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Suggested Citation:"Chapter 5 - Findings." National Academies of Sciences, Engineering, and Medicine. 2019. Partnerships Between Transit Agencies and Transportation Network Companies. Washington, DC: The National Academies Press. doi: 10.17226/25425.
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Suggested Citation:"Chapter 5 - Findings." National Academies of Sciences, Engineering, and Medicine. 2019. Partnerships Between Transit Agencies and Transportation Network Companies. Washington, DC: The National Academies Press. doi: 10.17226/25425.
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Suggested Citation:"Chapter 5 - Findings." National Academies of Sciences, Engineering, and Medicine. 2019. Partnerships Between Transit Agencies and Transportation Network Companies. Washington, DC: The National Academies Press. doi: 10.17226/25425.
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Suggested Citation:"Chapter 5 - Findings." National Academies of Sciences, Engineering, and Medicine. 2019. Partnerships Between Transit Agencies and Transportation Network Companies. Washington, DC: The National Academies Press. doi: 10.17226/25425.
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Suggested Citation:"Chapter 5 - Findings." National Academies of Sciences, Engineering, and Medicine. 2019. Partnerships Between Transit Agencies and Transportation Network Companies. Washington, DC: The National Academies Press. doi: 10.17226/25425.
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Suggested Citation:"Chapter 5 - Findings." National Academies of Sciences, Engineering, and Medicine. 2019. Partnerships Between Transit Agencies and Transportation Network Companies. Washington, DC: The National Academies Press. doi: 10.17226/25425.
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Suggested Citation:"Chapter 5 - Findings." National Academies of Sciences, Engineering, and Medicine. 2019. Partnerships Between Transit Agencies and Transportation Network Companies. Washington, DC: The National Academies Press. doi: 10.17226/25425.
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Suggested Citation:"Chapter 5 - Findings." National Academies of Sciences, Engineering, and Medicine. 2019. Partnerships Between Transit Agencies and Transportation Network Companies. Washington, DC: The National Academies Press. doi: 10.17226/25425.
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Suggested Citation:"Chapter 5 - Findings." National Academies of Sciences, Engineering, and Medicine. 2019. Partnerships Between Transit Agencies and Transportation Network Companies. Washington, DC: The National Academies Press. doi: 10.17226/25425.
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Suggested Citation:"Chapter 5 - Findings." National Academies of Sciences, Engineering, and Medicine. 2019. Partnerships Between Transit Agencies and Transportation Network Companies. Washington, DC: The National Academies Press. doi: 10.17226/25425.
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Suggested Citation:"Chapter 5 - Findings." National Academies of Sciences, Engineering, and Medicine. 2019. Partnerships Between Transit Agencies and Transportation Network Companies. Washington, DC: The National Academies Press. doi: 10.17226/25425.
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Suggested Citation:"Chapter 5 - Findings." National Academies of Sciences, Engineering, and Medicine. 2019. Partnerships Between Transit Agencies and Transportation Network Companies. Washington, DC: The National Academies Press. doi: 10.17226/25425.
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Suggested Citation:"Chapter 5 - Findings." National Academies of Sciences, Engineering, and Medicine. 2019. Partnerships Between Transit Agencies and Transportation Network Companies. Washington, DC: The National Academies Press. doi: 10.17226/25425.
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Suggested Citation:"Chapter 5 - Findings." National Academies of Sciences, Engineering, and Medicine. 2019. Partnerships Between Transit Agencies and Transportation Network Companies. Washington, DC: The National Academies Press. doi: 10.17226/25425.
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Suggested Citation:"Chapter 5 - Findings." National Academies of Sciences, Engineering, and Medicine. 2019. Partnerships Between Transit Agencies and Transportation Network Companies. Washington, DC: The National Academies Press. doi: 10.17226/25425.
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68 C H A P T E R 5 Common Motivations Transit agencies have a wide range of motivations for engaging in partnerships with TNCs. The motivations, however, are often not tied to specific performance indicators, an area in which transit agencies can be more proactive in setting the approach. Motivations generally fall into three categories, and some transit agencies were motivated by factors that fall into multiple categories: • Use TNCs to provide a specific type of service: Some transit agencies entered the pilot devel- opment with a specific type of service in mind, such as: – First mile/last mile connections to transit. – Late night or early morning service options. – Providing an on-demand service option. • Meet or respond to a specific policy goal or challenge: Several staff indicated that their transit agency’s motivation for engaging in a pilot or partnership was to meet a specific policy goal or address a specific policy or operational challenge. The most common goals or challenges were: – Reducing the cost of providing transit service to a specific market or service area, often as an alternative to providing a new fixed-route bus service or as a replacement for an existing unproductive service option. – Reducing the cost of providing ADA paratransit service and/or providing a same-day and/or alternative service for paratransit customers. – Providing service that could attract new or maintain existing customers for the transit agency’s broader mobility service offerings. • Demonstrate innovation and the flexibility to experiment: – Many transit agency staff, both in their survey responses and in interviews, expressed that at least part of their motivation for engaging in a partnership was to demonstrate to the public or board that the transit agency could develop innovative service options. A few transit agencies initiated their pilots after board members, other governmental representa- tives, stakeholders, or constituents specifically requested that the transit agency partner with a TNC. Relatedly, two of the case studies are part of FTA’s MOD Sandbox Program. TNCs’ Motivations • TNC representatives expressed that they believe their organizations share many of the same motivations of transit agencies, especially around an overarching goal to reduce private car ownership and facilitate shared mobility. TNC representatives said that they believe their services enable transit agencies to provide a higher quality service at a lower cost for certain types of trips and travel markets. Findings

