NOTICES

PENNSYLVANIA PUBLIC UTILITY COMMISSION

Act 164 of 2016—Implementation of Chapter 26

[46 Pa.B. 8136]
[Saturday, December 24, 2016]

Public Meeting held
December 8, 2016

Commissioners Present: Gladys M. Brown, Chairperson; Andrew G. Place, Vice Chairperson; John F. Coleman, Jr.; Robert F. Powelson; David W. Sweet

Act 164 of 2016—Implementation of Chapter 26; L-2016-2574379

Implementation Order

By the Commission:

 On November 4, 2016, Governor Wolf signed into law Act 164 of 2016, which amends Titles 53 (Municipalities Generally) 66 (Public Utilities) and 75 (Vehicles) of the Pennsylvania Consolidated Statutes. Act 164 establishes, inter alia, the regulatory framework for the provisions of a new type of transportation service in Pennsylvania, known as Transportation Network Company (TNC) service. This transportation service operates using an internet application on smart phones to match passengers with a TNC driver to facilitate transportation.

 The Pennsylvania Public Utility Commission's (Commission) administrative responsibilities for implementing the provisions of Act 164 are contained within Chapter 26 of the Act.¹ In general, Chapter 26 addresses vehicle safety, driver integrity, insurance coverage, and licensing requirements for TNC service. This Implementation Order will provide a general outline of Act 164 and provide specific procedures and guidance governing the TNC license application process. The Commission will address other substantive issues attendant to Act 164, such as impounding procedures, at a later date.

I. Overview of Act 164

 A. 66 Pa.C.S. § 102

 Act 164 amends the Public Utility Code to include definitions relevant to TNC service. 66 Pa.C.S. § 102. Those definitions include:

Digital Network

Any online-enabled application, software, website or system offered or utilized by a transportation network company that enables the prearrangement of rides with transportation network company drivers.

Dual Motor Carrier

A call or demand carrier operating under a certificate of public convenience and providing transportation network services pursuant to a license from the Commission. For purposes of Chapter 26, only certificated call or demand carriers may file an application with the Commission requesting a license to operate a transportation network service as a dual motor carrier.

Dynamic Pricing

A TNC's practice of adjusting the calculation used to determine fares at certain times and locations in response to the supply of TNC drivers and the demand for transportation network services.

Personal Vehicle

A vehicle that is used by a transportation network company driver and is owned, leased or otherwise authorized for use by the transportation network company driver.

 Transportation Network Company

A person or entity licensed by the commission to operate a transportation network service in this Commonwealth and that uses a digital network to facilitate prearranged rides.

Transportation Network Service

A service which meets all of the following:

• Matches a passenger and transportation network company driver using a digital network in advance of a prearranged ride;

• Is characterized by a TNC driver offering or providing a prearranged ride to a passenger; and

• Is rendered on an exclusive basis. For purposes of this paragraph, the term ''exclusive basis'' means a transportation network service on a given prearranged ride when each individual, party or group may not be required to ride with another passenger on that prearranged ride unless the individual, party or group consents to additional passengers on the prearranged ride.

 B. Chapter 26, Transportation Network Service

 Chapter 26 provides for, inter alia, TNC licensing requirements, the insurance responsibilities of TNCs and TNC drivers, disclosure requirements, record retention, service standards, TNC driver requirements, TNC vehicle requirements, as well as TNC rates, fines, and assessments. Specific statutory provisions are discussed below.

Section 2601. Definitions.

 License

 The license is proof of the Commission's approval authorizing a TNC to operate a TNC service in accordance with this chapter. The term does not include a certificate of public convenience as described under Chapter 11 (relating to certificate of public convenience); as such, TNC license applications are not published in the Pennsylvania Bulletin and are not subject to protest. Important to this definition is that there is no territorial limit to the TNC's operating authority for TNC service originating within the Commonwealth and outside of Philadelphia. 66 Pa.C.S. § 2601.

Section 2602. Exclusions.

