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

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37 registration, and insurance fees, and tolls, parking, and tickets. . . . [and] discretionary investment in business cards, advertising, or other ventures designed to attract customers.”260 The court further found that the return on investment of individual plaintiffs was dependent on their individual busi- ness acumen. In addition, the court’s analysis of the plaintiffs’ schedule flexibility led it to the conclusion that the plaintiffs’ discretion in deciding where, when, and how much to drive demonstrated both initiative on the part of the plaintiffs and a lack of control on the part of the defendants. The court rejected as immaterial the plaintiffs’ allegations concerning CTG’s control over their conduct, charac- terizing the degree of control exercised by the defen- dants engaging in “some monitoring and discipline” via the CTG Rulebook standards as being outweighed by the plaintiffs’ greater control over their opportu- nity for profit and loss. However, the court also noted the “narrow compass” of its decision, stating that the particular facts of the case led to the finding of inde- pendent contractor status and that with different specific facts, “an entity that exercised similar control over clients, fees, and rules enforcement in ways analogous to the Defendants here might well consti- tute an employer within the meaning of the FLSA.”261 IV. STATE AND LOCAL LEGAL AND RISK MANAGEMENT ISSUES RELATED TO RELATIONSHIPS WITH RSPS Part IV discusses specific legal and risk manage- ment issues that are likely to apply to relationships with RSPs under state and local law. Issues are discussed in order deemed most likely to be of inter- est to transit agencies in evaluating risks. While Part IV discusses examples of state law provisions that may be of particular interest, the discussion does not present a comprehensive review of all state law. Most state and local regulatory activity related to RSPs focuses on TNCs specifically; the discussion in Part IV does likewise unless a specific issue relates to microtransit. Specific state TNC statutes might affect generally applicable state law that would otherwise be rele- vant. For example, TNC statute provisions concern- ing the independent contractor status of drivers may affect the construction of state law governing employ- ment classification in the TNC context. However, other state and local laws that may affect TNC contracting govern issues that are not addressed by those TNC statutes. For example, some state or local In reviewing the facts that indicated control over manner and means of performance, the court empha- sized that Friendly’s control extended to the actual details of the operation of the vehicles. The court also focused on the presence of a disciplinary system that financially penalized drivers for infractions, the driver dress code, and training requirements. Saleem v. Corp. Transportation Group (CTG), Ltd.256—This case involved the employment status under the FLSA of a group of black-car drivers who operated under a franchise agreement with franchi- sors (CTG) who owned a base license that allowed them to operate black-car dispatch bases in New York City and to sell franchises to individual drivers. The test in the Second Circuit for determining whether a worker is an employee or independent contractor under the FLSA relies on five factors set forth in Brock v. Superior Care, Inc.,257 which focused on the totality of the circumstances to determine “whether, as a matter of economic reality, the workers depend upon someone else’s business for the opportunity to render service or are in business for themselves.”258 Factors the court highlighted included the driv- ers’ freedom to drive for competitors, for personal clients, or not at all without violating their franchise agreements; the availability of various type of fran- chise agreements; and the designation as indepen- dent contractors in the franchise agreement. The court found the ability to work for competitors and to transport personal clients suggested a minimal exercise of control by the defendants. The court also noted efforts made by some of the drivers to support their separate business of driving personal clients, such as creating business cards and placing adver- tisements, as well as their ability to hire others to drive under their own franchise. Moreover, the driv- ers had several options as to how to provide rides while working for CTG, with the choice of options at the drivers’ discretion. The court contrasted these circumstances with that in Superior Care, where the plaintiffs were entirely dependent on the putative employer for job assignment referrals, concluding “as a matter of economic reality, Plaintiffs’ affiliation with Defendants was but one means by which they generated income from their driving businesses.”259 The court also examined the drivers’ investment in their driving businesses, noting that large capital expenditures are highly relevant to the independent contractor designation. The court pointed to the cost of investing in a franchise, but also to “vehicle acqui- sition, fuel, repair, and maintenance, license, 256 854 F.3d 131 (2d Cir. 2017). 257 840 F.2d 1054, 1058–59 (2d Cir. 1988). 258 854 F.3d at 139, citing 840 F.2d at 1059. 259 Id. at 144. 260 Id. at 145. 261 Id. at 149.

38 similarly unsuccessful outcomes.265 As of November 2017, no litigation challenging the specific require- ments of state TNC statutes had been identified. Part IV discusses state and local government responsibility in general for regulating RSPs, includ- ing model legislation that has influenced state TNC statutes, state law on employment classification, acces- sibility requirements for persons with disabilities and minority and low income populations, requirements for maintenance of insurance, tort liability, RSP permitting, driver safety, public space issues, data requirements, public records law, and privacy concerns. A. General State/Local Responsibility for Regulation of Ridesourcing Services There do not appear to be any federal statutes directed specifically at TNCs, although certain over- arching federal legal requirements, such as the ADA, may apply. Thus the regulatory field has been left to state and local governments. A myriad of legal analysts266 have tackled the question of how best to regulate TNCs. When TNCs first entered the transportation market, state and local regulatory approaches varied267 and continued to do so to some extent through 2016. However, the pace of enactment of state legislation was swift: From the time of the publication in 2016 of one analysis of how best to regulate TNCs268 until July of 2017, the number of governments have living wage laws262 that may apply to service contracts entered into by transit agencies. It appears that any conflicts between such laws and TNC statutes have yet to be addressed. Other than a few references to contracting for specialized transportation services, none of the state TNC statutes appear to specifically address the issue of local governmental entities contracting with TNCs. Arguably this can be interpreted to mean that preemption of local regulation does not preclude such contracts. However, the issue of the effect on state statutes on the ability of transit agencies to contract with TNCs, and more specifically to contract for requirements that exceed those of state statutes, remains untested. Efforts by taxi associations and similar interests to challenge local regulations that treat TNCs differ- ently than taxi companies have met with little or no success;263 in many jurisdictions such claims are rendered moot by the enactment of state TNC stat- utes that preempt local regulation of TNCs.264 Chal- lenges to state law or regulation have resulted in 262 For example, the county of Arlington, Virginia, imposes living wage requirements for service contracts with an estimated annual value greater than $100,000, performed on county property and awarded under a com- petitive procurement process. Living Wage Policy, https:// budget.arlingtonva.us/purchasing/. 263 E.g., Gebresalassie v. District of Columbia, 170 F. Supp. 3d 52 (D.D.C., Mar. 18, 2016) (granting motion to dismiss equal protection and substantive due process challenges to District of Columbia’s Vehicle-for-Hire Inno- vation Amendment Act of 2014); Boston Taxi Owners Ass’n, Inc. v. City of Boston, 84 F. Supp. 3d 72 (D. Mass. 2015) (denying emergency motion to enjoin enforcement of motor vehicle registration requirements for TNCs and to require Boston to enforce taxi regulations against TNCs); Newark Cab Ass’n v. City of Newark, 235 F. Supp. 3d 638 (D. N.J. Jan. 25, 2017) (dismissing complaint with prejudice); (Sanfelippo Cabs, Inc. v. City of Milwaukee, 46 F. Supp. 3d 888, 890 (E.D. Wis. 2014) (same, as to chal- lenge to constitutionality of M.C.O. 100-3-14 (2014), Mil- waukee’s regulation; Glyca Trans LLC v. City of New York, 2015 NY Slip Op 31703(U), 2015 Misc. LEXIS 3282, (Sup. Ct. Sept. 8, 2015) (multiple challenges, including 5th Amendment taking claim, rejected). 264 E.g., Cambridge Taxi Drivers and Owners Ass’n, Inc., v. City of Cambridge, Civil Action No. 16-11357-NMG, 2017 U.S. Dist. LEXIS 10374 (D. Mass. Jan. 25, 2017) (rejecting plaintiff ’s claims for declaratory and injunctive relief as moot in light of enactment of M.G.L. ch. 159A½). The court also addressed and rejected claims that failure to enforce the taxi regulation against TNCs constituted takings, due process, and equal protection violations. 265 Desoto Cab Co. v. Picker, 228 F. Supp. 3d 950 (N.D. Cal. Jan. 12, 2017) (order granting PUC’s motion for judg- ment on the pleadings in § 1983 claim against CPUC based on TNC regulation; court finds no equal protection violation); Mifsud v. Uber Techs., Inc., 203 F. Supp. 3d 820 (E.D. Mich. Aug. 19, 2016) (dismissing claims against Michigan enforcement of Limousine Transportation Act and Michigan Vehicle Code); Capital City Cab Serv. v. Pa. Pub. Util. Comm’n, 138 A.3d 119 (Commonwealth Ct. Pa. 2016) (unsuccessful challenge to PUC decision allowing Rasier [Uber subsidiary] to operate in Pennsylvania as an experimental common carrier if Rasier filed its Statewide Compliance Plan). The Desoto Cab court had earlier denied the California PUC’s motion to dismiss on jurisdic- tional, ripeness, and joinder grounds. Desoto Cab Co. v. Picker, 196 F. Supp. 3d 1107 (N.D. Cal. 2016). 266 See Jaclyn Kurin, A Third Way for Applying U.S. Labor Laws to the Online Gig Economy: Using the Fran- chise Business Model to Regulate Gig Workers, 12 J. buS. & teCh. l. 193 (2017). For an extensive list of 2015 and 2016 law review articles, see Agnieszka A. McPeak, Sharing Tort Liability in the New Sharing Economy, 49 Conn. l. reV. 171, 175, note 18 (2016). 267 See, e.g., Julieta Chiquillo, Fort Worth mayor calls deregulation of Uber and Lyft ‘the right way.’ Is it?, dallaS mornInG newS, July 5, 2016, http://www.dallasnews.com/ business/business/2016/07/05/fort-worth-mayor-calls- deregulation-uber-lyft-right-way (accessed Dec. 5, 2016). 268 Kathleen E. O’Connor, Along for the Ride: Regulat- ing Transportation Network Companies, 51 tulSa l. reV. 579 (2016).

39 such as preemption of local regulation of TNCs and state regulatory activities concerning TNCs. While a number of other state statutes—such as those governing wage and hour requirements, driver licensing, and business permitting—may be rele- vant to assessing legal issues involved in contract- ing with TNCs, Part III focuses on TNC statutes. This section covers common issues/approaches contained in the TNC statute and regulations of California—one of the leaders in TNC regulation— as well as in the industry model legislation that became the basis for many state TNC statutes. State requirements that notably differ from those common to most state statutes/regulations are also identi- fied. The trend in state law has narrowed the field considerably for local regulation, resulting in several local regulations that were of note as recently as 2016 being rendered moot. Similarly, lawsuits chal- lenging such local regulations have been rendered moot. However, relevant local regulations—at least as of 2017—remain viable in some jurisdictions, and examples of these are discussed. 1. In General As discussed in more detail further in this section, California was the first state to regulate TNCs. The CPUC in fact appears to have coined the term TNC, thereafter so widely—albeit not universally274— adopted in other state legislation. Colorado was then the first state to enact TNC legislation. Wash- ington, D.C., Virginia, and Seattle, Washington, were also early adopters in regulating TNCs.275 It appears that two forces drove adoption of state- wide regulation: concern over the potential insur- ance gap, highlighted by high profile incidents like Liu v. Uber Technologies, Inc. in San Francisco, and TNCs’ concern over local regulations that they deemed onerous. In 2015, two model acts were released,276 states that enacted TNC legislation rose from two269 to forty-nine (including the District of Columbia). More than thirty of these statutes preempt local regulation of TNCs, although some of the preemption provisions allow the public entities that operate airports to exercise some regulatory authority over TNCs at those airports. As recently as 2016, some of the states with the largest TNC markets—New York, Texas, Florida, Illinois, and New Jersey—had not yet enacted statewide TNC statutes, leaving open the possibility that a large number of TNC operations would remain locally regulated.270 However, by July 2017, all of those states but Illinois had enacted TNC statutes preempting local regulation, albeit in the case of the State of New York exempting New York City and to a lesser extent three major suburban counties.271 Preemption affects the viability of a number of local government initiatives, including the ability to use TNC-related fees to support public tran- sit. For example, Chicago, which retains regulatory authority, has devoted a portion of its per-trip fee on TNC rides to fund public transit;272 Cuyahoga County, Ohio, whose regulatory authority of TNCs is preempted by state law, was unable to pursue a proposal to support the Greater Regional Transit Authority by adding a per-ride fee to TNC trips.273 [E-13] Appendix A lists the state TNC statutes enacted as of the end of 2017 and annotates certain aspects, 269 Id. at 586. 270 Schaller (Blueprint), supra note 19, at 18. This report discusses some issues of controversy, such as air- port access, that arose as states determined their regula- tory approaches, and contains a number of recommenda- tions on approaches to various TNC regulatory issues, many of which appear to have not been followed by state legislatures to date. 271 Westchester County, one of the jurisdictions autho- rized to opt-out of the statewide law, considered adopting its own regulations, but after Uber’s threat to cease ser- vice there, ultimately declined to do so. Instead, the county adopted a voluntary program under which TNC drivers themselves pay for a fingerprint background check, with those that pass receiving a special decal. Mark Lungari- ello, Uber will be legal in Westchester after all, USA today, June 27, 2017, https://www.usatoday.com/story/news/tran- sit/2017/06/27/westchester-ride-hailing-uber/432015001/ (accessed Nov. 7, 2017). 272 CTA to use fees from ride-hailing apps to repair rail, ProGreSSIVe raIlroadInG, Feb. 8, 2018, http://www. progressiverailroading.com/mow/news/CTA-to-use-fees- from-ride-hailing-apps-to-repair-rail--53889 (accessed Feb. 9, 2018); Andrew Small, How Should Chicago Spend Its Uber Tax?, CItylab, Nov. 27, 2018, https://www.citylab. com/transportation/2017/11/how-should-chicago-spend- its-uber-tax/546233/ (accessed Feb. 9, 2018). [E-13] 273 Id.; Karen Farkas, Cuyahoga County cannot impose ride-sharing fee, as proposed by public transit advocates, CleVeland.Com, Feb. 8, 2018, http://www.cleveland.com/ cuyahoga-county/index.ssf/2018/02/cuyahoga_county_ cannot_impose_ride-sharing_fee_as_proposed_by_public_ transit_advocates.html (accessed March 10, 2018). [E-13] 274 E.g., District of Columbia, D.C. Code § 50–301.03 (“private vehicle-for-hire”); Georgia Code § 40-1-190 (2016) (“ride share network service”); Washington, waSh. reV. Code § 48.177.005(2) (“commercial transportation services provider”). Although clearly applicable to TNCs, the Washington term covers “a corporation, partnership, sole proprietorship, or other entity, operating in Washington, that uses a digital network or software application to connect pas- sengers to drivers for the purpose of providing a prearranged ride” and excludes federally tax-exempt entities. 275 thorSon & GIll, supra note 24, at 20–27. 276 The TNC Insurance Compromise Model Bill was released in March 2015, http://www.naic.org/documents/ committees_c_sharing_econ_wg_related_tnc_insurance_ compromise_bill_package.pdf. On July 19, 2015, the Exec- utive Committee of the National Council of Insurance Legislators (NCOIL) adopted the Model Act to Regulate Insurance Requirements for Transportation Network Com- panies and Transportation Network Drivers, http://ncoil. org/wp-content/uploads/2016/04/07232015TNCModelAct. pdf (hereinafter NCOIL Model Act).

40 success,280 ultimately about two-thirds of the states with TNC statutes preempt local regulation of TNCs in whole or in part, albeit with some excep- tions for airport authorities. The Texas TNC statute specifically voided exist- ing local regulations as of the effective date of the statute. However, preemption under the Texas TNC statute includes authorization for municipalities and other local entities to contract with a TNC in their jurisdiction for coordination of large events in those jurisdictions, provided that such agreements do not exclude any permitted TNC and have compa- rable terms for each TNC providing services for the event.281 South Dakota preempts local regulation of insurance, but otherwise allows local municipal and county regulation of TNCs. The Illinois TNC statute prohibits local governments from regulating TNCs less restrictively than does the state statute,282 by implication allowing greater local regulation. Notable exceptions to preemption include New York, Pennsylvania, and Washington. As discussed in greater detail further in this digest, New York City and Philadelphia are specifically excluded from state preemption under the New York and Pennsylvania TNC statutes, while Washington not only does not preempt local ordinances, but also arguably encourages them. Except for insurance requirements, discussed further in this digest, TNCs appear to come under Washington’s statute both of which were drafted with some input from Uber.277 The primary difference between the TNC Model Bill and the National Council of Insurance Legislators (NCOIL) model legislation is that the former only covered insurance issues, while the NCOIL model covered permit and related require- ments as well. Neither piece of model legislation includes a preemption provision; state preemption was pursued separately—and vigorously—through TNC lobbying in state legislatures.278 While taxicab companies in some jurisdictions continue to oppose TNCs, either outright or by supporting TNC drivers seeking recognition as employees, some of the more recent state TNC legis- lation has been developed with input from taxi companies as well as from Uber and Lyft, as was the case in Connecticut, one of the last states to pass TNC legislation.279 2. Common State Issues By 2017, forty-eight states and the District of Columbia had enacted legislation that at least sets forth insurance requirements for TNCs, with most of those states addressing additional TNC issues as well. Appendix A identifies those states that only cover insurance requirements. While opposition to preemption enjoyed some initial 277 See NCOIL National Office Press Release Legisla- tors Approve Model Law to Regulate Controversial Trans- portation Network Companies (TNCs), (July 29, 2015), http://ncoil.org/wp-content/uploads/2016/04/07232015TN CModelPR-1.pdf. 278 E.g., Michael Auslen, Plan to regulate Uber, Lyft all but dead in Florida Legislature, mIamI herald, Mar. 10, 2016, http://www.miamiherald.com/news/politics- government/state-politics/article65208997.html (accessed July 22, 2017); Saul Hubbard, Uber, Lyft offer to pay state in return for changes to regulations, reGISter- Guard, June 17, 2017, http://registerguard.com/rg/news/ local/35683960-75/story.csp# (accessed June 19, 2017); Kathleen Vinehout, Uber vs. Taxi Cabs - Is Statewide Preemption of Local Laws a Good Idea?, Green bay Pro- GreSSIVe, Apr. 6, 2015, http://newiprogressive.com/index. php?option=com_content&view=article&id=5076%3Au ber-vs-taxi-cabs-is-statewide-preemption-of-local-laws- a-good-idea&catid=38%3Athe-state-news&Itemid=56. See also, Mitch Perry, Matt Gaetz files Uber preemption bill, FlorIda PolItICS, Nov. 2, 2015, http://floridapolitics. com/archives/193728-matt-gaetz-files-uber-preemption- bill (accessed July 22, 2017). 279 Kyle Constable, Years behind other states, rules for Uber, Lyft win final passage, CT mIrror, June 7, 2017, https:// ctmirror.org/2017/06/07/years-behind-other-states-rules-for- uber-lyft-win-final-passage/ (accessed July 9, 2017). 280 Stephanie K. Jones, Illinois Rideshare Bills Vetoed; Insurance Groups Urge Override, InS. J., Aug. 27, 2014, http://www.insurancejournal.com/news/midwest/2014/ 08/27/338672.htm (accessed July 22, 2017). At least some local government organizations have opposed the trend in state TNC legislation to preempt local ordinances. E.g., Nicole DuPuis, Trevor Langan, Christiana McFarland, Angelina Panettieri & Brooks Rainwater, City Rights in an Era of Preemption: A State-by-State Analysis, Center for City Solutions (National League of Cities), 2017, 12–15, http://nlc.org/sites/default/files/201702/NLC%20 Preemption%20Report%202017.pdf. (sign-in required). Specific examples of municipal league opposition include: Michigan Municipal League, which testified in opposition to preemption provision in Michigan TNC legislation (John LaMacchia II, Senate Eliminates Local Control over Transportation Network Companies and Taxi Carriers, InSIde 208, Dec. 2, 2016, http://blogs.mml.org/wp/inside 208/2016/12/02/senate-eliminates-local-control-over- transportation-network-companies-and-taxi-carriers/ (accessed July 22, 2017)); New Jersey State League of Municipalities, which urged opposition to bills including preemption (Preemption or Public Awareness? Two Approaches to a New Public Safety Challenge, the town CrIer leGISlatIVe baCkGrounder, Sept. 30, 2016, https:// njlmblog.wordpress.com/2016/09/30/preemption-or- public-awareness-two-approaches-to-a-new-public-safety- challenge/ (accessed July 22, 2017)). 281 tex. oCC. Code ann. § 2402.115 (2017), https://legiscan. com/TX/text/HB100/2017. 282 625 Ill. ComP. Stat. 57/32, Preemption (2015).