Findings 69 • TNC representatives also indicated that their initial desire to partner with transit agencies came in part from finding that a high proportion of TNC trips begin or end at a transit station in certain markets. Common Target Markets Partnerships between transit agencies and TNCs materialize in a variety of forms—in both their target market and the design of the partnership itself. Common target markets are shown in Figure 5-1. People Connecting to Transit Many transit agencies create partnerships with TNCs to address people’s needs for first mile/ last mile connections to fixed-route transit stations. This is the most common partnership target market, shared by 60% of survey respondents (see Figure 5-1). Typically, first mile/ last mile partnerships supplement or replace low productivity feeder routes for short trips to key transit stations or corridors in areas with poor pedestrian or bike connectivity. They attempt to offer customers reduced wait times—minimizing the “transfer penalty” between feeder and trunk lines—a common barrier to transit ridership. These partnerships have the potential to offer transit agencies operating cost savings compared with providing equivalent levels of fixed-route feeder transit. ADA Paratransit or Demand-Response Customers Another common partnership target market is customers of ADA paratransit or other demand-response service, represented by 40% of survey respondents (see Figure 5-1). Most Target Markets Description Percent of Case Studies People Connecting to Transit (First Mile/Last Mile) Feeder services for transit that cannot be sufficiently served by bike or pedestrian connections 60% (12 case studies) Customers of Paratransit or DAR Services Optional services for paratransit, DAR, and NEMT customers beyond traditional delivery models 40% (8 case studies) People Traveling in Lower Density Environments (Suburban Mobility) Transit for low-density land use types that are not financially viable for farebox recovery 25% (5 case studies) People with Late Night Travel Needs (24 hour/special event services) Late night, early morning, or special event mobility options 15% (3 case studies) People with Occasional Trip Needs (Guaranteed Ride Home) “Plan B” offering for transit commuters needing a reliable ride home when traditional services are not available 5% (1 case study) Figure 5-1. Target markets.

70 Partnerships Between Transit Agencies and Transportation Network Companies (TNCs) transit agency-operated paratransit, DAR, and non-emergency medical transportation (NEMT) services require at least one day’s advance notice to reserve a ride, and often these services provide only a window of time for their arrival time, leaving customers with unpredictable wait times. Due to low ridership and vehicle utilization, these services are often the most expensive for transit agencies to operate on a cost-per-ride basis. Partnerships with TNCs have the potential to improve customer experience for these services by offering on-demand, curb-to-curb service with real-time arrival information, while offering transit agencies significant operating cost savings compared with transit agency-operated paratransit services. However, not all TNCs reli- ably offer WAVs, assistance with boarding/alighting, or other services tailored for paratransit, DAR, or NEMT customers, who are often older adults, people with disabilities, or both. People Traveling in Lower Density Environments Many transit agencies also engage in partnerships with TNCs to provide enhanced point-to- point mobility in suburban areas that are difficult to serve efficiently with fixed-route transit, an intent indicated by 25% of survey respondents (see Figure 5-1). These partnerships typi- cally aim to improve service in low-density areas with dispersed activity centers that generate relatively little customer demand for transit. Transit agencies often have official mandates to provide fixed-route coverage to these areas, but their low-density development patterns compel the agencies to operate routes with low productivity and low farebox recovery ratios. Part- nerships with TNCs to provide suburban mobility can offer transit agencies opportunities to reduce operating costs by discontinuing low productivity fixed-route services while providing on-demand mobility and reducing average wait times for customers who depend on transit. People with Late Night Travel Needs Other transit agencies have engaged in partnerships with TNCs to provide supplemental service when fixed-route service is not available, such as early mornings, late nights, or special event service. About 15% of survey respondents indicated this as one of their target markets (see Figure 5-1). In some areas, transit agencies’ spans of service may be out of sync with the transportation needs of particular groups, such as service workers or attendees of special events (e.g., football games, concerts, conventions, etc.). Partnerships with TNCs provide on-demand service to target populations while allowing transit agencies to maintain existing service levels during their core hours of operation when customer demand is highest. People with Occasional Trip Needs Another possible reason for engaging in partnerships with TNCs is to provide rides for employees enrolled in GRH programs. This approach mirrors the one most GRH programs already use with conventional taxi companies, in which customers can seek reimbursement for taxi rides taken between work and home for pre-approved reasons. Partnerships with TNCs allow transit agencies to meet customer expectations of on-demand service at little or no additional cost. Common Partnership Designs Partnerships between transit agencies and TNCs typically take one of three general forms: • The transit agency directly subsidizes TNC trips from the TNC platform. • The transit agency markets or advertises TNC services as a complement to fixed-route transit service but does not directly subsidize TNC trips.

