Legal Considerations in Relationships Between Transit Agencies and Ridesourcing Service Providers (2018)

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The Problem and Its Solution The nation’s 6,000 plus transit agencies need to have access to a program that can provide authoritatively researched, specific, limited-scope studies of legal issues and problems having national significance and application to their business. Some transit programs involve legal problems and issues that are not shared with other modes, as for example, compliance with transit-equipment and operations guidelines, FTA financing initiatives, private- sector programs, and labor or environmental standards relating to transit operations. Also, much of the informa- tion that is needed by transit attorneys to address legal concerns is scattered and fragmented. Consequently, it would be helpful to the transit lawyer to have well- resourced and well-documented reports on specific legal topics available to the transit legal community. The Legal Research Digests (LRDs) are developed to assist transit attorneys in dealing with the myriad of initia- tives and problems associated with transit start-up and operations, as well as with day-to-day legal work. The LRDs address such issues as eminent domain, civil rights, constitutional rights, contracting, environmental con- cerns, labor, procurement, risk management, security, tort liability, and zoning. The transit legal research, when con- ducted through the TRB’s legal studies process, either collects primary data that generally are not available else- where or performs analysis of existing literature. Foreword Technology-based transportation network companies (TNCs; e.g., Uber) provide competition to traditional ride-hailing services (e.g., taxis) and public transit. However, TNCs and other on-demand providers also present opportunities to complement public transit. Legal Research Digest 53 TRANSIT COOPERATIVE RESEARCH PROGRAM Sponsored by the Federal Transit Administration June 2018 LEGAL CONSIDERATIONS IN EVALUATING RELATIONSHIPS BETWEEN TRANSIT AGENCIES AND RIDESOURCING SERVICE PROVIDERS This report was prepared under TCRP Project J-05, “Legal Aspects of Transit and Intermodal Transportation Programs,” for which the Transportation Research Board is the agency coordinating the research. The report was prepared under Topic 17-03 by Jocelyn K. Waite, Waite & Associates, Reno, NV. Responsible Senior Program Officer: Gwen Chisholm Smith These ridesourcing service providers (RSPs) have not fallen neatly within traditional regulatory schemes. States and municipalities have differed in their approaches to devising appropriate regulatory responses. This has resulted in a patchwork of rules and regulations that vary from jurisdiction to jurisdiction. Transit agencies have partnered with RSPs in varying capacities, both contractually and non-contractually. Such connections with public transit present potential regulatory, liability, procurement, and other legal con- cerns. These issues and other topics that are examined in this digest include: • Description of ridesourcing services in the U.S.; • State and municipal legislative and regulatory schemes and their effect on RSP relationships with transit agencies; • The structure of RSP procurements and what changes may be required for such procurements; • Contractual and partnership provisions in agree- ments between RSPs and a public transit agency; • Issues of compliance with federal legislation and with civil rights requirements and the ADA; • Legal claims and litigation associated with RSPs and related agency responsibility; and • Risk management issues stemming from relation- ships between RSPs and transit agencies. This digest will be useful to public and private practi- tioners interested in the forthcoming direction of public transit and efforts to provide on-demand services to the public. It provides transit agencies with legal guidance for considering whether to enter into relationships with RSPs.

CONTENTS I. Introduction, 3 A. Purpose, 3 B. Focus, 4 C. Scope, 4 II. Background, 6 A. General Background, 6 B. Taxicab Regulation, 16 III. Federal Legal Issues Affecting Relationships with RSPs, 18 A. Eligibility for Federal Financial Assistance, 19 B. Americans with Disabilities Act, 21 C. Title VI, 27 D. Drug and Alcohol Testing, 29 E. Data Collection, 30 F. Section 13(c), 31 G. Employment Classification, 31 IV. State and Local Legal and Risk Management Issues Related to Relationships with RSPs, 37 A. General State/Local Responsibility for Regulation of Ridesourcing Services, 38 B. Employment Classification, 45 C. Disability Accessibility Requirements for Public Transportation, 52 D. Minority/Low-Income Accessibility, 55 E. Maintenance of Insurance, 55 F. Tort Liability, 58 G. RSP Permitting and Miscellaneous Operating Requirements, 64 H. Driver Safety, 65 I. Public Space, 70 J. Data/Public Records/Privacy, 72 V. RSP Cases and Regulatory Proceedings, 73 A. Employment Classification, 74 B. Disability Accessibility, 88 C. Violation of TNC Statute, 91 D. Fraud/Misrepresentation/Unfair Competition/Privacy, 91 E. Tort Actions, 94 F. Miscellaneous, 97 VI. Transit Agency Survey Questionnaire Results, 99 A. Questionnaire Design and Distribution, 100 B. Project Status and Project Elements, 100 C. Legal Issues of Concern, 101 D. Other Contract Issues/Litigation, 102 E. Lessons Learned/Best Practices, 103 F. RFPs, 103 G. Contracts, 105 VII. Framework for Best Practices, 107 A. Institutional Readiness, 108 B. RSP Procurement Process, 108 C. Risk Management, 108 D. Data, 109 E. Curb Space/Signage, 110 F. Ensuring Accessibility for Customers with Disabilities, 110 G. Ensuring Compliance with Title VI and Equivalent State and Local Law, 110 H. Other Contract Requirements, 111 VIII. Conclusions, 111 A. Summary of Key Legal Issues, 112 B. Additional Factors to Consider in Assessing Legal Risk, 114 Acronyms, 118 Glossary, 119 Appendix A: State TNC Statutes and Regulations, A-1 Appendix B: Local TNC Regulations, B-1 Appendix C: Survey Questionnaire, C-1 Appendix D: Respondent Agency MOD Relationships, D-1 Appendix E: Additional Transit Agency Relationships with TNCs/ Microtransit Providers, E-1 Appendix F: RFPs/Agreement, F-1