41 compliance with applicable vehicle requirements, adopting nondiscrimination and accessibility poli- cies, and establishing record maintenance guide- lines); preconditions to the TNC allowing a driver on its network (requiring application with specified identification information, proof of insurance; conducting background, sex offender, and driver record checks; not knowingly allowing a driver with specified disqualifying offenses, such as three moving violations within the preceding three years, to drive on network); requiring the TNC to have a zero toler- ance policy for drug and alcohol use during any period the TNC driver is engaged in a prearranged ride, or logged into the TNC network, including provisions for investigation of alleged violations and suspension of drivers under investigation; and requiring that personal vehicles used to provide prearranged rides comply with all applicable laws and regulations concerning vehicle equipment. Other issues often addressed that may be of inter- est to transit agencies include parameters for fares and street hails, requirement for electronic receipts, independent contractor status, minimum age of driver, passenger seating capacity of TNC vehicles, and record retention. Additional issues of interest, albeit perhaps less commonly addressed include training;286 trade dress requirements;287 surge/state of emergency pricing;288 assessment on fares;289 passenger privacy;290 tort immunity for state and local officials from actions brought due to TNC acci- dents;291 medical examination and certification of drivers;292 hours of service restrictions;293 restric- tions on operation by TNC driver impaired by illness, fatigue, or otherwise endangering safety;294 require- ments for making a specified number of wheelchair accessible vehicles available;295 restrictions on TNC parking in the public way;296 affirmative duty to governing transportation of passengers in for-hire vehicles, which provides broad authorization for local governments to regulate such vehicles.283 As discussed further in this digest, Seattle cites Wash. Rev. Code § 46.72.160 as the basis for its ordinance amending its local government code provision governing taxicabs and for-hire vehicles to specifically cover TNCs.284 The lawsuit challeng- ing this ordinance is discussed infra Part V.D. Fraud/Misrepresentation/Unfair Competition/Privacy. Uber has lobbied the Washington state legislature to change direction and enact statewide law preempting this and other local ordinances.285 Many state statutes incorporate in some fashion the following issues that were covered in the NCOIL model legislation: providing that the TNC is not deemed to control, manage, or direct the vehicles or drivers connected to its network, absent a written agreement to that effect; requiring the TNC to obtain an operating permit; specifying that TNCs are not common carriers/contract carriers/motor carriers; mandating that the regulatory agency issue a permit to TNCs that meet four requirements (establishing a zero tolerance policy for drug and alcohol, requiring 283 The statute defines “for hire vehicle” as “all vehicles used for the transportation of passengers for compensa- tion.” Commercial transportation services provider is not in the list of specifically excluded categories. waSh. reV. Code § 46.72.010, http://app.leg.wa.gov/RCW/default. aspx?cite=46.72.010. The finding and intent section of chapter 46 provides: The legislature finds and declares that privately operated for hire transportation service is a vital part of the transportation system within the state. Conse- quently, the safety, reliability, and stability of privately operated for hire transportation services are matters of statewide importance. The regulation of privately oper- ated for hire transportation services is thus an essen- tial governmental function. Therefore, it is the intent of the legislature to permit political subdivisions of the state to regulate for hire transportation services with- out liability under federal antitrust laws. waSh. reV. Code § 46.72.001, http://app.leg.wa.gov/ RCW/default.aspx?cite=46.72.001. The statute also pro- vides specific authorization for local regulation of for hire vehicles. waSh. reV. Code § 46.72.160, Local regulation, http://app.leg.wa.gov/RCW/default.aspx?cite=46.72.160. 284 Seattle Ordinance No. 124524, July 15, 2014, http:// clerk.ci.seattle.wa.us/~scripts/nph-brs.exe?d=ORDF &s1=124524.ordn.&Sect6=HITOFF&l=20&p=1&u=/~pu blic/cbory.htm&r=1&f=G, amending Seattle Municipal Code, ch. 6.310, Taxicabs and For-Hire Vehicles, https:// library.municode.com/wa/seattle/codes/municipal_code? nodeId=TIT6BURE_SUBTITLE_IVNELICO_CH6.310 TAFREVE. 285 Sara Bernard, Are Uber and Lyft Plotting an End Run On Seattle Regs?, Seattle weekly, Feb. 14, 2017, http://www.seattleweekly.com/news/are-uber-and-lyft- plotting-an-end-run-around-seattle-regs/ (accessed July 22, 2017). 286 Pa. ConS. Stat. § 57A16(p) (2016). 287 S.C. Code § 58-23-1640 (2015). 288 maSS. Gen. lawS ch. 159A1/2, § 2(e) (2016); neb. reV. Stat. § 75-327(2)(d) (2015); Pa. ConS. Stat. § 57A17(b) and (d) (2016). 289 Pa. ConS. Stat. § 57A22 (2016); S.C. Code § 58-23- 1700 (2015). 290 Ind. Code 8-2.1-19.1-14. 291 alaSka Stat. § 09.65.350 (2017). 292 Colo. reV. Stat. § 40-10.1-605(d)(IV) (2016), as implemented by Colo. Code reGS. § 723-6-6708, § 723-6- 6713 (2016). § 723-6-6713 (a) requires TNC drivers to be medically examined and certified, pursuant either to 49 C.F.R. § 391.41, or subsections (b)–(d) of 6713. 293 Conn. Pub. Act No. 17-140, § 3(g) (2017); 220 maSS. Code reGS. 274.07; neb. reV. Stat. §§ 75-327(1) (2015). 294 Conn. Pub. Act No. 17-140, § 4(e) (2017). 295 Pa. ConS. Stat. § 57A11(c) (2016). 296 Pa. ConS. Stat. § 57A16(c) (2016).

42 includes requirements not specifically called for in the statute (e.g., hours of service), as well as more detailed requirements concerning statutory require- ments (e.g., permits and enforcement).307 3. California The CPUC first addressed TNC activity in 2010, when it issued a cease and desist order to Uber, followed by cease and desist orders to Lyft and Side- car in 2012.308 The CPUC then initiated regulation of TNCs in 2012,309 before any TNC legislation was enacted in the state. The following year the CPUC issued its first decision under the rulemaking (here- inafter D.13-09-045).310 The CPUC has jurisdiction over transportation charter party carriers of passengers (TCPs), that is, for-hire carriers providing pre-arranged passenger transportation.311 D.13-09-045 created a new cate- gory of TCP called Transportation Network Compa- nies (TNCs) that utilize an “online-enabled app or respond to service requests in underserved areas;297 prohibition on placing service animals in any other part of TNC vehicle other than the passenger compartment;298 invalidation of TNC disclaimers of liability;299 per-ride surcharge on TNC trips;300 audits of background check compliance;301 and provi- sions specifying that statutory insurance levels do not constitute limitations on TNC liability.302 It appears that only two states sunset their TNC stat- utes: Hawaii and Illinois. Colorado specifically defers to the Colorado Division of Workers’ Compen- sation to determine “whether or not transportation network companies have an obligation under exist- ing Colorado law to provide or offer for purchase workers’ compensation insurance coverage to trans- portation network company drivers.”303 The extent of state regulations implementing the TNC statutes varies considerably, from states whose regulations appear to closely track the legislative language304 to those whose regulatory agencies have exercised their discretion to impose additional requirements.305 The Massachusetts TNC statute, for example, authorizes a new division in the Depart- ment of Public Utilities (DPU) with “jurisdiction over transportation network companies to ensure the safety and convenience of the public” and required to determine that “the rendering of transportation network services by [a TNC] applicant is consistent with the public interest.” Section 11 of the TNC stat- ute requires the division to “promulgate regulations necessary for the implementation, administration and enforcement of [the statute].”306 The resulting regulations to establish a uniform system for certifi- cation and oversight of TNCs and their drivers 297 Pa. ConS. Stat. § 57A16(g) (2016). 298 Pa. ConS. Stat. § 57A16(k) (2016). 299 Portland Oregon City Code & Charter 16.40.240 (2016). 300 md. Code ann., Pub. utIl., § 10-406(c)(2) (2017). 301 maSS. dePt. oF Pub. utIl., 17-81, aPP. A (2016). 302 neb. reV. Stat. § 75-336 (2015); N.D. Cent. Code § 26.1-40.1-06 (2015). 303 Colo. reV. Stat. § 8-41-211 (2014). As of Sept. 21, 2017, the Division had no plans to promulgate rules on this issue. Email from Colorado Division of Workers’ Com- pensation (on file with author). 304 E.g., Permit requirements administered by Indiana Department of Revenue, http://www.in.gov/legislative/ iac/20150826-IR-045150275NRA.xml.pdf. 305 E.g., Massachusetts Department of Public Utilities, D.P.U. 17-81-A, Sept. 8, 2017, rulemaking pursuant to Chapter 187 of the Acts of 2016 . . . establishing require- ments for transportation network companies and the pro- vision of transportation network services. http://170.63.40. 34/DPU/FileRoomAPI/api/Attachments/Get/?path=17- 81%2f1781A_Order.pdf. 306 maSS. Gen. lawS ch. 25, § 23 (2016); ch. 159A½, §§ 2(a), 3(c), 11. 307 Mass. D.P.U. 17-81-A, Attachment 1. 308 Draft California CPUC decision stated that the Uber cease and desist order was issued in October 2010, and Lyft and Sidecar letters were issued in August 2012, http://docs. cpuc.ca.gov/publisheddocs/published/g000/m036/ k204/36204017.pdf. Later that year, the CPUC cited those companies for public safety violations, CPUC Cites Passen- ger Carriers Lyft, Sidecar, and Uber $20,000 Each For Pub- lic Safety Violations, Nov. 14, 2012, http://docs.cpuc.ca.gov/ PublishedDocs/Published/G000/M034/K968/34968919. PDF. In addition, on June 24, 2013, the Los Angeles Depart- ment of Transportation issued cease and desist letters to Lyft (https://techsportation.com/wp-content/uploads/Lyft- Cease-Desist-LADOT.pdf), Sidecar, (https://techsportation. com/wp-content/uploads/Sidecar-Cease-Desist-LADOT. pdf), and Uber (https://techsportation.com/wp-content/ uploads/Uber-Cease-Desist-LADOT.pdf). 309 Rulemaking 12-12-011, Order Instituting Rulemak- ing on Regulations Relating to Passenger Carriers, Ride- sharing, and New Online-Enabled Transportation Ser- vices, filed Dec. 20, 2012, issued Dec. 27, 2012, http://docs. cpuc.ca.gov/PublishedDocs/Published/G000/M040/ K862/40862944.PDF; Press Release, CPUC to Evaluate Ridesharing Services, (Dec. 20, 2012), http://docs.cpuc. ca .gov /Pub l i shedDocs /Pub l i shed /G000 /M039 / K594/39594708.PDF. The CPUC then entered operating agreements with Lyft (CPUC Enters Into Operating Agree- ment with Zimride, Press Release, (Jan. 30, 2013), http:// docs.cpuc.ca.gov/PublishedDocs/Published/G000/M047/ K132/47132286.PDF) and Uber (CPUC Enters Into Oper- ating Agreement with Uber, Press Release, (Jan. 31, 2013), http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/ M047/K151/47151370.PDF), 310 R.12-12-011, Decision 13-09-045, Sept. 19, 2013, (issued Sept. 23, 2013) [hereinafter D.13-09-045], http:// docs.cpuc.ca.gov/publisheddocs/published/g000/m077/ k192/77192335.pdf. 311 See The Passenger Charter-party Carriers’ Act, Cal. Pub. utIl. Code §§ 5351–63. The Act excludes from its provi- sions taxis, publicly owned transit systems, and ridesharing.

43 In 2014, the California legislature enacted AB 2293,316 which primarily, but not exclusively, addressed insurance requirements. The legislation ratified the CPUC’s regulatory approach by includ- ing the new TNC article under the Public Utilities Code Chapter on Charter-Party Carriers of Passen- gers, adopting the CPUC’s definition for TNCs, and specifying that the legislation does not prohibit the CPUC from exercising its rulemaking authority in a manner consistent with the legislation nor does it prohibit TNC-related enforcement activities. The Taxicab Paratransit Association of California and Uber applied for a rehearing of D.13-09-045. In response, the CPUC issued D.14-04-022, which granted limited rehearing on four issues: (1) the application of Pub. Util. Code § 5391 (adequate insurance), (2) the application of Pub. Util. Code § 5374 (mandatory drug testing), (3) the application of Pub. Util. Code § 5385.6 (license plate require- ment), and (4) whether UberX, or some other compo- nent or subsidiary of Uber, is a TNC. The CPUC emphasized that its grant of rehearing on the fourth issue was not an endorsement of Uber’s legal argu- ments concerning whether it provides transporta- tion services.317 As a result, the CPUC issued D.14-11-043, which modified D.13-09-045, imple- menting certain portions of AB 2293.318 D.14-11-043 also provided that only UberX (Rasier), but not Uber Technologies itself, was required to comply with the modified insurance requirements. The Phase II decision instituted requirements concerning vehicle inspections, records for vehicles and drivers, proof of insurance requirements, addi- tional background check requirements for TNCs transporting unaccompanied minors, and trade dress requirements; certification of fare-splitting calcula- tion compliance with Pub. Util. Code § 5401; and additional fare-splitting compliance requirements. The decision also ordered a Phase III, to consider platform to connect passengers with drivers using their personal vehicles.” In doing so, the CPUC rejected Uber’s arguments that TNCs were exempt from CPUC jurisdiction because they are simply providers of IP-enabled services: We find this argument to be factually and legally flawed and, therefore, do not accept that the method by which informa- tion is communicated, or the transportation service arranged, changes the underlying nature of the transportation service being offered . . . . We deem it is inconsistent with our grant of authority over transportation services to be barred from regulating a transportation service provided by TNCs based on the means of communication used to arrange the service.312 D.13-09-045 set forth twenty-eight requirements that TNCs must comply with in order to operate in California, including conducting driving record checks, obtaining a permit, not accepting street hails, obtaining insurance at levels and coverage specified in the order,; and conducting criminal background checks.313 D.13-09-045 also provided that TNCs may not own their own vehicles, leading the CPUC to find that UberX is a TNC, but Uber is not. The CPUC left to subsequent phases of the proceeding the question of whether Uber is a TCP.314 In addition, the CPUC continued to engage in enforcement activities.315 312 D.13-09-045, supra note 310 at 13–14. 313 Id.; CPUC Establishes Rules for Transportation Network Companies, CPUC Press Release Docket No. R.12-12-11, (Sept. 19, 2013), http://docs.cpuc.ca.gov/ PublishedDocs/Published/G000/M077/K132/77132276. PDF. The first TNC license under D. 13-09-045 was issued to Summon in 2014. Press Release, CPUC Issues First Per- mit for Transportation Network Company, (Mar. 4, 2014), http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/ M088/K782/88782988.PDF. 314 Uber has continued to argue that the corporate entity that owns the Uber app should not be considered a transportation company. Opening Comments of Uber USA, LLC on Phase III.B, http://docs.cpuc.ca.gov/ PublishedDocs/Efile/G000/M191/K054/191054690.PDF. 315 Additional CPUC enforcement actions have included notifying Lyft, SideCar, Summon, UberX, and Wingz that their operating permits from the CPUC were in jeopardy because of violations of D.13-09-045 (links to individual June 11, 2014 letters, http://www.cpuc.ca.gov/carrier investigations/); notifying Lyft and Uber that Lyft Line and UberPool violated Public Utilities Code § 5401(links to individual September 8, 2014 letters, http://www.cpuc. ca.gov/carrierinvestigations/); and issuing a contempt citation and $7.6 million fine to Rasier-CA for failure to fully and timely comply with the CPUC’s reporting requirements (CPUC Finds Uber Subsidiary in Contempt; Imposes $7.6 Million Penalty for Failure to Fully and Timely Comply with Reporting Requirements, Press Release, Docket no. R.14-07-002, Jan. 14, 2016, http://docs. cpuc.ca.gov/PublishedDocs/Published/G000/M157/ K717/157717293.PDF). 316 Transportation network companies: insurance cov- erage (2013–2014). 317 R.12-12-011, CPUC Decision 14-04-022, Apr. 10, 2014 (issued Apr. 11, 2014), at 16–19, http://docs.cpuc. ca.gov/PublishedDocs/Published/G000/M089/K077/ 89077611.PDF. 318 R.12-12-011, Decision 14-11-043, Nov. 20, 2014 (issued Nov. 25, 2014), http://docs.cpuc.ca.gov/PublishedDocs/Pub- lished/G000/M143/K313/143313104.PDF. (hereinafter D. 14-11-043). See also, CPUC Strengthens Insurance Require- ments for Transportation Network Companies, Press Release, Docket No. R.12-12-011, Nov. 20, 2014, http://docs. cpuc.ca.gov/PublishedDocs/Published/G000/M143/ K291/143291941.PDF.

44 new category of TCPs for autonomous vehicles.324 Other parties to the proceeding either argued that the CPUC does not have the authority to regulate autonomous vehicles or that the CPUC should not yet issue autonomous vehicle regulations.325 4. Local Regulation TNC regulations imposed by various local governments became moot when their states passed TNC statutes that preempted local regulation.326 Uber Technologies Inc.’s possible status as a Charter- Party Carrier, and noted that a separate ruling would be issued to discuss background checks, driver ID through methods such as fingerprinting, and party comment of the definition of personal vehicle.319 The state TNC statute was amended to add § 5444 (AB 1422, 2015), to add a definition of personal vehicle (AB 2763, 2016) and to add back- ground check and disqualifying offense requirements (AB 1289, 2016).320 In 2016, California amended its Vehicle Code to extend, effective July 1, 2018, the existing prohibition against driving a commercial vehicle with a 0.04 or more blood alcohol level to driving a motor vehicle with a passenger for hire in the vehicle.321 [E-12] In 2017, California also amended its Business and Professions Code to add a provision related to TNC driver business licenses;322 the City and County of San Francisco have chal- lenged that provision as unconstitutional.323 [E-16] In September 2017, Lyft, Uber, and General Motors petitioned the CPUC to modify its previous decisions in Rulemaking 12-12-011 to authorize public testing and deployment of autonomous vehicles for passenger transportation. The parties differed on whether the CPUC should establish a 324 Order Instituting Rulemaking on Regulations Relat- ing to Passenger Carriers, Ridesharing, and New Online- Enabled Transportation Services, Rulemaking 12-12-011: Lyft proposed that the CPUC create a new category of TCP for fully autonomous vehicles, Lyft, Inc.’s Petition for Modification of D.13-09-045, D.16-12-037 and D.16-04-041 to Authorize Public Testing and Deployment of Autono- mous Vehicles for Passenger Transportation, Sept. 11, 2017, http://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/ M195/K586/195586686.PDF. Uber argued for merely add- ing clarifying language concerning the CPUC’s jurisdic- tion over autonomous vehicles to existing regulations. Petition for Modification of Rasier-CA, LLC and UATC, LLC Per Amended Phase III.B. Scoping Memo and Ruling of Assigned Commissioner, Sept. 11, 2017 (filed Dec. 20, 2012), http://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/ M195/K587/195587128.PDF. General Motors argued for covering for-hire autonomous vehicles under the existing regulatory structure, but also establishing a new TCP cat- egory of “Autonomous Vehicle Carrier” (AVC) authorized to own or manage autonomous vehicles to provide TNC service. Petition of General Motors, LLC and GM Cruise, LLC for Modification of D.13-09-045, D.14-11-043, D.16- 04-041 and D.16-12-037 to Address the Use of Autono- mous Vehicles for Passenger Transportation, Phase III.B.—Track 8, Sept. 11, 2017, http://docs.cpuc.ca.gov/ PublishedDocs/Efile/G000/M195/K586/195586579.PDF. 325 Response of San Francisco International Airport and the San Francisco Municipal Transportation Agency to Petitions of General Motors/GM Cruise, Lyft and Rasier- CA Addressing the Use of Autonomous Vehicles for Pas- senger Transportation, Oct. 25, 2017, http://docs.cpuc. ca.gov/PublishedDocs/Efile/G000/M197/K794/197794849. PDF; Response of the San Francisco Taxi Workers Alliance (SFTWA) to Petitions for Modification Requesting Authori- zation for the Use of Autonomous Vehicles for Transporta- tion Services, Oct. 25, 2017, http://docs.cpuc.ca.gov/ PublishedDocs/Efile/G000/M197/K815/197815918.PDF. 326 Notably, regulations in Austin and Houston were preempted when Texas enacted a statewide TNC statute. The preempted regulations were Austin City Code §§ 13-2- 509 to 13-2-534, enacted by City Ordinance No. 20151217- 075, Dec. 17, 2015 (comprehensively regulating TNCs, including a fingerprint background check requirement), http://www.austintexas.gov/edims/document.cfm? id=245769; and Houston, Transportation Network Compa- nies, Code of Ordinances, §§ 46-501 through 46-516, https:// library.municode.com/tx/houston/codes/code_of_ ordinances?nodeId=COOR_CH46VEHI_ARTIXTRNECO (TNCs are also covered under Vehicles for Hire Generally, Code of Ordinances, §§ 46-1 through 46-15.6, https:// library.municode.com/tx/houston/codes/code_of_ ordinances?nodeId=COOR_CH46VEHI_ARTIINGE_ DIV1VEHIGE_S46-2RECO). 319 Order Instituting Rulemaking on Regulations Relat- ing to Passenger Carriers, Ridesharing, and New Online- Enabled Transportation Services, Rulemaking 12-12-011, Decision 16-04-041, Apr. 21, 2016 (issued Apr. 26, 2016), http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/ M161/K474/161474505.PDF. See also, Decision 16-05-027, May 17, 2016, (issued May 19, 2016). Correcting errors in Decision 16-04-041, http://docs.cpuc.ca.gov/PublishedDocs/ Published/G000/M161/K682/161682222.PDF. 320 Cal. Pub. utIl. Code §§ 5430-5445.2 (2016), http:// leginfo.legislature.ca.gov/faces/codes_displayText.xhtml? lawCode=PUC&division=2.&title=&part=&chapter=8.& article=7. 321 AB 2687, amending Cal. Veh. Code § 23153 (2016). [E-12] 322 SB 182, adding Chapter 7, Transportation Network Company Drivers: Business Licenses, to Cal. Veh. Code, pt. 1 of division 7 (2017). 323 City and County of San Francisco v. State of California, No. CPF-18-516041 (Cal. Super. Ct. Feb. 8, 2018) (Verified petition for writ of mandate and complaint for declaratory and injunctive relief). See City Administrator of San Fran- cisco, Herrera asks the court to invalidate state law that gives preferential treatment to Uber and Lyft, Feb. 8, 2018, https://www.sfcityattorney.org/2018/02/08/herrera-asks- court-invalidate-state-law-gives-preferential-treatment- uber-lyft/ (accessed Feb. 20, 2018). [E-16]

45 service in defined neighborhoods of SFMTA’s service area.329 [E-17] The resolution to amend the Municipal Transpor- tation Code stated that such vehicles could support San Francisco’s transportation goals “if they operate safely, replace single-occupancy vehicle trips, reduce car ownership, and contribute to a reduction in parking demand,”330 but that they could also “contribute to adverse impacts on San Francisco’s transportation network, including delaying transit bus and rail service, increasing traffic congestion, and interfering with the safe movement of people walking, biking, driving, and riding transit in San Francisco.”331 The regulations excluded taxis and vehicles operating entirely within the scope of a CPUC permit or certificate of public convenience and necessity.332 Specific requirements of these SFMTA regulations are discussed further in this digest under relevant issue headings. B. Employment Classification Employment classification is critical to the reso- lution of a variety of legal issues that may arise out of TNC relationships under state law, such as claims for minimum wage and unemployment insurance, However, regulations in New York City and Philadelphia remain in force under their respective state statutes. Moreover, local regulations in a number of cities are in force in the non-preemption states. Examples are included in Appendix B. In addition, airport regulations exist in a number of jurisdictions that allow the governing authorities of county or municipal airports to regulate TNCs, as specified in the TNC statute.327 In 2017, SFMTA adopted regulations governing microtransit operation under its jurisdiction.328 The regulations prohibit microtransit routes from substantially duplicating SFMTA public transit service, subject to approval by the SFMTA Board of Directors of the Director Transportation’s criteria for making that determination. In February 2018, the SFMTA Director of Transportation released private transit vehicle (PTV) route duplication crite- ria, which provided that PTV service would be in compliance with the § 1207(f)(1) requirement to provide complementary service only if the service has “substantially different stop spacing than any single comparable SFMTA public transit route,” or if it meets one of three (or more at the Director’s discretion) exemptions, including providing specified 327 E.g., Georgia’s statute governing Ride Share Net- work Services and Transportation Referral Services allows the governing authorities of county and municipal airports to regulate TNCs and establish fees consistent with Ga. Code § 40-1-191 (2017), https://www.lexisnexis. com/hottopics/gacode/. (sign-in required). Hartsfield- Jackson Atlanta International Airport has exercised this authority. ATL has designated pickup and drops off points for TNC passengers. Rideshare at ATL, http://www.atl. com/rideshare/. A number of airports have levied per trip fees on TNCs serving the airports. E.g., Port of Seattle updates pilot program for app-based transportation ser- vices to meet growing demand for airport resources, Press release, Oct. 26, 2017, https://www.portseattle.org/ news/port-seattle-updates-pilot-program-app-based- transportation-services (accessed Oct. 27, 2017). 328 San Francisco Municipal Transportation Agency Board of Directors and Parking Authority Commission Min- utes, Oct. 17, 2017, https://www.sfmta.com/sites/default/files/ reports-and-documents/2017/12/10-17-17_agenda_-_mtab. pdf. The SFMTA Board adopted Resolution No. 171017-133, § 2 of which amended Division II of the Transportation Code by adding Article 1200: Regulation of Non-Standard Vehicles (§§ 1201–1213), https://www.sfmta.com/sites/default/files/ reports-and-documents/2017/12/10-17-17_item_13_private_ transportation_vehicle_-_tc_amendment_resolution.docx_. pdf. The Transportation Code is available at http://www. amlegal.com/codes/client/san-francisco_ca/. (follow link for transportation code). 329 The criteria define “substantially different stop spac- ing” for purposes of § 1207(f)(1) as including, but not being limited to, instances in which: 1. Of the total number of stops served by the PTV route, fewer than 75 percent are located within 0.2 miles of a stop served by the comparable SFMTA public transit route; or 2. Of the total number of stops served by the compa- rable SFMTA public transit route, fewer than 50 per- cent are located within 0.2 miles of the stops served by the PTV route. The exemptions are: 1. The PTV route provides service at least every fif- teen minutes during normal service hours to one or more stops located in Qualified Communities of Concern; or 2. The PTV route provides service entirely outside the hours of the comparable SFMTA public transit route; or 3. The PTV route provides connections to BART or Caltrain stations except that stations along Market Street and the Transbay Transit Center shall not be taken into account for purposes of meeting this require- ment; or 4. Other factors determined by the Director. Private Transit Vehicle Route Duplication Criteria, Feb. 20, 2018, https://www.sfmta.com/sites/default/files/ reports-and-documents/2018/02/sfmta_18-0220_private_ transit_vehicle_route_duplication_criteria.docx_.pdf (accessed Feb. 22, 2018). [E-17] 330 S.F. mun. tranSP. Code § 1201(a)(5). 331 S.F. mun. tranSP. Code § 1201(a)(6). 332 The regulations were developed to be consistent with SFMTA Guiding Principles for Emerging Mobility Service and Technologies. S.F. mun. tranSP. Code § 1201(a)(8).