Findings 71 • The transit agency leverages TNC software platforms to offer streamlined, on-demand transit service using its own fleets and operators. At least one software partnership exists (TriMet’s RideTap), but none are captured in the case studies. This is an emerging area of collaboration between transit agencies and TNCs. Figure 5-2 summarizes these partnership designs. Common Mixes of Target Markets and Designs Transit agencies employ a variety of target market and design combinations to meet the needs of customers. Some of the more common approaches include: • First Mile/Last Mile Connections to Transit + Transit Agency Subsidized TNC Trips – Transit agencies provide TNC fare subsidy, usually by: � Transit agencies pays the first X dollars of a TNC trip, customer pays the remaining fare. � Customer pays a flat fare for a trip, transit agency pays the remaining fare. � Customer pays an initial fare for a trip, transit agency subsidizes the next X amount, and the customer pays any overage. � Paying the full fare for a TNC trip. • First Mile/Last Mile Connections to Transit + Marketing Partnership – Several partnerships really were just transit agencies marketing that people can use TNCs to access transit, and then the TNC provided a code that provided some sort of TNC-subsidized discount. Eligibility for these codes varied, including: – A discount for first-time TNC customers (similar to discounts for new customers commonly distributed by TNCs). – A discount for customers making a TNC trip that began and/or ended at a transit stop. – A discount for customers going to a specific destination (like a sporting venue), regardless of whether they used transit at some point during this trip. • Alternative Services for ADA Paratransit Customers + Transit Agency Subsidized TNC Trips – These look a lot like First Mile/Last Mile + Transit Agency Subsidy pilots. – Potential customers must already be pre-enrolled in existing ADA paratransit or DAR programs to receive the transit agency’s TNC subsidy, typically on the basis of age or disability status. Partnership Design Description Percent of Case Studies Transit agency subsidized TNC trips Locally or federally subsidized TNC fares 80 (16 case studies) Marketing partnership Partnership focused on marketing the shared usage of transit and TNC services, often without or with limited exchange of financial resources 20 (4 case studies) Software partnership Cross-app pass-through or fare integration through mobile apps 0 (none to date) Figure 5-2. Partnership design (i.e., what mechanisms the partnership uses to achieve its function).

72 Partnerships Between Transit Agencies and Transportation Network Companies (TNCs) – To adequately serve older adults and people with disabilities, transit agencies must ensure riders have access to WAVs. – If TNCs are unable to guarantee similar response times for WAVs as for non-ADA customers, transit agencies typically engage with an additional third party, such as a taxi company, human service transportation provider or NEMT service, to provide on-demand service with WAVs. Approaches to Procurement and Contracting Transit agencies used a range of procurement methods when considering and then entering into a TNC partnership. These included: • A formal RFP with a pilot or partnership scope. • A RFI targeting TNCs, taxi companies or other transportation providers, or emerging mobility vendors more generally. • Direct engagement with a TNC, initiated either by transit agency staff or, less commonly, by a representative from a TNC, taxi company, or other transportation or software vendor. • Transit agency partnerships with TNCs often include multiple vendors. Several transit agen- cies established relationships with multiple TNCs, including signing contracts and exchang- ing funds, and many established relationships with both a TNC and a taxi company or other transportation service provider. • Providing a service option for customers that use wheelchairs, do not have a cell phone, or do not have a credit or debit card was the most common motivation for including a taxi company or other transportation service provider into the partnership. The majority of formal partnerships that involved an exchange of funds were initiated through an RFP or RFI. Informal partnerships were generally initiated through direct engagement with a TNC and did not involve a formal procurement process. Marketing and Customer Outreach Marketing is a key component of any partnership between transit agencies and TNCs, and some partnerships focus exclusively on co-marketing. Marketing partnerships take two general forms: • Co-marketing of a service offering. These efforts often include marketing materials developed by the TNC on behalf of, or in partnership with, the transit agency. In most circumstances, both the transit agency and the TNC disseminate the marketing materials, with the transit agency providing advertising space at stations, on vehicles, or on the transit agency’s website at no cost to the TNC. • Marketing of TNC discount codes. These efforts are often in the context of informing customers about how they can use TNCs to access or as a supplement to using public transit. These partnerships have included transit agencies providing advertising space or promoting TNC services at no cost to the TNC, in exchange for the TNCs providing discount codes at no cost to the transit agency. TNCs have also independently purchased advertising space to highlight how transit custom- ers can use TNCs as a mobility service. These advertising purchases, while sometimes appearing similar to marketing partnerships between transit agencies and TNCs, do not involve a specific partnership effort.

