HB509 By Representative Williams (JD) RFD Commerce and Small Business Rd 1 16-APR-15

SYNOPSIS: Existing law does not specifically provide for the operation of a transportation network company (TNC) in the state. A TNC is a company that uses an online-enabled digital network to connect TNC riders with TNC drivers who use their personal vehicles to transport the TNC riders on a prearranged ride.

This bill would authorize the operation of a TNC in the state and would require the Alabama Public Service Commission to issue annual permits for a fee and to promulgate rules consistent with this act.

This bill would provide for fares charged for a prearranged ride and would require the TNC to send an electronic receipt of the fees charged to the TNC rider.

This bill would require certain TNC and TNC driver insurance requirements, including TNC and insurer disclosure requirements regarding insurance coverage and limits of liability.

This bill would require a TNC driver to meet certain qualifications, including background checks, and would require the personal vehicle of the TNC driver to meet certain state vehicle safety inspections and requirements.

This bill would provide that a TNC driver is an independent contractor, under certain conditions, and would impose certain recordkeeping requirements on a TNC.

A BILL TO BE ENTITLED AN ACT

Relating to transportation; to provide for the operation of a transportation network company; to require the Alabama Public Service Commission to issue permits and promulgate rules consistent with this act; to provide for fares; to require certain insurance requirements and disclosure requirements regarding insurance coverage and limits of liability; to require certain driver qualifications; to require background checks and certain state vehicle safety inspections and requirements; to provide that a TNC driver is an independent contractor, under certain conditions; and to impose certain recordkeeping requirements on a TNC.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:

Section 1. For the purposes of this act, the following terms shall have the following meanings:

(1) DIGITAL NETWORK. Any online-enabled application, software, website, or system offered or utilized by a TNC that enables a prearranged ride with a TNC driver.

(2) PERSONAL VEHICLE. A vehicle that is used by a TNC driver and meets both of the following criteria:

a. Is owned, leased, or otherwise authorized for use by the TNC driver.

b. Is not a taxicab, limousine, or for-hire vehicle.

(3) PREARRANGED RIDE. The provision of transportation by a TNC driver to a TNC rider, beginning when a TNC driver accepts a ride requested by a TNC rider through a digital network controlled by a TNC, continuing while the TNC driver transports a requesting TNC rider, and ending when the last requesting TNC rider departs from the personal vehicle of the TNC driver. A prearranged ride may not include transportation provided using a taxi, limousine, or other for-hire vehicle pursuant to the Alabama Motor Carrier Act, Chapter 3, Title 37, Code of Alabama 1975.

(4) TNC. A transportation network company that is a corporation, partnership, sole proprietorship, or other entity licensed pursuant to this act and operating in the state that uses a digital network to connect a TNC rider to a TNC driver who provides a prearranged ride. A TNC may not control, direct, or manage the personal vehicle or the TNC driver that connects to its digital network, except where agreed to by written contract.

(5) TNC DRIVER. An individual who meets both of the following criteria:

a. Receives connections to potential passengers and related services from a TNC in exchange for payment of a fee to the TNC.

b. Uses a personal vehicle to offer or provide a prearranged ride to a TNC rider upon connection through a digital network controlled by a TNC in return for compensation or payment of a fee.

(6) TNC RIDER. An individual who uses the digital network of a TNC to connect with a TNC driver who provides a prearranged ride to the TNC rider in the personal vehicle of the TNC driver between points chosen by the TNC rider.

Section 2. (a) A TNC or a TNC driver is not a broker, a common carrier by motor vehicle, a contract carrier by motor vehicle, or a motor carrier, as defined by Section 37-3-2 of the Code of Alabama 1975, nor does a TNC or a TNC driver provide taxicab service or for-hire vehicle service.

(b) A TNC driver may not be required to register the personal vehicle the TNC driver uses for a prearranged ride as a commercial vehicle or a for-hire vehicle.

Section 3. (a) A person may not operate a TNC in the state without first having obtained a permit from the Alabama Public Service Commission.

(b) The Alabama Public Service Commission shall issue a permit to each applicant that meets the requirements for a TNC pursuant to this act and each applicant shall pay an annual permit fee of five thousand dollars ($5,000) to the Alabama Public Service Commission.

Section 4. A TNC shall maintain an agent for service of process in the State of Alabama.

Section 5. (a) A TNC may charge a fare for a prearranged ride provided to a TNC rider.

