2017 -- S 0941

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LC002740

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2017

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A N   A C T

RELATING TO PUBLIC UTILITIES AND CARRIERS -- TRANSPORTATION NETWORK

COMPANY SERVICES

     Introduced By: Senator Marc A. Cote

     Date Introduced: June 08, 2017

     Referred To: Senate Commerce

     It is enacted by the General Assembly as follows:

     SECTION 1. Sections 39-14.2-1, 39-14.2-2, 39-14.2-7, 39-14.2-9, 39-14.2-14 and 39-

14.2-15 of the General Laws in Chapter 39-14.2 entitled "Transportation Network Company

Services" are hereby amended to read as follows:

     39-14.2-1. Definitions.

     Terms in this chapter shall be construed as follows, unless another meaning is expressed

or is clearly apparent from the language or context:

     (1) "Active TNC driver" means a TNC driver who has provided at least one prearranged

ride through the TNC in the preceding ninety (90) days.

     (2) "Administrator" means the administrator of the division of public utilities and

carriers.

     (3) "Digital network" means any online-enabled technology application service, website,

or system offered or utilized by a transportation network company that enables the

prearrangement of rider transportation with transportation network company drivers.

     (4) "Division" means the division of public utilities and carriers.

     (5) "Partner" or "partnering" means the act of a TNC operator agreeing to the terms and

conditions set forth by a TNC for access to the TNC's digital network for the purpose of being

connected to potential TNC riders seeking TNC services.

     (6) "Person" means and includes any individual, partnership, corporation, or other

association of individuals.

     (7) "Personal vehicle" means a vehicle that is used by a transportation network company

driver and is:

     (i) Designed to hold no more than seven (7) individuals, including the driver;

     (ii) Owned, leased, or otherwise authorized for use by the individual; and

     (iii) Not a jitney, as defined in § 39-13-1; a taxicab or limited public motor vehicle, as

defined in § 39-14-1; a public motor vehicle, as defined in § 39-14.1-1; or a common carrier as

defined in title 39.

     (8) "Transportation network company" or "TNC" means an entity licensed by the division

pursuant to this chapter that uses a digital network to connect transportation network company

riders to transportation network operators who provide prearranged rides. A transportation

network company shall not be deemed to control, direct, or manage the personal vehicles or

transportation network company drivers that connect to its digital network, except where agreed

to by written contract.

     (9) "Transportation network company affiliation placard" or "TNC affiliation placard"

means a recognizable logo or decal issued by the TNC used to identify personal vehicles

whenever such a vehicle is available to provide, or is providing, TNC services.

     (10) "Transportation network operator" or "TNC operator" or "TNC driver" means an

individual who:

     (i) Receives connections to potential riders and related services from a transportation

network company in exchange for payment of a fee to the transportation network company; and

     (ii) Uses a personal vehicle to offer or provide a prearranged ride to TNC riders upon

connection through a digital network controlled by a transportation network company in

exchange for compensation or payment of a fee.

     (11) "Transportation network company (TNC) rider" or "rider" means an individual or

persons who uses a transportation network company's digital network to connect with a

transportation network driver who provides prearranged rides to the rider in the driver's personal

vehicle between points chosen by the rider.

     (12) "Transportation network company vehicle owners" means the registered owner or

lessee of any personal vehicle used to offer or provide a prearranged ride to a transportation

network company (TNC) rider.

     (12)(13) "Transportation network company services" or "prearranged ride" means the

provision of transportation by a TNC driver to a TNC rider beginning when a TNC driver accepts

a TNC rider's request for a ride made only through a digital network controlled by a

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transportation network company (TNC), continuing while the TNC driver transports the

requesting TNC rider(s), and ending when the last requesting TNC rider(s) departs from the

personal vehicle. TNC services and prearranged rides do not include transportation provided

using a jitney, as defined in § 39-13-1; a taxicab or limited public motor vehicle, as defined in §

39-14-1; a public motor vehicle, as defined in § 39-14.1-1; a common carrier as defined in title

39, or a regional transportation provider. TNC services and prearranged rides do not include a

shared-expense carpool or vanpool arrangement or service.

     39-14.2-2. Not other carriers.

     (a) TNCs or TNC drivers are not common carriers, as defined in title 39; jitneys, as

defined in § 39-13-1; taxicabs or limited public motor vehicles, as defined in § 39-14-1; or public

motor vehicles, as defined in § 39-14.1-1.

     (b) A TNC driver vehicle owner shall not be required to register the vehicle such TNC

driver uses for prearranged rides as a commercial or for-hire vehicle.

     39-14.2-7. Transportation network company operators or TNC operators, TNC

drivers.

     (a) No individual shall provide TNC services or transport TNC riders in a personal

vehicle until the individual shall have first submitted to required, periodic background checks

conducted through the TNC in accordance with subsection (b).

     (b) Prior to permitting an individual to accept trip requests through its digital network, a

TNC shall:

     (1) Require the individual to submit an application to the TNC. The application shall

include the individual's driver's name; address; age; driver's license number; photocopy or

electronic copy of the driver's license; motor-vehicle registration for the personal vehicle that the

individual intends to use to provide prearranged rides; automobile liability insurance; and other

information as may be required by the TNC.