Findings 73 Data Sharing, the NTD, and Sunshine Laws Data Sharing Trip data from TNCs enable transit agencies to effectively evaluate program performance and make adjustments as necessary. Commonly requested datasets include trip origins and destina- tions, VMT, fare amount paid, ride volumes by time and date, the number of rides completed in WAVs, and the number of rides requested but not accepted. These metrics are intended to evaluate TNC ridership in the context of regional transportation networks, and are essential to determining TNCs’ relationship with traffic congestion and the performance of fixed-route transit networks. Additionally, transit agencies often request safety-related datasets such as crash volumes, causes of crashes, and crash locations. These metrics help transit agencies identify safety issues within the network and develop solutions to resolve them. However, TNCs have been hesitant to share data due to concerns about privacy, public records requests, and com- petition. As such, data sharing has been the most heavily contested subject in this realm. Data- sharing terms are often, but not universally, a key challenge when procuring, designing, and implementing a partnership between a transit agency and TNC. Most transit agencies were able to obtain at least some data from their TNC partners about trips they were subsidizing. This data sharing is sometimes codified during the contracting process, and sometimes happens on a more informal basis in response to a request by transit agency staff. The vast majority of earlier partnerships did not include data-sharing agreements, thus transit agencies did not have access to data from the TNCs. Although some of these transit agencies asked for data later on in the pilot process, most were met with mixed success. Transit Agency Perspective Several transit agencies indicated they did not expect to receive significant amounts or specific data from TNCs when they initiated the partnership, or only expected basic information such as number of trips subsidized and total subsidy amount (data they will expect to receive in a standard invoice). Most transit agencies, however, wanted disaggregated data for a wide range of data points. Transit agencies expressed several different reasons for wanting more extensive data: • Ability to measure whether the pilot was meeting the transit agency goals • Ability to understand who is using the pilot and for what purpose • Ability to report data on subsidized TNC trips to the NTD TNC Perspective TNCs noted privacy concerns as their primary barrier with sharing disaggregated trip data, especially data related to the origin and destination of specific trips. TCRP Legal Research Digest 53 states that TNCs’ [have] expansive definitions of what constitutes proprietary information . . . for example, in petitioning to modify D. 13-09-045,18 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.’ Beyond the concern that there is potential for competitors to access trip data is the concern that anyone could gain access, with any number of motivations. They cite academic research to support the concern that even anonymized and/or geographically aggregated origin and destina- tion data could be reverse-engineered to identify individuals and risk not only their loyalty to the TNC but also their safety.

74 Partnerships Between Transit Agencies and Transportation Network Companies (TNCs) Sunshine Laws In the course of this research, transit agencies have reported, and TNCs have corroborated, that the need to maintain the privacy of personally identifiable information (PII) heavily influ- ences data-sharing agreements. Further, TNCs cite the existence of sunshine laws—requiring certain information held by governments to be open or available to the public—as one of several reasons for protecting their data. Various privacy laws at the state and federal level govern the collection, storage, and release of PII in printed or digital formats or in public meetings—sometimes known as sunshine laws, open records laws, or public records laws.19 As stated in TCRP Legal Research Digest 53, “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.” Transit Agency Perspective One of the case study transit agencies (LAVTA) hired an outside consultant to evaluate its TNC pilot. Though data privacy was not a motivation in doing so, this relationship may help shield the TNC data from an open records request. The rationale is that the private consultant would collect the detailed TNC data for a complete evaluation, but may not be subject to an open records law because it is not a public agency. To date, this assumption remains untested. Another case study transit agency, with funding for its pilot from the FTA’s MOD program, was offered masked passenger ID information from its TNC partner. It elected against obtaining this information due to privacy concerns; the transit agency believes the federal FOIA rules could govern access to the shared data. On the other hand, Capital Metro was able to obtain specific origin-destination data from its TNC partner (RideAustin). In interviews, Capital Metro indicated it protects origin- destination data in public records requests, indicating only that there was a trip taken and the time of day. The research team received a suggestion from one of the case study transit agencies that legal staff of the transit agency establish a non-disclosure agreement template stating how the transit agency treats confidential and personally identifiable information and to find local- or state-level legal standing in regards to PII. In California, for example, there is a clause that explicitly calls out PII collected through fare payment or express lanes technologies as protected from public records requests, a clause the transit agency hopes to leverage in regards to data shared in part- nerships with TNCs.20 TNC Perspective The TNC concern regarding the sharing of certain data is that if a transit agency collects and stores certain details about TNC trips subsidized by the agency, sunshine laws would or could then require that those details be available to share with the public upon request. The TNCs’ stated concern is that, even if this data is anonymized, this disclosure could jeopardize the privacy of individual customers who have taken TNC trips, and they cite academic studies, such as Unique in the Crowd (March 2013)21, to justify their concerns. National Transit Database Currently, no TNCs report directly to the NTD, nor are they required to do so. For TNC services that meet the federal definition of public transportation (49 CFR Section 5302(14)), the FTA is developing guidance for how to classify the mode and type of service and the resulting required data reporting; this guidance would go through a round of public comment before becoming official.