(b) If a fare is charged, the TNC shall disclose to the TNC rider the fare calculation method on its website or through the digital network of the TNC.

(c) If a fare is charged, the TNC shall provide the TNC rider with the applicable rates being charged and the option to receive an estimated fare before the TNC rider enters the personal vehicle of the TNC driver.

Section 6. The digital network of the TNC shall display a picture of the TNC driver and the license plate number of the personal vehicle utilized by the TNC driver to provide a prearranged ride before the TNC rider enters the personal vehicle of the TNC driver.

Section 7. Within a reasonable period of time following the completion of a trip, a TNC shall transmit an electronic receipt to a TNC rider that lists all of the following:

(1) The origin and destination of the trip.

(2) The total time and distance of the trip.

(3) An itemization of the total fare paid, if any.

Section 8. (a) On or before 90 days after the effective date of this act, and thereafter, a TNC driver or a TNC on the behalf of the TNC driver shall maintain primary automobile insurance that recognizes that the driver is a TNC driver or otherwise uses a personal vehicle to transport passengers for compensation and cover the driver under both of the following circumstances:

(1) While the TNC driver is logged on to the digital network of a TNC.

(2) While the driver is engaged in a prearranged ride.

(b)(1) The following automobile insurance requirements shall apply while a participating TNC driver is logged on to the digital network of a TNC and is available to receive transportation requests but is not engaged in a prearranged ride:

a. Primary automobile liability insurance in the amount of at least fifty thousand dollars ($50,000) for death and bodily injury per person, one hundred thousand dollars ($100,000) for death and bodily injury per incident, and twenty-five thousand dollars ($25,000) for property damage.

b. All other state mandated coverage for motor vehicles, including the requirements under the Motor Vehicle Safety-Responsibility Act, Chapter 7, Title 32, Code of Alabama 1975.

(2) The coverage requirements of this subsection may be satisfied by any of the following:

a. Automobile insurance maintained by the TNC driver.

b. Automobile insurance maintained by the TNC.

c. Any combination of a. and b.

(c)(1) The following automobile insurance requirements shall apply while a TNC driver is engaged in a prearranged ride:

a. Primary automobile liability insurance that provides at least one million dollars ($1,000,000) for death, bodily injury, and property damage.

b. All other state mandated coverage for motor vehicles, including the requirements under the Motor Vehicle Safety-Responsibility Act, Chapter 7, Title 32, Code of Alabama 1975.

(2) The coverage requirements of this subsection may be satisfied by any of the following:

a. Automobile insurance maintained by the TNC driver.

b. Automobile insurance maintained by the TNC.

c. Any combination of a. and b.

(d) If insurance maintained by a TNC driver under subsections (b) or (c) has lapsed or does not provide the required coverage, insurance maintained by a TNC company shall provide the coverage required by this section beginning with the first dollar of a claim and shall have the duty to defend the claim.

(e) Coverage under an automobile insurance policy maintained by a TNC company may not be made dependent on a personal automobile insurer first denying a claim and a personal automobile insurance policy may not be required to first deny a claim.

(f) Insurance required by this section may be placed with an insurer licensed under state law or with a surplus lines insurer eligible under state law.

(g) Insurance satisfying the requirements of this section shall satisfy the financial responsibility requirement for a motor vehicle under the Motor Vehicle Safety-Responsibility Act, Chapter 7, Title 32, Code of Alabama 1975.

(h) A TNC driver shall carry proof of coverage satisfying this section with him or her at all times during his or her use of a personal vehicle in connection with the use of a digital network of a TNC. In the event of an accident, a TNC driver shall provide this insurance coverage information to the directly interested parties, automobile insurers, and investigating police officers, upon request pursuant to state law. Upon the request, a TNC driver shall also disclose to directly interested parties, automobile insurers, and investigating police officers, whether he or she was logged on to the digital network of a TNC or on a prearranged ride at the time of an accident.

Section 9. (a) The TNC shall disclose to a TNC driver both of the following in writing before the TNC driver is allowed to accept a request for a prearranged ride on the digital network of the TNC:

(1) The insurance coverage, including the types of coverage and limits of liability, that the TNC provides while the TNC driver uses a personal vehicle in connection with the use of the digital network of a TNC.

(2) That the automobile insurance policy of the TNC driver may not provide any coverage while the TNC driver is logged on to the digital network of a TNC and is available to receive transportation requests or is engaged in a prearranged ride, depending on its terms.