 Existing forms of traditional ridesharing transportation are excluded from the definition of TNC service. In particular, Section 2602(a) and (b) exclude: (a) ridesharing arrangements and ridesharing operators authorized under Act 279 of 1982, and (b) ridesharing facilitated by a digital network in which the transportation is to a common destination and the service does not include the services of a driver or where the driver is compensated only for actual expenses. 66 Pa.C.S. § 2602.

Section 2603. Applicability of Certain Laws and Prohibition.

 Section 2603(a) provides that rides originating in Philadelphia are not subject to the Commission's jurisdiction; this service falls within the Philadelphia Parking Authority's (PPA) jurisdiction. Section 2603(b) sets forth other laws that may not apply to TNC drivers, such as municipal law, laws imposing motor carrier insurance requirements, laws imposing a greater standard of care on motor carriers than that imposed on other drivers, and laws imposing special equipment requirements. Section 2603(b) states that municipalities are precluded from imposing a tax or requiring a license to TNCs. 66 Pa.C.S. § 2603.

Section 2603.1. Financial Responsibility Requirements.

 Section 2603.1 discusses the financial responsibility of TNCs and TNC drivers, and provides restrictions on liability waivers. 66 Pa.C.S. § 2603.1.

 Section 2603.1(a) sets forth the requirements for insurance and the minimum amounts of insurance on TNCs when a TNC driver is logged on to the digital network and when the TNC driver is engaged in a prearranged ride. In particular, this section provides that, while providing a prearranged TNC ride, the primary automobile liability insurance coverage shall be at least $500,000 for death, bodily injury and property damage, as well as first-party medical benefits of $25,000 for passengers and pedestrians and $5,000 for a driver. Dual motor carrier insurance requirements are addressed and section 2603.1 directs that dual motor carriers are to carry the same insurance as taxis. 66 Pa.C.S. § 2603.1(a).

 This section further addresses who is responsible for carrying the necessary insurance coverage and what happens in the event of lapses of insurance on a TNC driver's policy. In particular, it provides that if the insurance maintained by the driver's policy has lapsed or does not provide the required coverage, the TNC's insurance policy shall provide the necessary coverage. Section 2603.1(a) further directs the TNC to file a certificate of insurance with the Commission according to the form specified by the Commission by its order or regulation. 66 Pa.C.S. § 2603.1(a).

 Section 2603.1(b) provides for what an insurance company may exclude from its coverage of a TNC and TNC driver. It further discusses an insurance provider's right of contribution and indemnification when an insurance provider defends a claim against a driver that is excluded under the terms of its policy. 66 Pa.C.S. § 2603.1(b).

 Section 2603.1(c) prohibits TNCs and TNC drivers from requiring passengers to waive liability for a loss of personal property or injury. TNCs are further precluded from requiring TNC drivers from waiving liability for loss of personal property or injury. The Commission's regulations and orders may further supersede the TNC's terms and conditions provided at the time of TNC driver enrollment or TNC service enrollment deemed necessary to ensure compliance with Chapter 26. 66 Pa.C.S. § 2603.1(e).

Section 2603.2. Disclosures.

 Section 2603.2 discusses the disclosures that the TNC must make to its drivers and explains the type of insurance coverage the TNC will provide as well as the details regarding the TNC's insurance coverage and the driver's insurance coverage. In particular, the TNC must provide notice that the driver's own automobile insurance policy might not provide coverage while the driver is logged on to the digital network or engaged in a prearranged TNC ride. Section 2603.2 also directs that disclosures must be made to lienholders and lessors regarding the vehicles used as TNC vehicles. 66 Pa.C.S. § 2603.2.

Section 2604. Licenses and Regulations.

 Section 2604 directs that TNCs must acquire a license to operate lawfully as a TNC within the Commonwealth. Pursuant to this section, the Commission is authorized and tasked with providing for all licensure regulations, policies and orders necessary to regulate TNC services within its geographic jurisdiction. This section also authorizes the Commission to impose license conditions, as necessary, to ensure compliance with Chapter 26 and the laws of the Commonwealth. Significantly, Section 2604 again recognizes that a license is not a certificate of public convenience. 66 Pa.C.S. § 2604.