Findings 75 More pressing for the purposes of this research is NTD reporting policies in the context of partnerships between TNCs and transit agencies. Currently, TNC trips provided through transit agency partnerships (that either subsidize or promote those trips) are not eligible to be counted and reported to the NTD because the FTA has not yet made a formal determination of whether those trips meet the statutory definition of public transportation. To be considered public transportation, among other requirements, neither the driver nor the passenger(s) may refuse additional passengers. Until FTA makes a formal ruling on TNC trips’ eligibility for NTD, or a separate local regulatory entity requires it, transit agencies must rely on contractual provisions to require NTD-related data (e.g., vehicle revenue miles and passenger trips) from TNC partners. Background All transit agencies that are recipients or beneficiaries of either the 5307 Urban Formula or the 5311 Rural Formula federal funding programs must report all transit activities and services to the NTD. The key distinction in identifying whether a transit agency–subsidized trip in a TNC vehicle would be eligible to be counted in the transit agency’s NTD reporting is whether that trip meets the definition of public transportation (most notably, is the trip provided by a shared ride service and open to the general public). If that trip does meet the definition of public transportation as defined by 49 CFR Section 5302(14), and the transit agency is a recipi- ent or beneficiary of either Section 5307 or 5311 funding, then the transit agency can and must report data on these trips consistent with the current NTD Policy Manual, available online at https://www.transit.dot.gov/ntd/manuals. Depending on the size of the transit agency, these data could include: • Total boardings • Vehicle revenue miles • Vehicle revenue hours • Passenger miles • Asset inventory • Revenue sources Currently, the only TNC services that may meet the definition of public transportation are their shared ride products (e.g., UberPOOL and Lyft Line). However, until FTA undertakes a formal assessment of these shared ride services, transit agencies subsidizing or promoting TNC trips as part of a partnership should not report those trips to the NTD. Data: An Unresolved Issue and Efforts Toward a Solution The sharing of data is complicated by the differing perspectives and needs of the two parties to the partnership—public transit agencies and private TNCs—as well as by public records laws and concerns about the privacy of individuals taking TNC trips. The issue remains unresolved. There has been, however, some progress: one of the TNCs reports a better understanding of the importance of data to transit agencies with development of a standard template that tries to address the data needs of transit agencies, including the provision of NTD-related data to enable transit agencies to report trips if FTA provides such guidance in the future. Additional progress is likely as more and more transit agencies look to partner with TNCs and the request for more robust data becomes commonplace. A maturation of transit agency–TNC partnerships will need to resolve data sharing in a way that meets both parties’ needs, and it is likely that the FTA’s expected formal definition of TNC trips for NTD reporting purposes will help work toward resolution.

76 Partnerships Between Transit Agencies and Transportation Network Companies (TNCs) ADA Considerations In December 2016, Secretary of Transportation Anthony R. Foxx issued an official statement of FTA guidance advising transit agencies of their “. . . obligation to ensure equity and access as you partner with TNCs. . . .” The statement advised that ADA regulations apply to partnerships between transit agencies and TNCs regardless of funding source. The majority of transit agen- cies that were interviewed for this study initiated their TNC partnership after this FTA guidance was issued. This statement reminds transit agencies that they must ensure equivalency for customers “along the full spectrum of disabilities, including both physical and intellectual disabilities.” The statement also makes the distinction between demand-response service and paratransit service. For those transit agencies operating a demand-response service—the FTA considers first mile/last mile service as most likely demand-response service for the general public22— the statement affirms that the transit agencies “must either acquire accessible vehicles or otherwise ensure that such services provide equivalent service to persons with disabilities, including those who use wheelchairs and/or have intellectual disabilities.” Further, in interviews conducted as part of this research, an FTA representative stated that, to date, the FTA has not received any formal complaints about equivalency in regards to existing operational partnerships between transit agencies and TNCs. Defining Equivalent Service “Equivalent” for demand-response services means that people with disabilities, including wheelchair users, are provided with the same level of service as those without disabilities as measured by the following seven criteria: 1. Response time 2. Fares 3. Geographic area of service 4. Hours and days of service 5. Restrictions or priorities based on trip purpose 6. Availability of information and reservations capability 7. Any constraints on capacity or service availability Essentially, whatever level of service is provided to people without disabilities should be the same as that provided to those with disabilities, including wheelchairs users. For transit agencies operating ADA paratransit service, FTA guidance emphasizes that any service improvement must benefit all paratransit customers; it states, “It would not be appro- priate, for example, to offer real-time service to ambulatory paratransit riders, while leaving wheelchair users with next-day service.” Transit agency partnerships with TNCs, to date, have involved same-day, real-time service for ADA customers, which is considered a premium ser- vice, beyond that required for complementary ADA paratransit service, and the premium service must meet the equivalency standards listed earlier. Equivalent Service for Customers Using Wheelchairs (ADA) Challenges: • WAVs: A major challenge for transit agencies in developing partnerships with TNCs is that, in many markets, TNCs do not offer WAVs. A customer who uses a manual wheelchair and can transfer to a sedan seat may be able to use TNC service, but those using electric chairs and those with manual chairs who cannot transfer need alternative solutions. Transit agencies use

