May 26, 2015, Introduced by Rep. Kelly and referred to the Committee on Commerce and Trade.
A bill to regulate transportation network companies in this
state; to provide for the powers and duties of certain state
officers and entities; and to prescribe penalties and provide
remedies.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. This act shall be known and may be cited as the
"transportation network company act".
Sec. 3. As used in this act:
(a) "Department" means the state transportation department.
(b) "Digital network" means an 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.
(c) "Personal vehicle" means a motor vehicle that is used by a
transportation network company driver that satisfies both of the
following:
(i) The vehicle is owned, leased, or otherwise authorized for
use by the transportation network company driver.
(ii) The vehicle is not a taxicab, limousine, or commercial
vehicle.
(d) "Prearranged ride" means the provision of transportation
by a transportation network company driver to a transportation
network company rider, beginning when a transportation network
company driver accepts a ride requested by a transportation network
company rider through a digital network controlled by a
transportation network company, continuing while the transportation
network company driver transports the requesting transportation
network company rider, and ending when the last requesting
transportation network company rider departs from the personal
vehicle. Prearranged ride does not include transportation provided
using a taxicab, limousine, or other commercial vehicle.
(e) "Transportation network company" means a person operating
in this state that uses a digital network to connect transportation
network company riders to transportation network company drivers
who provide prearranged rides. Transportation network company does
not include a taxi service, transportation service arranged through
a transportation broker, ridesharing arrangement, or transportation
service using fixed routes at regular intervals.
(f) "Transportation network company driver" means an
individual who satisfies all of the following:
(i) Receives connections to potential passengers and related
services from a transportation network company in exchange for
payment of a fee to the transportation network company.
(ii) Uses a personal vehicle to offer or provide prearranged
rides to transportation network company riders upon connection
through a digital network controlled by a transportation network
company in return for compensation or payment of a fee.
(g) "Transportation network company rider" means an individual
who uses a transportation network company's digital network to
connect with a transportation network company driver who provides a
prearranged ride to the transportation network company rider in the
transportation network company driver's personal vehicle between
points chosen by the transportation network company rider.
Sec. 5. (1) Neither a transportation network company nor a
transportation network company driver shall be considered a common
carrier, motor carrier, or contract carrier, or to provide taxicab
or commercial vehicle service.
(2) A transportation network company driver is not required to
register his or her personal vehicle as a commercial or for-hire
vehicle.
(3) As used in this section, "motor carrier" means that term
as defined in section 1 of the motor carrier act, 1933 PA 254, MCL
475.1.
Sec. 7. (1) A transportation network company shall not operate
in this state without first having obtained a permit from the
department under this act.
(2) The department shall issue a permit to an applicant that
meets the requirements of this act and pays a permit fee of
$5,000.00 to the department annually.
(3) The department, or a third party agreed upon by the
department and a transportation network company, may audit the
records of that transportation network company, including a random
sample of the transportation network company's records related to
drivers, in accordance with all of the following:
(a) The department may conduct the audit described in this
subsection no more than 2 times per year.
(b) The audit shall take place at a third-party location
agreed upon by the department and the transportation network
company.
(c) Notwithstanding subdivision (a), the department may within
a reasonable time frame investigate a complaint related to public
safety or a violation of this act, if the department has received
details of the nature of the complaint before the investigation
takes place.
Sec. 9. A transportation network company operating under a
permit issued under this act shall maintain an agent authorized to
receive service of process in this state.
Sec. 11. On behalf of a transportation network company driver,
a transportation network company may charge and collect a fare for
services provided to a transportation network company rider, if all
of the following are satisfied:
(a) The transportation network company discloses the fare
calculation method on its website or within the software
application service.
(b) The transportation network company provides the
transportation network company rider with the applicable rate being
charged and the option to receive an estimated fare before the
transportation network company rider enters the transportation
network company driver's personal vehicle.
Sec. 13. A transportation network company's software
application or website shall display a picture of the
transportation network company driver and the registration plate
number of the personal vehicle to be used for the prearranged ride
before the transportation network company rider enters the
transportation network company driver's personal vehicle.
Sec. 15. Within a reasonable period of time after a
prearranged ride is completed, a transportation network company
shall transmit an electronic receipt to the transportation network
company rider listing all of the following information:
(a) The origin and destination of the trip.