Section 2604.1. License Requirements.

 Section 2604.1(a) sets forth the elements that TNC must provide in its license application. In particular, it requires a TNC applicant to apply for a license in writing, and that the application be verified, by oath or affirmation, by an officer of the applicant and be in the form and contain the information required by the Commission. 66 Pa.C.S. § 2604.1(a).

 Section 2604.1(b) sets forth the elements a TNC must satisfy in order to acquire a license and for maintaining a license to operate within the Commonwealth. The elements include, inter alia, proof of registration with the Department of State, proof of the required insurance coverage, an agent for service of process, maintenance of verifiable records, inspection of records, zero tolerance drug policy, criminal background checks, driver history checks, driver training materials, reporting of accidents, and a publicly accessible internet website. Also, in addition, Section 2604.1(a)(5) specifies that the Commission may impose conditions that are reasonably related to a licensee's obligations as set forth in Chapter 26. 66 Pa.C.S. § 2604.1(b).

Section 2604.2. Records.

 Section 2604.2 authorizes the Commission to inspect, audit and investigate any books, records and facilities of the TNC. It goes on to provide an exception for documents marked confidential that are to be excluded from disclosure to a third person, including a Right-to-Know request. 66 Pa.C.S. § 2604.2.

Section 2604.3. Service Standards.

 Section 2604.3 instructs that the TNC must take reasonable steps to ensure the service provided by each TNC driver is safe, reasonable, and adequate. It further instructs that a licensed TNC must accommodate individuals with disabilities and prohibits discriminatory service. 66 Pa.C.S. § 2604.3.

Section 2604.4. Dual Motor Carrier Authority.

 Section 2604.4 directs that dual motor carriers have both a license to operate as a TNC as well as a certificate of convenience with the Commission to provide taxi service. Dual motor carriers may either dispatch call or demand vehicles or a personal vehicle in its authority's service territory. 66 Pa.C.S. § 2604.4.

Section 2604.5. Lienholder and Lessor Requirements.

 Section 2604.5 requires TNCs to provide its drivers with the disclosure language found in section 2604.5(a)(1). It further directs that a TNC must notify its drivers in writing whether it is providing insurance coverage during service. Section 2604.5(b)—(c) also instruct how payment of damage claims are to be made and permits the lienholder or lessor of a vehicle to obtain coverage at the expense of the driver without prior notice to the driver. 66 Pa.C.S. § 2604.5.

Section 2605. Transportation Network Company Drivers.

 Section 2605 directs that TNC drivers do not need a separate license and also sets forth all of the requirements a prospective driver must satisfy in order to qualify as a TNC driver. In particular, the section specifies that the driver must be 21 years of age, satisfy the criminal history and driver history background checks, possess a valid driver's license, and carry either a paper copy of electronic copy of the liability insurance required by Chapter 26. It further directs the TNC driver to affirm the ownership of the vehicle being used and that the driver has notified his insurance carrier about operating as a TNC driver. 66 Pa.C.S. § 2605.

Section 2606. Personal Vehicle Requirements.

 Section 2606(a) sets forth the requirements for a vehicle used in TNC service. The requirements for eligible vehicles for TNC service listed under section 2606 include in part: any light duty vehicle; no older than 10 model years or 12 model years if an alternative fuel vehicle; and no more than 350,000 cumulative miles. 66 Pa.C.S. § 2606(a).

 Section 2606(b) grants the Commission authority to adjust the vehicle requirements by regulation or by order. Section 2606(c) further requires that the vehicle be subject to an annual state inspection, maintain a valid certificate of inspection, and remain in continuous compliance with state inspection standards and the Commission's vehicle requirements. This section also grants authority to the Commission to inspect a personal vehicle if there is reason to believe that the vehicle is not in compliance with the Commission's vehicle standards. 66 Pa.C.S. § 2605(b) and (c).

