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House | August 11, 2015 | Committee Room | Transportation Committee

Full MP3 Audio File

Essentially the regulation of transportation network companies is something that we're doing to prevent the local regulation TNCs bus cities. Initially when some of the companies came in at the Make the cities outlaw them because they want taxi companies but they didnt know how to regulate them. The purpose here in a nutshell is, you don't use the regulations for rail roads to regulate the airline industry this is a disruptive and technology and we want to allow it to happen in a way that the public is protected. There were some real concerns and these are being addressed. Essentially what would happen is that the transportation network company uber being the most commonly known would register with the state and pay an annual fee of $5000 plus $5000 renewal. That would cover the cost of the regulation and would be significantly less than what would have been implemented had they been regulated all across the state this is for the company and not for the drivers. There are insurance requirements within the Bill where the transportation network company will maintain liability which will be in force while persons are driving for Uber they'll be exemptions from taxi regulations as people are driving personal cars they'll be inspection choose to maintain the safety of the public. There are regulations on the way things will work with the airport. Airports will not be able to block Uber drivers or transit drivers but there will be methods where they can measure the trips and receive some compensation for the services being provided on the airport. In exchange for this, access for TNC drivers must be allowed staging areas and pickup areas must be made available so there are cost that the airport will incur the TNC companies know where the drivers are will be able to provide all of the transportation information to the airports if they do not, the airports will be able to require transponders be put on the vehicles that will be doing the business at the airport. This Bill has been under negotiation for quite sometime. The transportation companies, insurance industries, a lot of the cities, the airports, even the banks are all on board. Nobody is ecstatic, but everybody can live with it. It has all the hallmarks of good compromise Legislation. I will tell you personally this thing started out of Charet, I gave them a copy and the only response I have heard from xx city council member for years they tweet saying, I will be the first Charlotte city council person to get a bill through the North Carolina General Assembly, so at that point I think Senator McKissick and I are ready to take your questions but Any questions for the sponsors of the bill? Mr. Chairman for a motion. Rodney, representative Moore. Thank you Mr. Chairman. I was actually going to do the same thing that representative Brawley just did for a motion so he can make it. Representative [xx] already asked earlier a motion on this, if there are no questions representative [xx] you got a question representative [xx] Thank you. Has legislation like these been done in other states? This is very similar to legislation that has been done in several states but of course being North Carolina, we closely examined it, found a few faults and corrected it. If I may add one.  Yes. There was a national model that was negotiated with the Uber and many other stakeholders in the North Carolina. We had 26 different stakeholders, the lenders were there the commission of insurance office as well as all those other entities that might be involved in this. We customize that model to fit the needs of North Carolina and one of the reasons you need this in place today is that from the time that you turn on that app if you're a TNC driver, your personal liability insurance is no longer any good because you're using your personal vehicle as a commercial type taxi. So they will not cover a claim if you were in an accident that driver is exposed, passengers exposed, another vehicle is exposed. What this bill essentially does is cover all the potential

