
under subsections (h)-Cn; and
ill
W
~
telephone number or electronic mail address for the
Department's Division of Transit Services Taxicab Unit.
verify that each motor vehicle used for passenger service has passed:
ill
ill
an annual state-required safety inspection; or
an initial safety inspection within 90 days before entering
service
Qy
~
105
licensed mechanic in an inspection station
106
authorized
Qy
the State of Maryland, the District of Columbia,
..alLLS\1454 Taxicabs - Transportation Network Service\BiI13.Doc
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BILL No. 54-14
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
or the Commonwealth of Virginia to perform vehicle safety
inspecti ons.
ill
(g)
annually verify the safety inspection status of each vehicle after the
initial verification is conducted;
verify that each background check required
by
Section 53-803Cb) has
been conducted, and that no TNO is subject to disqualification under
Section 53-803Cc);
ill
ill
establish
~
zero tolerance policy on the use of alcohol or illegal
~
drugs or being impaired
by
the use of alcohol or drugs while
transportation network operator is logged into
~
TNAC's digital
dispatch;
ill
immediately suspend
~
TNO for the duration of the
~
investigation upon receIvmg
written complaint from
~
passenger submitted through regular or electronic mail
containing
~
reasonable allegation that the TNO violated the
zero tolerance policy established under paragraph
ill
and
ill
conduct an investigation when
~
passenger alleges that
~
TNO
violated the zero tolerance policy established
by
paragraph
ill
ill
ill
establish
~
zero tolerance policy regarding discrimination or
discriminatory conduct on the basis of
~
protected characteristic
while
~
TNO is logged into
~
TNAC's digital dispatch system.
ill
Discriminatory conduct under this subsection includes:
®
refusing service on the basis of
~
protected characteristic,
including refusing service to an individual with
~
service
animal unless
- - - -
has
-
documented serious
the TNO
-
a
medical allergy to animals on file with the TNAC;
aILLS\I454 Taxicabs· Transportation Network SelVice\BiII 3.Doc
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BILL
No. 54-14
133
134
135
136
137
138
ill}
using derogatory or harassing language on the basis of !!
protected characteristic;
.cg
(D)
refusing service based on the pickup or drop-off location
of!! passenger; and
rating !! passenger on the basis of !! protected
characteristic.
139
140
141
142
143
144
145
146
147
148
149
150
151
152
153
154
155
156
157
158
ill
Discriminatory conduct under this subsection does not include
refusing to provide service to an individual with disabilities
because of violent, seriously disruptive, or illegal conduct
Qy
the individual. However,!!
rno
must not refuse to provide
service to an individual with !! disability solely because the
individual's disability results in an appearance or involuntary
behavior that may offend, annoy, or inconvenience the TNO or
another person.
ffi
immediately suspend !!
rno
for the duration of the
investigation after receiving !! written complaint from !!
passenger submitted through regular or electronic mail
containing !! reasonable allegation that the TNO violated the
zero tolerance policy established
Qy
paragraph
01.
and
ffi
conduct an investigation when !!passenger submits !! reasonable
allegation that !!
rno
violated the zero tolerance policy
established
Qy
paragraph
01.
and
ill
maintain any records required
Qy
the Department to enforce this
Section.
A rnAC
is not required to collect or transmit data or
information about any specific customer or that customer's trip.
However, as required
Qy
the Department or regulation, the TNAC
~ILLSIl4S4T~k""
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'.Do,
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BILL No. 54-14
159
160
161
162
163
164
165
166
167
168
169
170
171
172
173
174
175
176
177
must transmit aggregate trip data collected
Qy
~
digital dispatch or
taxicab meter system to the Department for all trips.
53-803.
Registration of transportation network operators and vehicles.
To operate as
~
W
(Q)
transportation network operator, an individual must
submit an application to register with
~
TNAC.
Before approving
~
TNO registration application submitted under
~
subsection
hl
each TNAC must have
third
P.ill:!Y
that is accredited
Qy
the National Association of Professional Background Screeners or
~
successor accreditation entity conduct the following examinations:
~
ill
ill
ill
(£)
local and national criminal background check;
the national sex offender database background check; and
~
full driving record check.