(b) The total time and distance of the trip.
(c) An itemization of the total fare paid, if any.
Sec. 17. (1) Beginning on the effective date of this act, a
transportation network company driver, or a transportation network
company on a transportation network company driver's behalf, shall
maintain primary automobile insurance that recognizes that the
transportation network company driver uses the vehicle as a
transportation network company driver or otherwise uses a vehicle
to transport passengers for compensation and covers the
transportation network company driver while he or she is logged on
to the transportation network company's digital network and while
he or she is engaged in a prearranged ride.
(2) During the time that a transportation network company
driver is logged on to the transportation network company's digital
network and is available to receive transportation requests but is
not engaged in a prearranged ride, all of the following types of
automobile insurance are required:
(a) Residual third party automobile liability insurance as
required under chapter 31 of the insurance code of 1956, 1956 PA
218, MCL 500.3101 to 500.3179, in the amount of at least $50,000.00
per person for death or bodily injury, $100,000.00 per incident for
death or bodily injury, and $25,000.00 for property damage.
(b) Personal protection insurance and property protection
insurance in the amounts and of the types of coverage required by
chapter 31 of the insurance code of 1956, 1956 PA 218, MCL 500.3101
to 500.3179.
(3) During the time that a transportation network company
driver is engaged in a prearranged ride, all of the following types
of automobile insurance are required:
(a) Residual third party automobile liability insurance with a
minimum combined single limit of $1,000,000.00 for all bodily
injury or property damage.
(b) Personal protection insurance and property protection
insurance in the amounts and of the types of coverage required by
chapter 31 of the insurance code of 1956, 1956 PA 218, MCL 500.3101
to 500.3179.
(4) The requirements of subsections (2) and (3) may be
satisfied by automobile insurance maintained by a transportation
network company driver or a transportation network company, or a
combination of both.
(5) If the insurance required by subsection (2) or (3) lapses
or does not provide the required coverage, insurance maintained by
a transportation network company shall provide the coverage
required by this section, beginning with the first $1.00 of a
claim, and the transportation network company shall defend the
claim.
(6) Coverage provided under an automobile insurance policy
maintained by a transportation network company shall not be
dependent upon a personal automobile insurer denying the claim
first and shall not require a personal automobile insurer to deny
the claim first.
(7) All of the following apply to the automobile insurance
described in subsections (2) and (3):
(a) It may be placed with an insurer licensed under chapter 4
of the insurance code of 1956, 1956 PA 218, MCL 500.402 to 500.480,
or, if the insurance is maintained by a transportation network
company, a surplus lines insurer eligible under chapter 19 of the
insurance code of 1956, 1956 PA 218, MCL 500.1901 to 500.1955.
(b) The insurance policy satisfies the financial
responsibility requirements described in chapter V of the Michigan
vehicle code, 1949 PA 300, MCL 257.501 to 257.532.
(8) A transportation network company driver shall carry proof
of the insurance required under subsections (2) and (3) with him or
her at all times during his or her use of a vehicle in connection
with a transportation network company's digital network. The
transportation network company driver may provide proof of
insurance by a paper or electronic copy of the certificate of
insurance. If an accident occurs during the time that a
transportation network company driver is using a vehicle in
connection with a transportation network company's digital network,
he or she shall provide all of the following information upon
request to directly interested parties, automobile insurers, and
investigating law enforcement officers as required under section
328 of the Michigan vehicle code, 1949 PA 300, MCL 257.328:
(a) Insurance coverage information.
(b) Whether he or she was logged on to the transportation
network company's digital network or on a prearranged ride at the
time of the accident.
(9) If a transportation network company's insurer makes a
payment for a claim covered under comprehensive coverage or
collision coverage, the transportation network company's insurer
shall issue the payment directly to the business repairing the
vehicle or jointly to the owner of the vehicle and the primary
lienholder on the vehicle.
(10) A transportation network company shall disclose all of
the following information in writing to a transportation network
company driver before that transportation network company driver
may accept a request for a prearranged ride on that transportation
network company's digital network:
(a) The insurance coverage, including the types of coverage
and limits for each type of coverage, that the transportation
network company provides while the transportation network company
driver uses a personal vehicle in connection with the
transportation network company's digital network.
