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Page 107
Suggested Citation:"VII. Framework for Best Practices." National Academies of Sciences, Engineering, and Medicine. 2018. Legal Considerations in Relationships Between Transit Agencies and Ridesourcing Service Providers. Washington, DC: The National Academies Press. doi: 10.17226/25109.
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Suggested Citation:"VII. Framework for Best Practices." National Academies of Sciences, Engineering, and Medicine. 2018. Legal Considerations in Relationships Between Transit Agencies and Ridesourcing Service Providers. Washington, DC: The National Academies Press. doi: 10.17226/25109.
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Suggested Citation:"VII. Framework for Best Practices." National Academies of Sciences, Engineering, and Medicine. 2018. Legal Considerations in Relationships Between Transit Agencies and Ridesourcing Service Providers. Washington, DC: The National Academies Press. doi: 10.17226/25109.
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Page 109
Page 110
Suggested Citation:"VII. Framework for Best Practices." National Academies of Sciences, Engineering, and Medicine. 2018. Legal Considerations in Relationships Between Transit Agencies and Ridesourcing Service Providers. Washington, DC: The National Academies Press. doi: 10.17226/25109.
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Page 110

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107 own analysis of relevant case law, and the agency’s own institutional parameters regarding risk. Further development of these concepts should also be informed by more generally applicable contracting best practices.752 Additionally, best prac- tice recommendations may be further refined as solutions are developed to address problem areas discussed in Part VII, Conclusions. In this regard, transit agencies could consider evaluating require- ments imposed under settlement agreements by state and local governments in other jurisdictions to determine if any of those requirements are appro- priate models for RSP contract provisions concern- ing issues such as driver safety and data security. For purposes of this section, legal risk is defined somewhat broadly as including assurances that the contract requires the RSP to provide information that the transit agency needs to achieve the purposes of the project. This is particularly important in order to be able to determine whether the RSP service does indeed provide the looked-for value and to ensure that contract terms align with project goals. For example, TNCs have been reluctant to engage in robust data sharing. The transit agency contract negotiators should be aware of their program offices’ information needs for the project. Thus, for a pilot project with a goal of gathering sufficient informa- tion concerning ridership to determine whether to make the project permanent, the negotiators should be aware of the information required, including acceptable formats, in order to be able to include contract terms that require the needed information. Based on the survey questionnaire responses, these projects may go through project office person- nel with limited understanding of all the legal issues involved. Transit agency counsel may wish to explore how to provide guidance to their boards of directors concerning potential pitfalls of approving projects without involving legal counsel and how to provide training to their program offices on relevant issues, whether directly or by working with risk manage- ment and/or third-party contracting offices. The balance of Part VI sets forth concepts that would aid in the development of best practices concern- ing institutional readiness, the RSP procurement process, risk management, data, curb space, signage, and accessibility for customers with disabilities and under civil rights laws. The discussion also suggests several additional unrelated contract provisions that may be of interest. It should be noted that some of these practices are in areas more likely to be under the control of local governments than of transit agencies, and thus will require intergovernmental coordination. requiring commercial auto liability insurance in general [two contracts]. The insurance provisions for the tenth TNC contract were deemed confidential. 9. Other Additional issues addressed in the TNC agree- ments include requiring the TNC to provide the contracting agency with a summary of its current policies concerning background checks and driving records of its drivers [two contracts], requiring the TNC to provide the contracting agency with a summary of its current policies concerning insur- ance and driver training certificates [one contract], and requiring the TNC to make available to driver partners accessible service educational materials about providing service to riders that may have accessibility needs [one contract]. Additional issues addressed in OTP agreements include requiring the establishment of Part 655 compliant drug and alco- hol testing programs [one contract], requiring fingerprint background check and 10-year criminal and national sex offender check [one contract], requirements for provider vehicles [two contracts], specifications for response time [two contracts], and requiring documentation concerning driver training for passenger sensitivity, defensive driving, and passenger assistance [one contract]. One OTP also included in the contract agreement an option to extend the contract. VII. FRAMEWORK FOR BEST PRACTICES Due to the evolving nature of the concept of involving TNCs in public transit service delivery— and perhaps in part to the tendency of TNCs to limit information and data sharing—the research for this project identified the need for the development of best practices, as much as it identified the limited best practices that appear to be in use. Initiatives to facilitate greater information-sharing between tran- sit agencies could foster the development of best practices. Technical assistance from FTA and/or the American Public Transportation Association might be helpful in this regard. Accordingly, Part VI identifies areas that would benefit from the development of robust best contract- ing practices to address legal risks specific to contracting with RSPs and suggests concepts that could be employed in developing those practices. The concepts described further were developed from analysis of the questionnaire responses, as well as from various sources cited in the digest. The suit- ability of applying these concepts in specific situa- tions should be evaluated by the transit agency, taking into account factors such as state and local law of the transit agency’s jurisdiction, the agency’s 752 E.g., Golden et al., supra note 16, § 3, Procurement and Contracting.