areas where there might be exposure and grey areas today. So that from the time you turn on that app that driver is insured through a kind of a umbrella policy through Uber, $50, 000 of coverage for one person in the vehicle 100, 000 if there are two or more, 25000 property damage. Likewise, from the time that customer gets in the vehicle and they are inside. There's a million dollars of coverage for under-insured motorist, and the like as for anybody who's involved the coverage is very expensive, it's very significant, and that coverage continues until that passenger gets out of the vehicle. So if you can envision this new technology, where within one mile of driving you could go from potentially having no insurance to $50, 000 of insurance or $100, 000 up to $1 million just by the turning on and off of an F by the driver or by the passenger. We needed to bring our laws in conformance with the technology and the times I want to really thank Representative Brawley for his exceptional work on this bill with him as well as Senator Rabin and Representative Hanes as well there was a lot of work that went into it. It's probably taken about, what? About Five months? And I think we all feel good. I'm not aware of any opposition to the bill, and Arthy is here today from Uber in the event there's anybody who would like to question anything but when everything's on track and there is a motion on the floor, then I'm ready to just let things run smoothly, but we do have a representative from Uber here today who is prepared to answer any questions you might have Thank you, Senator McKissick. Representative Blackwell. Jut a quick question. Problem with talking is it stimulates people thinking things. Senator McKissick, regarding insurance, is there some med pay provision in this bill Yes there's med pay provision stand to which there is $1, 000, 000 of coverage. So I mean that covers anything and everything that may be involved including medical expenses or all of the like.  Follow up?  Follow up. But as I understand med-pay normally that can be payable without regard to fault or liability issues if you're injured in the vehicle, is there something like that that would cover a passenger or is that part of the million dollar umbrella? Its part of that $1, 000, 000 umbrella, and which is far exceeds what you would have in a taxi today. In a taxi today it would be 30, 000 one passenger, 60, 000 two passengers, 25, 000 property damage. So this $1, 000, 000 is substantial enhancement in terms of providing substantial public protection. Representative Faircloth. Thank you Mr. Chairman. Representative Bromley, you talked about the airport and one question came to mind, is it the choice of the airport whether or not to allow [xx] or they require to They're required to. Follow up? Follow up. How about a venue, and I'll just pick one I'm familiar with, let's say the high [xx] market where they have a transportation terminal. Are they required to allow TNC to use that, or do they have some choice? I'm not saying they would do that, but do they have some choice if they want? Is that private property or public property? It would be public, but its under a covered transportation owned by the city. Representative Faircloth, I believe that they would. Yes. This was a place where I could drive up, and pick you up as a friend, or a taxi could drive up and pick you up. Yes an Uber driver would be able to do that. Thank you. Follow up? Representative McNeill. Thank you. Just a quick question, I had noticed in the part of the bill that it says that presumption exists in the TMC drivers. Independent contract and not an employee is this not being in conflict with house bill 482 the ploy mis-classification bill? Am probably not competent to answer that question that being controversial in 482 and as someone who has occasionally done touch work I think that under federal law an over-grabber will meet all of the tests. For an independent contractor they decide when or even if they

will work they are providing all of their own equipment. They are paying their own gas, so that they are not unemployed in any conventional sense. Uber doesn't get to direct their work only to provide the opportunity to match them with clients that are seeking work. The only the supervisory aspects of Uber would be to ensure that these people can pass a background check. Also the Uber application allows the pasenger to rate the driver after each trip and with a few very bad reviews that person's ability to pick up passengers forever is was terminated, and those I think are less supervisory in the traditional sense of the balls but in someone providing a a brokerage service for an independent contractor to ensure good faith dealing on the part of the individuals they represent. Staff could comment on that if you'd like for them to? Grett [xx] research division, the understand it just says that the common law task for independent contractor and employee we apply and so what this senate bill does is it also uses that same thing as the commonwealth tester going to apply. Doping is a in the presumption that this bill contains, is exactly the same thing. We have the general statutes for taxi drivers. There's a presumption that extra resource and contractors. So it puts the Uber drivers on exactly the same statutory footing as taxi drivers, but in both cases is merely presumption that could be rebutted by facts and in particular case, and then the deciding factor, the law will decide which way you are is the common law test and the house bill as I understand it also relies on that common law test. Thank you Steph, representative Bowles. microphone representative Bowles. Thank you. Is this the TNC or network companies and that there is a $5, 000 application fee and roughly there is three that are operating in the state now. Is there a limit of how many, I guess sub-contract, are they are are all allowed or? and I see what the fee is for they have to check, who is responsible for making sure that the insurance is at the state will check to make sure they're in compliance, and if I figured that out right, that means it's $15, 000 that would be collected for three companies the possibility of checking the permits of 10, 000, or how does that operate? Sure. I mean, the TNC itself, the company, so whether it was Uber, Lyft or Sidecar, those that make you want to go ot the marketplace today, they have to apply annual to the State for a license to operate here. There's no limit on the number of drivers that that particular company can have. It's up to under the legislation the company must do the rigorous background checks on each and every one of the drivers. Best of all this. Best as provided for in the bill, so it's up to the company to do it. It's not going to be DMV doing it. It's the company which is required to. For some reason they were failing to. When they come back up for renewal, I guess there'll be grounds potentially for not renewing their authority to operate for another year, but that cost isn't being borne on the State, it's being borne by the TNC itself. Okay, and just a follow up and I guess, maybe I'll read into it, and there's no per driver franchise fee or? That's correct. It says, just a one fee, so these three companies have a possibility of putting out maybe 50 taxi services. I would say that these people could probably put out thousands of drivers across the state, and because it's totally market driven. Right.  Anybody that wants to get into this business business if they can qualify with the TNC or if another TNC wants to come into the market place, they can. This is a complete