A TNAC must reject an application submitted under subsection
and must pennanently disqualify any applicant:
W
ill
who, within
~
years before the registration application is
submitted, was convicted of, pled guilty or no contest
!Q.,.
or was
placed on probation without
~
finding of guilt for, or who when
the application is submitted, has
~
charge pending for, or who
has, within
J.
years before the application was submitted,
completed
for:
~
178
179
180
181
182
183
184
185
sentence or period of probation based on
~
charge
®
ill.)
any offense involving violence or
~
weapon;
any sex offense;
soliciting for prostitution;
illegal sale or use of alcoholic beverages;
violation of any law governing controlled dangerous
substances;
(Q
{ill
.au
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BILL No. 54-14
186
187
188
189
190
191
192
193
194
195
196
197
198
199
200
201
202
203
204
205
206
207
208
209
210
211
212
ill
ill)
violation of any gaming law;
any offense involving driving under the influence; or
any act of moral turpitude;
~
(H)
ill
ill
who has
pattern of reasonably verifiable complaints of
substandard customer service during the previous 24 months;
whose driving record during the
d
years immediately before the
application was submitted, demonstrates that the applicant is
not
~
responsible, safe, or careful driver because the applicant
~
has received more than
points under applicable criteria
defined
Qy
the State Motor Vehicle Administration or the
equivalent in another jurisdiction, or
Qy
other reasonably
verifiable evidence of unsafe or dangerous driving;
®
who makes
~
false statement or gives
~
false answer on
~
registration application;
ill
who is unable to safely operate
~
vehicle, or who may otherwise
endanger the public health, safety, or welfare, or who would be
unable to fulfill the duties of
~
driver as required
Qy
applicable
regulation;
®
who has substantial delinquent debts to the County, State, or
Federal government; or
ill
whose record of violations of this Chapter or other laws or
regulations of the County, State, or any other jurisdiction
indicates that to protect public safety an operator should not be
registered.
@
Each motor vehicle used for transportation network service must:
ill
have
~
manufacturer's rated seating capacity of
~
persons or
fewer, including the operator;
a-ILLS11454 Taxicabs - Transportation Network ServicelBiII3.Doc
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BILL No. 54-14
213
214
215
216
217
218
219
220
221
222
223
224
225
226
227
228
229
230
231
232
233
234
235
236
237
ill
have at least
.1
doors and meet all applicable federal motor
~
vehicle safety standards for vehicles of its size,
proposed use; and
and
ill
ill
be no more than 10 model years old at entry into service and no
more than 12 model years old while in service.
A person registered with
~
TNAC as
~
TNO under this Section must
be treated
Qy
the Department as holding the
necess~
authorization to
operate in the County as may be required
Qy
another jurisdiction or
interstate authority.
53-804.
Insurance requirements for transportation network application
companies and operators.
W
Each TNAC or TNO must maintain
~
primary automobile liability
insurance policy that provides coverage of at least
II
million per
occurrence for accidents involving
~
TNO at all times when the TNO
is engaged in
~
prearranged ride.
{hl
For the time period when
~
TNO is logged onto
~
TNAC's digital
dispatch showing that the TNO is available to pick
!ill
passengers but
is not engaged in
~
prearranged ride, each TNO or
~
TNAC, on the
TNO's behalf, must maintain
~
primary automobile liability insurance
policy that:
ill
recognizes that the TNO is
~
transportation network operator,
and covers the TNO's provision of private vehicle-for-hire
service while the operator is logged into the TNAC's digital
dispatch showing that the TNO is available to pick
!ill
passengers; and
~ILLS\1454
Taxicabs - Transportation Network Service\BiII3.Doc
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BILL No. 54-14
238
239
240
241
242
243
244
245
246
247
248
249
250
251
252
253
254
255
256
257
258
259
260
261
262
263
ill
provides minimum coverage of at least $50,000 per person per
accident, with
!ill
to $100,000 available to all persons per
accident, and $25,000 for property damage per accident; and
ill
does one of the following:
(A}
offers full time coverage similar to the coverage required
under Section 53-225; or
au
offers
~
liability insurance policy purchased
Qy
the
TNAC that provides primary coverage for the time
period in which
~
TNO is logged into the TNAC's digital
dispatch showing that the TNO is available to pick
!ill
passengers.
ill
If
~
TNAC obtains an insurance policy under this Section, it must
provide proof to the Department that the TNAC has secured the
policy.