108 • Establishing a procedure for unsolicited propos- als, for example, LA Metro Office of Extraordinary Innovation’s Unsolicited Proposal Policy, https:// www.metro.net/projects/oei/partnerships-ups/. • Ensuring competition rather than sole- sourcing procurements. 2. Structure RSP procurements will often involve a new service delivery model. Consider: • Structuring the procurement and contract to allow project expansion, project enhancements, and/ or changes in the subsidy/discount mechanism. • Employing pilot projects so that the RSP ser- vice delivery can be assessed using operational procedures and possibly taking advantage of more flexible approaches to meeting FTA requirements. C. Risk Management 1. Insurance Requirements for commercial automobile insur- ance should specify that coverage applies to vehicles used in connection with carrying out activities under the agreement that are non-owned and hired, as well as vehicles that are owned and leased. The evalua- tion of insurance requirements referenced under Section A should at minimum include a review of UM/UIM coverage under the state TNC statute to determine whether a coverage gap may exist for the driver during the period between accepting a rider reservation and passenger boarding. 2. Indemnification Unless and until TNCs change their position concerning the employment status of their drivers, standard indemnification provisions that require the RSP to indemnify against liabilities, etc., of the RSP and its employees may be ineffective in requir- ing the TNC to indemnify against the tortious acts of TNC drivers. Broader language that covers liabil- ity arising out of performance of the contract could be more effective.755 In addition, narrowing standard A. Institutional Readiness Dealing with RSPs will be a new experience for many transit agencies. Institutional collaboration will be required. Consider: • Examining the agency’s standard services contract and other institutional practices for com- patibility with RSP business practices. • In particular, requiring insurance evaluation of the adequacy of both state-mandated TNC cover- age and the transit agency’s standard coverage requirements in the context of RSP service delivery. • Reviewing the possible TNC issues that may be covered in a state TNC statute (highlighted supra, Part IV.A.2, Common State Issues) to determine if any are of concern; review the applicable state TNC statute to determine coverage of those issues under the stat- ute, as well as under any applicable state regulations. • Determining which standard requirements are nonnegotiable and which can be modified. • Ensuring management and program offices are aware that legal counsel and risk managers should be involved from the inception of program design and the contracting process. This is partic- ularly important in the context of signing nondis- closure agreements (NDAs) before, during, or after the formal procurement process. • Developing an understanding of the regulatory limits on procuring RSP services. B. RSP Procurement Process 1. Approach RSP procurements require flexibility in approach, while still safeguarding the need for competition. Consider: • Particularly for initial efforts, employing a procurement vehicle, such as a request for informa- tion, before issuing a procurement request.753 • If possible, proceeding with flexible procurements, such as Request for Qualifications (e.g., LA County Shared Mobility Action Plan, p. 33, http://shareduse mobilitycenter.org/wp-content/uploads/2016/09/ SUMC-Single-Page-Web-2.pdf), Austin Capital Met- ro’s Demonstration Agreement,754 or a procurement ve- hicle that includes a Statement of Work with required outcomes and asks bidders to describe how they will meet them, for example, WMATA RFP (Appendix F). 753 “Use requests for information to gauge private opera- tors’ capacities and needs before issuing requests for qualifi- cations or proposals. Obtaining accurate information early in the process of pursuing public-private ventures will ensure that each party knows what the other needs, can supply, and is prepared to do.” FeIGon & murPhy, supra note 6, at 39. 754 Bob Graves, Taking Transit Beyond the Traditional, GoVernInG, Nov. 13, 2017, http://www.governing.com/ commentary/gov-taking-transit-beyond-traditional- innovative-approaches.html (accessed Nov. 13, 2017). 755 For example, Chapter VII of WMATA’s RFP CQ17005/ JWC included the following indemnification provision: Contractor shall indemnify, defend and hold harmless the Authority, its Board members, employees and agents, from all liabilities, obligations, damages, penalties, claims, costs, charges and expenses (including reasonable attor- neys’ fees), of whatsoever kind and nature for injury, including personal injury or death of any person or per- sons, and for loss or damage to any property, including the property of the Contractor and the Authority, occurring in connection with, or in any way arising out of the use, occu- pancy and performance of the work and/or any acts in connection with activities to be performed under this Con- tract, unless the loss or damage is due to the sole negli- gence of the Authority. Nothing in the preceding sentence shall be deemed to relieve Contractor from ultimate lia- bility for any of its obligation under this Contract.

