BILL ANALYSIS                                                                                                                                                                                                    



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          ASSEMBLY THIRD READING


          AB  
          1360 (Ting)


          As Amended  May 13, 2015


          Majority vote


           ------------------------------------------------------------------- 
          |Committee       |Votes |Ayes                 |Noes                 |
          |                |      |                     |                     |
          |                |      |                     |                     |
          |----------------+------+---------------------+---------------------|
          |Utilities       |14-0  |Rendon, Patterson,   |                     |
          |                |      |Achadjian, Bonilla,  |                     |
          |                |      |Burke, Dahle,        |                     |
          |                |      |Eggman, Cristina     |                     |
          |                |      |Garcia, Hadley,      |                     |
          |                |      |Jones, Quirk,        |                     |
          |                |      |Santiago, Ting,      |                     |
          |                |      |Williams             |                     |
          |                |      |                     |                     |
          |----------------+------+---------------------+---------------------|
          |Privacy         |11-0  |Gatto, Wilk, Baker,  |                     |
          |                |      |Calderon, Chang,     |                     |
          |                |      |Chau, Cooper,        |                     |
          |                |      |Dababneh, Dahle,     |                     |
          |                |      |Gordon, Low          |                     |
          |                |      |                     |                     |
          |                |      |                     |                     |
           ------------------------------------------------------------------- 


          SUMMARY:  Exempts ridesharing programs operated by transportation  








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          network companies (TNC) that arrange rides among multiple  
          passengers who share the ride, in whole or in part, from  
          transportation charges computed and assessed on charter-party  
          carriers.  Specifically, this bill:  


          1)Exempts a ridesharing program operated by a TNC that arranges a  
            ride on a prearranged route among multiple passengers who share  
            the ride, in whole or in part, from offering passengers charges  
            computed and assessed on a vehicle mileage or time of use basis,  
            or on a combination of the two. 
          2)Specifies that the exemption applies provided that:


             a)   The vehicle seats no more than seven passengers, including  
               the driver; 
             b)   The driver is a participating driver, as defined; and 


             c)   The individual fare for each passenger is less than the  
               fare that would be charged for the same ride to a single  
               passenger traveling alone. 


          3)Specifies that TNCs may not use vehicles to provide transit  
            service or to carry passengers over a fixed route, provide  
            school pupil transportation services, or provide public  
            paratransit services.
          4)Specifies that the insurance requirement and limitations, as  
            specified, for a TNC and any participating driver does not  
            change. 


          FISCAL EFFECT:  Unknown.  This bill is keyed non-fiscal by the  
          Legislative Counsel.


          COMMENTS:  









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           1)Author's Statement:  "The primary cause of traffic congestion  
            originates from nearly 80% of commuters traveling to work alone.  
             Traffic results in 5.5 billion hours of productivity at a cost  
            of $818 to the average commuter, with increased congestion  
            generating nearly 4 billion gallons of excess fuel wasted and 56  
            billion pounds of greenhouse gasses.  This contributes to  
            California's transportation sector functioning as the greatest  
            source of pollution, accounting for 40% of the state's  
            greenhouse gas emissions.  TNC's such as Lyft, Uber, and Sidecar  
            have been extremely innovative in creating models that empower  
            consumers and allow more ease and access to transportation  
            alternatives.  They have recently started services that allow  
            riders with similar pick up locations and destinations to share  
            a driver and carpool for a decreased fare.  Shared rides such as  
            carpooling decrease traffic and congestion, and ultimately cut  
            pollution." 


          2)Background:  California law regulates different modes of  
            passenger transportation for compensation, including taxi  
            services, which are regulated by cities and/or counties, and  
            charter party carriers (CPC) and passenger stage companies,  
            which are regulated by the California Public Utilities  
            Commission (CPUC).


          3)What are CPCs?  CPCs are services that charter a vehicle, on a  
            prearranged basis, for the exclusive use of an individual or  
            group.  Charges are based on the mileage, or time of use, or a  
            combination of both.  The CPUC does not regulate the level of  
            charges for CPCs.  Types of CPCs include limos, tour buses,  
            sightseeing services, and charter and party buses.  


          4)What are TNCs?  Beginning as early as 2009, a new model of  
            transportation service began springing up in cities across the  
            United States.  Known as TNCs, these companies work by allowing  








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            patrons to prearrange transportation services through an online  
            application on their smartphone or computer.  Patrons would  
            request a ride to a predetermined location and the application  
            would connect them with a TNC driver.  Payment is processed  
            through the application so that no physical financial  
            transaction occurs during the trip itself between the patron and  
            the driver.  The TNC takes a commission on each trip.  


            Although TNCs do not neatly fall into the conventional  
            definition of either taxis or limousines, the CPUC does believe  
            that TNCS are currently providing passenger's transportation for  
            compensation, and reasonably concludes that TNCs are CPCs,  
            therefore, falling under the CPUC's existing jurisdiction over  
            these services. 


          5)CPUC Letter to TNCs:  In September 2014, the CPUC sent letters  
            to the three major TNCs, Uber, Lyft, and Sidecar, regarding  
            their intent to add carpooling service to their transportation  
            service.  The CPUC stated that this model is in violation of  
            existing law that prohibits CPCs from calculating charges on an  
            individual-fare basis.  The CPUC found that CPCs "cannot change  
            an individual fare when carrying multiple persons in a vehicle,  
            and therefore, a person chartering a [CPC] vehicle must have  
            exclusive use of the vehicle."
            This bill would permit a rideshare program operated by a TNC to  
            charge individual fares, provided that the individual fare for  
            each passenger is less than the fare that would be charged for  
            the same ride to a single passenger traveling alone.




          Analysis Prepared by:                                               
                          Edmond Cheung / U. & C. / (916) 319-2083  FN:  
          0000386










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