@
A TNAC must not allow
~
TNO who has obtained his or her own
~
policy to fulfill the requirements of this Section to accept
trip
reguest through the digital dispatch service used
Qy
the TNAC until
the TNAC verifies that the TNO maintains the insurance required
under this Section. If the insurance maintained
Qy
~
TNO to fulfill the
insurance requirements of this Section has lapsed or been cancelled,
the TNAC must provide the coverage reguired
Qy
this Section,
beginning with the first dollar of
~
claim.
W
Nothing in this Section reguires
~
TNO to obtain
~
personal
automobile insurance policy that provides coverage for the time
period when the TNO is logged into
system.
~
TNAC's digital dispatch
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BILL No. 54-14
264
265
266
267
268
269
270
271
272
273
274
275
276
277
278
279
280
281
282
283
284
285
286
287
288
289
290
ill
If more than one insurance policy held
Qy
f!
TNAC provides valid and
collectable coverage for
f!
loss arising out of an occurrence involving
f!
motor vehicle operated
Qy
f!
TNO, the responsibility for the claim
must be divided on an equal basis among all of the applicable policies
unless the claim has been divided in
f!
different manner
Qy
written
agreement of all insurers of the applicable policies and each policy
owner.
(g)
In
f!
claims coverage investigation, each TNAC must cooperate with
any insurer that insures the TNO's motor vehicle, including providing
relevant dates and times during which an accident occurred that
involved the TNO to determine whether the TNO was logged into
f!
TNAC's digital dispatch showing that the TNO is available to pick
!ill
passengers.
{hl
Each TNAC must disclose the insurance coverage requirements of
this Section on its website, and its terms of service must not contradict
or be used to evade any insurance requirement.
ill
By (first day of next month 90 days after this Act takes effect), each
TNAC that obtains insurance on
f!
TNO's behalf under this Section
must disclose in writing to the TNO, as part of its agreement with the
TNO:
ill
the insurance coverage and limits of liability that the TNAC
provides while the TNO is logged into the TNAC's digital
dispatch showing that the TNO is available to pick
!ill
passengers; and
ill
that the TNO's personal automobile insurance policy may not
provide
coverage,
including
collision
physical
damage
coverage, comprehensive physical damage coverage, uninsured
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BILL No. 54-14
291
292
293
294
295
296
297
298
299
and underinsured motorist coverage, or medical payments
coverage, because the TNO uses
TNAC.
~
vehicle in connection with
~
ill
(k)
An insurance policy required
by
this Section may be obtained from
any insurance company authorized to do business in the State.
Each TNAC or TNO must secure primary insurance coverage that
complies with the requirements of subsection
[hl
by
(first day of next
month 120 days after this Act takes effect). Until that date, each
TNAC must maintain
~
contingent liability policy meeting at least the
minimum limits of subsection
®
that will cover
~
claim if the TNO's
personal insurance policy denies
~
claim.
~
300
301
302
303
ill
In this Section, "pre-arranged ride" means
when
!!
TNO accepts
~
period of time that begins
requested ride through digital dispatch,
304
305
continues while the TNO transports the passenger in the TNO's
vehicle, and ends when the passenger departs from the vehicle.
53-805.
Requirements for transportation network operators.
306
307
!ill
Each transportation network operator must:
308
309
310
311
ill
ill
ill
ill
[hl
accept only rides booked through
f!
TNAC's' digital dispatch,
and must not solicit or accept street-hails;
possess
~
valid driver's license issued
by
Maryland, the District
of Columbia, or Virginia;
possess proof of personal motor vehicle insurance for any
motor vehicle used as
~
private vehicle-for-hire; and
be at least
21
years old.