109 transit agency needs (see previous text). Particu- larly in the case of pilot projects, it may also be advisable to preserve some flexibility to modify data requirements in the event that they change over the course of the project. 3. Maintain Flexibility for Data Usage Initial TNC agreements indicate that TNCs, partic- ularly Uber and Lyft, negotiate for stringent confiden- tiality of as much data as possible. The TNCs may in fact insist on confidentiality for data that has been held by at least some courts not to be trade secrets.758 [E-23] The negotiating team should consider: • Being cognizant of its jurisdiction’s trade se- cret law, so as not to agree to keep confidential a type of data already ruled not to be a trade secret; • Ensuring the right to use data within the agency for the above-noted purposes and any oth- ers identified as important to agency program and policy goals; • Paying close attention to the effect that any pro- posed NDA could have on subsequent data provisions; • Excluding data the transit agency deems criti- cal from contractual definitions of proprietary/ confidential data; • Examining the appropriateness of the transit agency’s standard provisions concerning public re- cords requests; and • Attempting to maintain the ability to share data with other public agencies or with third par- ties such as university researchers.759 4. Data Security In some states, TNCs are already under a legal obligation to maintain data security for passenger information.760 Under some contracts, transit agen- cies have agreed to comply with additional data security measures.761 Given the significantly delayed indemnification language should be avoided. On a related matter, it might be useful to require the TNC to indemnify the transit agency against any claims that might be brought against the agency by third parties with whom it enters into contracts to effectu- ate the purposes of the agreement and any claims based on contentions by any of the TNC’s employees or subcontractors, or by any third party, that an employer–employee relationship (or a substitute for such) exists for any purpose because of the agree- ment or the nature and/or performance of any services under the agreement. It might also be advisable to include additional indemnifications related to disclosure: an indemnifi- cation against liability arising from the transit agen- cy’s disclosure or nondisclosure of any documents submitted in response to the procurement, and an indemnification against any liability arising from any breach of the RSP’s data system that affects, or potentially affects, transit agency customers. D. Data 1. Understand Data Needs Agreeing on data terms can be one of the most challenging RSP negotiating issues. The negotiating team should understand what data the transit agency needs from the RSP to: • Meet program goals for the RSP relationship,756 • Evaluate project success, • Make future planning and policy decisions, and • Meet any applicable NTD reporting requirements. In addition, the negotiating team should be aware of other legal and transit agency policy compliance needs that should be addressed by data require- ments, such as monitoring that service requests are fulfilled in a nondiscriminatory manner. 2. Specify Data Needs It is important to specify data needs as clearly as possible and as soon as possible in the procurement process. It may be advisable to make meeting data requirements a critical, if not core, requirement for contract award, keeping in mind that the data offered by the TNC757 may not be the data the 756 In 2015, in conjunction with a partnership with Uber, the city of Boston, Massachusetts and Uber entered into a voluntary data-sharing agreement. However, it turned out that the aggregated data Uber agreed to provide was not suf- ficient to support the program goals of the partnership. Moreover, the regional agencies that could have benefited from the data were not provided access under the agree- ment. tSay et al., supra note 81, at 38. 757 Elizabeth Weise, Uber gives cities free travel-time data, USA today, Jan. 8, 2017, http://www.usatoday.com/ story/tech/news/2017/01/08/uber-gives-cities-free-travel- time-data-movement/96289114/ (accessed Feb. 24, 2017). 758 A Florida district court of appeals agreed with the trial court that “the aggregate number of pick-ups and the sum of money paid by [Uber] to the County as a usage fee at the [airport did] not constitute trade secret information such that it would be exempt from public disclosure.” Rasier-DC, LLC v. B & L Serv., Inc., 4D16-3070, 2018 Fla. App. LEXIS 320 (Fla. Dist. Ct. App. Jan. 10, 2018). The court quoted a 2009 Florida appellate decision: “A public record cannot be transformed into a private record merely because an agent of the government has promised that it will be kept private.” Id.at 5, citing Nat’l Collegiate Athletic Ass’n v. Associated Press, 18 So. 3d 1201, 1208 (Fla. Dist. Ct. App. 2009). [E-23] 759 Under the Boston-Uber agreement, the regional agen- cies that could have benefited from the data were not pro- vided access under the agreement. Id. University research- ers and others similarly situated might be in a better position to analyze some of the data provided than would be the transit agency itself. tSay, et. al, supra 81 at 37. 760 See supra Part IV. J. Data/Public Records/Privacy. 761 See supra Part VI.G., Contracts.