     (2) Conduct, or have a third party accredited by the National Association of Professional

Background Screeners conduct, a local and national criminal background check for each

applicant that shall include:

     (i) Multi-state/multi-jurisdictional criminal records locator or other similar commercial

nationwide database with validation (primary source search); and

     (ii) Dru Sjodin National Sex Offender Public Website; and

     (3) Obtain and review, or have a third party obtain and review, a driving history research

report for such driving applicant.

     (c) The TNC shall certify that the required background checks verify that the applicant

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meets the following criteria:

     (1) Has not had more than three (3) moving violations in the prior three-year (3) period,

or one of the following major violations in the prior three-year (3) period:

     (i) Attempting to evade the police;

     (ii) Reckless driving or driving on a suspended; or

     (iii) Revoked license;

     (2) Has not, in the past seven (7) years, been convicted of or pleaded nolo contendere to

any of the following:

     (i) Driving under the influence of drugs or alcohol;

     (ii) Felony fraud;

     (iii) Sexual offenses;

     (iv) Use of a motor vehicle to commit a felony;

     (v) Felony crimes involving property damage and/or theft; or

     (vi) Acts of violence or felony acts of terror;

     (3) Is not a match in the Dru Sjodin National Sex Offender Public Website;

     (4) Possesses a valid driver's license;

     (5) Possesses proof of registration for the motor vehicle to be used to provide prearranged

rides or TNC services;

     (6) Possesses proof of automobile liability insurance, that satisfies the financial-

responsibility requirement for a motor vehicle under § 31-47-2(13)(i)(A), for the motor vehicle(s)

to be used to provide prearranged rides or TNC services; and

     (7) Is at least nineteen (19) years of age.

     (d) TNC operators may be affiliated with or may "partner" with more than one properly

permitted transportation network company to provide TNC services.

     39-14.2-9. Vehicles to be utilized to provide TNC services.

     TNC operators may utilize a personal vehicle to provide licensed TNC services,

provided:

     (1) The vehicle is owned by, leased to, or otherwise authorized by the legal owner/lessee

shall grant express written permission to the TNC for the personal vehicle to be used by a TNC

operator to provide TNC services: and

     (2) The vehicle is no older than fifteen (15) model years old and is designed to hold no

more than seven (7) individuals, including the driver; and

     (3) The vehicle meets the vehicle-safety inspection requirements for a private motor

vehicle in Rhode Island, or the state in which the vehicle is registered, performed by a facility

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licensed by the state to conduct such inspections, and shall display an according inspection sticker

on the vehicle's windshield if required to do so by applicable law; and

     (4) The vehicle shall have met or surpassed sanitary/acceptability standards established

by the TNC with which the TNC operator has "partnered"; and

     (5) It shall be prohibited for a TNC operator to connect to a TNC's digital network for the

purpose of accepting solicitations and providing TNC services in a personal vehicle other than a

personal vehicle that the TNC operator has registered with the TNC pursuant to § 39-14.2-11.

     39-14.2-14. Proof of financial responsibility of transportation network companies.

     (a) On or before ninety (90) days after the effective date of this chapter and thereafter,

TNC drivers vehicle owners, or a TNC on the driver's and TNC vehicle owners behalf, shall

maintain primary automobile insurance that:

     (1) Recognizes that the driver is a transportation network company driver or otherwise

uses a vehicle to transport riders for compensation and covers the driver and the vehicle owner:

     (i) While the driver is logged on to the transportation network company's digital network;

or

     (ii) While the driver is engaged in a prearranged ride or providing transportation network

company services.

     (b) The following automobile liability insurance requirements shall apply during the time

a TNC driver is logged into the TNC's digital network and available to receive requests for

transportation but is not providing prearranged rides:

     (1) Primary automobile liability insurance in the amount of at least fifty thousand dollars

($50,000) for death and bodily injury per person, one hundred thousand dollars ($100,000) for

death and bodily injury per incident, and twenty-five thousand dollars ($25,000) for property

damage.

     (2) Uninsured and underinsured motorist coverage to the extent required by § 27-7-2.1.

     (3) The coverage requirements of subsection (b) may be satisfied by any of the following:

     (i) Automobile insurance maintained by the TNC driver vehicle owner; or

     (ii) Automobile insurance maintained by the TNC; or

     (iii) Any combination of subsections (b)(3)(i) and (b)(3)(ii).

     (c) The following automobile liability insurance requirements shall apply while a TNC

driver is providing prearranged rides:

     (1) Primary automobile liability insurance that provides at least one million five hundred

thousand dollars ($1,500,000) for death, bodily injury, and property damage;

     (2) Uninsured and underinsured motorist coverage to the extent required by § 27-7-2.1;

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     (3) The coverage requirements of this subsection may be satisfied by any of the

following:

     (i) Automobile liability insurance maintained by the TNC driver vehicle owner; or

     (ii) Automobile liability insurance maintained by the TNC; or

     (iii) Any combination of subsections (c)(3)(i) and (c)(3)(ii).