(b) That, depending on the terms of the policy, the
transportation network company driver's personal automobile
insurance policy might not provide coverage while the
transportation network company driver is logged on to the
transportation network company's digital network and available to
receive transportation requests or is engaged in a prearranged
ride.
Sec. 19. (1) A transportation network company driver shall be
considered an independent contractor, and not an employee of a
transportation network company, if all of the following conditions
are met:
(a) The transportation network company does not prescribe the
specific hours during which the transportation network company
driver is required to be logged in to the transportation network
company's digital network.
(b) The transportation network company does not impose any
restrictions on the transportation network company driver's ability
to use other transportation network companies' digital networks.
(c) The transportation network company does not assign a
transportation network company driver a particular territory within
this state in which he or she may provide prearranged rides.
(d) The transportation network company does not restrict a
transportation network company driver from engaging in any other
occupation or business.
(e) The transportation network company and the transportation
network company driver agree in writing that the transportation
network company driver is an independent contractor.
(2) A transportation network company shall not be deemed to
control, direct, or manage a personal vehicle or a transportation
network company driver who connects to its digital network, unless
the parties have agreed otherwise in a written contract.
Sec. 21. (1) A transportation network company shall develop
and implement a zero-tolerance policy regarding a transportation
network company driver's activities while accessing the
transportation network company's digital network. The zero-
tolerance policy required under this subsection shall address the
use of drugs or alcohol while a transportation network company
driver is providing a prearranged ride or is logged in to the
transportation network company's digital network.
(2) A transportation network company shall provide notice of
the zero-tolerance policy required under subsection (1) on its
website, and shall also provide on its website a procedure for a
transportation network company rider to report a complaint about a
transportation network company driver with whom the transportation
network company rider was matched and who the transportation
network company rider reasonably suspects was under the influence
of drugs or alcohol during a prearranged ride.
(3) Upon receipt of a complaint described in subsection (2), a
transportation network company shall immediately suspend the
transportation network company driver's access to the
transportation network company's digital network, and shall
investigate the incident. The transportation network company
driver's suspension shall last for the duration of the
investigation.
(4) A transportation network company shall maintain records of
a transportation network company rider complaint for at least 2
years after the date the complaint was received by the
transportation network company.
Sec. 23. (1) Before an individual may accept prearranged ride
requests as a transportation network company driver using a
transportation network company's digital network, he or she shall
submit an application to the transportation network company. The
application required under this subsection shall include, but is
not limited to, the applicant's name, address, age, operator's
license number, driving history, motor vehicle registration
information, and automobile liability insurance information. A
transportation network company receiving an application under this
subsection shall do both of the following before allowing the
applicant to accept prearranged ride requests as a transportation
network company driver using the transportation network company's
digital network:
(a) Conduct, or use a third party to conduct, a local and
national criminal background check of the applicant. The background
checks required under this subdivision shall include a search of
all of the following:
(i) A multistate or multi-jurisdiction criminal records
locator or similar commercial nationwide database with validation.
(ii) The national sex offender registry database.
(b) Obtain and review a driving history research report for
the applicant.
(2) A transportation network company shall not allow an
individual to accept prearranged ride requests as a transportation
network company driver using its digital network if any of the
following apply:
(a) The individual has had more than 3 moving violations or 1
major violation in the 3-year period before the date of the
application. As used in this subdivision, "major violation"
includes, but is not limited to, attempting to evade the police,
reckless driving, or driving on a suspended or revoked license.
(b) The individual was convicted within 7 years before the
date of the application of any of the following:
(i) Driving under the influence of drugs or alcohol.
(ii) Fraud.
(iii) A sexual offense.
(iv) Use of a motor vehicle to commit a felony.
(v) A crime involving property damage.
(vi) Theft.
(vii) An act of violence.
(viii) An act of terror.
(c) The individual is listed on the national sex offender
registry database.
(d) The individual does not possess a valid operator's license
issued under the Michigan vehicle code, 1949 PA 300, MCL 257.1 to
257.923.
(e) The individual does not possess proof of registration
issued under the Michigan vehicle code, 1949 PA 300, MCL 257.1 to
257.923, for each personal vehicle that he or she intends to use to
provide prearranged rides.
