Transportation network company
A transportation network company (TNC) is a company that uses an online-enabled platform to connect passengers with drivers using their personal, non-commercial, vehicles. This can be considered a type of ridesharing. Examples include Lyft, Uber X, Sidecar, Wingz, Summon and Haxi.
The definition of a TNC was created by the California Public Utilities Commission in 2013, as a result of a rulemaking process around new and previously unregulated forms of transportation. Prior to the definition, the commission had attempted to group TNC services in the same category as limousines. Taxi industry groups opposed the creation of the new category, arguing that TNCs are taking away their business as illegal taxicab operations.
The commission established regulations for TNC services at the same time as the definition. These included driver background checks, driver training, drug and alcohol policies, minimum insurance coverage of $1 million, and company licensing through the Public Utilities Commission.
Requirements of a TNC include the following safety requirements as well as other regulatory requirements:
- TNCs shall maintain excess liability insurance policies providing a minimum of $1,000,000 (one million dollars) per-incident coverage for incidents involving TNC vehicles and drivers in transit to or during a TNC trip. The insurance coverage shall be available to cover claims regardless of whether a relevant TNC driver maintains insurance adequate to cover any portion of the claim.
- TNC drivers shall be required to provide proof of both their personal insurance and the excess liability insurance in the case of an accident
- TNCs shall perform a criminal background checks on each TNC driver before the driver begins offering service. Drivers convicted of felonies or misdemeanors deemed to pose a threat to public safety, including but not limited to, driving under the influence, fraud, sexual offenses, and use of a motor vehicle to commit a felony, acts of violence, or acts of terror shall not be permitted to provide TNC services.
- TNCs shall institute a zero tolerance intoxicating substance policy with respect to drivers...
- TNCs shall obtain each TNC driver’s driving record before the driver begins providing service and annually thereafter. Drivers with convictions for reckless driving, driving under the influence, hit and run, or driving with a suspended or revoked license shall not be permitted to provide TNC services. Drivers may have a maximum of two points on their driving records for lesser offenses,e.g., equipment problems or child safety seat violations.
- TNCs shall establish a driver training program or mentor program to ensure that all drivers are safely operating the vehicle prior to the driver being able to offer service. This program must be filed with the Commission within 45 days of the adoption of this decision.
- TNC drivers must possess a valid California driver’s license, be at least 21 years of age, and must provide at least one year of driving history before providing TNC services.
- TNCs may only use street-legal coupes, sedans, or light-duty vehicles including vans, minivans, sport utility vehicles (SUVs) and pickup trucks.Hatchbacks and convertibles are acceptable.
- TNC vehicles shall not be significantly modified from factory specifications, e.g., no “stretch” vehicles.
- TNCs must inspect all vehicles and maintain proper documentation of such inspections. TNCs must conduct a 19 point inspection..
- "DECISION ADOPTING RULES AND REGULATIONS TO PROTECT PUBLIC SAFETY WHILE ALLOWING NEW ENTRANTS TO THE TRANSPORTATION INDUSTRY". California Public Utilties Commission. Retrieved 26 Nov 2013.
- Geron, Tomio (9 Sep 2013). "California Becomes First State To Regulate Ridesharing Services Lyft, Sidecar, UberX". Forbes. Retrieved 23 Oct 2013.
- Yeung, Ken (19 Sep 2013). "California Becomes First State To Regulate Ridesharing Services Uber, Lyft, Sidecar, Wingz and InstantCab". TheNextWeb. Retrieved 19 Nov 2013.
- Ride-Sharing Startups Get California Cease-And-Desist Letters - Forbes
- In California, They're Not Taxis, They're "Transportation Network Companies" - WNYC
- California PUC Proposes Legalizing Ride-Sharing From Startups Lyft, SideCar, Uber - Forbes