Bill to Regulate Transportation Network Companies Signed Into Law
The Massachusetts Legislature passed, and Governor Charles Baker recently signed into law, a bill to regulate Transportation Network Companies (TNC’s), including Uber and Lyft. The new law creates a strong regulatory framework for operatives and drivers to be administered by the Department of Public Utilities (DPU). It also subjects drivers to strict background checks, sets rules for insurance requirements, and requires drivers to be certified.
During 2016, as the legislation was being developed, legislators met with a range of stakeholders on this issue including TNC’s, taxi drivers, taxi medallion owners, the livery industry, the Division of Insurance, municipal leaders, insurance companies, and the Department of Criminal Justice Information Systems.
“The new law protects opportunities for entrepreneurship and innovation while ensuring appropriate oversight of and safety regarding a burgeoning industry,” said Senator Jason Lewis. “The bill has found the right balance between promoting new technology and implementing commonsense regulation, and I was pleased to support it. It will allow entrepreneurs to prosper while protecting consumers, ensuring public safety, and preserving the ease and convenience of the public’s access to these ride-sharing services.”
Under the law, the state division established within DPU and the TNC’s must both verify that each driver has successfully completed a background check. A driver must be at least 21 years old, and his or her name must not appear on the National Sex Offender Registry. The driver must not have been convicted of certain crimes in the past seven years and no more than 5 traffic violations or any major traffic violation in the past 3 years. The DPU will be required to issue TNC-specific decals that drivers will be required to place on their vehicles for identification purposes. The law also includes steep penalties of up to $1,000 for willfully permitting an uncertified driver to use a certificate that does not belong to them.
The law increases consumer protection and ensures that the industry is transparent and accountable. Under the law, a TNC must provide accurate fare estimates, prohibit fare increases during emergencies and require accommodation of riders with special needs. It also requires a TNC to set up a toll-free customer service hotline on their app and website to better meet the needs and concerns of consumers.
The law establishes a trust fund that will provide cities and towns with funds at least annually based on the proportion of rides originating in those cities and towns. These funds may be used for anything related to unmet transportation needs. It is funded by a marginal 10-cent charge on each TNC ride in the Commonwealth.