110 F. Ensuring Accessibility for Customers with Disabilities The procurement may address issues related to providing accessible service under the ADA and equivalent state and local law either by establishing minimum requirements or by requesting descrip- tions of the respondents’ capabilities to be scored as evaluation criteria. Adopted requirements should then be included in the resulting agreement. Issues to consider covering include: • Driver training concerning serving customers with disabilities, specifically accommodating custom- ers traveling with service animals, communicating with customers who are deaf/hard of hearing; escort- ing customers who are blind in and out of vehicle. • Respondent’s monitoring of ADA compliance by drivers. • Number and/or percentage of WAVs in respon- dent’s fleet or otherwise available to respondent for providing service under the agreement. • Verification of the availability of WAVs. • Requiring regular maintenance of WAVs. • Plans to increase the number of WAVs. • Offering incentives to drivers to provide WAVs. • Description of average and minimum wait times for WAVs. • Penalty for failure to provide contracted for number of WAVs; meet contracted for response times. In addition, it may be advisable to require the tran- sit agency’s approval of any WAV subcontractors. G. Ensuring Compliance with Title VI and Equivalent State and Local Law Given the nature of RSP service, accessibility issues for two passenger populations in particular may raise Title VI issues: transit agency customers without smartphones and customers who are unbanked. Transit agencies have already conducted Title VI analyses to ensure Title VI compliance when they update fare medium to include electronic payment.764 These analyses may be useful in ensur- ing that accessibility is included in RSP procure- ments that involve fare integration. Moreover, it may be advisable to include RSP services in the Four Factor Analysis conducted for LEP purposes. Also, while TNCs have suggested that they provide telephone reservations and non-credit methods of disclosure of Uber’s 2016 data breach that affected the personal information of over 57 million passen- gers, transit agencies may want to consider adding contract requirements concerning RSP data breaches. Transit agencies may want to consider not only specifying a required notice period, but also whether failure to disclose breaches should be subject to penalty and whether failure to disclose such data breaches should be considered material breaches of the service agreement itself. In addition, depending on individual circumstances, information technology errors and omissions insurance and/or cyber liability insurance to cover data breaches may be appropriate. The negotiating team may wish to consult with the transit agency’s risk managers to determine whether either requiring the RSP to obtain insurance or obtaining such insurance on behalf of the transit agency is appropriate concern- ing a particular contract. 5. Consider Leverage in Bargaining for Data Rights It should be noted that where the law requires data sharing (and the market is important enough to them), RSPs provide the required data.762 As in the case of specifying data, it may be advisable to make data sharing a critical, if not core, require- ment for contract award. E. Curb Space/Signage 1. Managing RSP Street Usage Few transit agencies have the authority to desig- nate pickup and drop-off zones for RSPs on the public right of way. However, transit agencies can implement such designations at rail stations and park-and-ride lots. Moreover, where local govern- ments have implemented such requirements, tran- sit agencies can specify compliance with pickup and drop-off designations in their procurement docu- ments and contracts. Appropriate coordination with local governments concerning right-of-way usage by TNCs under contract to the transit agency could also be useful. 2. Clarifying Signage While signage at transit stations is not an RSP contract issue per se, it is worth noting that ensur- ing clear signage denoting entrances, exits, and pickup and drop-off sites may increase the chance of project success.763 762 See supra § IV. J. Data/Public Records/Privacy. 763 For example, the assessment of the Go Centennial pilot found confusing signage at the Dry Creek station hampered the pilot. Centennial Innovation Team, Fehr & Peers, goCentennial Final Report, June 2017, at 45, http:// www.centennialco.gov/uploads/files/Government/Iteam/ Go%20Centennial%20Final%20Report_for%20web.pdf. 764 “Use Title VI equity analyses relating to fare medium changes to understand how to broadly distribute the ben- efits of integrated payment and information. . . . Build in accessibility from the ground up whenever information or payment solutions are pursued. Accessibility can be part of every payment or information system RFP.” FeIGon & murPhy, supra note 6, at 39.

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TRB's Transit Cooperative Research Program (TCRP) Legal Research Digest 53: Legal Considerations in Relationships Between Transit Agencies and Ridesourcing Service Providers explores the efforts made by public transit agencies to provide on-demand services to the public.

It also provides transit agencies with legal guidance for considering whether to enter into relationships with ridesourcing service providers (RSPs).

The report includes a description of ridesourcing services in the United States, state and municipal legislative and regulatory schemes, procurement and procurement processes, contractual and partnership provisions in agreements between RSPs and a public transit agency, issues of compliance with federal legislation and civil rights requirements and those under the Americans with Disabilities Act, legal claims and litigation, and risk management issues stemming from relationships between RSPs and transit agencies.

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