46 extended to employment law.335 Courts have applied the common law right-to-control standard in a vari- ety of ways.336 The second primary standard for determining employment status is the economic realities test, applicable under the FLSA, and applied in Rutherford Food Corp. v. McComb337 In practice, many courts have assessed control in applying both standards.338 Moreover, it has been argued that “similarly situated workers are classified differently, not because of different facts, but because of different jurisdictions and opinions.”339 For example, a South Carolina court of appeals noted “there is a split of authority on whether a taxi driver, who leases a taxi- cab under a per diem payment agreement and keeps his fares and tips as compensation, is an employee or independent contractor.”340 Classification under state law will depend in part on how closely state law hews to the FLSA standard, which is purportedly more broad than is the common law standard. State law may define independent contractor status even more strictly. Massachu- setts’s law, for example, contains a presumption of employment for unemployment compensation and wage law purposes. The Commonwealth applies a three-part test (ABC test) to determine whether an employer has rebutted that statutory presumption. The ABC test for wage law requires that the employer establish that: (1) the individual is free from control and direction in connection with the performance of the service, both under his contract for the performance of service and in fact; (2) the service is performed outside the usual course of the business of the employer; and tort liability, and indemnification. For example, the ease of enforcing—if not the ultimate enforcement of—an indemnification provision covering TNC employees in the case of an accident caused by a TNC driver may be materially affected by the TNC’s position that the driver is not a TNC employee. The NCOIL model legislation included provisions specifying that a TNC “shall not be deemed to control, direct or manage the Personal Vehicles or Transportation Network Company Drivers that connect to its Digital Network, except where agreed to by written contract,” and that neither the TNC nor TNC driver is a common carrier, contract carrier, or motor carrier.333 These provisions or variants thereof are examples of several ways that a number of state TNC statutes directly address employment classification. Where that is the case, such provi- sions should govern state employment claims, although as of September 2017, no TNC cases had been identified raising state employment classifica- tion claims that were brought after the enactment of state TNC statutes. Absent a provision in the state TNC statute governing employment status, the state’s general employment law should govern such disputes. However, despite the similar legal foundations for many of the state laws, courts and administrative agencies have reached different conclusions under very similar factual situations as to whether TNC drivers are employees or independent contractors because of the differing ways the decision makers have applied the underlying legal principles.334 The balance of this section discusses relevant general principles of state employment law, including several illustrative cases. In addition, this section discusses independent contractor provisions in state TNC statutes. Cases involving TNCs are discussed infra Part V, RSP Cases and Regulatory Proceedings. 1. State Employment Law in General The common law standard for distinguishing between employees and independent contractors was originally developed for purposes of assessing tort liability under respondeat superior and was later 335 See Redfearn, supra note 222, at 1031. 336 Brown, supra note 222 at 23–25. 337 331 US 722, 729, 67 S. Ct. 1473, 1476, 91 L. Ed. 1772, 1778 (1947). 338 Cunningham-Parmeter, supra note 212, at 1691–1703. 339 Brown, supra note 222, at 40. 340 Nelson v. Yellow Cab., 349 S.C. 589, 594, 564 S.E.2d 110, 113 (2002) (finding cab driver was employee for work- ers’ compensation purposes). The court stated that the majority rule is that such a driver is an employee. In its holding, the court emphasized that the right to control the driver was critical, finding that “Yellow Cab retained the right to exercise sufficient control over Nelson, including the right to fire, as to render him an employee.” Id. at 118. See also Pikaart v. A & A Taxi Inc., 393 S.C. 312, 713 S.E.2d 267 (2011) (finding cab driver was employee for workers’ compensation purposes). The Pikaart court noted the pri- mary consideration is right to control, not the actual con- trol exercised, based on four considerations: “(1) direct evidence of the right to, or exercise of, control; (2) the method of payment; (3) the furnishing of equipment; and (4) the right to fire.” Id. at 316, 713 S.E.2d at 270. 333 NCOIL Model Act, supra note 276 at § A.3. 334 Brown, supra note 222, at 15, 17, 27–29; Cunning- ham-Parmeter, supra note 212, at 1704, n.s 221 and 222, 1705, n.s 223, 224, 225, 226, 227; Redfearn, supra note 222, at 1037, n. 68, citing Gray v. FedEx Ground Package Sys., Inc., 799 F.3d 995, 997 n.1 (8th Cir. 2015) (summarizing and providing examples that “[s]ome courts, in various legal and procedural postures, have found employee status . . . [o] ther courts, again in various postures, have found indepen- dent-contractor status . . . [and] [s]till others have concluded simply that summary judgment was inappropriate”).

47 is in fact an independent contractor.346 The seminal California case on determining employment status is S.G. Borello & Sons, Inc. v. Dept. of Indus. Rela- tions.347 The analysis in Borello is relevant not only for evaluating the potential employment status of California TNC drivers, but also for evaluating TNC driver employment status in other jurisdictions that employ similar tests for determining employment status. A taxi case that applied Borello in determin- ing employment status for workers compensation purposes348 and was cited by the courts in two major TNC employment cases may also be instructive. Finally, a 2014 appellate case may result in the Cali- fornia Supreme Court adopting a different standard for establishing employee status, which could signif- icantly affect the ability of California TNC drivers to establish that they are employees rather than inde- pendent contractors.349 Borello involved the employment status for purposes of the Worker’s Compensation Act (Act) of migrant agricultural laborers working under so-called sharefarmer agreements. The California Supreme Court rejected the grower’s claim that the laborers were independent contractors because “they manage their own labor, share the profit or loss from the crop, and agree in writing that they are not employees.”350 The court reviewed the terms under which the laborers worked and the factors asserted by the growers in support of the independent contrac- tor designation, and disagreed “both with the grow- ers’ premises and with their conclusions.”351 The court analyzed the application of the control- of-work test in the context of California workers compensation and unemployment insurance stat- utes, including the importance of secondary indicia such as the right to discharge at will, without cause, as well as factors derived from the Restatement (3) the individual is customarily engaged in an independently established trade, occupation, profession, or business of the same nature as that involved in the service performed.341 Prongs one and three of the ABC test of unemploy- ment insurance is substantively the same as for wage law, but the second prong requires demonstrat- ing that “such service is performed either outside the usual course of the business for which the service is performed or is performed outside of all the places of business of the enterprise for which the service is performed.”342 All three prongs must be satisfied to rebut the presumption of employment.343 Although the second prong has been ruled preempted as to motor carriers with respect to the transportation of property,344 it remains in force for other employers. In addition, as in the case of federal law, the deter- mination of employment status may depend in part on the purpose for which it is sought. 2. California Law Under California law, the presumption is that a worker is an employee.345 This presumption is rebut- table. Once the plaintiff has established a prima facie case by coming forward with evidence that he provided services for an employer, the burden shifts to the employer to prove that the presumed employee 346 Narayan v. EGL, Inc., 616 F.3d 895, 900 (9th Cir. 2010), citing Robinson v. George, 16 Cal. 2d 238, 105 P.2d 914, 917 (1940); Cristler v. Express Messenger Sys., Inc., 171 Cal. App. 4th 72, 84, 89 Cal. Rptr. 3d 34, 43 (2009); Bemis v. People, 109 Cal. App. 2d 253, 263–64, 240 P.2d 638, 644, (1952). 347 48 Cal. 3d 341, 769 P.2d 399, 256 Cal. Rptr. 543 (1989). 348 Yellow Cab Coop. at 1288, 277 Cal. Rptr. at 437, 226. 349 See discussion further in this part of the digest of Dynamex OperationsWest v. Superior Court, 179 Cal. Rptr. 3d 69, 230 Cal. App. 4th 718 (2014). 350 Borello, 48 Cal. 3d at 345, 769 P.2d at 400, 256 Cal. Rptr. at 544. 351 Id. at 350, 769 P.2d at 403, 256 Cal. Rptr. at 547. 341 maSS. Gen. lawS ch. 149, § 148B, https://malegislature. gov/Laws/GeneralLaws/PartI/TitleXXI/Chapter149/ Section148B. In a 2008 advisory opinion, the Massachu- setts Attorney General cited to an interpretation of the Illinois independent contractor law statute that stated: “When one is in the business of dispatching limousines, the services of chauffeurs are provided in the usual course of business because the act of driving is necessary to the busi- ness.” An Advisory from the Attorney General’s Fair Labor Division on M.G.L. c. 149, s. 148B, 2008/1, at 6, note 4, http://www.mass.gov/ago/docs/workplace/independent- contractor-advisory.pdf, citing Carpetland U.S.A., Inc. v. IL Dept. of Employment Security, 201 Ill.2d 351, 386–88 (2002). 342 maSS. Gen. lawS ch. 151A, § 2, https://malegislature. gov/Laws/GeneralLaws/PartI/TitleXXI/Chapter151A/ Section2. The ABC test in New Jersey’s Unemployment Compensation Act, N.J. Stat. § 43:21-19(i)(6). 343 Athol Daily News v. Bd. of Review of the Div. of Employment and Training, 439 Mass. 171, 175, 786 N.E.2d 365, 369–370 (2003). 344 Mass. Delivery Ass’n v. Coakley, 769 F.3d 11 (1st Cir. 2014). 345 Any person rendering service for another, other than as an independent contractor, or unless expressly excluded herein, is presumed to be an employee.” Cal. labor Code § 3357, https://leginfo.legislature.ca.gov/faces/codes_ displaySection.xhtml?lawCode=LAB&sectionNum=3357; Yellow Cab Coop. v. Workers’ Comp. Appeals Bd., 226 Cal. App. 3d 1288, 1294, 277 Cal. Rptr. 434, 437, (1991).

48 The court reviewed the particular circumstances of Borello’s operation, concluding: Under these circumstances, Borello retains all necessary control over the harvest portion of its operations. A business entity may not avoid its statutory obligations by carving up its production process into minute steps, then asserting that it lacks “control” over the exact means by which one such step is performed by the responsible workers.354 Finally, in rejecting the growers’ argument that by signing the sharefarmer agreement the laborers had agreed to accept its risks and benefits, the court noted that—aside from the fact that such agree- ments do not necessarily overcome other strong indicia of employment—there was no indication that the laborers had any real choice as to terms. Yellow Cab Coop. v. Workers Comp.355 applied Borello in the context of a workers compensation claim made by a cab driver leasing a cab from Yellow Cab Cooperative, Inc. (Yellow). In determining whether the driver rendered services to Yellow Cab Coop., the court found that Yellow Cab Coop. did not merely lease vehicles to drivers, but also actively marketed and delivered passenger services, and provided instructions to the drivers concerning service delivery. The court therefore held that Yellow Cab. Coop. was in the business of operating a fleet of taxis for public carriage, and the drivers, “as active instruments of that enterprise, provide an indis- pensable ‘service’ to Yellow Cab Coop.; the enterprise could no more survive without them than it could without working cabs.”356 The court then addressed the effect of common law authorities in determining whether the driver was an employee of an independent contractor for purposes of the workers compensation statute, citing Borello for the proposition that complete control or control over details do not preclude a finding of control for statutory purposes “at least where the principal retains pervasive control over the opera- tion as a whole, the worker’s duties are an integral part of the operation, the nature of the work makes detailed control unnecessary, and adherence to stat- utory purpose favors a finding of coverage.”357 Thus the court found Yellow Cab Coop.’s reliance on common law criteria misplaced. In applying Borello’s principles to the facts of the instant case, the court found that the lease agree- ment did not accurately define the parties’ relation- ship, as drivers were required to make payments and subjected to controls not mentioned in the lease. The court also found that the parties’ actual conduct Second of Agency.352 In addition, the court noted that, rather than being limited by common law prin- ciples, the statutory definition of employment must take into account the statutory purpose of distin- guishing between employees and independent contractors: protection of employees. The court cited to numerous cases in other jurisdictions that have held that the statutory purpose must be considered in determining employment status, despite statutes that include control references in the statutory defi- nitions, and agreed with that approach. The court then examined the purposes of the Act to determine whether the nature of the work and overall arrangement between the parties come within the history and fundamental purposes of the Act. The possible standards to apply included the Restatement principles already discussed, statutory standards for contractor’s licensees, and the six- factor test developed by other jurisdictions.353 The court held that regardless of the specific standard applied, the laborers were employees for purposes of the Act. The court noted that in similar cases, other courts had also ruled that the growers were employ- ers because they retained overall control over the production and sale of the crop, and the laborers made no significant capital investment nor did they exhibit other aspects of independent contractors, such as performing work that requires special skills. 352 The court cited the following included factors, noting that they cannot be applied mechanically, but are inter- twined: (a) whether the one performing services is engaged in a distinct occupation or business; (b) the kind of occu- pation, with reference to whether, in the locality, the work is usually done under the direction of the princi- pal or by a specialist without supervision; (c) the skill required in the particular occupation; (d) whether the principal or the worker supplies the instrumentalities, tools, and the place of work for the person doing the work; (e) the length of time for which the services are to be performed; (f) the method of payment, whether by the time or by the job; (g) whether or not the work is a part of the regular business of the principal; and (h) whether or not the parties believe they are creating the relationship of employer-employee. (citations omitted) Id. at 351, 769 P.2d at 404, 256 Cal. Rptr. at 548. 353 Referring to a Ninth Circuit FLSA case, the court stated these factors as the right to control the work and “(1) the alleged employee’s opportunity for profit or loss depending on his managerial skill; (2) the alleged employ- ee’s investment in equipment or materials required for his task, or his employment of helpers; (3) whether the service rendered requires a special skill; (4) the degree of perma- nence of the working relationship; and (5) whether the service rendered is an integral part of the alleged employ- er’s business.” Id. at 355, 769 P.2d at 407, 256 Cal. Rptr. 551, citing Real v. Driscoll Strawberry Associates, Inc., 603 F.2d 748, 754 (9th Cir.1979). 354 Id. at 357, 769 P.2d at 408, 256 Cal. Rptr. 552. 355 226 Cal. App. 3d 1288, 277 Cal. Rptr. 434 (1991). 356 Id. at 1294, 277 Cal. Rptr. at 437. 357 Id. at 1295, 226 Cal. Rptr. at 439.

49 falling outside the scope of that order. The court of appeals explained that under the relevant IWC wage order, there are three relevant definitions of to employ: “(a) to exercise control over the wages, hours or working conditions, or (b) to suffer or permit to work, or (c) to engage, thereby creating a common law employment relationship.”360 The court also discussed the importance under Borello and Marti- nez of considering the purpose of the relevant stat- ute, when considering the appropriate scope of the definition of employee in construing a statute focused on employee protection, such as a wage and hour statute. The court rejected Dynamex’s assertion that if the superior court’s holding were upheld, “independent contractors will no longer exist in California.”361 The California Supreme Court granted review of the case in January of 2015.362 Then in late 2017, the California court issued an order asking the parties to file briefs on the question of whether California should adopt an employment classifica- tion test similar to the ABC test adopted by the New Jersey Supreme Court in 2015. Adoption of such a test would make it easier for drivers to establish they are employees rather than independent contrac- tors than is the case under Borello.363 When the California court heard oral argument on February 6, 2018, the court gave some indication that it was indeed considering adopting the ABC test or some variation of it, rather than continuing to apply the showed that Yellow Cab Coop. exerted by direct and indirect means control over aspects of the work, including instructions as to behavior, appearance, and cleanliness of the cabs, as well as control over dispatched calls, and lease terminations based on write-ups and passenger complaints. The court deemed the prohibition against driving for other companies to be significant. The court gave little weight to the flexibility in scheduling, noting that the driver had enjoyed a similar flexibility when he had been employed by Yellow Cab Coop. as a union- ized cab driver prior to Yellow Cab Coop.’s bank- ruptcy and reorganization, and that in any event, the freedom was illusory as earning a livelihood required carrying paying passengers. Thus, as to control, the court concluded: In sum, Yellow exercised pervasive control over the enter- prise as a whole; it exercised at least some direct control over applicant’s work; indirect control was effected through the payment system and the threat of termination; and such actual independence as applicant enjoyed was inher- ent in the work and was not the product of any specialized skill or expertise. It thus appears that Yellow exercised “all necessary control” over the work, and the test applied in Borello was satisfied here.358 The court then examined the additional Borello factors, finding that being a regular and integrated portion of the principal’s business operation applied to the driver, as did the lack of entrepreneurial char- acter in the work. In addition, although accepting the characterization of independent contractors’ status is a condition of employment, that characterization itself does not forfeit the protection of the statute, which serves public as well as private interests. The court therefore upheld the decision by the Workers’ Compensation Appeals Board holding that Yellow Cab Coop. was the employer for workers’ compensa- tion purposes. Yellow Cab Coop. was considered on point by the California Labor Commission in deter- mining the employment status of an Uber driver seeking damages under California labor law. Dynamex Operations West, Inc. v. Superior Court359 involved an action brought by delivery driv- ers challenging their classification as independent contractors. The superior court had certified the class based on the definition of employee found in Industrial Welfare Commission (IWC) wage orders, rather than relying solely on the Borello factors. The California court of appeals held that it was correct to rely on the IWC definition of an employment rela- tionship for purposes of claims falling within the IWC wage order in question, but not for those claims 358 Id. at 1300, 226 Cal. Rptr. at 442. 359 230 Cal. App. 4th 718, 179 Cal. Rptr. 3d 69 (2014). 360 Id. at 728, 230 Cal. Rptr. at 77, citing Martinez v. Combs, 49 Cal. 4th 35, 64, 109 Cal. Rptr. 3d 514, 231 P. 3d 259 (Cal. 2010). 361 Id. at 730, 230 Cal. Rptr. at 79. 362 See Dynamex Operations West v. Superior Court, 182 Cal. Rptr. 3d 644, 341 P.3d 438 (2015) (case reviewed and depublished); Jonathan A. Siegel, Controversial Dynamex Case Regarding Misclassification of Independent Contrac- tors to be Reviewed by California Supreme Court, nat’l l. reV., Feb. 3, 2015, https://www.natlawreview.com/article/ controversial-dynamex-case-regarding-misclassification- independent-contractors-to-be (accessed Feb. 9, 2018). In granting review, the Court framed the issue as follows: In a wage and hour class action involving claims that the plaintiffs were misclassified as independent contractors, may a class be certified based on the Industrial Welfare Commission definition of employee as construed in Martinez v. Combs (2010) 49 Cal. 4th 35, or should the common law test for distinguishing between employees and independent contractors dis- cussed in S.G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal. 3d 341 control? Id. 363 Jon Steingart, GrubHub Wage Case May See New Delivery: Worker Status Test Redo, bloomberG law, Jan. 25, 2018, https://bnanews.bna.com/daily-labor-report/ grubhub-wage-case-may-see-new-delivery-worker-status- test-redo (accessed Jan. 30, 2018).