(f) The individual does not possess proof of automobile
liability insurance for each personal vehicle that he or she
intends to use to provide prearranged rides.
(g) The individual is under 19 years of age.
Sec. 25. A transportation network company shall not allow a
transportation network company driver to accept trip requests
through that transportation network company's digital platform
unless the transportation network company driver's vehicle has
undergone a safety inspection conducted annually by a mechanic
licensed by this state before being used to provide transportation
services. Each transportation network company driver shall provide
to the transportation network company documentation of the
inspection required by this section showing that all of the
following vehicle components were inspected:
(a) Foot brakes.
(b) Parking brakes.
(c) Steering mechanism.
(d) Windshield.
(e) Rear window and other glass.
(f) Windshield wipers.
(g) Headlights.
(h) Taillights.
(i) Brake lights.
(j) Front seat adjustment mechanism.
(k) Doors.
(l) Turn signal lights.
(m) Horn.
(n) Speedometer.
(o) Bumpers.
(p) Muffler and exhaust system.
(q) Tires, including tread depth.
(r) Interior and exterior mirrors.
(s) Safety belts.
(t) Defrosting system.
Sec. 27. A transportation network company driver shall not
solicit or accept a street hail.
Sec. 29. (1) A transportation network company driver shall not
solicit or accept cash payments from transportation network company
riders for prearranged rides.
(2) A payment for a prearranged ride shall only be made
electronically using a transportation network company's digital
network or software application.
(3) A transportation network company shall adopt a policy
prohibiting a transportation network company driver from soliciting
or accepting cash payments from transportation network company
riders, and shall notify transportation network company drivers
using its digital platform of the policy required by this
subsection.
Sec. 31. (1) A transportation network company shall adopt a
policy of nondiscrimination with respect to transportation network
company riders and potential transportation network company riders
and shall notify transportation network company drivers of the
policy adopted under this subsection.
(2) A transportation network company driver shall comply with
all applicable laws regarding nondiscrimination against a
transportation network company rider or potential transportation
network company rider.
(3) A transportation network company driver shall comply with
all applicable laws regarding accommodation of service animals.
(4) A transportation network company shall not impose an
additional charge for providing services to a transportation
network company rider with a physical disability because of his or
her disability.
Sec. 33. A personal vehicle shall display a consistent and
distinctive signage or emblem, which may be removable, that is
approved by the department at all times while the transportation
network company driver is engaged in a prearranged ride. The
signage or emblem shall satisfy all of the following:
(a) The signage or emblem shall be sufficiently large and
color-contrasted to be readable during daylight hours from a
distance of at least 50 feet.
(b) The signage or emblem shall be reflective.
(c) The signage or emblem shall sufficiently identify the
transportation network company with which the vehicle is
affiliated.
Sec. 35. A transportation network company shall comply with
the Michigan consumer protection act, 1976 PA 331, MCL 445.901 to
445.922.
Sec. 37. A transportation network company shall maintain all
of the following records:
(a) Individual trip records of transportation network company
riders. An individual trip record shall be maintained for a period
of at least 1 year after the date the trip was provided.
(b) Individual records of transportation network company
drivers. An individual transportation network company driver record
shall be maintained for a period of at least 1 year after the
transportation network company driver ceases to provide prearranged
rides using the transportation network company's digital network.
Sec. 39. Notwithstanding any other provision of law,
transportation network companies and transportation network company
drivers operating in this state are governed exclusively by this
act and rules promulgated by the department to administer this act
under the administrative procedures act of 1969, 1969 PA 306, MCL
24.201 to 24.328. A local unit of government shall not impose a tax
upon or require a license for a transportation network company, a
transportation network company driver, or a personal vehicle, if
the tax or license is related to the provision of prearranged
rides. Except as otherwise provided in this section, a local unit
of government shall not enact or enforce an ordinance regulating a
transportation network company. A local unit of government may
issue a civil infraction to a transportation network company driver
for a violation of section 17(8), 27, 31, or 33.
Enacting section 1. This act takes effect 90 days after the
date it is enacted into law.
Enacting section 2. This act does not take effect unless
Senate Bill No.____ or House Bill No.____ (request no. 02044'15) of
the 98th Legislature is enacted into law.