shift rather than having the local counties regulate everybody that drives in the city. We have set performance standards for the businesses to which they adhere and we have one place where we audit to make sure all the insurance is there, we allow the market. When you deal with a taxi-man, you go to a taxi stand, you're a fare they own you, they decide, who gets to take you, they get to tell you how much it is, and you have no choice If you have a bad experience you complain to the local taxi commission and you may hear back in weeks the situation with Uber, you ask for a ride, you find out about the driver, you can accept that driver, or take another one. And you completely own yourself, your business, you get to pick and choose and you get to write, we are taking the traditional model with this bill and turning it upside down. And I agree. Follow up. So, on page four you Yes I think you listed the three that are already operating in the state.yes.is that correct? So these have, I guess state wide franchise agreements. I mean there's no [xx] the Charlotte area, these are all three. They operate from It's all the same now. It's also valid in Chicago, in New York. Well I don't know about New York but I've used it in Chicago, it's great. Okay. Alright. Oliver? [xx] Thank you. I love the ubra. I just spent the last four days is Uber up and down rightful beach. I guess I would like to hear from the Uber representative as to what the impact of this might be on places like that, that have inadequate quick tax coverage presently and it's just about all you can do.  Is there over representative here that will like to take a couple of minutes on Thank you Chairman members of the committee. My name is and I'm the general manager of [xx] North Carolina, we thank senator Raben and senator McKissick for all their work working jointly on the senate side [xx] for all your leadership and effort on the how side is born, we will support this bill to ensure that a cohesive state wide framework regulating right sharing is implemented. This bill establishes a much needed state wide regulatory framework for TNCS. It promotes choice and opportunity by allowing TNCs to provide access to more transportation options riders and more economic opportunity for drivers. And it cutifies and to lock the entire industry many of the safety standards that have attracted riders and drivers TNCs including rigorous background checks for all drivers and $1.5 million of insurance on every single ride. Uber support reasonable requirements for TNCs that ensure rider safety, adequate insurance and vigorous background checks and that encouraging new technology, growth and innovation. Uber already abiding by these safety and insurance requirements and this bill cutifies they industry practices. North Carolina has been an incredible state for us. We've already created 8, 000 job opportunities across the state and we expect 120, 000 and in the next five years, we put over $1 million in to the hands of Uber military partners, we've done over two million trips and of those etrips 85% had a driver arrive within 10 minutes, you can imagine the impact that has on reducing DUYs we've already seen this happen across the country to your question as well, we're able to be a reliable option in neighborhoods that are traditional been under served by taxi, this split again will create a comprehensive permanent solution across the entire state, passing this bill will ensure that North Carolina residents can continue to access the safe, reliable and affordable transportation option provided by TNC drivers as well as flexible job opportunities that the TNC industry generate, we're in 14 markets and growing so we all whole heartedly support this bill. Thank you. The zip cars whether they're rent able cars and you drive it and leave it, I think this are totally separate yes there're different answers to a similar problems but they

don't [xx] follow up. Representative Speciale.  I'd like to recommend a favorable report for senate 41 with a refferal to finance.  All those in favor say aye, opposed likewise. Senate bill 541 get a favorable vote with referral to finance. Thank you all for being here.