50 right-to-control test. The court restated the 20-factor test and concluded that the restated test, which includes economic reality considerations but main- tains a primary focus on the employer’s right to control, was the appropriate test for determining employment status under the KWPA. The court reviewed Kansas’s precedent in classifying truck drivers (for the most part as employees) and other jurisdictions’ classification of FedEx drivers (for the most part as employees). The court then indicated overarching principles, such as statutory purpose, that would guide its analysis and proceeded to apply the 20-factor test to the case at hand.367 The court concluded that FedEx had established an employ- ment relationship with the drivers.368 While there are substantial differences between FedEx drivers and TNC drivers (e.g., the require- ments for uniforms and company-branded vehicles), the court did make a number of findings with poten- tial relevance to TNC cases. These included FedEx’s right to control, the integration of the services into FedEx’s business, the existence of a continuing rela- tionship, the degree to which FedEx effectively established set work hours, the manner of payment, the ability of drivers to make a profit or loss, whether the drivers can work for more than one company at a time, and whether the drivers have the right to Borello test. A decision was expected within 90 days of the date of the oral argument.364 3. Craig v. FedEx Ground Package Systems, Inc. In Craig v. FedEx Ground Package Systems, Inc.,365 the Kansas Supreme Court answered a ques- tion certified to it by the Seventh Circuit—whether under the undisputed facts of the case, the drivers were employees of FedEx as a matter of law under the Kansas Wage Payment Act (KWPA)—in the affirmative, holding that such full-time drivers are employees as a matter of law under the KWPA, regardless of whether they have more than one service area.366 This case is of interest because of the court’s discussion of the economic reality test, includ- ing its detailed analysis of factors that may be appli- cable to TNC cases. FedEx had acknowledged in oral argument that it had purposely structured the operating agreements so that it could label the drivers as independent contractors and thus save the costs associated with employees. The Kansas Supreme Court held that the substance of the actual relationship overrode the form of the agreements. The KWPA is a remedial statute covering several aspects of wages and benefits not covered by the FLSA. It applies to employees, defined as “any person allowed or permitted to work by an employer,” and specifically excludes independent contractors, as defined by the DOL under the FLSA. The Kansas Supreme Court noted that it had not developed a specific test for determining employment status under the KWPA, although earlier cases had used a 20-factor test that appeared to derive from a 1987 Internal Revenue Service revenue ruling. Regard- less, Kansas’s courts had long emphasized the right- to-control test for employment status for other purposes. However, the court discussed the Kansas labor regulations that deferred to the federal defini- tion of independent contractor in analyzing how to define employee under the KWPA, which led to a discussion of the economic reality test used in deter- mining whether an individual is an employee under the FLSA, including the overlap between that test, the 20-factor test, and the Kansas common law 364 Rabia Z. Reed & Ryan McCoy, California Supreme Court Hears Oral Argument to Define “Independent Con- tractor,” CalIFornIa PeCulIarItIeS emPloyment law bloG, Feb. 7, 2018, https://www.calpeculiarities.com/2018/02/07/ california-supreme-court-hears-oral-argument-to-define- independent-contractor/ (accessed Feb. 9, 2018). 365 300 Kan. 788, 335 P.3d 66 (Kan. 2014). 366 Id. at 789, 335 P.3d at 71. Based on this decision, the Seventh Circuit instructed the district court to enter judg- ment in favor of the plaintiff drivers. Craig v. FedEx Ground Package Sys. Inc., 792 F.3d 818 (7th Cir. 2015) (FedEx drivers are employees under Kansas law). 367 The court stated: The Seventh Circuit indicated that it was looking for overarching principles to guide the weighing pro- cess. If there are such principles, one would be that the KWPA is broadly construed to effect its purpose of pro- tecting workers against the overreaching of employers, such as artificially designating an employee as an inde- pendent contractor to permit the withholding of wages for business expenses. On the other hand, the KWPA should not be construed in such a manner that it pre- vents a worker from having the opportunity to enter into a mutually advantageous business arrangement that provides the worker with a legitimate opportunity to generate a profit over and above what a pure wage earner could expect to earn. But perhaps the most fun- damental principle is that form should not be elevated over substance, e.g., if a worker is hired like an employee, dressed like an employee, supervised like an employee, compensated like an employee, and termi- nated like an employee, words in an operating agree- ment cannot transform that worker’s status into that of an independent contractor. Id. at 806, 335 P.3d at 80–81. 368 The court stated: Viewing the factors as a whole leads to the conclu- sion that FedEx has established an employment rela- tionship with its delivery drivers but dressed that rela- tionship in independent contractor clothing. Even where the factors should point us toward finding that the drivers are independent businesspersons, FedEx’s control and micromanaging undermine the benefit that a driver should be able to reap from that arrangement. Id. at 827, 335 P.3d at 92.

51 (3) The TNC does not assign a TNC driver a particular territory in which to operate, (4) The TNC does not restrict a TNC driver from engaging in any other occupation or business, and (5) The TNC and TNC driver agree in writing that the TNC driver is an independent contractor of the TNC.370 While not addressing employee status directly, the Ohio TNC statute undercuts the possibility of drivers recovering state benefits by providing that unless agreed to by written contract Ohio statutory provisions related to minimum wage, workers’ compensation, and unemployment compensation are inapplicable to TNCs as to driver employment status. In addition, absent a written agreement to the contrary, drivers are not agents of the TNC.371 Indiana’s TNC legislation arguably creates a more stringent barrier for drivers than the more typical formulation, specifically stating that except as provided in a written contract: (1) A TNC driver who connects to a TNC’s digital network is an independent contractor of the TNC and (2) A TNC is not considered to do either of the following: (a) Control, direct, or manage a TNC driver who connects to the TNC’s digital network. (b) Own, control, operate, or manage a personal vehicle used by a TNC driver to provide prear- ranged rides.372 North Carolina’s TNC statute, however, may provide a greater opportunity to establish employee status by creating a rebuttable presumption that “a TNC driver is an independent contractor and not an employee. The presumption may be rebutted by application of the common law test for determining employment status.”373 Rhode Island’s provision appears to afford a greater opportunity to establish employee status by terminate the relationship. Perhaps the most perti- nent of these findings from a TNC analysis perspec- tive were the first two. Right to Control.— In discussing the FedEx OA and right to control, the court noted that there was no indication that any driver could modify the OA to the driver’s advantage so that the OA more closely resembled a take-it-or-leave-it employment contract than a negotiated independent contractor agree- ment. In discussing the audits, customer service rides, and business discussions FedEx conducted with drivers, the court noted that the alleged advi- sory nature of resulting “recommendations” were suspect at best, given that they could lead to over- sight procedures that in turn may lead to termina- tion. The court was also skeptical of FedEx’s characterization as its control going to the results of the work to be completed rather than to the manner and methods of reaching those results. Degree of Integration of Services Into Business.— The court rejected FedEx’s contention that the drivers’ services were merely complementary to FedEx’s business: FedEx’s business is to take a package from one person or entity and deliver it to another person or entity; it does not manufacture or sell any product or perform any other service. A driver delivering hamburger to a fast-food restaurant is performing a service that complements the business of sell- ing sandwiches. A driver leaving a Frito-Lay plant with a semitrailer full of potato chips is performing a service that complements the business of manufacturing and selling snack foods. To the contrary, when a FedEx driver delivers a package, he or she has performed the sole service that FedEx offers. There is nothing complementary about that because without the delivery drivers there is no FedEx business.369 The court found that the degree to which the drivers were integrated into FedEx’s business weighted heavily in the favor of an employment relationship. 4. State TNC Independent Contractor Provisions The common formulation in state TNC statutes that address this issue is to state that drivers are independent contractors and not employees under state law—with the specificity to which the provi- sions reference other state laws such as those governing unemployment or workers’ compensation varying between states—provided that certain conditions are met. These conditions—which track typical TNC practices—commonly include a varia- tion on the following: (1) The TNC does not prescribe specific hours during which a TNC driver must be logged into the TNC’s digital platform, (2) The TNC imposes no restrictions on the TNC driver’s ability to utilize digital platforms from other TNCs, 369 Id. at 815, 335 P.3d at 86. 370 del. Code, tit. 2, § 1911–15, Limitation on TNCs, http://delcode.delaware.gov/title2/c019/. Florida, for exam- ple, does not include the requirement concerning territory assignment. 371 ohIo reV. Code § 4925.10(A) (2016), http://codes. ohio.gov/orc/4925.10v1. The statute does allow a driver to recover under the Ohio whistleblower law if the TNC dis- continues the driver’s access to the TNC digital network for making a whistleblower report, but specifies that noth- ing in the provision creates an employer and employee relationship between the TNC and driver. ohIo reV. Code § 4925.10(C) (2016). 372 IC 8-2.1-19.1-4 (2017), http://iga.in.gov/legislative/ laws/2017/ic/titles/008#8-2.1. 373 N.C. Gen. Stat. § 20-280.8 (2015), http://www.ncleg. net/EnactedLegislation/Statutes/PDF/ByArticle/ Chapter_20/Article_10A.pdf.

52 talked about creating similar associations for California drivers.377 C. Disability Accessibility Requirements for Public Transportation The typical state TNC statute includes relatively general language concerning accommodating indi- viduals with disabilities. The typical language does not require TNCs to actually provide WAVs or for that matter to take active measures other than having a policy that requires their drivers to follow applicable laws concerning service provision to indi- viduals with disabilities. It also requires the TNC to take action if violations of such laws occur. Common requirements concerning disability accommodation in state TNC statutes include prohi- bitions on charging more to individuals with disabil- ities, complying with applicable laws concerning accommodation of service animals, and providing riders an opportunity to indicate whether they require a WAV. However, rather than requiring TNCs to make WAVs available, a common proviso is, “If a TNC cannot arrange wheelchair-accessible TNC service in any instance, it shall direct the rider to an alternate provider of wheelchair-accessible service, if available.”378 A limited number of state TNC laws do contain more specific provisions regarding provision of service to individuals with disabilities. The balance of this section discusses more specific state requirements, as well as several examples of local accessibility regulations. 1. California Regulatory Requirements The CPUC requires TNCs to file annual reports with the CPUC’s Safety and Enforcement Division detailing “the number and percentage of their customers who requested accessible vehicles, and how often the [TNCs were] able to comply with requests for accessible vehicles.379 These annual reports must include updates on each aspect of the accessibility plan that each TNC was required to file within 45 days of the issuance of D.13-09-045. That decision noted that the CPUC would, based on the Safety and Enforcement Division’s review of those plans, as well as external input, determine the need for changing the TNC business model or for adopt- ing new regulations to ensure TNC accessibility.380 D.13-09-045 also required TNCs to submit a plan requiring that in order to be independent contrac- tors, drivers must meet the requirements of the independent contractor test of several federal and state labor laws.374 5. Local Regulation/Organizing San Francisco’s microtransit regulation does touch on the issue of employment classification by providing that microtransit permittees are respon- sible for ensuring that their drivers comply with all applicable state and local laws, whether the drivers are direct employees or independent contractors.375 The issue of classification has been sidestepped in two other cities to ensure some benefits to TNC drivers. Seattle has passed an ordinance that creates collective bargaining opportunities for taxi- cab, flat-rate vehicle, and TNC drivers.376 The legal challenge to this ordinance is discussed infra Part V, RSP Cases and Regulatory Proceedings. In New York City, Uber reached a 5-year agreement with the International Association of Machinists and Aerospace Workers to create an association called the Independent Drivers Guild, limited to only those Uber drivers based in New York City, with no cost to drivers to join. The agreement does not include collective bargaining, but does require monthly meetings with Uber executives to discuss members’ concerns. The Teamsters Union has 374 The Rhode Island statute provides: “TNC drivers shall be independent contractors and not employees of the TNC if they are determined to meet federal and state law and regulation relating to independent contractors, includ- ing, but not limited to, 26 U.S.C. § 3401(a), 26 U.S.C. § 3402(a)(1), §§ 28-29-17.1 and 28-42-7, and the TNC and TNC driver agree in writing that the TNC driver is an inde- pendent contractor of the TNC.” R.I. Gen. lawS § 39-14.2-16 (2016). 26 U.S.C. § 3401(a) defines “wages” for the purposes of the Internal Revenue Code’s chapter on federal income tax withholding requirements; § 3402(a) sets forth the withholding requirement in general; R.I. Gen. lawS § 28-29- 17 is the Rhode Island Workers’ Compensation statute’s requirement that a person file a notice of designation to be considered an independent contractor; § 28-42-7 specifies that for the purposes of Rhode Island’s Employment Secu- rity Act, including its contributions and benefits provisions, the factors for distinguishing independent contractors and employees are to be the same as those factors used by the Internal Revenue Service in its code and regulations. 375 S.F. mun. tranSP. Code, § 1207(e)(5) (2017). 376 Seattle City Ordinance 124968, Dec. 23, 2015, http:// clerk.seattle.gov/~legislativeItems/Ordinances/Ord_ 124968.pdf. Seattle City Ordinance 125132, Sept. 22, 2016, amended the first ordinance to set a commencement date of January 17, 2017, and provided additional guid- ance to the responsible department for drafting an imple- menting rule, https://seattle.legistar.com/View.ashx?M=F &ID=4705435&GUID=E441CDF8-7BB6-4857-ABC3- D90F302A312E. 377 Seyforth Shaw, Uber Agrees to Form Non-Union Guild With New York City Drivers, emPloyer labor rela- tIonS, May 24, 2016, http://www.employerlaborrelations. com/2016/05/24/uber-agrees-to-form-non-union-guild- with-new-york-city-drivers/ (accessed Jan. 15, 2017). 378 See, e.g., kan. Stat. § 8-2716(e) (2016). 379 D. 13-09-045, supra note, 310 at 30–31. 380 Id. at 43–44.

53 special needs, as well as containing the usual requirements that disabled passengers not be charged more and that TNC drivers comply with all legal requirements concerning accommodation of service animals.385 However, although the imple- menting regulation requires a TNC oversight process that ensures that wheelchairs are accommo- dated and that records related to accessibility of riders with special needs, disabilities, and visual impairments be maintained, the regulation does not specifically require that TNCs provide WAVs.386 The session law that enacted the Massachusetts TNC statute required the establishment of a task force to review current laws, regulations, and local ordinances governing the ride for hire industry, including TNCs, and to make recommendations concerning public safety, consumer protection, and the economic fairness and equity of the regulatory structure governing the industry. The task force was directed to consider sixteen specified issues— six of which explicitly mentions TNCs—including “the feasibility of establishing a Massachusetts Accessible Transportation Fund credited with annual surcharges from ride for hire companies that do not, as determined by the task force, provide sufficient wheelchair-accessible service.”387 5. Other State TNC Statutes The Pennsylvania TNC statute imposes a collec- tive requirement for provision of WAVs within Phil- adelphia.388 The Texas TNC statute requires each TNC to conduct an accessibility pilot program in one of the four largest markets in which the TNC oper- ates in Texas and to report back to the state legisla- ture on the findings of the pilot program, minimally providing information on four specified points related to capacity and service for passengers with fixed-frame wheelchairs.389 within 90 days of the date of issuance to explain “how they plan to ensure that this new form of transportation service does not create a divide between the able and disabled communities.”381 2. Connecticut TNC Statute The TNC statute requires the Commissioner of Transportation to study how to implement and fund a substantially equivalent level of service for indi- viduals with disabilities from taxicabs and TNCs, including examining a per-trip surcharge, and to report back to the General Assembly with recom- mendations by January 1, 2019.382 3. Maryland TNC Statute The TNC statute requires the state Public Service Commission (PSC) to adopt regulations “to ensure that transportation network companies and operators are making reasonable efforts to make transportation network services accessible to all people, including individuals with disabilities,” specifying four areas that must be covered: service animals, technology accessibility, reasonable accommodations, and TNC notification to drivers concerning federal and state antidiscrimination requirements.383 The implement- ing rules do create some affirmative obligations beyond those typically found in a state TNC statute, particu- larly for TNCs that operate five or more vehicles under their permits. Such TNCs were required after adop- tion of the regulation to report to the PSC staff on how they intend to “increase access to wheelchair accessi- ble public or private vehicle-for-hire service to individ- uals with disabilities,” and thereafter to annually report (a) on the steps taken to ensure and upgrade the accessibility of the TNC’s services and (b) on the number of complaints received regarding inability or failure to accommodate persons with disabilities. Other requirements include ensuring the accessibility of the TNC website and mobile applications, providing information and training to the drivers concerning non-discrimination and accessibility, and ensuring that driver-rating platforms are not based on unlawful discrimination and that drivers do not discriminate against passengers or potential passengers based on a number of characteristics, including disability.384 4. Massachusetts TNC Statute The provision related to the jurisdiction of the TNC division created under the statute requires the division to ensure the accommodation of rides with 381 Id. at 74. 382 Conn. Pub. Acts 17-140, § 13(a) (2017). 383 md. Code ann., Pub. utIl, § 10-403, Regulations for accessibility of services (2017). 384 md. Code reGS. § 20.95.01.25, http://www.dsd.state. md.us/comar/comarhtml/20/20.95.01.25.htm. 385 maSS. Gen. lawS ch. 159A1/2, § 2(g) (2016). 386 220 maSS. Code reGS. § 274.03(2)(e), Transportation Network Company Permit Process: TNC Oversight Pro- cess; 220 maSS. Code reGS. § 274.11(3)(d), Record Mainte- nance and Retention. 387 Mass. Acts. (2016), ch. 187, § 7, https://malegislature. gov/Laws/SessionLaws/Acts/2016/Chapter187. 388 53 Pa. ConS. Stat. § 57A11(c) (2016), http://www. legis.state.pa.us/CFDOCS/LEGIS/LI/consCheck.cfm?txt Type=HTM&ttl=53&div=00.&chpt=057A&sctn=011.& subSctn=000. 389 Information must be provided regarding: number of vehicles equipped to accommodate such passengers avail- able through the TNC network at the end of the program; average wait time for such passengers; number of rides provided to such passengers during the pilot; and number of instances TNC referred such passengers to another provider because the TNC could not accommodate the requesting passenger. tex. oCC. Code ann. § 2402.113 (2017), https://legiscan.com/TX/text/HB100/2017.

54 and courteous manner” and specifies requirements for wheelchair securement.394 In July 2017, the New York City Taxi and Limousine Commission proposed a rule change that would “require all FHV [For-Hire Vehicle] Bases to send 25% of their dispatched trips to wheelchair accessible vehi- cles,” in an effort to increase the availability of WAVs.395 The joint comment received from several major provid- ers, including Uber, objected to the proposal as ineffec- tive in increasing WAVs or reducing the wait time for them and as having negative economic effects on their industry. They proposed that the New York City Taxi and Limousine Commission instead consider estab- lishing a for-hire vehicle centralized accessible dispatch center, responsible for handling all requests for WAVs.396 SFMTA’s 2017 microtransit regulation contains several requirements related to accessibility. In addition to requiring permit applicants to describe their training policies and procedures for drivers related to providing accessible service to people with disabilities, and their policies and procedures for providing equal access to people with disabilities,397 the regulation specifically mandates that permit- tees provide equal access to persons with disabili- ties. In determining whether the microtransit service provides such equal access, SFMTA must consider whether the service provided to persons with disabilities is comparable to the service provided to the general public based on six specific factors, as well as other factors established by the Director of Transportation. In addition, permittees must comply with federal requirements for accessi- bility of information and communications technol- ogy, such as smartphone applications and websites.398 The Florida TNC statute specifies that a TNC “that contracts with a governmental entity to provide paratransit services must comply with all applicable state and federal laws related to individ- uals with disabilities.”390 The Nebraska TNC legisla- tion prohibits TNC from providing transportation for any person under contract with the Department of Health and Human Services or its contractors without specific authorization from the Nebraska Public Service Commission, whose grant of author- ity requires a showing of public convenience and necessity.391 Nevada, on the other hand, specifically authorizes contracts between TNCs and the Depart- ment of Health and Human Services. 392 6. Local Accessibility Regulations Local governments that retain regulatory author- ity may impose additional requirements. The City of Chicago, for example, imposes several requirements to specifically ensure provision of TNC wheelchair- accessible service, including penalties for failure to meet WAV-planning requirements.393 The imple- menting regulations require TNC drivers who oper- ate WAVs to undergo training approved by the Commissioner of Department of Business Affairs and Consumer Protection “specific to servicing and transporting people that use wheelchairs in a safe 390 Fla. Stat. § 627.748(13)(f) (2017). 391 neb. reV. Stat. § 75-342 (2015), https://nebraska legislature.gov/laws/statutes.php?statute=75-342. 392 neb. reV. Stat. § 706A.220 (2015). 393 Chicago requires that TNCs: either connect customers who request a WAV with a TNC driver operating a WAV or contract with other persons that dispatch WAVs in order to dispatch WAVs through the TNC platform; train drivers not to discriminate against person with disabilities in any pas- senger rating system; submit to the commissioner of busi- ness affairs and consumer protection (BACP Commissioner) a plan to enhance service to customers with disabilities and to execute such plan within 6 months of approval; pay a $10,000/day fine for failure to submit or execute such plan; pay $0.10/ride accepted for each TNC vehicle that is not wheelchair accessible for payment into the city’s accessibil- ity fund. mun. Code oF ChI., § 9-115-140, Transportation network service – Accessibility and accessibility fund. Sec- tion 9-115-140 also authorizes the establishment of a taxi fare subsidy program to subsidize the cost of WAV taxi rides by persons with disabilities when such rides are arranged through ride hailing apps for prearranged taxi service, and requires city inspection of WAVs for compliance with legally required safety standards before they are used as TNC WAVs. In addition, the commissioner is required to consider an applicant’s ability to provide service to customers with disabilities in determining whether to issue or renew a TNC license. § 9-115-060 Transportation network provider license – Qualifications for license. 394 CIty oF ChICaGo ruleS, Rule TNP4.03, TNP Wheel- chair-Accessible Vehicles; Rule TNP5.12, TNP Wheelchair Accessible Vehicle (WAV), https://www.cityofchicago.org/ content/dam/city/depts/bacp/rulesandregs/TNPRules AmendedeffJan12017.pdf. 395 FHV Wheelchair Accessibility Rules, http://www. nyc.gov/html/t lc /downloads/pdf /proposed_req_ wheelchair_accessibility_6_30_17.pdf. 396 Joint comment from the Black Car Assistance Corp./ New York Black Car Operators’ Injury Compensation Fund, Inc., Livery Base Operators, Inc., and Uber, http:// rules.cityofnewyork.us/sites/default/files/proposed_rules_ sup_docs/2017-09-21_comment_to_tlc.pdf. It appears only two comments were received, including this one. 397 S.F. mun. tranSP. Code, § 1203(b)(2)(G), (H) (2017). 398 S.F. mun. tranSP. Code, § 1207(i) (2017). The six factors are: response time, travel time, fare, origins and destinations served, ontime performance, and vehicle accessibility. Subsection (i) also prohibits denial of service based on “race, color, ancestry, national origin, place of birth, sex, age, religion, creed, disability, sexual orienta- tion, gender identity, weight, or height.”

