State Regulation of App Based Transportation Network Companies
Post date: Aug 15, 2016 4:7:59 PM
(note new annual reporting required for our 10 cents per ride share of Uber type rides....)
State Regulation of App-Based Transportation Network Companies
On August 5, 2016, Governor Baker signed into law Chapter 187 of the Acts of 2016, “An Act Regulating Transportation Network Companies”, codified as Chapter 159A ½ of the Massachusetts General Laws. Massachusetts’ first statewide legislation regulating ride-hailing transportation network companies (“TNCs”) such as Uber and Lyft, the act is intended to ensure public safety while supporting a new and innovative industry. The Act imposes a two-tier background check on drivers and a per-ride fee to be distributed, in part, to municipalities. Importantly, however, the Act prohibits local licensing. These issues are described below in further detail.
The new law requires TNCs to conduct driver background checks and subjects TNCs to inspections, insurance requirements, and civil fines. Despite legislative efforts to require driver finger-printing, the final version of the law does not include such a requirement. The new TNC background check system requires both the state Department of Public Utilities (“DPU”) and the TNCs to conduct Criminal Offender Record Information and Sex Offender Registry checks and TNCs must issue driver clearance certificates. Drivers are also required to have their vehicles inspected, pay commercial toll rates and display decals on the front and rear of their vehicles identifying them as rides-for-hire.
The law requires TNCs to: obtain a permit from the Commonwealth to operate; carry adequate vehicle insurance coverage; and annually pay to the Commonwealth an assessment of $.20 per ride for a period of ten years. The assessment cannot be passed on to consumers. The assessments collected will be proportionately distributed as follows:
$.10 to the municipality where the passenger was picked up, to be expended for infrastructure maintenance purposes to address the impact of transportation network services on municipal roads, bridges and other transportation infrastructure or any other public purpose substantially related to the operation of transportation network services;
$.05 to MassDevelopment for grants to help the taxi and livery industries improve their technology and provide workforce development for drivers; and
$.05 cents to the Massachusetts Department of Transportation for statewide improvements.
Municipalities receiving money from the assessment must submit an annual report to a newly-established division within DPU, detailing the projects and the amounts used or planned to be used for the purposes described above. The division will then compile and publish this information on its website. The division must also promulgate rules and regulations by August 2017 to implement the new law and will be responsible for its administration, implementation and enforcement.
While the Act will take effect generally on November 3, 2016, we anticipate that it is possible that the actual licensing of TNCs may not begin until DPU has promulgated regulations. We will advise you of any new developments that impact municipalities as they arise.
If you have any questions regarding the regulation of TNCs, please contact Attorney Brian Riley at (617) 654-1722 or by e-mail at briley@k-plaw.com.
Disclaimer: This information is provided as a service by KP Law, P.C. This information is general in nature and does not, and is not intended to, constitute legal advice. Neither the provision nor receipt of this information creates an attorney-client relationship with KP Law, P.C. Whether to take any action based upon the information contained herein should be determined only after consultation with legal counsel.