 The newly added definition of ''personal vehicle'' in Section 102 encompasses a vehicle that is ''owned, leased or otherwise authorized for use'' by the TNC driver. As such, it appears that a vehicle owned by a parent, by a friend or by the TNC may be used by the driver so long as its use is authorized and the vehicle complies with Chapter 26, Commission regulations and orders, and all applicable PennDOT requirements. 66 Pa.C.S. § 102.

Section 2607. Rates and Forms of Compensation.

 Section 2607 discusses how payment is to be completed and how rates and tariffs are to be maintained with the Commission. Section 2607 permits TNCs to set their rates according to its provisions including the way in which they will administer dynamic pricing. TNCs must file and maintain with the Commission a tariff that sets the terms and conditions of service including its policies regarding dynamic pricing. Importantly, this section requires that if a fare is charged, the TNC must disclose the fare calculation method before providing the prearranged ride and that the TNC must provide an estimate for the cost of the trip upon request. Section 2607 further directs that the amount charged for the prearranged trip is not subject to review or approval by the Commission pursuant to Chapter 13 (relating to rates and distribution systems). While the amount of the fare may not be challenged, the legislation does not bar a complaint regarding an alleged billing error, for example, a bill for a prearranged ride that was not provided. 66 Pa.C.S. § 2607.

Section 2608. Nondisclosure of Passenger Information.

 Section 2608 prohibits the TNC from disclosing to a third party any personally identifiable or financial information of a TNC passenger with exceptions listed. Section 2608(b) further prohibits TNCs from selling TNC passenger information. However, section 2608(c) permits such disclosure to TNC vendors, such as health insurance providers, as they are not viewed as third parties. 66 Pa.C.S. § 2608.

Section 2609. Fines and Penalties.

 Section 2609 authorizes the Commission, after notice and opportunity to be heard, to impose fines, penalties, license suspensions and other appropriate remedies on TNCs that have violated Chapter 26, Commission regulations or order. Complaints regarding such alleged violations may be filed pursuant to Section 701 and will be adjudicated by the Commission. 66 Pa.C.S. § 701. Section 2609 directs the Commission to adopt a schedule of penalties to be imposed for specific violations including multiple violations, which the Commission must further delineate offenses deemed to be serious. The Commission will be adopting the Penalty Guidelines for Motor Carrier Services and Enforcement for TNC service. See Appendix C.² Section 2609(c) dictates when the Commission can issue an order to a TNC disqualifying a driver and further directs the Commission to adopt regulations to allow for reinstatement of a driver following disqualification period and compliance with any conditions imposed by the Commission. 66 Pa.C.S. § 2609.

Section 2610. Commission Costs.

 Section 2610 permits the Commission to assess program costs associated with regulation of TNCs in accordance with Section 510 (relating to assessments for regulatory expenses), 66 Pa.C.S. § 510, and directs the Commission to include these costs in its proposed budget. It instructs that the Commission may group TNC expenses with utilities furnishing the same kind of service and that the TNCs must report annually their gross intrastate receipts derived from all fares charged to customers for the provision of TNC service regardless of the entity that collects the revenues. 66 Pa.C.S. § 2610.

II. Procedure for TNC License

 Chapter 26 and, in particular, Section 2604.1, set forth in detail the requirements governing the issuance and maintenance of TNC licenses. The Commission has developed a form to be used for applications for TNC licenses, attached as Appendix A. TNC applicants are required to submit a completed form and supply all relevant supporting documentation and information. Specifically, a TNC applicant must:

 • Submit a verified, written application on a form prescribed by the Commission. 52 Pa. Code § 1.36. (See Appendix A). The TNC applicant must:

 • Provide a general description of the nature and scope of the proposed TNC required under section 2603.1 in the form of a certificate of insurance (Form E) as set forth in Appendix B.