55 that transit agencies should consider in evaluating whether/under what terms to enter into relationships with TNCs. It appears that insurance coverage for microtransit providers will be covered by state insur- ance requirements for vans and buses; no state stat- utes were identified that specifically covered microtransit providers. However, microtransit opera- tions have been conditioned on meeting generally applicable requirements for maintenance of insur- ance,404 and local governments may impose additional requirements, as was the case in San Francisco. The importance of insurance coverage for TNC drivers quickly became apparent in 2013, when a six-year-old pedestrian was struck and killed by an Uber driver, and Uber at first refused to cover the accident.405 Because TNC drivers use their own personal vehicles, as TNCs became more prevalent, a concern quickly arose within the insurance industry that unless TNCs offered primary insurance cover- age for their drivers from the time they turn the TNC app on until they turn it off, a significant gap in insurance coverage could occur. The gap would stem from the fact that virtually every personal automo- bile liability insurance policy contains a livery exclu- sion, that is, excludes coverage for injuries/damages sustained while carrying passengers for hire.406 In addition to being the subject of warnings from state insurance regulators, the insurance gap was an issue seized upon by taxicab and livery drivers in raising doubts about the TNC industry.407 State insurance D. Minority/Low-Income Accessibility It is a common requirement in state TNC stat- utes to require that payments be made by using the TNC digital network. Those requirements, as well as specific explicit requirements prohibiting cash payment,399 may inhibit low-income access to ride- sourcing services. The Seattle Department of Trans- portation, citing the factors that could inhibit use of new mobility services by low-income and LEP individuals, noted, “Without proper oversight and solutions to ensure equity, we risk advancing transportation options that are not accessible to a significant portion of the population.”400 In general, state TNC statutes do not appear to directly address nondiscrimination concerns (other than those relating to persons with disabilities). However, as noted previously, Maryland’s imple- menting regulations require TNCs to ensure that driver-rating platforms are not based on unlawful discrimination. TNCs must ensure that drivers do not discriminate against passengers or potential passengers based on “geographic endpoints of the ride, race, color, national origin, religion, sex, disabil- ity, age, or sexual orientation/identity.”401 The Pennsylvania TNC statute establishes an affirmative duty for TNCs to respond to requests for service in underserved areas within Philadelphia and to ensure compliance with this requirement by TNC drivers.402 The requirement to ensure compli- ance suggests an obligation on the part of TNCs to take action to prevent violations, rather than to merely suspend drivers who violate the policy, as is the case in the zero drug and alcohol policy require- ments. The Illinois TNC statute similarly provides that TNC drivers providing services within any local unit of government that imposes requirements that licensed chauffeurs not discriminate in providing services to underserved areas must comply with such requirements within that unit.403 E. Maintenance of Insurance This section focuses primarily on the issue of requirements for liability insurance covering TNC drivers, perhaps the most significant insurance issue 399 See e.g., wIS. Stat. §§ 440.445(5) (2015); Seattle waSh. mun. Code, § 6.310.452.G - TNC driver operating, conduct, and passenger relations standards, https:// library.municode.com/wa/seattle/codes/municipal_ code?nodeId=TIT6BURE_SUBTITLE_IVNELICO_ CH6.310TAFREVE. 400 New Mobility Playbook, Seattle Department of Transportation, September 2017, at 29, 38, https://new mobilityseattle.info. 401 md. Code reGS. § 20.95.01.25.I. 402 53 Pa. ConS. Stat. § 57A16(g) (2016). 403 625 Ill. ComP. Stat. § 57/20(f) (2015). 404 Heather Kelly, Luxury bus startup suspends service over permit issues, CNN money, May 20, 2015 (Leap ordered to cease operation for, inter alia, not providing proof of insurance), http://money.cnn.com/2015/05/20/ technology/leap-bus-cease-desist/; Arjun S. Byju, City Council Approves Transportation Pilot Program, harV. CrImSon, Nov. 11, 2014 (Cambridge City Council granted jitney license to Bridj after requiring proof of commercial auto insurance), http://www.thecrimson.com/article/2014/ 11/11/council-approves-transportation-startup/. 405 See O’Connor, supra note 268 at 579, 585. 406 Supporting Innovation; Closing TNC Insurance Gaps, ProPerty CaSualty InSurerS aSSoCIatIon oF amerICa, 2014, http://www.pciaa.net/docs/default-source/default- document-library/tncq-a091614.pdf?sfvrsn=2 (accessed June 20, 2017). See also, Commercial Ridesharing, Center For InSuranCe PolICy and reSearCh, Apr. 5, 2017, http:// www.naic.org/cipr_topics/topic_commercial_ride_sharing. htm (accessed June 20, 2017); US: The Emerging Regulation of Transportation Network Companies, lloyd’S, Apr. 24, 2015, https://www.lloyds.com/the-market/ communications/regulatory-communications-homepage/ regulatory -communicat ions / regulatory -news- articles/2015/04/insurance-issues-in-the-new-sharing- economy (accessed Sept. 22, 2017). 407 E.g., Ben Popken, States Warn of Rideshare Risks for Passengers, NBC newS, June 5, 2014, http://www.nbcnews. com/business/consumer/states-warn-rideshare-risks- passengers-n116736 (accessed Jan. 9, 2017).

56 D.14-11-043 defined “providing TNC services” to cover three periods: (1) App open—waiting for a match. (2) Match accepted—but passenger not yet picked up. (3) Passenger is in the vehicle and until passen- ger safely exits vehicle.413 D.14-11-043 then applied the requirements of AB 2293 to those periods to set forth required levels of various types of coverage for each. The key differ- ences between the new requirements and those in D.13-09-045 are that the earlier decision allowed excess insurance policies and did not require insur- ance when no passenger was in the vehicle.414 Several statutory requirements were not addressed in D.14-11-043, including that the statute does not limit a TNC’s liability for tort claims from an auto- mobile accident involving a TNC driver to the amount of mandated insurance coverage.415 commissioners also expressed concern over the inherent risk involved in the TNC drivers being distracted while looking at the app to find passen- gers, and then potentially rushing to locations to pick up passengers.408 However, it should be noted that two gaps may still exist in TNC insurance coverage: where uninsured/underinsured motorist (UM/UIM) coverage is not required unless a passenger is in the vehicle409 and any period in which the TNC driver has turned off the app but has interaction with a TNC passenger outside of the vehicle.410 The balance of this section discusses California’s regulation of TNC insurance coverage, industry model act provisions, regulatory trends in other states, and local government regulation. The section also includes a brief discussion of worker’s compen- sation insurance in the RSP context. 1. California As noted supra Section A of this Part IV, California addressed this insurance issue in 2013 and 2014. The CPUC’s first decision covering TNCs imposed several requirements related to insurance, notably that TNCs must maintain $1 million-per-incident coverage for incidents that occur while drivers are providing TNC services.411 In 2014, the CPUC issued D.14-11-043 to implement certain portions of AB 2293, which had enacted specific require- ments for TNC insurance coverage in California.412 408 Transportation Network Company Insurance Prin- ciples for Legislators and Regulators, natIonal aSSoCIa- tIon oF InSuranCe CommISSIonerS, Mar. 31, 2015, at 5–6, http://www.naic.org/documents/committees_c_sharing_ econ_wg_exposure_adopted_tnc_white_paper_150331.pdf (accessed Sept. 22, 2017). 409 For example, the Tennessee regulatory authority warned of a gap occurring when the TNC as named insured opted out of UI/UIM motorist coverage during period 1. See TDCI: Ridesharing Drivers Should Check Insurance Cov- erage for Gap, Press Release, Apr. 28, 2017, https://www. tn.gov/commerce/news/2017/4/28/tdci-ridesharing-drivers- should-check-insurance-coverage-for-gap.html. 410 See infra pt. V.E., Tort Actions. 411 D.13-09-045, supra note 310. Specifically, TNCs must maintain commercial liability insurance policies providing not less than $1,000,000 per-incident coverage for incidents involving vehicles and drivers while they are providing TNC services, available to cover claims regardless of whether a TNC driver maintains insurance adequate to cover any portion of the claim, and disclosed on the TNC app and website. Id. at 73. Such insurance was apparently allowed to be made available through excess coverage. Id. at 60. Other insurance-related requirements included: TNCs must obtain proof of insurance before allowing driv- ers to provide service on their platforms and as long as they remain available to provide service. Id. at 30. TNC drivers must provide proof of both their personal insurance and the commercial insurance in case of an accident. Id. at 26. 412 D. 14-11-043 supra 318. 413 Id. at 10. 414 Required coverage levels are: $1 million TNC insur- ance (primary) coverage must be provided for death, per- sonal injury, and property damage for periods 2 and 3. In addition, TNC insurance must provide uninsured/under- insured motorist coverage of $1 million for period 3. For period 1, TNCs must maintain primary insurance of at least $50,000 for death and personal injury per person, $100,000 for death and personal injury per incident, and $30,000 for property damage, as well as providing excess coverage insuring the TNC and the driver for at least $200,000 per occurrence to cover any liability arising from a participating driver using a vehicle in connection with a TNC’s online-enabled application or platform. All of the coverage requirements may be met through TNC insur- ance maintained by the driver, TNC insurance maintained by the TNC if the driver does not maintain the coverage or if the driver’s coverage does not exist, or a combination of the two. Id. at 22–25. 415 Cal. Pub. utIl. Code § 5433(f) (2016). The statute does not specifically denominate three periods, but for simplicity of discussion, the period references are included here to cover the intervals described in the statute. Equiv- alent provisions to subsection (f) are included in some other state TNC statutes. The following additional statu- tory provisions impose significant insurance-related requirements that were not addressed in D.14-11-043: • Disclosures: The TNC must disclose in writing to drivers the insurance coverage and limits of liability that the TNC provides while the driver uses a vehicle in con- nection with the TNC app, and must advise drivers in writing that their personal automobile insurance policies will not provide coverage because the driver is using the vehicle to provide TNC service. In addition, the TNC must disclose in writing to drivers that their personal automo- bile insurance policies will not provide collision or compre- hensive coverage for damage to the vehicles used by the drivers from the moment the driver logs on to the TNC app to the moment the driver logs off the app. Cal. Pub. utIl. Code § 5432 (2016).

57 • The Model Act does not require the TNC to maintain excess coverage of at least $200,000 per occurrence to cover any liability from the driver’s use of the TNC app. • The Model Act does not provide that the insur- ance coverage mandates do not limit TNC liability to the amount of the required coverage. • The Model Act specifies ratings for insurers that may provide the required insurance. • The Model Act requires that in the event of an accident, upon request from directly interested parties, automobile insurers, and investigating police officers, TNC driver must indicate whether he/she was logged onto TNC network or on pre- arranged ride at the time of the accident. • The required TNC disclosures to TNC drivers concerning scope of coverage are less extensive and less definitive under the Model Act than under the California statute. • The Model Act provides specific examples of the types of coverage that may be excluded from per- sonal automobile coverage provided to TNC drivers. • The Model Act does not limit the types of vehi- cles that may be covered by personal automobile in- surance policies providing coverage to TNC drivers. • The Model Act limits the disclosure of driver log-on information that TNCs must provide in claims coverage investigations to a 12-hour period immediately preceding and following the accident. 3. State Trends As of the end of 2017, all states except Oregon and Vermont had enacted some sort of TNC insurance legislation.416 For the most part, states have adopted insurance requirements substantially similar to those in the California statute and/or Model Act. Variations range from differences in coverage levels417 to more substantive differences such as those in Hawaii’s stat- ute. Hawaii, in its otherwise apparently typical TNC insurance legislation, includes a provision that makes the following unenforceable in Hawaii: disclaimers of liability of a TNC or TNC driver; waiver, before the 2. NCOIL Model Act As discussed supra Section A, following the enact- ment of the California TNC statute, two model laws were drafted by the insurance industry: the TNC Model Bill drafted by insurance industry interests and Uber, and a modified version adopted by NCOIL. There is substantial overlap between the insurance requirements under the NCOIL model legislation (Model Act) and those under the California statute. Notable differences are as follows: • The Model Act does not require UM/UIM cov- erage, although it suggests referencing all other state mandated coverage, including UM/UIM; the CPUC regulation implementing the California statute requires UM/UIM during the period in which a passenger is in the TNC vehicle. • The Model Act provides for the duty to defend, but not to indemnify, in the case of insurance pro- vided as required for Model Act period 2. • The Model Act does not specify that the TNC must verify driver insurance coverage for the ve- hicle in TNC service before such insurance may be used to meet the TNC’s insurance obligations. • The Model Act only requires $25,000 for prop- erty damage during period 1, as opposed to the $30,000 required by the California statute. • Indemnification/defense: The insurer has the duty to defend and indemnify the insured for [periods 2 and 3]. The insurer providing coverage for [period 1] is the only insurer having the duty to defend any liability claim aris- ing from an accident occurring within [period 1]. Coverage under a TNC insurance policy is not dependent on a per- sonal automobile insurance policy first denying a claim; a personal automobile insurance policy is not required to first deny a claim. If the TNC insurance maintained by the driver has lapsed or ceased to exist, the TNC must provide coverage beginning with the first dollar of the claim. Id. § 5433. • Effect on private passenger automobile insurance policies: Such policies are not required to provide primary or excess coverage during any of the three periods. No cov- erage is provided during those periods unless specifically provided for in the policy. There is no duty of the personal automobile policy to defend or indemnify in connection with a driver’s TNC activities during periods 1–3 unless the policy specifically so specifies. Personal automobile insurers may offer policies that specifically cover [speci- fied] passenger vehicles with a seating capacity of 8 per- sons or less in connection with a driver’s TNC activities during periods 1–3 if the policy expressly provides for such coverage. Id. § 5434. • Duty to cooperate: Requires cooperation, as specified, of TNC or its insurer during claims coverage investiga- tion. Id. § 5435. • Financial responsibility: TNC insurance that meets the requirements of § 5433 will be deemed to satisfy the financial responsibility requirements of §§ 16054 and 16056 of the Vehicle Code. Id. § 5439. 416 The Oregon legislature considered three bills that would have required TNC regulation (directly or indirectly), but all three remained in committee when the legislature adjourned. Legislative Summary 2017, or. deP’t oF tranSP., 51, http://www.oregon.gov/ODOT/About/GR/2017%20 Legislative%20Summary.pdf. A Vermont TNC insurance bill also remained in committee when the legislature adjourned for the year. H.143, An act relating to automobile insurance requirements and transportation network com- panies, http://legislature.vermont.gov/bill/status/2018/H.143. 417 E.g., New Jersey requires $1.5 million rather than $1 million during the Model Act period 2. P.L.2017, ch. 26, § 10 c.(1), http://www.njleg.state.nj.us/2016/Bills/AL17/26_. PDF. Georgia requires coverage of $50,000 for property damage per accident during Model Act period 2. Ga. Code § 33-1-24 (b)(2) (2017).

58 sets forth nine criteria for determining whether an individual is an employee under Colorado law. These criteria supersede the common law.424 However, Colorado’s Transportation Network Service Company Act more specifically provided that the Director of the Division of Workers’ Compensation “may by rule determine whether or not transporta- tion network companies have an obligation under existing Colorado law to provide or offer for purchase workers’ compensation insurance coverage to trans- portation network company drivers.”425 If state law does not address the eligibility of TNC drivers, then the general analysis required to determine employee status under state employment law must be under- taken to determine eligibility for workers’ compen- sation insurance. F. Tort Liability The original purpose of employment classifica- tion law was to distinguish between employee and independent contractor for liability purposes under respondeat superior.426 The relevance of tort liability as a major risk factor in engaging with RSPs will be significantly affected by disposition of employment classification issues discussed supra Section B, although courts could rely as well on other theories that do not require a finding of employment status. Also, as discussed more fully in this digest, back- ground check issues may overlap with tort liability issues.427 While the liability issues discussed may arise with microtransit providers that use nonpro- fessional drivers, the incidents identified for this digest have all involved TNCs; the following discus- sion is organized accordingly. Aside from vehicle defects, tort liability in the TNC context will arise either from injury to the driver428 or occurrence of an accident, of any claim or right to file a lawsuit by a passenger against a TNC or TNC driver; or an agreement by the passenger to defend, indem- nify, or hold harmless a TNC or TNC driver.418 The Hawaii legislation also requires the state insurance commissioner to conduct an annual report on the effects of the law on personal motor vehicle insurance policy rates. Hawaii’s law sunsets in 2021.419 In addi- tion, as state TNC insurance legislation has been enacted, eliminating uncertainty in the market, insur- ance companies have started to adapt to offer TNC- specific personal automobile policies.420 4. Local Government Where local governments are not preempted from regulating TNCs, they may impose insurance requirements. Portland, Oregon, for example, covers TNC insurance under its Private For-Hire Trans- portation Regulations. Requirements include main- taining commercial general liability insurance, which provides $2-million aggregate coverage for claims arising out of bodily injury and property damage in the course of work under the Portland For-Hire Transportation TNC permit, and naming the City of Portland as an additional insured.421 SFMTA’s microtransit regulation imposes insurance requirements, with levels based on the seating capacity of the vehicle.422 5. Workers’ Compensation Insurance States take different approaches to the eligibility of TNC drivers for workers’ compensation insur- ance. For example, Alaska’s TNC statute amended its workers’ compensation law to exclude TNC driv- ers from worker’s compensation coverage.423 Ohio’s TNC statute essentially creates a presumption against TNC drivers’ eligibility for workers’ compen- sation insurance without categorically excluding them. The Worker’s Compensation Act of Colorado 418 haw. reV. Stat. 24 § 431:10C-705 (2016). 419 Sections 3, 6 of Act 236, 2016 haw. SeSS. lawS. 420 Mark Vallet, Which insurers offer ridesharing poli- cies?, insurance.com, Jan. 24, 2017, http://www.insurance. com/auto-insurance/coverage/insurance-rideshare-uber- lyft.html (accessed June 3, 2017). E.g., State Farm® Intro- duces Transportation Network Company Driver Coverage in Additional States, Oct. 21, 2016, https://newsroom. statefarm.com/state-farm-introduces-transportation- network-company-driver-coverage-in-additional- states/#zwJoQCLpZRQwVuC3.97 (accessed June 3, 2017). 421 Section 16.40.230, TNC Insurance Requirements, Portland City Code & Charter, https://www.portland oregon.gov/citycode/article/649146. 422 S.F. mun. tranSP. Code, § 1207(c) (2017). 423 alaSka Stat. § 23.30.230(a), (c) (2017). 424 Colo. reV. Stat. § 8-40-102, citing § 8-40-202(2)(b)(II). 425 Colo. reV. Stat. § 8-41-211. As of Sept. 21, 2017, the Division had not exercised this authority. 426 Redfearn, supra note 222, at 1028–30. 427 An argument made by taxicab interests is that the requirement for more stringent background checks is one reason taxis are safer than TNCs. Adrienne LaFrance, Rose Eveleth, Are Taxis Safer Than Uber?, atlantIC, Mar. 3, 2015, http://www.theatlantic.com/technology/archive/2015/ 03/are-taxis-safer-than-uber/386207/. But see, Joe Chiodo, Woman Says Omaha Taxi Driver Raped Her In Cab, WOWT NBC omaha, Mar. 28, 2016, http://www.wowt.com/home/ headlines/Woman-Says-Omaha-Taxi-Driver-Raped-Her- In-Cab-306725421.html. 428 Molly McHugh, Uber and Lyft Drivers Work Danger- ous Jobs—But They’re on Their Own, wIred, Mar. 10, 2016, https://www.wired.com/2016/03/uber-lyft-can-much-keep- drivers-safe/ (accessed Feb. 23, 2017).

59 Other factors inherent to TNC operations that may affect liability include the distracted driving issues inherent in relying on an app to connect driv- ers to passengers,434 possible conflict between state laws against cell phone usage while driving and app-driven systems for picking up passengers, leas- ing of vehicles to TNC drivers, and state laws that award a public franchise to TNCs. 2. Bars to Liability There are two issues of overriding importance in analyzing the applicability of various tort liability theories to TNCs and by extension to transit agen- cies that enter into relationships with TNCs. The first is sovereign immunity, which in some situa- tions will preclude a finding of transit agency liabil- ity regardless of the TNC’s liability. The second is the effectiveness of the arbitration and waiver clauses in the TNC user apps, which may preclude a finding of TNC liability (at least in court), if not a finding of transit agency liability. Sovereign Immunity.—Sovereign immunity (or governmental immunity, depending on state law) may bar suit against a particular agency.435 If it does not, in the instance of alleged tortious behavior on the part of an RPS driver, the question will arise whether one of the exceptions to the state liability waiver statute applies to the decision to enter into an arrangement with an RSP. While control of bus companies is gener- ally considered a governmental function immune from liability, the actual driving of a bus is generally consid- ered a ministerial function not so immune. It is unclear whether a court considering an RSP driver’s tortious behavior would focus on the driver’s actual activity, finding it to be analogous to the ministerial function of driving the vehicle, or would focus on the RSP driver’s status and find that the incident is immune from injury caused by the driver.429 As has been the case with taxicab drivers, perhaps the most analogous type of tortfeasor, TNC incidents have involved both. Courts have applied various theories of liability to hold taxi- cab companies liable for the tortious conduct of their drivers—even in some cases when those drivers were deemed to be independent contractors. It is still unclear the extent to which courts will apply those doctrines to TNCs and in turn whether that liability could attach to transit agencies that have contracted with TNCs. Theories of liability raised in cases involving paratran- sit and transit drivers430 may also be relevant. This section discusses TNC-specific factors that relate to tort liability, bars to transit agency liability in the context of TNC service, various theories of vicarious liability that may be alleged in TNC cases, and tort cases involving transit agencies and/or analogous tortfeasors. 1. TNC-Specific Factors Related to Liability Some state TNC laws specifically make disclaim- ers of liability, such as those included in TNC app agreements, null under state law,431 or directly provide that the TNC statute itself does not limit TNC liability to the required insurance minimums.432 Other states, however, specifically provide that TNCs are not common carriers under state law, which could affect assessment of liability.433 Thus there are factors that make it less likely that TNC will be found liable for torts committed by or against its drivers. However, it is unclear whether those factors will make it more or less likely that transit agencies that contract with TNCs will be vulnerable to suit. 429 E.g., Uber Driver Fired After Being Charged With Sexually Assaulting Passenger, CBS boSton, July 6, 2016, http://boston.cbslocal.com/2016/07/06/uber-driver-sexual- assault-passenger-fired-junior-clarke/; Vivian Ho, Victim of alleged Uber hammer attack may lose eye, S.F. Chron., Oct. 1, 2014, http://www.sfgate.com/bayarea/article/Victim-of- alleged-Uber-hammer-attack-may-lose-eye-5792092.php; Sage Lazzaro, An Uber Driver Has Been Charged With Strangling a Student in a Dorm Parking Lot, obSerVer, May 23, 2016, http://observer.com/2016/05/self-driving- cars-will-lead-to-a-lot-of-sex-behind-the-wheel-expert- warns/; Steve Schmadeke, Uber driver charged in sexual assault of intoxicated passenger, ChI. trIb., July 15, 2016, http://www.chicagotribune.com/news/local/breaking/ct- uber-driver-sex-assault-charges-met-20160714-story.html. 430 E.g., Bob Egelko, $4 million awarded to son in S.F. woman’s death, S.F. Chron., Feb. 28, 2017, http://www. sfgate.com/bayarea/article/4-million-awarded-to-son-in-S- F-woman-s-death-10966735.php (accessed Mar. 3, 2017). 431 E.g., la. reV. Stat. § 45:201.5 (2015), http://legis.la. gov/legis/Law.aspx?d=963742. 432 E.g., neb. reV. Stat. § 75-336 (2015), http://nebraska legislature.gov/laws/statutes.php?statute=75-336. 433 E.g., 625 Ill. ComP. Stat. 57/25(e) (2015), http://www. ilga.gov/legislation/ilcs/ilcs3.asp?ActID=3589& ChapterID=49. 434 Matt Richtel, Distracted Driving and the Risks of Ride-Hailing Services Like Uber, N.Y. tImeS (Dec. 21, 2014, 7:00 AM), http://bits.blogs.nytimes.com/2014/12/21/ distracted-driving-and-the-risks-of-ride-hailing-services- like-uber/; Kale Williams and Kurtis Alexander, Uber sued over girl’s death in S.F., S.F. Chron., Jan. 28, 2014, http://www.sfgate.com/bayarea/article/Uber-sued-over- girl-s-death-in-S-F-5178921.php. 435 For a more in-depth discussion of transit agency tort liability, including sovereign immunity, see JoCelyn k. waIte, tranSIt buS StoPS: ownerShIP, lIabIlIty, and aCCeSS 4-14 (Transit Cooperative Research Program, Legal Research Digest No. 24, Transportation Research Board of the National Academies of Sciences, Engineering and Med- icine, Washington, D.C., 2008). That digest noted that liabil- ity may be: precluded under state sovereign immunity law (case law or statute); entire or partial; shielded for particu- lar action complained of under discretionary or governmen- tal exceptions; precluded by the public duty rule, particu- larly in relation to security issues; found only where the transit agency’s action or inaction proximately causes injury. Id. at 8.