Findings 77 different strategies to provide WAV service with their TNC pilots, as demonstrated through this project’s case studies. However, meeting the requirements for response time and avail- ability of service is more difficult. • Response time: One transit agency was very explicit about the issue of ensuring an equivalent response time for its TNC pilot. With the density of TNC drivers in the transit agency’s urban area, the transit agency representative felt that it is “nearly impossible” to provide an equivalent response time for a customer who needs an accessible vehicle. Concerns about the ability to meet ADA requirements, including response time, was the cause for one transit agency to end its TNC pilot and another to decide not to include any TNCs in its pilot for ADA customers. On the other hand, one of the case study transit agencies specifically mentioned that it had received no complaints about the responsiveness of the WAVs operated by the local taxi company included in its first mile/last mile pilot to meet ADA requirements. Significantly, this was after the transit agency renegotiated the contract with the taxi company to guarantee service. • Adoption by customers who use wheelchairs: The case studies of TNC pilots that supplement ADA paratransit and that have data on pilot use by ambulatory customers versus customers needing accessible vehicles show that use of the pilot by customers needing wheelchair- accessible service is disproportionate to their use of ADA paratransit. In other words, while this is a very small sample, it appears that fewer customers with wheelchairs use the acces- sible component of the TNC pilot (typically provided by a local taxi company) than would be expected from their use of the transit agency’s ADA paratransit service. This is an issue deserving additional attention. Solutions: • Transit agencies engage with a third-party transportation provider, such as a taxi company, that can commit to providing an equivalent level of service for customers using wheelchairs. • Transit agencies use their own WAVs to provide an equivalent level of service. • TNCs engage with a third-party transportation provider that can provide an equivalent level of service, either voluntarily or by requirement of the transit agency (e.g., in an RFP). • Transit agency contracts with a company providing call center service that in turn has arrangements with transportation providers, including providers with WAVs.23 Title VI Considerations FTA guidance also advised that while Title VI applies to partnerships when federal funding is used, it encouraged its funding recipients to keep the spirit of Title VI in mind when designing partnerships with TNCs. Trip Requests Challenge: TNCs require customers to request trips using a smartphone. Solutions: • Transit agencies engage a third-party transportation provider, such as a taxi company, that can provide equivalent service accessible by contacting a dispatcher or scheduler via telephone. • More recently, TNCs have developed dispatching platforms that enable a call center employee to book and monitor trips for customers. This enables customers to book a trip via telephone, similar to a standard on-demand or paratransit service. • In at least one instance, a TNC has provided a smartphone to customers who are eligible to take trips through a partnership that provides an alternative service for ADA paratransit customers.

78 Partnerships Between Transit Agencies and Transportation Network Companies (TNCs) Fare Payment Challenge: TNCs require customers to pay for trips via smartphone, primarily by using a debit or credit card. Customers without access to a debit or credit card (often referred to as the unbanked or underbanked) may be unable to pay for a TNC trip. Solutions: • Transit agencies engage a third-party transportation provider, such as a taxi company, that can provide equivalent service that customers can pay for in cash. • Transit agencies allow customers to book through a dispatching platform to pay via invoice. • TNCs allow customers to pay using prepaid debit or gift cards or PayPal, which can be purchased using cash at retail locations (such as a pharmacy or convenience store). • Longer term, transit agencies are considering how smart fare cards could be adapted to allow a customer to add cash that could be used to pay for multiple services, such as transit and TNC trips. Other Legal Considerations Less than half of the transit agency survey respondents answered the questions on drug and alcohol testing, fingerprinting for driver background check, and liability insurance, perhaps indi- cating they had less information about this issues. Responses from the 17 transit agencies that answered the three questions are mixed but generally about half of these transit agencies reported that TNC drivers are not required to undergo drug and alcohol testing, are not fingerprinted as part of background checks, and that additional liability insurance is not required. Follow-up interviews with the transit agencies found at least one case where the transit agency had incorrectly answered at least two of those questions, thinking that the state regulations for TNCs required drug and alcohol testing and fingerprinting as part of background checks. Drug and Alcohol Testing Drug and alcohol testing is a requirement that conveys with FTA funding. According to FTA regulations, recipients of FTA’s Section 5307, 5309, and 5311 funding are required to conduct drug and alcohol testing of transit agency “employees responsible for safety-sensitive functions, including contractors of those recipients and subcontractors of those recipients.”24 Drug and alcohol testing is required when the transit agency “enters into a contract with one or more entities to provide taxi service,” a scenario that could describe many of the partnerships in this report in which transit agencies directly subsidize TNC trips, regardless of whether the Section 5307, 5309, or 5311 funds are used for those subsidies.25 The only situations in which the transit agency and its service providers would be exempt from drug and alcohol testing are those in which customers select the provider directly from two or more options (as opposed to a dispatcher choosing and sending a vehicle).26 In NYC, TNC drivers must pass a drug test to meet requirements established by the TLC, and other municipalities may make similar requirements of TNCs. Both Lyft27 and Uber28 have zero tolerance policies for drug and alcohol abuse. Lyft specifies that individuals who have had a DUI or other drug-related violation in the last seven years may render a person ineligible to drive on the platform.29 Driver Background Checks Driver background checks for TNC drivers have been a contentious issue, in particular whether fingerprint-based criminal history record checks should be required or whether document-based