(b)(1) Insurers that write automobile insurance in this state may exclude any and all coverage afforded under the policy issued to an owner or operator of a personal vehicle for any loss or injury that occurs while a TNC driver is logged on to the digital network of a TNC or while a driver provides a prearranged ride.

(2) The right to exclude all coverage may apply to any coverage included in an automobile insurance policy, including, but not limited to, any of the following:

a. Liability coverage for bodily injury and property damage.

b. Personal injury protection coverage as defined by state law.

c. Uninsured and underinsured motorist coverage.

d. Medical payments coverage.

e. Comprehensive physical damage coverage.

f. Collision physical damage coverage.

(3) The exclusions unless this subsection shall apply notwithstanding any requirements under the Motor Vehicle Safety-Responsibility Act, Chapter 7, Title 32, Code of Alabama 1975.

(c) Nothing in this section implies or requires that a personal automobile insurance policy provide coverage while the driver is logged on to the digital network of a TNC, while the TNC driver is engaged in a prearranged ride, or while the driver otherwise uses a vehicle to transport passengers for compensation.

(d) Nothing shall preclude an insurer from providing coverage for the personal vehicle of a TNC driver, if it so chooses to do so by contract or by endorsement.

(e) Automobile insurers that exclude the coverage described in this section shall have no duty to defend or indemnify any claim expressly excluded. Nothing in this act shall invalidate or limit an exclusion contained in a policy, including any policy in use or approved for use in this state prior to the enactment of this act that excludes coverage for vehicles used to carry persons or property for a charge or available for hire by the public. An automobile insurer that defends or indemnifies a claim against a driver that is excluded under the terms of its policy, shall have a right of contribution against other insurers that provide automobile insurance to the same driver in satisfaction of the coverage requirements of this section at the time of loss.

(f) In a claims coverage investigation, a TNC and any insurer potentially providing coverage under this section shall cooperate to facilitate the exchange of relevant information with directly involved parties and any insurer of the TNC driver, if applicable, including the precise times that a TNC driver logged on and off of the digital network of a TNC in the 12-hour period immediately following the accident and disclose to one another a clear description of the coverage, exclusions, and limits provided under any automobile insurance maintained under this section.

Section 10. (a)(1) A TNC shall implement a zero tolerance policy on the use of drugs or alcohol while a TNC driver is providing a prearranged ride or is logged into the digital network of a TNC but is not providing a prearranged ride.

(2) A TNC shall provide notice of its zero tolerance policy, as required by this section, on its website as well as procedures to report a complaint about a TNC driver with whom a TNC rider was matched and whom the TNC rider reasonably suspects was under the influence of drugs or alcohol during the course of the prearranged ride.

(b)(1) Upon receipt of a TNC rider complaint alleging a violation of the zero tolerance policy, as required by this section, the TNC shall immediately suspend the access of the TNC driver to the digital network of the TNC and shall conduct an investigation into the reported incident.

(2) The suspension shall be for the duration of the investigation.

(c) A TNC shall maintain records relevant to the enforcement of this section for a period of at least two years from the date that a TNC rider complaint was received by the TNC.

Section 11. (a) Prior to permitting an individual to act as a TNC driver on its digital network, a TNC shall do all of the following:

(1) Require the individual to submit an application to the TNC, which includes all of the following information:

a. The legal name, address, and age of the individual.

b. A copy of the driver's license, driving history, motor vehicle registration, and automobile liability insurance of the individual.

c. Any other information as may be required by the TNC.

(2) Conduct or have a third party conduct a local and national criminal background check for each applicant that includes a search of both of the following:

a. Multi-state or multi-jurisdiction criminal records locator or other similar commercial nationwide database with validation.

b. National sex offender registry database.

(3) Obtain and review a driving history research report for the individual.

(b) A TNC may not permit an individual to act as a TNC driver on its digital network if the individual meets any of the following:

(1) Has had more than three moving violations in the prior three-year period, or one major violation in the prior three-year period, including, but not limited to, any of the following:

a. Attempting to evade the police.

b. Reckless driving.

c. Driving on a suspended or revoked license.

(2) Has been convicted, within the past seven years, of any of the following:

a. Driving under the influence of drugs or alcohol.

b. Fraud.

c. A sexual offense.

d. The use of a motor vehicle to commit a felony.

e. Any crime involving property damage.

f. Theft.

g. An act of violence.

h. An act of terror.