60 facts of the individual incident could also affect the sovereign immunity analysis. Waivers.—State law varies on the enforceability of waivers of tort liability. For example, California clearly prohibits contracting away liability for fraud- ulent or intentional acts, or of negligent violation of statutory law, but allows contractual waiver of ordi- nary negligence so long as no public interest is involved439 and it is not expressly prohibited by stat- ute.440 However, waivers of gross negligence are unen- forceable in most states,441 including California.442 3. Theories of Liability443 Theories of liability that may apply in the case of alleged tortious actions by TNC drivers include vicarious liability for the acts of employees under respondeat superior; vicarious liability for the acts of independent contractors under the nondelegable duty doctrine/inherently dangerous activity princi- ple, or apparent agency; negligent hiring; common carrier liability; and strict product liability. In the context of assessing possible transit agency liability for TNC drivers’ tortious activity, principles of joint enterprise liability and joint employer liability could come into play. No cases were identified in which tort claims against TNCs were fully litigated. However, liability, having arisen from the governmental function of selecting a transit provider. In addition, the precise scope of the state tort claims statute and case law will influence the outcome of such analysis. Several other factors could affect the application of the doctrine in this context. Statutes addressing sovereign and governmental immunity often exclude gross negligence from the protection of the stat- ute.436 State law may specifically exempt indepen- dent contractors from the statutory scope of government liability.437 In addition, such statutes may contain what is commonly referred to as a motor vehicle exception to immunity.438 Thus, specific 436 E.g., Michigan’s statute governing government tort liability provides in relevant part: Except as otherwise provided in this section, and without regard to the discretionary or ministerial nature of the conduct in question, each officer and employee of a governmental agency . . . is immune from tort liability for an injury to a person or damage to property caused by the officer, employee, or member while in the course of employment . . . if all of the following are met: (a) The officer, employee, member, or volunteer is acting or rea- sonably believes he or she is acting within the scope of his or her authority. (b) The governmental agency is engaged in the exercise or discharge of a governmental function. (c) The officer’s, employee’s, member’s, or volun- teer’s conduct does not amount to gross negligence that is the proximate cause of the injury or damage. mICh. ComP. lawS § 691.1407(2). The statute defines gross negligence as “conduct so reckless as to demonstrate a substantial lack of concern for whether an injury results.” Id. at (8)(a). 437 For example, California’s Government Claims Act limits the liability of public entities as provided by statute, GoV. Code, § 815. Section 815.2, subdivision (a) codifies the applicability of respondeat superior to public entities: “A public entity is liable for injury proximately caused by an act or omission of an employee of the public entity within the scope of his employment if the act or omission would, apart from this section [where employee is immune from liability] have given rise to a cause of action against that employee or his personal representative.” The definition section of the Government Code specifically excludes inde- pendent contractors from the definition of “employee” under the statute. GoV. Code, § 810.2. 438 For example, Michigan’s Governmental Tort Liability Act makes governmental agencies “liable for bodily injury and property damage resulting from the negligent operation by any officer, agent, or employee of the governmental agency, of a motor vehicle of which the governmental agency is owner, as defined in Act No. 300 of the Public Acts of 1949,” mICh. ComP. lawS § 691.1405. Government owned vehicles; liability for negligent operation, http://www.legislaturemi. gov/(S(uuikewj0oo5gzw2rmkvvao4t))/mileg.aspx?page=get Object&objectName=mcl-691-1405. Under Act 300, an “owner” either rents a motor vehicle or has exclusive use of it for a period greater than 30 days, has legal title, or has immediate right of possession under an installment sales contract. mICh. ComP. lawS § 257.37, “Owner” defined, http:// www.legislature.mi.gov/(S(uuikewj0oo5gzw2rmkvvao4t))/ mileg.aspx?page=getObject&objectName=mcl-257-37. 439 Tunkl v. Regents of University of California, 60 Cal. 2d 92, 383 P.2d 441, 32 Cal. Rptr. 33, (1963) (setting forth fac- tors for determining public interest in context of enforce- ability of waiver of ordinary negligence). 440 Gardner v. Downtown Porsche Audi, 225 Cal. Rptr. 757, 180 Cal. App. 3d 713 (1986) (holding under relevant statute repair garage cannot avoid liability for its negli- gence by having car owners sign a waiver form when they leave their cars with the garage). 441 See e.g., Steinberg v. Sahara Sam’s Oasis, LLC, 226 N.J. 344, 142 A.3d 742 (N.J., 2016); Abacus Fed. Savings Bank v. ADT Security Services, Inc., 18 N.Y.3d 675 (2012), 967 N.E.2d 666, 944 N.Y.S.2d 443. 442 City of Santa Barbara v. Superior Court, 62 Cal. Rptr. 3d 527, 41 Cal. 4th 747, 161 P.3d 1095 (Cal. 2007). 443 For discussions of the question of TNC liability for their driver’s tortious conduct, including applicable theo- ries of liability, see Lauren Geisser, Risk, Reward, and Responsibility: A Call to Hold UberX, Lyft, and Other Transportation Network Companies Vicariously Liable for the Acts of Their Drivers, 89 S. Cal. l. reV. 317 (2016); Mark Macmurdo, Hold the Phone! “Peer-to-Peer” Ride- sharing Services, Regulation, and Liability, 76 la. l. reV. 307 (2015); McPeak, supra note 266; Pfeffer-Gillett, supra note 24.

61 arrange such leases could affect the outcome in liability litigation by affecting the determination of the existence of an employment relationship.448 Generally an employer is not responsible for the negligence of an independent contractor.449 However, this general rule is subject to numerous (and argu- ably overlapping) exceptions, including the peculiar risk (inherently dangerous activity) doctrine, nondelegable duty doctrine, public franchise doctrine, and apparent agency/authority.450 In addi- tion, the employer may be held directly liable for negligent hiring of independent contractors and strictly liable for product defects.451 The precise application of these exceptions will depend on the facts of the case and specific state law. Several of these exceptions may prove relevant to incidents arising in connection with a transit agency relationship with a TNC. Under apparent authority, for example, a principal who represents another as his agent, whether by advertising or otherwise, and causes a third party to justifiably rely on the skill of such an agent may be liable to that third party for harm caused by the apparent agent’s lack of skill. This is so regardless of the actual arrangement between the principal and the apparent agent.452 As to the TNC itself, TNC emblems required under state law, the TNC’s own advertising of its services, and the fact that the TNC’s app is the means of securing the transport may give the passenger reason to consider the driver an agent of the TNC.453 This may be undercut by the TNC terms of service. As to the transit agency, depending on how the rela- tionship is marketed to passengers, they may reasonably believe that the TNC driver is furnishing transportation on behalf of the transit agency. Common carriers, and in some instances taxicab companies, have been deemed to have a nondelega- ble duty to operate safely.454 At least in California, TCPs, such as limousine services, have also been held to owe a duty of utmost care.455 (Where state complaints in such cases illustrate that the forego- ing theories could be relied upon by plaintiffs. For example, the complaint in Perez v. Lyft444 made alle- gations apparently intended to apply regardless of the driver’s employment status and to lay the foun- dation for arguing theories of common carrier liabil- ity, negligent hiring, apparent agency, and possibly inherently dangerous activity. The complaint in Liu v. Uber Technologies, Inc.,445 in addition to attempt- ing to lay the foundation for similar claims against Uber as were made in Perez, raised negligence per se due to alleged violations of the California Vehicle Code and strict product liability for the alleged defect in the Uber app. The doctrine of respondeat superior allows an employer to be held liable for the torts of an employee. To prevail the plaintiff must establish that an employment relationship exists and that the employee acted within the scope of employment.446 This theory has been successfully relied upon in cases seeking to hold taxicab companies liable for the torts of their drivers.447 Although one TNC tort case in the District of Columbia alleging respondeat supe- rior at least survived a motion to dismiss, the issue of establishing employment could prove an insuperable barrier in seeking to hold TNCs liable for driver torts under respondeat superior. However, the trend among TNCs to lease vehicles to their drivers or 444 No: 2015-026727 CA 01 (Fla. Cir. Ct. Nov. 23, 2015) (amended complaint). The complaint alleged that the driver was the employee or agent of Lyft, and that Lyft was vicari- ously liable for the fatal collision at issue because Lyft had breached its duty of reasonable care as to screening and hir- ing drivers and its duty—as a common carrier for hire—of utmost care. Promoting the use of hand-held phones, i.e., driver distraction, in the provision of TNC service was spe- cifically cited as one of the ways Lyft had breached its duty of care owed to Perez, who was alleged to have been within the zone of danger. 445 No. CGC-14-536979 (Cal. Super. Ct. Jan. 27, 2014) (complaint). The complaint alleged that the driver was the agent and/or employee and/or partner of Uber. The com- plaint further alleged that: using the Uber app in the manner intended and required by Uber violated California’s prohibition against using (including texting) hand-held cell phones while driving and the requirements for location of GPS devices (Cal. Veh. §§ 23123; 26708); Uber had been neg- ligent in its development, implementation, and use of the app in a manner so as to lead Uber drivers to be distracted and/or inattentive in driving; Uber was liable in strict prod- uct liability for the defective app and/or user interface; Uber was liable for negligent entrustment of the vehicle to the driver; the violations of the California Vehicle constituted negligence per se; Uber breached its duty of reasonable care in the hiring, training, and supervision of its drivers. 446 McPeak, supra note 266, at 192. 447 Id. at 205–08; Pfeffer-Gillett, supra note 24, at 243, citing Yellow Cab Coop., Inc. v. Workers’ Comp. Appeals Bd., 277 Cal. Rptr. 434, 440–41 (Ct. App. 1991) and People v. Rouse, 249 Cal. Rptr. 281 (App. Dep’t Super. Ct. 1988). 448 Macmurdo, supra note 442, at 334, n. 204, citing Metro Taxi, Inc. v. Brackett, 614 S.E.2d 232, 233 (Ga. Ct. App. 2005); McPeak, supra note 266, at 206–08. 449 Privette v. Superior Court, 854 P. 2d 721, 724 (Cal. 1993), citing Restatement (Second) of Torts § 409. 450 Macmurdo, supra note 442, at 337–40; McPeak, supra note 266, at 193–95; Pfeffer-Gillett, supra note 24, at 253. 451 Macmurdo, supra note 442, at 340–43. 452 Jacobs v. Yellow Cab Affiliation, Inc., 2017 Ill. App (1st) 151107, ¶¶ 31–33, 73 N. E.3d. 1220, 1235–36. See also McPeak, supra note 266, at 194. 453 See McPeak, supra note 266, at 220; Pfeffer-Gillett, supra note 24, at 245–46. 454 McPeak, supra note 266, at 209. 455 Geisser, supra note 442, at 333, citing Rogoff v. Grabowski, 246 Cal. Rptr. 185, 186–87 (Ct. App. 1988).

62 Where it can be reasonably alleged that a TNC knows or should have known that a driver had a propensity for the activity, for example, reckless driving or assault, giving rise to the alleged harm suffered, there may be a colorable claim for negli- gent hiring.463 Given allegations concerning the inadequacy of TNC background screening, the ques- tion may arise whether the transit agency that has entered into a relationship with the TNC reasonably should have known of this risk. Similar issues arise as to training and supervision. 4. Analogous Cases This section discusses several cases that involve one or more of the previously described theories of tort liability and that involve factual situations rele- vant to potential situations involving RSPs. Tort cases involving RSPs are discussed infra Part V.E, Tort Actions. Connell v. Call-a-Cab, Inc.464—This is one of a number of cases in which a taxicab company was held to be liable for the tortious actions of one of its drivers, regardless of the driver’s employment status, based on the taxicab company’s status as a common carrier under state law.465 In this case, the Alabama Supreme Court held a taxicab company liable for a sexual assault on a female passenger by one of its drivers. The court held that whether the driver was an employee or independent contractor (as argued by the defendant) or whether he was acting within the scope of his employment were immaterial issues because of the high duty of care owed by common carriers under Alabama law. In support of its conclusion, the court cited a previous Alabama case holding that taxicab companies are common carriers under Alabama law, several previ- ous railroad cases holding that common carriers are liable for the intentional torts of their employees, and a 1931 case that held that the common carrier’s duty of care is nondelegable, that is, it cannot be avoided by using an independent contractor. The court noted: In this case, Connell contacted AAA, not Hamlin, and requested transportation, which AAA agreed to provide. In so providing transportation, AAA assumed a duty to TNC statutes specifically provide that TNCs are not common carriers under state law, the viability of arguing nondelegable duty as a basis for TNC liabil- ity may be greatly reduced, although not necessarily entirely eliminated.) The nondelegable duty rule prevents a publicly licensed or franchised company from avoiding liability for public safety violations by delegating work subject to public safety require- ments to an independent contractor. The extent of TNC regulation under state law may affect the viability of nondelegable duty claims: the more substantial the requirements for issuing permits, the greater the foundation for arguing that the TNC is a publicly licensed company owing a nondelegable duty of safe operation.456 In addition, depending on state law, driving a vehicle while using an app may be considered inherently dangerous because of the potential conflict with state law.457 Demonstrably operating under authority of federal regulation has also been held to be a basis for vicarious liability.458 In addition, persons engaged in a common busi- ness purpose may be liable for each other’s negli- gence under joint enterprise liability.459 Although it is not clear that an arrangement between a transit agency and a TNC would meet this vicarious liabil- ity’s required element of a single business for profit, this theory has been the basis for recovery against a state transportation department that was found to be in a joint enterprise with a (grossly negligent) transit agency.460 Joint enterprise liability has also been found to exist in the case of drivers and cab owners, and a transportation broker and a small motor carrier.461 Negligent hiring is an exception to the general rule that an employer is not liable for the torts of an independent contractor or that contractor’s employ- ees. Section 411 of the Restatement of Torts provides: An employer is subject to liability for physical harm to third persons caused by his failure to exercise reasonable care to employ a competent and careful contractor [¶] (a) to do work which will involve a risk of physical harm unless it is skillfully and carefully done, or [¶] (b) to perform any duty which the employer owes to third persons.462 456 See Pfeffer-Gillett, supra note 24, at 253–62; Macmurdo, supra note 442, at 337. 457 Driving is not considered to be a “peculiar risk.” Geisser, supra note 442, at 330–31. The widespread accep- tance of TNC app usage could take that activity out of the realm of inherently dangerous activity. 458 McPeak, supra note 266, at 210. 459 Id. at 195–97. 460 Id. at 212–13, citing Texas Department of Transpor- tation v. Able, 35 S.W.3d 608 (Tex. 2000). 461 Id. at 213–15. 462 Camargo v. Tjaarda Dairy, 25 P. 3d 1096, 1100, 108 Cal. Rptr. 2d 617, 621 (2001), citing Rest. 2d Torts, at p. 376. 463 See Macmurdo, supra note 442, at 340–41. 464 937 So.2d 71 (Ala. 2006). 465 See e.g., Teixeira v. Cab Three, Inc., 1994 Mass. App. Div. 154 (1994) (holding duty owed to a passenger by the owner as a common carrier encompasses responsibility for the actions of those who lease or otherwise use the owner’s public license to carry passengers for hire); Hamid v. Metro Limo, Inc., 619 So.2d 321 (Ct. App. Fla. 1993) (find- ing holder of a for-hire license on a taxicab may be held liable for the driver’s negligence).

63 for a dispatch assignment from El Palmar. The only penalty for refusing a fare was losing his place in El Palmar’s dispatch line. However, the court also held that the facts alleged—El Palmar advertised its taxi services, it provided El Palmar business cards for drivers to give to passengers, the plaintiff called El Palmar for a taxi, and the taxi that arrived to pick the plaintiff up displayed the El Palmar logo— supported a negligence claim under the theory of apparent agency. In analyzing the applicability of apparent agency to the instant case, the court discussed a hospital case in which the Georgia Supreme Court cited the following example from § 267 of the Restatement of Agency: Suppose a cab company holds itself out to the public as a safe, efficient supplier of transportation causing the public, including plaintiff-passenger, to justifiably believe the driv- ers are its employees. But suppose there is a secret arrange- ment unknown to the public and this passenger, which renders the drivers independent contractors in their rela- tionship to the cab company. If a taxi driver in a single colli- sion negligently injures a passenger and a pedestrian on the street, the passenger may successfully pursue a claim against the cab company on apparent agency principles.470 Lopez v. Southern Cal. Rapid Transit Dist.471— This case addresses a transit agency’s duty to protect its passengers from assaults by fellow passengers. The plaintiffs were injured during a fight among fellow passengers, and alleged the RTD’s negligent operation of the bus caused their injuries. The trial court had found the RTD to be immune from liability under California Government Code provisions relat- ing to immunity for police activity, discretionary acts, and public entity immunity for immune acts of employees. The California Supreme Court first considered whether RTD had a duty to protect its passengers from assaults by fellow passengers and found that as a common carrier, RTD did have such a duty, and noted that this holding was “supported by the overwhelming weight of authority. Virtually all courts and all commentators who have considered the issue have concluded that a common carrier’s duty to its passengers includes a duty to protect them from assaults by fellow passengers.”472 However, while § 2100 of the California Civil Code imposes a duty of utmost care and diligence, liability is limited to instances where the carrier “has or should have Connell, which AAA retained regardless of whether Hamlin is considered an employee or an independent contractor.466 Thus, the court reversed and remanded for a deter- mination of whether the cab company had in fact breached the duty of care that the Alabama Supreme Court had held that it owed to the plaintiff. Kass v. Beethoven Transit Inc.467—Kass involved an accident between an Access-A-Ride vehicle owned and operated by a New York City Transit Authority contractor and a taxi. The plaintiff was a passenger in the Access-A-Ride vehicle. The plaintiff ’s notice of claim alleged that the accident was caused by the negligent operation, maintenance, and control of the Access-A-Ride vehicle. The complaint raised a different theory: By contrast, the complaint alleges that the City “breached its duties owed to the Plaintiff ’s in contracting with entities negligent in their ownership and control of motor vehicles . . . through the access-a-ride program”; and, that the City “owed a duty to the Plaintiffs to use reasonable care in entering into, overseeing, training, monitoring and supervising of entities participating in the access-a-ride program.’468 The court held that the City’s provision of motor vehicle records showing that it was neither the owner nor registrant of the vehicle at issue established that the City had no duty pertaining to the operation, maintenance, and control of the vehicle in question. Thus, the documentary evidence was a defense to the claim, as a matter of law. The negligent hiring claim was dismissed on procedural grounds because it was not included in the notice of claim. Lopez v. El Palmar Taxi, Inc.469—This case involved the reversal of summary judgment granted to the defendant taxicab company on a negligence claim against the company for injuries sustained by the plaintiff while riding in a taxi that displayed the company’s logo. The court of appeals agreed that the driver was an independent contractor, based on his control over his own schedule, the fact that he drove a cab part-time, and that he was free to pick up his own fares while driving for El Palmar but waiting 466 Connell, 936 So.2d at 75. See also, Eli v. Murphy, 39 Cal. 2d 598, 248 P.2d 756 (1952) (en banc) (holding truck- ing company was liable for tort of independent contractor driver because of nondelegable duty of common carrier). As the California Supreme Court more recently explained: “The nondelegable duties doctrine prevents a party that owes a duty to others from evading responsibility by claiming to have delegated that duty to an independent contractor hired to do the necessary work. The doctrine applies when the duty preexists and does not arise from the contract with the independent contractor.” SeaBright Ins. Co. v. US Airways, Inc., 52 Cal. 4th 590, 601–02, 258 P.3d 737, 743, 129 Cal. Rptr. 3d 601, 609 (2011). 467 2016 N.Y. Slip Op 30704(U), 2016 N.Y. Misc. LEXIS 1430 (N.Y. Sup. Ct. 2016). 468 Id. at 5. citation omitted. 469 676 S.E.2d 460, 297 Ga. App. 121 (Ga. App. 2009). 470 Id. at 465, citing Richmond County Hosp. Auth. v. Brown, 257 Ga. 507, 509, 361 S.E.2d 164 (1987). 471 40 Cal. 3d 780, 710 P.2d 907, 221 Cal. Rptr. 840 (1985). 472 Id. at 786, 710 P.2d at 910, 221 Cal. Rptr. at 843, (citing, inter alia, McCoy v. Chicago Transit Authority (1977), 69 Ill. 2d 280, [13 Ill. Dec. 690, 692–93, 371 N.E.2d 625, 627–28]; Jackson v. Bi-State Transit System (Mo. App. 1977) 550 S.W.2d 228, 232; Mangini v. Southeastern Pennsylvania Transp. Auth. (1975), 235 Pa. Super. 478, [344 A.2d 621, 623]; City of Dallas v. Jackson (Tex.1970) 450 S.W.2d 62, 63).