Findings 79 criminal history record checks (that is, using a driver’s license, Social Security number, etc.) are sufficient. The TNCs use document-based record checks, not fingerprint-based checks. NYC is one jurisdiction where TNC drivers are required to undergo fingerprinting as part of the driver background checks, which is a typical requirement for taxi drivers. Such a requirement has been considered by other jurisdictions, but not implemented to date. Instead, regulations of TNC driver background checks in most states follow the guidelines of the National Conference of Insurance Legislators (NCOIL) Model Act, which 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 individual’s driving record maintained under state law.”30 Disqualifying offenses go back 3 years for traffic offenses and 7 years for criminal convictions. State or nationally registered sex offenders are also precluded from driving for a TNC under the Model Act. In cases that TNC drivers are serving more vulnerable populations, such as people with cognitive disabilities, a more rigorous background check—including fingerprinting or other biometric check—may be merited. Two of the transit agencies interviewed for the study noted some questions or reservations regarding TNCs drivers serving seniors and customers with cognitive disabilities. Similar concerns have been identified in research on use of TNCs for NEMT. Uber and Lyft’s official policies regarding background checks are as follows: Lyft Background Check Policy31 Potential drivers must undergo a criminal background check. Lyft reviews the results of these checks and may disqualify applicants who don’t meet the standards of both Lyft and applicable regulations. Drivers are screened for both criminal offenses and driving incidents. Lyft’s crimi- nal background checks are provided by a third-party company. These checks include national and county-level databases, and, when necessary, local courthouse record checks going back a minimum of seven years, and longer in some jurisdictions. Among other things, or as otherwise required by law, potential drivers may be ineligible to drive on the Lyft platform if the back- ground check results include a: • Violent crime • Sexual offense • Disqualifying felony • Disqualifying drug-related offense • Disqualifying theft or property damage offense In NYC, DMV and criminal background checks are conducted by the TLC according to their licensing standards, not by Lyft. Lyft reserves the right to disqualify a driver at any time, in compliance with applicable law, should the background check reveal any disqualifying offense or for any other safety-related reason. If a background check is flagged, drivers will get a copy via email and instructions on how to dispute the results. Keep in mind background checks may take several weeks to process. Uber Background Check Policy32 The background check includes a Motor Vehicle Record review as well as a criminal back- ground check. The evaluation of background checks can vary from city to city and is based on criteria speci- fied in local laws and regulations governing ridesharing drivers, as well as Uber’s internal safety standards. In general, drivers must have a minimum of one year of licensed driving experience in the United States (three years if under 23 years old).

80 Partnerships Between Transit Agencies and Transportation Network Companies (TNCs) Major driving violations or a recent history of minor driving violations may result in dis- qualification. Convictions for felonies, violent crimes, sexual offenses, and registered sex offender status, among other types of criminal records, are also disqualifying. Pending charges for those categories of crimes are also disqualifying, unless and until such charges are resolved in a driver-partner or potential driver-partner’s favor. Applicable laws specifying the criteria Uber must follow when reviewing background check results vary considerably by state, so individuals might be rejected for criminal offenses and driving history not indicated here. Subject to state and local law, background checks may include criminal records from throughout a person’s adult life. Subject to and in accordance with state and local law, some types of criminal convictions such as murder, sexual assault, terrorism-related offenses, and other serious criminal convictions will result in disqualification if they occurred at any time in a person’s lifetime. The background check is private, secure, and completely free for potential driver-partners. Background checks are performed by Checkr, Inc., a third-party background check provider that is accredited by the National Association of Professional Background Screeners. Periodically, background checks are re-run for current driver-partners. The background check does not include a credit check. In NYC, Uber driver-partners must complete the following steps to obtain a license from the TLC to operate legally in the city: 33 • Submit a TLC license application • Upgrade to a Class E or CDL license • Complete a WAV class • Complete a defensive driving course • Complete a For-Hire Vehicle (FHV) course testing the driver’s knowledge of NYC, the rules of the road, and TLC regulations • Get a TLC medical exam • The TLC requires all applicants be fingerprinted • To meet TLC requirements, all partners need to pass a drug test, administered at a certified drug test center Liability Insurance The insurance industry has only recently developed a standardized approach to liability insurance for TNCs. TNCs lack the licensing and vehicle inspection standards of legacy taxi com- panies, and most personal vehicle insurance policies exclude coverage for operating as TNCs. To resolve this conflict, the NCOIL worked with TNCs to develop an insurance model designed expressly for TNC driver-partners. The model defines three periods in the TNC business model: 34 • Period 1: App on, waiting for ride request • Period 2: Ride request accepted, no rideshare passengers in the vehicle • Period 3: Passenger in vehicle The NCOIL insurance model has been adopted into law in 45 states. It requires TNCs to offer primary liability coverage during Period 1 of at least $50,000 bodily injury per person, $100,000 bodily injury per incident, and $25,000 property damage depending on state law, and mandatory primary liability coverage during Period 2 of at least $1 million. Coverage may be maintained by the TNC, the TNC driver, or a combination of the two, though personal auto insurance policies maintain the right to exclude TNC service-related damages from coverage.

