Pros And Cons Of Tnc

CONCLUSION AND RECOMMENDATIONS - A NEED FOR THIRD PARTY VALIDATION

A. Deficiencies of the TNCs’ Self-Regulation Model

The essence of Transportation Network Company (“TNC”) laws revolves around a “we can do it faster and better than government” attitude. TNC laws generally transfer the responsibility of conducting background checks and vehicle inspections with less stringent requirements from regulators to the TNC so that they can sign up as many drivers as possible. However, there is an ulterior motive, as no app-based dispatch model works without having an adequate supply of drivers. It is too costly and difficult to entice and subsidize the transfer of professionally licensed black car and taxicab drivers to TNCs (although this was done
at a very high cost by Uber in New York City). TNCs claim that college students and part-time workers would be discouraged by the process of purchasing insurance, completing physical paperwork, leaving their homes or computers and undertaking a simple five minute fingerprint check. While there is some truth to the convenience factor, the motive of TNCs is to attract more drivers by making it easier for drivers to become approved as TNC drivers while managing and assuming the risks of some potentially unsafe or inexperienced drivers who slip through the cracks and cause harm to others. The self-regulation model allows the TNCs to control the information pertaining to public incidents such as sexual assaults and crashes, and discourages further media coverage as such information – which is of public interest - has been labeled as “proprietary” and not subject to public disclosure laws that keep such stories and criticism alive. The self-regulation model is an effort to control information, make licensing more efficient and to facilitate a less costly market takeover.

It is possible to engage in modified self-regulation of transportation companies, as is done with trucking and limousine companies engaged in interstate commerce by the U.S. Department of Transportation’s Federal Motor Carrier Safety Administration (“FMCSA”). The FMCSA requires that interstate truckers and drivers obtain medical exams and not work more than a certain number of hours during a time period for public safety reasons. FMCSA-licensed carriers must collect information ensured by Federal auditor compliance. As such, the key ingredients for the success of a self-regulation system are auditing resources and significant penalties and fines to serve as an appropriate and effective deterrent. Without unbridled access to TNC data to audit real-time performance and compliance at all levels, including the ability to impose significant fines, this model is doomed to fail. In general, governments, and not private parties, should be the ones who regulate; but if TNCs are allowed to engage in self-regulation due to the lack of government resources, they should be required to pay for enforcement resources and provide their data for auditing and compliance.

B. Enforcement of TNC Laws

Since the advent of disruptive for-hire ground transportation app-based TNCs, such as Uber and Lyft, many laws have been enacted throughout the United States to permit market entry of TNCs through partial deregulation and self-regulation of these services, mostly at a State level after facing opposition in many localities (“TNC laws”). TNCs have, for the most part, pushed for statewide regulation and laws that semi-legitimize their business model, because doing so at the state level involves conceivably less lobbying, legal, and media-related resources than engagement in a much larger number of municipalities, counties and/or villages. TNCs have recognized that states typically lack the same enforcement capabilities as localities, and it is no mistake that state regulation has been sought.

As of March 2017, 43 States and the District of Columbia have passed some sort of TNC legislation.
These TNC laws define a TNC by describing the same exact activity or service performed by taxicabs and limousines—transporting a paying passenger from point A to point B—and specifically exempt incumbent operators. Several of the newly enacted laws are “cookie cutter” versions of one another, which provide modest standards with which TNCs must comply in the areas of: licensing; insurance; driver vetting; vehicle standards; and accessibility.

For example, in California, some TNC regulatory requirements include:

• Conducting, or have a third party conduct, a local and national criminal background check for each participating driver that shall include both a multistate and multi-jurisdiction criminal records locator or other similar commercial nationwide database with validation; and a search of the United States Department of Justice National Sex Offender Public Web site.
• Inspecting all vehicles and maintaining the records of such inspections in case of an audit.

In Colorado, TNC regulatory requirements include:

• Obtaining and reviewing a criminal history record check for the individual before permitting an individual to act as a driver on their digital
network;
• Maintaining copies of TNC medical examiner’s certificates for all TNC drivers that are authorized to access its digital platform;
• Maintaining the following data for each prearranged ride, as applicable, for a minimum of one year from the date of each such prearranged ride: the personal vehicle’s license plate number; the identity of the driver; the identity of the matched individual using the TNC application to request a prearranged ride; the date and time of the rider's request for service; the originating address; the date and time of pickup; the destination address; and the date and time of drop-off;
• Conducting or having a vehicle inspector conduct an initial safety inspection of a prospective driver’s vehicle before it is approved for use as a TNC vehicle and at least annual periodic inspections of TNC vehicles;
• Adopting a policy designed to ensure that, after 16 cumulative hours logged into the TNC's digital network in a calendar day, the driver shall log out of the TNC's digital network for eight consecutive hours; enforcing this policy through appropriate monitoring of available data and administration of disciplinary actions;
• Adopting a policy designed to ensure that no driver is logged in to the TNC’s digital network for more than 70 hours in a consecutive seven-day period; enforcing this policy through appropriate monitoring of available data and administration of disciplinary actions.

This self-regulatory TNC framework has been exposed as having many deficiencies.
In April 2017, Massachusetts officials disqualified over 8,000 Uber, Lyft and other app-based vehicle drivers for failing a criminal background check. According to the report: “Hundreds were disqualified for having serious crimes on their record, including violent or sexual offenses, and others for driving-related offenses, such as drunken driving or reckless driving, according to the state Department of Public Utilities”. Also disqualified were 51 sex offenders and 352 offenders in incidents related to “Sex, Abuse, and Exploitation.” Despite the inferior background checks TNCs conduct, a plethora of convicts of criminal offenses were also recently discovered in Boston and
Houston.

C. The Solution of a Third-party Validator

A third-party validator hired by the government and paid for by the TNCs to collect, maintain and analyze data is the solution to the different issues raised in this Chapter. A third-party validator would collect, monitor and audit the aforementioned items including, but not limited to, granular pick-up and drop-off locations and times, collision or “black box” data, duration of trip. A third-party validator would be able to test data accuracy, protect trade secrets, provide transparency and assist with law enforcement, and enable regulators to access this information under conditions acceptable to the TNCs to assess market conditions and make policy decisions.

In general, governments, and not private parties, should be in charge of regulating the ground transportation industry. However, since TNCs are allowed to self-regulate in many jurisdictions and due to the lack of government resources, they should be required to pay for a third-party validator to ensure their data is accurate and turn over their data to facilitate auditing and compliance. As such, the key