64 to determine the existence of an agency relation- ship, the court cited to several employment cases, including Yellow Cab Coop. Tinkham v. Groveport.477—Tinkham involved a sexual assault committed by a taxicab driver. The driver was an employee of a taxicab company that provided transportation for developmentally disabled students under contract to Groveport, the local school district. The court rejected the argument that the sexual assault was outside the driver’s scope of employment, finding the taxicab company strictly liable as a common carrier for the torts of its employee. Moreover, the court noted that even if the driver had been determined to be an independent contractor, the taxicab company would have remained liable as a common carrier for the breach by its driver of the nondelegable duty of safe carriage for its passengers. However, the court found that Groveport’s decision to contract out this transportation was a policy decision covered by sovereign immunity. Vargas v. FMI, Inc.478—Vargas turns on the distinction between a claim alleging a breach of a duty arising from a statutory or common law duty and one alleging a breach of a duty arising from the grant of a public franchise or license. The court found California cases holding that certain statu- tory and common law duties can be delegated to an independent contractor as to that contractor’s employees (but not necessarily as to innocent third parties) did not apply to a situation in which an employee of a public licensee’s independent contrac- tor was injured. Thus at least one California court of appeals has held that it is possible for a hirer to be liable for injuries to the employees of an indepen- dent contractor, provided the duty arises under a public franchise and involves an unreasonable risk of harm to others. G. RSP Permitting and Miscellaneous Operating Requirements When TNCs first emerged, some states and local governments—lacking a specific regulatory struc- ture for these then-novel entities—required TNCs to obtain a variety of types of operating permits and/or licenses for TNCs to operate in their jurisdictions. For example, the Pennsylvania Public Utilities Commission (PUC) issued a cease and desist letter against Uber and Lyft in 2014 for operating without a certificate of public convenience.479 In 2016, the PUC fined Uber $11.4 million for failure to obtain a knowledge from which it may reasonably be appre- hended that an assault on a passenger may occur, and has the ability in the exercise of that degree of care to prevent the injury.”473 In discussing the applicability of the police activity immunity, the court noted its previous holding that “in governmental tort cases ‘the rule is liability, immu- nity is the exception’ . . . . Unless the Legislature has clearly provided for immunity, the important societal goal of compensating injured parties for damages caused by willful or negligent acts must prevail.”474 In evaluating RTD’s argument that the bus driv- er’s decision whether to intervene was a discretionary act immune from liability, the court stated that statu- tory immunity for discretionary acts is limited to basic policy decisions, not ministerial acts that carry with them some degree of discretion, noting the distinction between planning and operational levels of decision-making, the former but not the latter coming under the discretionary exception to liability. Metrolimo, Inc. v. Lamm.475—This case involved a plaintiff injured while riding in a paratransit van. Metrolimo, Inc. (Metrolimo) had formed Compre- hensive Paratransit Services (Comprehensive) as a joint venture with Red Top Transportation (Red Top). Comprehensive contracted with Miami–Dade County to provide special transportation services to passengers with disabilities. The injured plaintiff sued Metrolimo, Red Top, and Comprehensive. The defendants argued that they were not vicariously responsible for the negligence of the driver, an inde- pendent contractor. The court held that the joint venture had contracted with the county to carry out the transportation services, and therefore the joint venture partners were responsible for the execution of the contract. They could not subcontract away their liability and were therefore liable for the negli- gence of the driver. Although it appears that the county was not sued for hiring Comprehensive Para- transit, that issue was not specifically addressed in this opinion. Secci v. United Independent Taxi Drivers, Inc.476— In Secci, a California court of appeals held that under California law, a court may consider controls required by public regulations in finding an agency relationship. The fact that the cab driver at fault was found to be an independent contractor did not preclude him from also being the defendants’ agent, thus allowing the defendants to be vicariously liable under respondeat superior. In analyzing the factors 473 Id. at 791, 710 P.2d at 914, 221 Cal. Rptr. at 847. 474 Id. at 793, 719 P.2d at 915, 221 Cal. Rptr. at 847 (citations omitted). 475 666 So.2d 552 (Fla. App. 1995). 476 8 Cal. App. 5th 846, 214 Cal. Rptr. 3d 379 (2017). 477 77 Ohio App. 3d 242, 602 N.E.2d 256 (Ohio App.1991). 478 233 Cal. App. 4th 638, 182 Cal. Rptr. 3d 803 (2015). 479 Jessica Nath, PUC Issues Cease and Desist Orders For Uber, Lyft, WESA, July 2, 2014, http://wesa.fm/post/ puc-issues-cease-and-desist-orders-uber-lyft#stream/0 (accessed Jan. 13, 2017).

65 and hold harmless San Francisco (city and county) from all claims that might be made against them for damages for injury, death, or property damage result- ing directly or indirectly from the activity authorized by the permit; requiring permittee compliance with applicable laws, including Article 1200, the San Fran- cisco Charter and Municipal Code, the California Vehicle Code, the California Public Utilities Code, California worker’s compensation laws, and the ADA; providing for reduced permit fees for operation of zero-emission vehicles and for serving stops within designated areas of service; setting forth reasons for revoking permits and imposing administrative fines on permittees; providing for administrative fines against non-permit holders; and summary suspen- sion of permits for health or safety reasons.488 H. Driver Safety This section covers background check, vehicle condition, and trade dress requirements—all of which have clear public safety implications. Driver drug and alcohol use is also clearly safety related, but as noted in Section A, TNC statutes tend to have very general requirements concerning drug and alcohol use by drivers. No TNC statutes were identi- fied that required driver testing for drug and/or alcohol use. However, the SFMTA microtransit regulations do require that permittees comply with all applicable laws and regulations governing drug and alcohol testing.489 Various incidents have called TNC vetting into question, including whether Uber and Lyft have misrepresented their driver safety practices.490 As in several other areas, the TNC position on background checks (opposing fingerprinting requirements) may be based on the need to prevent being deemed to be the employer of the TNC drivers.491 It has also been transportation brokerage license.480 The City of Columbus, Ohio, sued Uber and Lyft for operating without a vehicle-for-hire license.481 However, as states began to enact TNC legisla- tion, TNC-specific permit requirements were incor- porated into those laws. It appears that generally speaking, issuance of permits may require as little as payment of required annual permitting fees— which range from as low as $100482 to a perhaps more typical $1,000483 up to at least $111,250484— and compliance with insurance and other require- ments of the state TNC statute. The TNC statute may require a finding of public interest by the desig- nated regulatory body in order to issue or renew the TNC permit.485 Local governments with regulatory authority may impose additional permitting requirements. Chicago’s licensing requirements, for example, include that the TNC applicant must pay an annual $10,000 fee and must have a place of business in Chicago.486 Licensing requirements may also apply to TNC drivers. In 2017, California amended its business code to limit the authority of local jurisdic- tions to require a TNC driver to obtain a business license to operate as a TNC driver other than in the jurisdiction in which the driver is domiciled.487 As noted previously, SFMTA has adopted a new permitting program for microtransit—which SFMTA denominated PTV, a type of non-standard vehicle— that included application requirements, permit terms and conditions, fees, and administrative penalties. Permit-related provisions that may be of particular interest include requiring applicants to indemnify 480 Jack Greiner, No Brotherly Love for Uber, Graydon, Sept. 1, 2016, https://graydon.law/no-brotherly-love-for-uber/ #page=1 (accessed Jan. 6, 2017). 481 Rick Rouan, Columbus suing app-based car service, ColumbuS dISPatCh, Apr. 9, 2014, http://www.dispatch.com/ content/stories/local/2014/04/08/City_suing_app-based_ livery_service.html# (accessed Jan. 6, 2017). 482 Ga. Code § 40-1-193 (2017). 483 w. Va. Code § 17-29-3 (2016), http://www.legis.state. wv.us/wvcode/chapterentire.cfm?chap=17&art=29& section=3#01. 484 Colo. reV. Stat. § 40-10.1-606. 485 E.g., Massachusetts requires that the DPU deter- mine that the rendering of TNC services by the TNC applying for a permit or renewal is consistent with the public interest, requiring verification that the TNC has established 10 specified processes/procedures, including an oversight process to ensure that each of its drivers pos- sesses adequate insurance and otherwise complies with all applicable state requirements. maSS. Gen. lawS ch. 159A1/2, § 3 (2016). 486 mun. Code oF ChI., § 9-115-040, Transportation net- work provider license – Fee and license term; § 9-115-060, Transportation network provider license – Qualifications for license. 487 Cal. buS. & ProF. Code, §§ 16550-16550.2 (2017). 488 S.F. mun. tranSP. Code, § 1203(b)(2)(L); § 1206(b)(3); § 1207(j)(6) and (7); § 1209; § 1210; § 1212 (2017). 489 S.F. mun. tranSP. Code, § 1207(e)(4) (2017). 490 E.g., Matt Hamilton, Uber driver in Orange County charged with raping his passenger, L.A. tImeS, Apr. 26, 2017, http://www.latimes.com/local/lanow/la-me-ln-uber-oc- charged-20170426-story.html (accessed Apr. 26, 2017); Olivia Nuzzi, The Definitive List Of Uber Horror Stories, daIly beaSt, Nov. 19, 2014, https://www.thedailybeast.com/ the-definitive-list-of-uber-horror-stories (accessed Jan. 26, 2017); Thompson Reuters, Michigan Attacks May Renew Scrutiny of Uber Vetting Processes, buS. InS., Feb. 23, 2016, http://www.businessinsurance.com/article/20160223/ NEWS06/160229950 (accessed Jan. 6, 2017). Lawsuits alleging misleading practices are discussed infra pt. V, RSP Cases and Regulatory Proceedings. 491 Editorial Board, Uber and Lyft’s arguments against fingerprinting make little sense, waSh. PoSt, Jan. 2, 2017, https://www.washingtonpost.com/opinions/uber-and-lyfts- arguments-against-fingerprinting-make-little-sense/ 2017/01/02/a0926aae-ce1b-11e6-b8a2-8c2a61b0436f_ story.html?utm_term=.c4e924a6d497 (accessed Jan. 6, 2017).

66 required for taxicab and other for-hire vehicles.496 However, this was decidedly not the direction that most states chose to go. Instead, the requirements found in the NCOIL Model Act have often, though not universally, been adopted in state TNC statutes. The Model Act requires TNCs to conduct—or have a third party conduct—a local and national criminal background check and a search of the national sex offender registry and to obtain a copy of the indi- vidual’s driving record maintained under state law. Disqualifying offenses go back 3 years for traffic offenses and 7 years for criminal convictions. Coming up as a match on the state or national sex offender registry also precludes an individual for driving for a TNC under the Model Act.497 A number of local jurisdictions imposed fingerprint requirements under now-preempted ordinances.498 However, some local requirements remain in force, notably those of the New York City Taxi and Limou- sine Commission, which requires common standards for background checks—and other safety-related measures—for TNCs and taxicab companies.499 The balance of the background check discussion focuses on the requirements of several states that apply, are considering applying, or have withdrawn more stringent background check requirements than those included under the NCOIL Model Act. California.—CPUC D.13-09-045 required TNCs to require criminal background checks for drivers and provided that drivers must be disqualified on substantially similar grounds, as were subsequently suggested that the TNCs’ interest in rapid expan- sion has played a role in rejecting allegedly time- consuming screening processes. However, despite the argument of Uber and Lyft that their own systems are better, law enforcement generally supports requiring fingerprint background checks, and TNC drivers have been shown to clear Uber’s non-fingerprint background checks despite having had histories of traffic492 or criminal offenses.493 Moreover, where the market is large enough, for example, New York City, TNCs have complied with requirements for fingerprint background checks. State law will provide the legal floor for require- ments that a TNC must meet in providing service, although at least in the case of driver age, the TNCs themselves may impose a higher age threshold.494 The NCOIL Model Act provisions exemplify the safety requirements commonly imposed under state TNC statutes. Phase III of the California rulemak- ing proceeding, as well as several other state statu- tory and regulatory processes, illustrate the issues at play in the debate over driver safety issues. 1. Background Checks Background checks have been most controversial of these driver safety issues because of TNC objec- tions to fingerprint requirements.495 As states were deciding what types of regulation to impose, many commentators argued for applying the same back- ground check requirements to TNC drivers as 492 On October 31, 2017, a driver who had passed Uber’s background check carried out a fatal attack by driving a truck into cyclists in New York City. Investigation into the driver’s past showed that he in fact had received multiple traffic citations, including a 2015 citation for failure to equip a motor vehicle carrier with or maintain a required brake system. Jethro Mullen, Uber: New York truck attack suspect passed background check, CNN, Nov. 1, 2017, http:// money.cnn.com/2017/11/01/technology/uber-new-york- attack-driver-background-check/ (accessed Nov. 1, 2017). 493 See Schaller (Blueprint), supra note 19, at 10–12. 494 Both Lyft and Uber require drivers to be at least 21 years of age, although other requirements such as how long the driver must have had an active U.S. driver license vary. Driver requirements, How to drive with Uber, https:// www.uber.com/drive/requirements/; Driver requirements, https://help.lyft.com/hc/en-us/articles/213585758- Driver-requirements. Statutory minimum age require- ments for drivers range from 18 years of age, e.g., Texas, tex. oCC. Code ann. § 2402.107(a), to 21 years of age, e.g., Va. Code. § 46.2-2099.49 (2016). At least one state, Wyoming, does not specify any minimum age at all. wyo. Stat. § 31-20-106 (2017). 495 Mike Isaac, Uber’s System for Screening Drivers Draws Scrutiny, N.Y. tImeS, Dec. 9, 2014, http://www. nytimes.com/2014/12/10/technology/ubers-system-for- screening-drivers-comes-under-scrutiny.html. 497 NCOIL Model Act, § B.4. Disqualifying offenses are: traffic—receiving judgments for more than three moving violations or for at least one reckless driving or driving on a suspended/revoked license; criminal convictions—any felony; a misdemeanor involving resisting law enforce- ment; dishonesty; injury to a person; operating while intox- icated; operating a vehicle in a manner that endangers a person; operating a vehicle with a suspended or revoked license; or damage to the property of another person. 498 Broward County, Florida, for example, required fingerprinting in its TNC ordinance. When Uber left the jurisdiction in protest, the county rescinded the require- ment. Brittany Wallman, Taxi reforms sideline drivers with criminal records, SunSentInel, May 29, 2016, http:// www.sun-sentinel.com/local/broward/fl-taxi-drivers- banned-20160529-story.html (accessed Oct. 1, 2017). In any event, the ordinance was preempted by the Florida TNC statute. Fla. Stat. § 627.748(15) (2017). 499 ruleS oF the CIty oF new york, tit. 35, ch. 80, Driv- ers of Taxicabs, For-Hire Vehicles and Street Hail Liveries: § 80-04, Licensing – Requirements (2016), http://www.nyc. gov/html/tlc/downloads/pdf/rule_book_current_ chapter_80.pdf. See also, New Driver Applicants, http://www. nyc.gov/html/tlc/html/industry/drivers.shtml. As the TLC notes, a TNC driver is not authorized to operate in NYC without having a valid NYC TLC Driver’s license, operat- ing a vehicle licensed by the NYC TLC, and having the vehicle affiliated with a base licensed by the TLC, http://www.nyc.gov/html/tlc/html/faq/faq_nysdmv_tnc.shtml.

67 Alliance, the Los Angeles Department of Transpor- tation, the San Francisco International Airport, and SFMTA all submitted comments in favor of requir- ing biometric background check requirements for TNC drivers.505 The arguments included, inter alia, that biometric checks are the only means of confirm- ing the applicant’s identity; biometric checks do not unduly discriminate against minorities; the National Sex Offender Public Website is incomplete; that the TNC background checks have failed, as demon- strated by a lawsuit brought by the District Attor- neys of San Francisco and Los Angeles506; and that government conducted checks are required to ensure impartiality. Ultimately, however, the CPUC decided against requiring biometric checks, although it did add background check requirements beyond those established under the California TNC statute. These additional requirements include requiring that TNCs use nationally accredited background check companies and conduct background screening for each TNC driver before granting authorization to operate on the TNC’s platform. Those background checks must then be repeated at least annually thereafter for as long as the driver is authorized to operate on the platform.507 included in the NCOIL Model Act. D.13-09-045 did not mandate fingerprint-based background checks, but did require that the check be based on the appli- cant’s social security number, rather than on just the name.500 The TNC statute enacted in 2015 did not address background check requirements. However, the legislature subsequently amended the statute by adding provisions that required TNCs to participate in the state’s pull-notice system to regu- larly check driver records, codified and added to the disqualifying offenses included under D.13-09-045, and added penalties for violating the background check requirements. The legislation did not, however, require biometric background checks.501 In April 2017, the CPUC opened Phase III.B of Rulemaking 12-12-011. Phase III covered determin- ing the appropriate requirements for TNC back- ground checks, including whether the CPUC should adopt biometric or other protocols for background checks.502 The arguments made for and against the biometric requirement in this proceeding are typical of those raised elsewhere. Rasier submitted comments to the effects that fingerprint-based back- ground checks are unnecessary and flawed, and that the existing background check requirements (finger- prints not required) were consistent with AB 1289;503 Lyft submitted comments arguing that the Califor- nia legislature had already considered and rejected such requirements.504 The San Francisco Taxi Workers 500 A conviction within the past seven years for the fol- lowing disqualifies a driver from offering TNC services: “driving under the influence of drugs or alcohol, fraud, use of a motor vehicle to commit a felony, a violent crime or act of terror, a sexual offense, a crime involving property dam- age, and/or theft.” R. 12-2-011, D. 13-09-045, at 72–73, http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/ M077/K192/77192335.PDF. See also 2-6-15 letter, http:// www.cpuc.ca.gov/uploadedFiles/CPUC_Public_Website/ Content/Safety/Transportation_Enforcement_and_ Licensing/Enforcement_Actions_Transportation_Network_ Companies/SEDResponsetoRasier122414letter.pdf. 501 Cal. Pub. utIl. Code §§ 5444, 5445.2 (2016). 502 R.12-12-011, Phase III. B. Scoping Memo and Ruling of Assigned Commissioner, Apr. 4, 2017, http://docs.cpuc.ca.gov/ PublishedDocs/Efile/G000/M183/K388/183388905.pdf. 503 Opening Comments of Rasier-CA, LLC, on Phase III.B Scoping Memo and Ruling of Assigned Commissioner Track I (Background Check Requirements That Should be Applicable to TNCs, http://docs.cpuc.ca.gov/Published Docs/Efile/G000/M190/K624/190624037.PDF; Reply Com- ments of Rasier-CA, LLC, http://docs.cpuc.ca.gov/Published Docs/Efile/G000/M190/K624/190624373.PDF. 504 Opening Comments of Lyft, Inc: Phase III B., Track 1 - Background Check Requirements for TNCs, http://docs. cpuc.ca.gov/PublishedDocs/Efile/G000/M190/K623/ 190623043.PDF; Reply Comments of Lyft, Inc: Phase III B., Track 1 - Background Check Requirements for TNCs, http://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M192/ K303/192303603.PDF. 505 Opening Comments of the San Francisco Taxi Work- ers Alliance, http://docs.cpuc.ca.gov/PublishedDocs/Efile/ G000/M190/K623/190623044.PDF; Opening Comments of the Los Angeles Department of Transportation to Order Instituting Rulemaking 12-12-011, http://docs.cpuc.ca.gov/ PublishedDocs/Efile/G000/M190/K624/190624260.PDF; Opening Comments of San Francisco International Airport and The San Francisco Municipal Transportation Agency, http://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M190/ K623/190623049.PDF; Reply Comments of San Francisco International Airport and The San Francisco Municipal Transportation Agency to Phase III.B Scoping Memo and Ruling of Assigned Commissioner, http://docs.cpuc.ca.gov/ PublishedDocs/Efile/G000/M190/K624/190624042.PDF; Reply Comments of the San Francisco Taxi Workers Alli- ance (SFTWA) on Phase III.B Track I, Background Check Requirements That Should be Applicable to TNCs, http:// docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M191/ K784/191784389.PDF. The San Francisco opening com- ments were supported by declarations from the San Fran- cisco Police Department’s Manager of the ABIS Automatic Biometric Identification System and Identification Bureaus, http://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M190/ K623/190623050.PDF, and SFMTA’s Director of Taxis and Accessible Services Division, http://docs.cpuc.ca.gov/ PublishedDocs/Efile/G000/M190/K624/190624371.PDF. 506 Press Release, Bill to Protect Safety of Passengers Uti- lizing Ride-Sharing Services Sent to Governor, (Aug. 31, 2016), https://a09.asmdc.org/press-release/bill-protect-safety- passengers-utilizing-ride-sharing-services-sent-governor. 507 Order Instituting Rulemaking on Regulations Relat- ing to Passenger Carriers, Ridesharing, and New Online- Enabled Transportation Services, Rulemaking 12-12-011, Decision 17-11-010, Nov. 9, 2017 (issued Nov. 13, 2017), http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/ M199/K073/199073743.pdf.

68 December 2015, the PSC had disqualified 6% of TNC drivers, 97% of those being Uber drivers.513 Massachusetts.—The Massachusetts TNC statute disqualifies drivers who have been convicted within 7 years of specified crimes (e.g., violent crimes, DUIs, leaving the scene of an accident, felony robbery, or felony fraud) or have had within 3 years more than four traffic violations or any major traffic violation. The statute also includes a two-tier background check procedure that requires the TNC (a) to conduct its own background check of applicants based on a suitability standard to be established under DPU regulations and then (b) to furnish identifying infor- mation to the DPU for referral to the Common- wealth’s department of criminal justice information services for a search of criminal offender records under specified Massachusetts statutes. In addition, the TNC must run a background check on each driver at least twice a year and deactivate any driver that does not meet DPU suitability standards. The TNC must also immediately notify DPU of any veri- fied criminal arrest or driving citation that meets the disqualifying criteria under the statute. The statute also requires DPU to audit TNC certification and criminal background check processes on a quarterly basis.514 Reportedly some 8,000 drivers failed the state’s portion of the background check process in the first few months that checks were conducted; some 1,500 had been convicted of a violent crime.515 The DPU adopted regulations in September 2017 to implement these requirements, governing the oversight by DPU’s TNC Division (Division), the provision of TNC services within Massachusetts, and suitability requirements for TNC drivers.516 These regulations are more detailed than are those in the Georgia.—Georgia requires that TNC drivers meet the background check requirements for the limousine chauffeur endorsement.508 That provision conditions a chauffeur’s endorsement on not having been “convicted, been on probation or parole, or served time on a sentence for a period of ten years previous to the date of application for any felony or any other crime of moral turpitude or a pattern of misdemeanors that evidences a disregard for the law unless he or she has received a pardon and can produce evidence of same,” and on the submission of classifiable electronically recorded fingerprints for an FBI search.”509 Maryland.—Maryland’s TNC statute requires a national criminal history records check that is conducted by the National Association of Profes- sional Background Screeners or a comparable entity approved by the PSC and that includes a multi- state, multi-jurisdictional criminal records database search (or search of a similar national database with validation), as well as specified sex offender data- base searches and a driving record check, including a driving history research report. However, the stat- ute also allows a TNC to request a waiver from the statutory process.510 The PSC’s implementing regu- lations require a fingerprint-supported State and FBI background investigators’ record check for each individual applying to drive for a TNC, unless the PSC has granted a § 10-404(e) waiver to the TNC. In order to receive such waiver, the TNC must demon- strate “that the background check it uses meets the requirements of Public Utilities Article, § 10-404(b) . . . and is as comprehensive and accurate as comply- ing with the supplemental criminal background check as set forth under Public Utilities Article, § 10-104(b).”511 In 2016, Maryland granted both Uber and Lyft a waiver of the § 10-404(b) require- ment, allowing both companies to continue using their alternative background check processes with certain modifications, including rerunning the back- ground checks on all drivers annually.512 Maryland continues, however, to review the TNC background checks. In April 2017, the PSC reported that since 508 Ga. Code § 40-1-192(d)(5) (2016). 509 Ga. Code § 40-5-39 (2014). 510 md. Code ann., Pub. utIl, § 10-404. 511 md. Code reGS. § 20.95.01.21, Transportation Net- work Operator’s Licenses, http://www.dsd.state.md.us/comar/ comarhtml/20/20.95.01.21.htm. 512 Order No. 87957, No. 9425, Dec. 22, 2016, http://www. psc.state.md.us/wp-content/uploads/Order-No.-87957- Case-No.-9425-Rasier-LLC-and-Lyft-Inc.-Fingerprint- Waiver-Petitions.pdf. See also, Press Release, Maryland PSC Approves Alternative Background Checks for Uber and Lyft Drivers, (Dec. 22, 2016), http://www.psc.state.md.us/ wp-content/uploads/MD-PSC-Decision-On-Uber-Lyft- Fingerprint-Waiver-Petitions_12222016.pdf. 513 Faiz Siddiqui, Maryland has booted more than 4,000 Uber drivers for failing the state’s screening requirements, waSh. PoSt, Apr. 10, 2017, https://www.washingtonpost. com/news/dr-gridlock/wp/2017/04/10/maryland- has-booted-more-than-4000-uber-drivers-for-failing-the- states-screening-requirements/?utm_term=.52c70ac 7ba12 (accessed Apr. 14, 2017). 514 maSS. Gen. lawS ch. 159A1/2, § 4 (2016). 515 Jordan Graham, More than 8,000 ride-share drivers flunked Mass. background checks, boSton herald, Apr. 5, 2017, http://www.bostonherald.com/news/local_coverage/ 2017/04/more_than_8000_ride_share_drivers_flunked_ mass_background_checks (accessed Apr. 19, 2017). 516 D.P.U. 17-81-A, Order Adopting Final Regulations, Sept. 8, 2017, http://170.63.40.34/DPU/FileRoomAPI/api/ Attachments/Get/?path=17-81%2f1781A_Order_9817. pdf. The DPU subsequently amended that order to incor- porate the Suitability Standard as part of the regula- tions themselves rather than as an appendix. D.P.U. 17-81-B, Sept. 21, 2017, http://170.63.40.34/DPU/FileRoom API/api/Attachments/Get/?path=17-81%2f1781B_ Amendatory_Order_92117.pdf. The TNC regulations are codified as 220 maSS. Code reGS. 274.00: Transportation Network Companies.