     (d) If insurance maintained by a TNC driver vehicle owner to fulfill the insurance

requirements of subsections (b) and (c) of this section has lapsed or does not provide the required

coverage, insurance maintained by a TNC shall provide the coverage required by this section

beginning with the first dollar of a claim and such insurer shall have the duty to defend such

claim.

     (e) Coverage under an automobile insurance policy maintained by the transportation

network company shall not be dependent on a personal automobile insurer first denying a claim

nor shall a personal automobile insurance policy be required to first deny a claim.

     (f) Insurance required by this section may be placed with an insurer licensed under § 27-

2.4-1 et seq., or with a surplus lines insurer eligible under § 27-3-40 that has a credit rating of no

less than "A-" from A.M. Best, or "A" from Demotech, or similar rating from another rating

agency recognized by the Rhode Island insurance division.

     (g) Insurance required by this section shall be deemed to satisfy the financial

responsibility requirement for a motor vehicle under § 31-47-2(13)(i)(A).

     (h) A TNC driver or TNC vehicle owner shall carry physical or electronic proof of

coverage satisfying subsections (b) and (c) with him or her at all times during his or her use of a

vehicle in connection with a TNC's digital network. In the event of an accident, a TNC driver or

TNC vehicle owner shall provide this insurance coverage information to the directly interested

parties, automobile insurers, and investigating police officers, upon request pursuant to § 31-47-

2(15). Upon such request, a TNC driver shall also disclose to directly interested parties,

automobile insurers, and investigating police officers, whether they were logged on to the TNC's

digital network or providing prearranged rides at the time of an accident.

     39-14.2-15. TNC and insurer disclosure requirements.

     (a) The TNC shall disclose, in writing, to TNC drivers and the TNC vehicle owners the

following before they are allowed to accept a request for prearranged rides on the TNC's digital

network:

     (1) The insurance coverage, including the types of coverage and the limits for each

coverage, that the TNC provides while the TNC driver uses a personal vehicle in connection with

a TNC's digital network; and

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     (2) That the TNC driver's vehicle owner's own automobile insurance policy might not

provide any coverage while the driver is logged on to the TNC's digital network and is available

to receive transportation requests or is engaged in a prearranged ride, depending on its terms.

     (b) Insurers that write automobile liability insurance in Rhode Island may exclude any

and all coverage afforded under the policy issued to an owner or operator of a personal vehicle

for any loss or injury that occurs while a TNC driver is logged on to a TNC's digital network or

while a TNC driver provides a prearranged ride. This right to exclude all coverage may apply to

any coverage included in an automobile insurance policy including, but not limited to:

     (1) Liability coverage for bodily injury and property damage;

     (2) Uninsured and underinsured motorist coverage;

     (3) Medical payments coverage;

     (4) Comprehensive physical damage coverage;

     (5) Collision physical damage coverage; and

     (6) Personal injury protection.

     Such exclusions shall apply notwithstanding any requirement under § 31-47-2(13)(i)(A).

Nothing in this section shall be construed as to require an insurer to use any particular policy

language or reference to this section in order to exclude any and all coverage for any loss or

injury that occurs while a driver is logged on to a TNC's digital network or while a TNC driver

provides a prearranged ride.

     Nothing in this section shall be deemed to preclude an insurer from providing primary or

excess coverage by contract or endorsement for the TNC driver's vehicle owner's personal vehicle

while the TNC driver is logged on to a digital network or while the driver is engaged in a

prearranged ride.

     (c) Automobile insurers that exclude the coverage described in § 39-14.2-14(b) and (c)

shall have no duty to defend or indemnify any claim expressly excluded thereunder. Nothing in

this chapter shall be deemed to invalidate or limit an exclusion contained in a policy including

any policy in use or approved for use in Rhode Island prior to the enactment of this chapter that

excludes coverage for vehicles used to carry persons or property for a charge or available for hire

by the public. An automobile insurer that defends or indemnifies a claim against a vehicle owner

and driver that is excluded under the terms of its policy, shall have a right of contribution against

other insurers that provide automobile insurance to the same driver and vehicle owner in

satisfaction of the coverage requirements of § 39-14.2-14(b) and (c) at the time of loss.

     (d) In a claims coverage investigation, a TNC shall immediately provide upon request by

directly involved parties or any insurer of the transportation network company vehicle owner or

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driver, if applicable, the precise times that a transportation network company driver logged on

and off of the TNC's digital network in the twelve-hour (12) periods immediately preceding and

immediately following the accident. Any insurer providing coverage under § 39-14.2-14(b) and

(c) shall disclose upon request by any other such insurer involved in the particular claim, the

applicable coverage, exclusions, and limits provided under any automobile insurance maintained

under § 39-14.2-14(b) and (c).

     SECTION 2. This act shall take effect on January 1, 2018.

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LC002740

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO PUBLIC UTILITIES AND CARRIERS -- TRANSPORTATION NETWORK

COMPANY SERVICES

***

     This act would subject TNC vehicle owners to the regulation of transportation network

companies.

     This act would take effect on January 1, 2018.

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LC002740

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