 • Submit documentation evidencing the TNC's financial position.

 • Certify that it will maintain accurate records in compliance with Chapter 26.

 • Certify that the vehicles used in TNC service comply with Pennsylvania's equipment standards (67 Pa. Code Chapter 175) and Chapter 26, and explain how it will ensure that vehicles which no longer meet vehicle age and/or vehicle mileage standards will be replaced.

 • If autonomous vehicles are used in TNC service, the TNC must verify under affidavit through its authorized representative that the autonomous vehicles and their operation comply with all applicable PennDOT regulations.

 • Certify that it will implement a driver drug and alcohol policy in compliance with Chapter 26 and explain that policy.

 • Certify that it will conduct background checks of its TNC drivers before permitting them access to their digital network in compliance with Chapter 26, and explain how it will conduct background checks.

 • Certify that it will establish and provide a driver training program in compliance with Chapter 26, and explain that program.

 • Certify that it has a procedure for complaint resolution and explain that procedure, including how it will inform customers of that procedure.

 • Certify that it has established a procedure for complaint resolution and explain how it will inform customers of how to file complaints with the PUC and explain the complaint resolution procedure.

 • Certify that it will comply with all applicable requirements set forth in Chapter 26, including service, safety, reporting, disclosure and waiver requirements.

III. Conclusion

 This Implementation Order outlines the key portions of Act 164 that the Commission is required to administer and sets forth the procedures, guidelines and filing requirements submission of a TNC license application under Act 164 of 2016. Since this is largely an administrative matter, due to the importance of obtaining and processing properly supported TNC license applications before any current temporary authorizations lapse, we will not invite public comment. However, we will address, at a later date, the rules applicable to the Commission's authority for the confiscation and impoundment of vehicles pursuant to Section 512.1, and any further regulations or guidance necessary under Act 164. Lastly, given that the experimental service certificates issued by the Commission authorizing TNC service are temporary in nature, and the fact that certain TNC companies are poised to offer new forms of app-based motor carrier service using autonomous vehicles, in order to avoid regulatory uncertainty regarding legal status, TNC companies that are offering or planning to offer such services should file applications for TNC licenses under Act 164 at the earliest practical date; Therefore,

 It Is Ordered That:

 1. The Commission hereby adopts the procedures, guidelines and filing requirements set forth in this Implementation Order for Act 164 of 2016.

 2. TNCs currently operating transportation services originating within the Commonwealth and outside of Philadelphia pursuant to the Commission's prior grant of experimental service authority under 52 Pa. Code § 29.352 are directed to file for a TNC license at the earliest practical date, should they desire to continue to operate as a TNC after the expiration of their current authority granted by the Commission.

 3. The Commission hereby adopts the certificate of insurance form set forth in Appendix B.

 4. The Commission's Penalty Guidelines for Motor Carrier Services and Enforcement are implemented as the fine schedule for TNC service, as set forth in Appendix C.

 5. The Commission will address other substantive issues attendant to Act 164, such as impounding procedures pursuant to Section 512.1, at a later date.

 6. A copy of this Order shall be published in the Pennsylvania Bulletin and posted on the Commission's website at www.puc.pa.gov.

ROSEMARY CHIAVETTA, 
Secretary

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Pa.B. Doc. No. 16-2285. Filed for public inspection December 23, 2016, 9:00 a.m.]

_______

¹  The Commission regulatory oversight of TNC service for all of Pennsylvania, with the exception of TNC service originating within Philadelphia. 66 Pa.C.S. § 2603.

²  To the extent the penalty guidelines do not address each and every potential TNC violation, we will amend those guidelines in the near future. In the interim, any penalties for violations not specifically enumerated in the penalty guidelines will be considered on an individual basis.

---

No part of the information on this site may be reproduced for profit or sold for profit.

This material has been drawn directly from the official Pennsylvania Bulletin full text database. Due to the limitations of HTML or differences in display capabilities of different browsers, this version may differ slightly from the official printed version.

---