312
313
314
315
316
317
A TNO may affiliate with more than one company to use digital
dispatch unless an agreement between the TNAC and the TNO
provides otherwise.
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BILL No. 54-14
318
319
320
321
322
323
324
325
326
327
328
329
330
331
332
333
334
335
336
337
338
339
53-806.
Accessibility of digital dispatch for individuals with disabilities.
ill
By January
.L.
2016, each TNAC that provides digital dispatch must:
ill
assure that its websites and mobile applications are accessible
to the blind and visually impaired and the deaf and hard of
hearing; and
ill
submit
~
plan to the Director that describes its actions to
improve service to senior citizens, people with disabilities, or
other underserved populations identified
by
the Director.
(Q)
Any TNAC that provides digital dispatch must not:
ill
impose any additional or special charge on an individual with
~
disability for providing services to accommodate the individual;
or
ill
require an individual with
attendant.
~
~
disability to be accompanied
by
an
~
W
If
~
TNO accepts
~
ride request through digital dispatch from
passenger with
disability who uses mobility equipment, upon
picking
!ill
the passenger the TNO must stow the passenger's mobility
equipment in the vehicle if the vehicle is capable of stowing the
equipment. If the passenger or TNO decides that the vehicle is not
capable of stowing the equipment, the company that provides digital
dispatch must not charge
~
trip cancellation fee or, if any fee was
charged, must provide the passenger with
~
timely refund.
Approved:
340
341
Craig
L.
Rice, President, County Council
Date
~ILLS\1454
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LEGISLATIVE REQUEST REPORT
Bill 54-14
Taxicabs
-
Transportation Network Service
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Requirements
DESCRIPTION:
Bill 54-14 would establish a regulatory framework applicable to the
delivery of transportation network service.
It
would: require a
transportation network application company (TNAC), such as Uber
and Lyft, to obtain a license to operate in the County; require a
TNAC and transportation network operator (TNO) to meet certain
registration requirements; require a vehicle used to provide
transportation network service to meet certain standards; require a
TNAC and TNO to be insured; and require a TNAC and TNO to
meet certain accessibility standards.
TNACs are not currently regulated in the County. These unregulated
drivers and companies are not currently required to meet regulatory
standards similar to those imposed on "traditional" taxicabs, such as
insurance, driver training and testing, or vehicle inspection and
maintenance requirements.
Ensure an efficient, competitive market for the delivery of transit
services while maintaining high standards of public safety,
convenience, and comfort.
MCDOT
To be requested.
To be requested.
To be requested.
Several jurisdictions have enacted similar regulatory regimes.
Josh Hamlin, Legislative Attorney
To be researched.
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITHIN
MUNICIPALITIES:
PENALTIES:
N/A
f:\law\bills\14S4 taxicabs - transportation network service\lrr.doc
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Fiscal Impact Statement
Council
Bill 54-14,
Taxicabs - Transportation Network Service .. Requirements
I. Legislative
Stffi1mary.
Bill
4 would require a transportation
nei\vork
apptkation company to obtain a
license
t()
operate in
the
County,
require
a transportation
application
company and
transportation network operator to meet certain registration
r(~ments,
require a
vehicles used to provide transportation net\-I/ork service to meet ct.."ftain standard:-t requlr..;;
a transportation
network
applications company and
transportation network operator
to
insured, and require transportation network appIicaticm
company
and
transportation
network operator
10
meet certain
accessibility
standards.
2. An estimate of
changes
in County revenues and expenditures
regardless
of whether the
revenues
or
expenditures are assumed
in the
recommended
or
approved.
buqget. Includes
source of
information, assumptions, and
methodologies
used. .
...
Additional revenue ()f$357,500 assuming an additional
drivers will
aifected.
It
is
flO\V
many new operators in the CoumywiJl
apply for
licenses. The 550
figure represents the actual number of cabs currently
operating
und
prCSUHjC5
the
Transportation Network
Companies
rrNCs)
will
match those.
lV'fnnaging the potential changes to Chapter 53