69 frequency of inspections, the type of entity that is authorized to perform the inspection, and record- retention requirements. Other vehicle safety requirements include trade dress and vehicle owner- ship. Several examples follow. California.—Phase II of the CPUC rulemaking addressed questions about TNC vehicle require- ments, including inspection, trade dress, and vehicle ownership. D.16-04-041522 addressed several public safety issues, including whether TNCs should be required to inspect vehicles on a biennial, mileage, or other basis and whether to maintain such records for CPUC review; who should be allowed to conduct such inspections; and whether the 19-point vehicle inspection checklist in D.13-09-045 should apply to all TCP vehicles, except for those already subject to statutory inspection requirements. The CPUC ruled that TNC vehicles must be inspected by a facility licensed by the California Bureau of Automotive Repair (a) before the vehicle is first introduced into service as TNC vehicle and (b) every 12 months or 50,000 miles thereafter, whichever occurs first. TNCs are responsible for ensuring that each of their drivers’ vehicles complies with this requirement and must maintain records of such compliance for 3 years. In addition, the CPUC’s Safety and Enforcement Division was required to collect data on the number of TNC vehicles that have travelled more than 50,000 miles/year and to report its findings to the CPUC. The TNC records must also demonstrate that the 19-point checklist was followed and that covered vehicles passed inspection. The CPUC also ruled that TNC vehicles must display consistent trade dress in the front and rear of the vehicle, as specified in ruling, sufficient to identify the vehicle with a particular TNC. In September 2016, the legislature amended the TNC statute to define a personal vehicle under the statute as (in relevant part) one that has passenger capacity of eight persons or less (including the driver); is owned, leased, rented for a term that does not exceed 30 days, or otherwise authorized for use by the participating driver; and meets all inspection and other safety requirements imposed by the CPUC.523 In D.16-12-037, the CPUC clarified the meanings of owned, leased, rented, and or otherwise authorized for use, finding that the latter should be interpreted expansively. The CPUC ordered that regardless of the vehicle possession arrangement chosen, the existing TNC regulations apply, includ- ing but not limited to the 19-point vehicle inspection TNC statute. For example, the regulations specify that the TNC background check must review multi- state criminal history and motor vehicle driving history databases. The Division’s background check is based on information received from “the Depart- ment of Criminal Justice Information Services, Sex Offender Registry Board, Warrant Management System, Registry of Motor Vehicles, and other reli- able sources.”517 That information is then evaluated against the regulation’s suitability standard. The suitability standard sets forth numerous disqualify- ing conditions, offenses, and violations, categorized into six time periods ranging from present to indefinite.518 Kansas.—The original TNC statute required fingerprint-based background checks. Uber threat- ened to pull out of the state. Kansas subsequently enacted SB 101, which amended the original statute to remove the fingerprinting requirement.519 New Jersey.—The statute requires that the state attorney general (AG) approve TNC’s proposed method of background checks. If the AG does not approve the method, the statute requires applicants to submit to the Division of State Police the appli- cant’s name, address, fingerprints, and written consent for a criminal history record background check to be performed by the Division.520 As of September 2017, no decisions by the AG or enforce- ment by the Division had been identified. San Francisco.—SFMTA requires that micro- transit permittees comply with all applicable laws and regulations governing background checks.521 2. Vehicle Requirements TNC statutes typically address vehicle inspection requirements, albeit some in greater detail than others. Vehicle inspection issues include whether the statute specifies inspection requirements or merely references compliance with state law, the 517 220 maSS. Code reGS. 274.06(3). 518 220 maSS. Code reGS. 274.21. The time periods are: present (e.g., age requirements); 3 years (e.g., multiple traffic violations); 5 years (e.g., license suspension); 7 years (e.g., felony conviction); 10 years (habitual traffic offender); and indefinite (e.g., multiple traffic offenses). 519 Senate Bill No. 101, http://www.kslegislature.org/ li_2016/b2015_16/measures/documents/sb101_enrolled. pdf; Kansas Legislator Briefing Book 2016, http://www. kslegresearch.org/KLRD-web/Publications/2016 Briefs/2016/J-3-KansasTransportationNetworkCompany- ServicesAct.pdf; John Ribeiro, Uber stops operations in Kansas over new legislation, CIO, May 5, 2015, https://www. cio.com/article/2919354/uber-stops-operations-in-kansas- over-new-legislation.html (accessed July 22, 2017). 520 P.L.2017, ch. 26, § 17(e), http://www.njleg.state.nj.us/ 2016/Bills/AL17/26_.PDF. 521 S.F. mun. tranSP. Code, § 1207(e)(4). 522 Decision on Phase II Issues and Reserving Addi- tional Issues for Resolution in Phase III, Apr. 21, 2016 (issued Apr. 26, 2016), http://docs.cpuc.ca.gov/Published Docs/Published/G000/M161/K474/161474505.PDF. 523 Ca. Pub. utIl. Code § 5431(b), as amended by AB 2763.

70 many do not.530 Designating specific pickup and drop-off points for RSPs may raise liability issues similar to those that transit agencies may encounter with designating bus stops.531 This issue is as relevant to microtransit as to TNCs. For example, in San Francisco, when Chariot filed an application with the CPUC to operate as a fixed-route and on-demand passenger stage corpo- ration, both the SFMTA and the Golden Gate Bridge, Highway and Transportation District (Golden Gate) filed protests to the application. The protests cited, inter alia, congestion concerns, and in Golden Gate’s case, objections to delays in Golden Gate’s own service, caused Chariot’s unauthorized use of its bus stops and substantial overlap of Chariot’s routes with Golden Gate’s service.532 Chariot eventually withdrew its application.533 performed at a California Bureau of Automotive Repair-licensed facility and trade dress rules.524 Chicago.—The Chicago ordinance requires trans- portation network providers (TNPs)—the term used under the ordinance for TNCs—to require that vehi- cles used for TNP services meet a 22-point inspec- tion semi-annually, be less than 6 years old, and display signage and emblems as provided by rule to identify the TNP.525 Massachusetts.—Massachusetts requires that TNC vehicles be inspected at a licensed facility pursuant to statutory vehicle inspection require- ments.526 In addition, the TNC must submit a proposed removable decal or trade dress to the Divi- sion in order to obtain its operating permit and must issue a Division-approved removable decal or trade dress to each driver before the driver provides TNC services. The driver must apply the removable decal or trade dress to the front and back panels of the vehicle at all times it is used to provide TNC services. The removable decal or trade dress must be reflec- tive, illuminative or otherwise visible at night or in low-light environments.527 Driver violations subject the TNC for which service is being provided to a $500 penalty.528 San Francisco.—SFMTA imposes several vehi- cle requirements, including a maximum length of PTVs, global positioning system (GPS) transmit- ting capability, and notice of deployment of autono- mous vehicles.529 I. Public Space This section covers issues related to use by RSPs of parking areas and rights-of-way. To the extent that use of public space by RSPs affiliated with tran- sit agencies turns out to be problematic, solutions may not be simple: While some transit agencies have jurisdiction over bus stops and/or street space, 524 D. 16-12-037, Dec. 15, 2016 (issued Dec. 16, 2016), http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/ M171/K329/171329614.PDF. Although D. 16-12-037 is denominated a proposed decision, the CPUC subsequently refers to it as having addressed the issue. 525 mun. Code oF ChI., §§ 9-115-110, Transportation network vehicles – Inspections and conditions; 9-115-120, Transportation network vehicles – Distinctive signage and emblem. 526 maSS. Gen. lawS ch. 159A1/2, § 4 (2016). Phase III.B. Scoping Memo and Ruling of Assigned Commissioner, Arp. 7, 2017, http://docs.cpuc.ca.gov/PublishedDocs/Efile/ G000/M183/K388/183388905.PDF. 527 220 maSS. Code reGS. §§ 274.03(1)(c), 274.08(1). 528 220 maSS. Code reGS. §§ 274.14(1). 529 S.F. mun. tranSP. Code, § 1207(d). 530 SFMTA has jurisdiction over the Municipal Railway (Muni), parking, traffic engineering, pedestrian planning, bicycle implementation, accessibility and taxi regulation, https://www.sfmta.com/about-sfmta/organization/ divisions-and-units/director-transportation. (SFMTA pro- hibits pick-ups and drop-offs in transit-only lanes. Aaron Bialick, The Rules for When You Can Enter a Transit- Only Lane, moVInG SF, Sept. 26, 2017, https://www.sfmta. com/blog/rules-when-you-can-enter-transit-only-lane). Few, if any, other agencies in the U.S. have as expansive a jurisdiction. LA Metro, on the other hand, may be more typical. LA Metro “does not own or have jurisdictional con- trol over transit access routes beyond the immediate con- fines of station facilities.” First Last Mile Strategic Plan & Planning Guidelines, Los Angeles County Metropolitan Transportation Authority – Metro, March 2014, http:// media.metro.net/docs/sustainability_path_design_ guidelines.pdf. 531 See JoCelyn k. waIte, tranSIt buS StoPS: ownerShIP, lIabIlIty, and aCCeSS 4-14, Transit Cooperative Research Program, Legal Research Digest No. 24, Transportation Research Board of the National Academies of Sciences, Engineering and Medicine, Washington, D.C., 2008. 532 Protest of the San Francisco Municipal Transit Agency to Application No. A.16-08-015, Before the Public Utilities Commission of the State of California, Sept. 30, 2016, http://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/ M167/K738/167738068.PDF; Protest to Application No. A.16-08-015 by the Golden Gate Bridge, Highway and Transportation District, Before the Public Utilities Com- mission of the State of California, Sept. 30, 2016, http:// docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M167/ K738/167738067.PDF. 533 Chariot’s failure to respond drew a show cause order from the CPUC. E-mail Ruling Order to Show Cause Why Chariot Should Not Be Sanctioned for Failure to Appear, Jan. 27, 2017, http://docs.cpuc.ca.gov/PublishedDocs/Efile/ G000/M173/K102/173102075.PDF. Chariot responded on February 7, and filed a motion to withdraw its application on February 28, 2017. See Monthly Activity Report Con- sumer Protection and Enforcement Division, California Public Utilities Commission, March 2017, at 11, down- loadable from http://www.cpuc.ca.gov/WorkArea/Download Asset.aspx?id=6442453743.

71 usage on the public way and at Amtrak train stations.539 As of September, the Philadelphia Park- ing Authority (PPA), which has regulatory authority over TNCs in Philadelphia, had not yet issued regu- lations under Pennsylvania’s 2016 TNC statute.540 In the interim, the PPA appeared to provide direc- tives for specific large events.541 Chicago, however, regulates TNC operations at two designated areas within the city as well as at its airports.542 The regu- lations cover the airports in general, with specific operating protocols for O’Hare and Midway. In addi- tion, the regulations require TNPs (Chicago’s term for TNCs) to obtain specific authorization to operate at McCormick Place and at Navy Pier and must observe required operating protocols for each, including using the designated TNP loading zones. Local governments may also prioritize use of public space by TNCs in an effort to address conges- tion. In 2017, the District of Columbia launched a 1-year nightlife parking demonstration project to address traffic and pedestrian safety in an area below DuPont Circle. Under the program, parking was prohibited in the designated area from 10:00 p.m. Thursday through 7:00 a.m. Sunday to create pickup and drop-off zones.543 The regulation of public space in the cases of other shared mobility modes may also be of inter- est. Modes that have been regulated and/or given rise to controversy, and that may provide exam- ples of ways to allocate public space for TNCs, As noted above, SFMTA adopted new regula- tions for microtransit operation. Testimony at the board meeting considering adoption of the regula- tions noted that residents had filed complaints about PTVs taking curb space and blocking drive- ways, bus zones, and crosswalks.534 The regulations require permit applications to include a service plan that includes staging locations and a map or detailed description of each proposed stop—which must be a location at which stopping or parking is permitted—including the exact location and type of curb regulation. Applications must also provide a service disruption plan that includes a description of how the applicant will quickly remedy vehicle breakdowns or stalls so as to not block loading zone access or impede the flow of traffic.535 PTV routes may not operate so as to substantially duplicate SFMTA public transit service, as determined by the Director of Transportation, but grandfathers in routes that were already being operated as of August 1, 2017.536 The San Francisco regulation also specifically addressed PTV stops. PTVs are prohibited from stopping in any location where stopping is prohib- ited, for example, bus zones, crosswalks, and bike lanes, but must instead use authorized locations, such as white passenger loading zones with suffi- cient capacity to accommodate the PTVs. In addi- tion, PTVs may only stop while actively loading and unloading passengers.537 In November 2017, San Francisco announced a pilot program to designate TNC passenger loading zones in certain commercial corridors. Passenger pickups and drop-offs in those corridors would be required to use the designated zones. The intent was to prevent double parking and blocking of bicycle and transit lanes.538 Other state and local governments have addressed the use of public space—particularly at airports—by TNCs. The Pennsylvania TNC statute specifically addresses several uses of public space under its section on operating regulations, including curb 534 San Francisco Municipal Transportation Agency Board of Directors and Parking Authority Commission Minutes, Oct. 17, 2017, p. 11. 535 S.F. mun. tranSP. Code, § 1203(b)(2)(C), (D), (J) (2017). 536 S.F. mun. tranSP. Code, § 1207(f) (2017). 537 S.F. mun. tranSP. Code, § 1207 (g) (2017). 538 Michael Cabanatuan, SF to experiment with Uber and Lyft passenger loading and pick-up zone, S.F. Chron., Nov. 7, 2017, http://www.sfgate.com/bayarea/article/SF-to- experiment-with-Uber-and-Lyft-passenger-12339573.php (accessed Nov. 8, 2017). 539 53 Pa. ConSt. Stat. § 57A16(c), § 57A16(k) (2106) 540 Advance Notice of Proposed Rulemaking – Trans- portation Network Companies, July 25, 2017, http://www. philapark.org/2017/07/advance-notice-of-proposed-rule making-transportation-network-companies/. 541 E.g., Enforcement Bulletin NFL Draft 4.26.17, Apr. 26, 2017, (directing taxicab and TNC operators where they may stage and queue for the NFL Draft event), http:// www.philapark.org/wp-content/uploads/Enforcement- Bulletin-NFL-Draft-4.26.17-1.pdf. 542 CIty oF ChI. ruleS, Transportation Network Providers Rules, Jan. 1, 2017, https://www.cityofchicago.org/content/ dam/city/depts/bacp/rulesandregs/TNPRulesAmended effJan12017.pdf. 543 Press Release, DDOT Nightlife Parking Demonstra- tion is Underway (Oct. 26, 2017) https://ddot.dc.gov/ release/ddot-nightlife-parking-demonstration-underway (accessed Oct. 27, 2017). Although not mentioned in DDOT’s notice, the project was reportedly intended to make it easier for TNCs to provide transportation to and from the demonstration area. Benjamin Schneider, D.C. Gives Uber and Lyft a Better Spot in Nightlife, CItylab, Oct. 25, 2017, https://www.citylab.com/transportation/ 2017/10/a-dc-neighborhood-rethinks-parking/543870/ (accessed Oct. 27, 2017).

72 public transit),550 safety,551 and evaluating compliance with a range of legal requirements (including nondis- crimination). Yet—in no small part because of TNC’s expansive definitions of what constitutes proprietary information552— obtaining necessary data, and the right to share it appropriately within the organiza- tion, may be one of the more contentious issues in negotiating TNC agreements. Data requirements will be affected both by state TNC statutes and by state general public records laws. Those laws will also affect records retention and passenger privacy requirements. 1. Data State TNC legislation may impose data require- ments on TNCs, such as reporting accidents and traf- fic violations.553 Massachusetts requires TNCs to submit annual reports concerning information pertaining to number of rides from the previous year—including aggregated and anonymized trip route and length (miles and minutes)—as well as intrastate operating revenues and monthly reports concerning complaints.554 The Texas TNC statute authorizes a municipality and TNC to voluntarily enter into an agreement for data sharing.555 It is unclear how this requirement, taken together with other data requirements under the statute, might affect the ability of transit agencies in Texas to enter into data-sharing agreements with TNCs. However, as discussed further in this digest, information submit- ted to the state under the TNC statute may be exempt from public disclosure under state public records law. The CPUC is considering under Phase III of its TNC rulemaking proceeding whether to establish a website portal for TNC data and whether the CPUC should share TNC trip data with interested California govern- ment entities.556 In a workshop under that proceeding, include corporate and commuter shuttles,544 ride- sharing,545 carsharing,546 and bikesharing.547 J. Data/Public Records/Privacy548 Data on TNC usage is important for planning,549 service evaluation (including project success and whether the service complements or detracts from 544 SFMTA regulates commuter shuttles, allowing par- ticipating shuttles to load passengers in a designated net- work in exchange for paying a fee and following SFMTA regulations. Requirements include limiting where buses over 35 feet long may travel and providing SFMTA with real-time GPS tracking for all registered vehicles. Com- muter Shuttle Program Policy, Jan. 2017, https://www. sfmta.com/sites/default/files/projects/2017/Commuter%20 Shuttle%20Policy%20and%20Program%20-%202017.pdf. 545 King County Metro offers reserved parking for car- pools at select park-and-rides. Permit Parking, http:// www.kingcounty.gov/depts/transportation/metro/ programs-projects/parking/permit-parking.aspx. BART offers guaranteed parking until 10 A.M. at the Millbrae and San Bruno BART stations for passengers who carpool using the Scoop app. Carpool to Millbrae and San Bruno by 10 AM with Scoop and get guaranteed parking, Sept. 12, 2017, http://www.bart.gov/news/articles/2017/news 20170912-0. 546 SFMTA’s permit program for on-street parking for shared-use vehicles (one of two vehicles sharing permit pro- grams) grants up to 1,000 permits for curb parking, primar- ily for non-metered parking spaces. The permits are issued to qualifying vehicle-sharing organizations, which must meet a variety of regulatory requirements. Vehicle Sharing Parking Permit Policy, San Francisco Municipal Transpor- tation Agency, July 18, 2017, https://www.sfmta.com/sites/ default/files/projects/2017/SFMTA%20Vehicle%20 Sharing%20Policy%2020170718.pdf. New York City has adopted a two-year carshare pilot program that allocates 300 of on-street parking spaces for carshare vehicles. The pilot was planned to launch in the fall of 2017 and to last at least through 2019. NYC DOT Carshare Pilot, http://nyc dotcarshare.info. 547 Sound Transit has proposed a program for system access that includes facilitating the location of bikeshare stations near Sound Transit Stations, System Access Pro- gram (Pedestrian and bicycle access, bicycle parking, tran- sit) (July 1, 2016), accessible from https://www.soundtran- sit.org/st3. See also, Bike Share Station Siting Guide, National Association of City Transportation Officials, 2016, https://nacto.org/wp-content/uploads/2016/04/NACTO- Bike-Share-Siting-Guide_FINAL.pdf. 548 Press Release, NACTO Releases City Data Sharing Principles, (Jan. 9, 2017) http://nacto.org/2017/01/09/nacto- releases-city-data-sharing-principles/ (accessed Jan. 23, 2017); Emily Badger, Uber offers cities an olive branch: your valuable trip data, waSh. PoSt, Jan. 13, 2015, https:// www.washingtonpost.com/news/wonk/wp/2015/01/13/ uber-offers-cities-an-olive-branch-its-valuable-trip-data/. 549 See, e.g., Creighton Randall, Twin Cities Shared Mobility Action Plan, Shared-Use Mobility Center, 2017, at 25, http://sharedusemobilitycenter.org/wp-content/ uploads/2017/10/SUMC_TWINCITIES_Web_Final.pdf. 550 Editorial: Cities Need Data From Uber and Lyft, bloomberG, July 5, 2017, https://www.bloomberg.com/view/ articles/2017-07-05/cities-need-data-from-uber-and-lyft (accessed July 7, 2017). 551 New York City Taxi and Limousine Commission Notice of Promulgation of Rules, http://www.nyc.gov/html/ tlc/downloads/pdf/newly_passed_rule_driver_fatigue.pdf. 552 For example, in petitioning to modify D. 13-09-045, Uber maintained that information concerning date, time, start and end zip codes, and amounts paid for each ride was “a highly sensitive commercial trade secret.” Petition of Rasier-CA, LLC to Modify Decision 13-09-045, Dec. 4, 2014, http://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M143/ K956/143956944.PDF. 553 E.g., N.D. Cent. Code § 39-34-05, http://www.legis. nd.gov/cencode/t39c34.pdf. 554 220 maSS. Code reGS. § 274.12. 555 Tex. Occ. Code Ann. § 2402.154 (2017), https://legiscan. com/TX/text/HB100/2017. 556 Amended Phase III.B. Scoping Memo and Ruling of Assigned Commissioner, June 12, 2017, http://docs. cpuc.ca.gov/PublishedDocs/Efile/G000/M190/K174/ 190174048.PDF.