(3) Is a match in the National Sex Offender Registry Database.

(4) Does not possess a valid driver's license.

(5) Does not possess proof of registration or proof of automobile liability insurance for the personal vehicle or vehicles the individual will use to provide a prearranged ride.

(6) Is not at least 19 years of age.

Section 12. (a) A TNC shall conduct, or have a third party conduct, an annual safety inspection of any personal vehicle that a TNC driver will use to provide a prearranged ride, and maintain complete documentation of the inspections at least for the period the current inspection remains valid.

(b) The safety inspection shall cover all of the following equipment:

(1) Foot brakes.

(2) Emergency brakes.

(3) Steering mechanism.

(4) Windshield.

(5) Rear window and other glass.

(6) Windshield wipers.

(7) Head lights.

(8) Tail lights.

(9) Turn indicator lights.

(10) Stop lights.

(11) Front seat adjustment mechanism.

(12) Doors.

(13) Horn.

(14) Speedometer.

(15) Bumpers.

(16) Muffler and exhaust system.

(17) Condition of tires, including tread depth.

(18) Interior and exterior rear view mirrors.

(19) Safety belts and air bags for the driver and passengers.

(c) A personal vehicle used by a TNC driver to provide a prearranged ride may be a coupe, sedan, or other light-duty vehicle including a van, minivan, sport utility vehicle, hatchback, convertible, or pickup truck that is equipped and licensed for operation on the public roads of this state.

Section 13. A TNC driver may only accept a prearranged ride booked through the digital network of a TNC and may not solicit or accept street hails.

Section 14. (a) The TNC shall adopt a policy prohibiting solicitation or acceptance of cash payments from a TNC rider and notify all TNC drivers of this policy.

(b) Any payment for a prearranged ride shall be made electronically using the digital network of a TNC. A TNC driver may not solicit or accept cash payments from a TNC rider.

Section 15. (a) A TNC shall adopt a policy of nondiscrimination with respect to TNC riders and potential TNC riders and notify all TNC drivers of its nondiscrimination policy.

(b) A TNC driver shall comply with all applicable laws regarding nondiscrimination against TNC riders or potential TNC riders.

(c) A TNC driver shall comply with all applicable laws relating to accommodation of service animals.

(d) A TNC may not impose additional charges for providing services to persons with physical disabilities because of those disabilities.

(e) A TNC shall provide TNC riders an opportunity to indicate whether they require a wheelchair-accessible vehicle. If a TNC cannot provide a wheelchair-accessible prearranged ride, the TNC shall direct the TNC rider to an alternate provider that can provide wheelchair-accessible services, if available.

Section 16. A TNC shall maintain both of the following:

(1) Individual trip records for at least one year from the date each trip was provided.

(2) TNC driver records at least until the one year anniversary of the date on which the activation of a TNC driver on the TNC digital network has ended.

Section 17. (a) Notwithstanding any other provision of law to the contrary, a TNC driver is an independent contractor and not an employee of a TNC if all of the following conditions are met:

(1) The TNC does not prescribe specific hours during which a TNC driver must be logged into the digital network of the TNC.

(2) The TNC imposes no restrictions on the ability of the TNC driver to utilize the digital network of another TNC.

(3) The TNC does not assign a TNC driver a particular territory in which a prearranged ride can be provided.

(4) The TNC does not restrict a TNC driver from engaging in any other occupation or business.

(5) The TNC and the TNC driver agree in writing that the driver is an independent contractor of the TNC.

(b) A TNC operating under this act is not required to provide workers' compensation coverage to a TNC driver who is classified as an independent contractor pursuant to this section.

Section 18. (a) Notwithstanding any other provision of law, a TNC and a TNC driver is governed exclusively by this act and any rules promulgated by the Alabama Public Service Commission consistent with this act.

(b) No municipality or other local entity may impose a tax on, or require a license for, a TNC, a TNC driver, or a personal vehicle used by a TNC driver where the tax or license relates to providing a prearranged ride, or subject a TNC to the municipality or other rate, entry, operational, or other requirements of the local entity.

Section 19. This act shall become effective on the first day of the third month following its passage and approval by the Governor, or its otherwise becoming law.

Transportation

Public Service Commission

Motor Vehicles

Transportation Network

Liability Insurance

Background Checks