Findings 81 The larger TNCs have filled this gap with extended excess policies although these policies are mostly secondary. However, a recent TCRP report notes 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 vehicle and any period in which the TNC driver has turned off the app but has interaction with a TNC passenger outside of the vehicle.35 As TNC service has become more widespread across the country, at least 46 states and territories have passed legislation that sets insurance coverage rules and standards for TNCs.36 A notable outlier is NYC, where TNCs are required to have for-hire 24-hour liability insurance coverage, which is standard for the taxi industry. Legal Resources Various legal issues should be considered by transit agencies considering a partnership with a TNC beyond those outlined previously. TCRP Legal Research Digest 53: Legal Considerations in Relationships Between Transit Agencies and Ridesourcing Service Providers addresses the legal issues regarding use of TNCs and other MOD services. TCRP LRD 53 provides legal guidance to transit agencies for consideration when contem- plating a relationship with what the report’s author terms “ridesourcing service providers,” including Lyft and Uber. The digest addresses regulatory, liability, and procurement con- cerns as well as other legal risks that the report addresses. The digest also reviews the his- tory of transit agency contracts with third-party service providers—in particular, to provide paratransit service—and the federal and other statutory requirements that apply to TNCs. These requirements include, among others: eligibility for federal funding, ADA, Title VI, drug and alcohol testing, data collection, permitting, liability insurance, and employment classification law. Organizational Considerations An additional consideration for transit agencies engaging in partnerships with TNCs is the organizational framework in which such partnerships are managed. The specific organiza- tion or working group managing the partnership may be housed within a transit agency’s planning, operations, marketing, or other department. Some transit agencies have created standalone offices, such as LA Metro’s OEI, to manage transit agency contracts with a variety of mobility service providers. Each type of organization brings slightly different motivations to engage in partnerships with TNCs, and it is important for transit agencies to be cognizant of these potential organizational biases as it structures partnerships. The transit agency survey did not directly ask respondents about the organizational framework of the partnerships, and this is an area that warrants further research. Summary of the TNC Perspective The research included interviews with representatives of both Lyft and Uber, with an objective of clarifying the TNCs’ overall approach to relationships with transit agencies. The discussions proved useful in understanding the TNC perspective in partnering with the transit industry and are summarized here. • TNCs have learned from early partnerships with transit agencies and are adapting offerings to better meet the transit industry’s needs. Specifically, there are now TNC dispatching platforms that enable third parties to request, track, and pay for rides, such as Uber Health and Lyft Concierge. TNCs were also key partners in establishing the NCOIL Model Act

82 Partnerships Between Transit Agencies and Transportation Network Companies (TNCs) which, among other measures, requires criminal background checks of driver-partners in at least 45 states. The Model Act also standardizes liability insurance coverage requirements in these states. • Several models for providing WAVs have been tried, including through the TNCs’ platforms directly. Given TNCs’ approach to partnering with drivers and leveraging their personally owned vehicles, it is challenging to provide wheelchair-accessible service at a scale that enables response times equivalent to those for non-WAV requests. As such, fully ADA-compliant service has been out of reach. • TNCs and transit agencies have often encountered challenges related to data sharing and privacy. TNCs have found it difficult to offer the precise origin and destination data that many transit agencies request because they are concerned that it risks revealing their cus- tomers’ PII and undermining the privacy protection customers expect from the company. They cite risks associated with public records requests and point to studies37 that suggest anonymized trip data can be reverse-engineered to identify individuals. However, at least one of the TNCs reported they have a standard template that attempts to address transit agencies’ data requests related to NTD data (to prepare for the possibility of reporting to the database in the future), planning, and finance. That TNC currently offers origin-destination data at a Census Tract level. • TNCs expressed that they wish to maximize utilization of partnerships and work collabora- tively with transit agencies to find the best channels to reach customers.

Next: Chapter 6 - Partnership Playbook »
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TRB’s Transit Cooperative Research Program (TCRP) Research Report 204: Partnerships Between Transit Agencies and Transportation Network Companies (TNCs) is designed to help transit agencies that have decided to pursue partnerships with one or more TNCs. The report provides information on where, when, and how partnerships between transit agencies and TNCs should be considered and pursued.

As new mobility service providers emerge, many public transit agencies have partnered, or are in the process of partnering, with such providers. Among these providers are TNCs. While partnerships between transit agencies and private mobility providers are not new, partnerships with TNCs create unique opportunities and challenges as both parties work toward mutually beneficial program models.

TCRP Report 204 provides 20 in-depth case studies of partnerships between transit agencies and TNCs. Its Partnership Playbook synthesizes lessons learned from these case studies and provides step-by-step practical guidance for transit practitioners on how they should be considered and pursued.

The report provides an up-to-date guide on partnerships between transit agencies and TNCs in all stages of development and realization. It covers partnerships developed with several target markets in mind, including:

  • First/last-mile connections to transit;
  • Customers of ADA Paratransit and Demand-Response Services;
  • People traveling in lower density environments;
  • People with late night travel needs; and
  • People with occasional trip needs (e.g. guaranteed ride home).
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