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IN FOCUS |
by Matthew W. Daus, Esq. |
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THE IATR RELEASES MODEL REGULATIONS ON SMARTPHONE TECHNOLOGY:
A BLUEPRINT FOR REGULATORS TODAY - AND THE FUTURE
Photos © 2013 Wim Faber
In response to the influx of smartphone applications ("apps") in ground transportation, I empanelled and chaired a Smartphone Apps Committee (the "Apps Committee") in the summer of 2012 for the International Association of Transportation Regulators ("IATR") in my capacity as the IATR President. The Apps Committee was tasked to research and examine the regulatory issues related to apps and draft proposed Model Regulations. The Apps Committee began its work to coincide with the release of a white paper on the rapid influx of "rogue apps" in jurisdictions around the country.[1]
With these goals in mind, the proposed regulations endeavored to present a balanced and uniform standard adaptable to most, if not all, jurisdictions within both the taxicab and limousine/executive sedan sectors. Each sector would have a defined role in the for-hire industry substantially reducing or eliminating gray areas, loopholes, and unfair competition with the objective being to enhance safety, community wide availability and quality of service.
We reviewed and considered the regulations of the twelve (12) most populated cities in the United States, as well as several smaller cities, for which we found that there existed noteworthy regulations or innovative approaches to defining various for-hire services.[2] In addition, we sought and received regulator and stakeholder comments on the initial draft of the proposed regulations from regulators and industry stakeholders at an international public hearing held on November 16, 2012 at the IATR 25th Anniversary Conference in Washington, DC.
Due to the interest from stakeholders, the period to submit comments was extended twice from the original deadline of December 15, 2012 to the ultimate deadline of March 31, 2013. The model regulations were recently released at the 2013 IATR conference which was held in St. Louis, Missouri from September 23 to September 25, 2013 and conducted as a joint conference with the Airport Ground Transportation Association ("AGTA").
It is our belief that the regulations embody our understanding of various regulatory practices. This understanding has guided us in defining various services and business licensing distinctions required to create a fair and sensible differentiation and playing field between taxicab and limousine (collectively, the limousine and executive sedan) sectors.
The IATR promulgated these model regulations to clarify or expand the definitions and regulations of for-hire transportation services in order to enhance and modernize such regulations. The model regulations are to be carefully evaluated and may be incorporated, as applicable, into various jurisdictions' for-hire regulations in order to adequately address the use of smartphone applications in transportation services.
Left to right, IATR Board member Malachi Hull, the IATR's International Driver of the Year Terrence Reid, IATR President Matthew W. Daus,
IATR St. Louis regulator and conference host Lou Hamilton, and IATR Board Chair Tom Drischler (LA DOT).
The current use of smartphone applications [3] creates public safety concerns and raises, inter alia, the following questions:
(a) Is the use of a smartphone application considered prearrangement or an electronic street hail?
(b) Are the smartphone application companies responsible for the transportation they arrange/provide?
(c) Are or should smartphone applications be permitted to use the words "taxi," "taxicab," "cab" and "hack" in their names?
(d) What obligations, if any, do smartphone applications have to provide accessible transportation and/or not to illegally refuse service requests in such jurisdictions with accessibility requirements?
(e) Are the fares charged through the use of smartphone applications consistent with regulations, i.e.: can a smartphone application require the passenger to pay a gratuity and/or can a limousine/executive sedan use a meter?
(f) Is a smartphone a taximeter, or is its use permitted in taxicabs in lieu of a taximeter?
The definitions and model regulations attempt to answer each of the forgoing questions with the following general responses:
(a) The use of a smartphone application is an electronic hail ("e-hail") and, if the request for transportation is intended to be for immediate or on-demand transportation service, the request is considered "Demand Response Booking" which shall only be used for the dispatching of a taxicab;
(b) Smartphone applications may use the word or words "taxi," "taxicab," "cab" or "hack", if they are licensed as a dispatch business and affiliated with - and dispatch only-taxicabs;
(c) As dispatch businesses, if the jurisdiction has accessibility dispatch requirements. Smartphone applications will be obligated to affiliate with a sufficient number of accessible vehicles and be liable for service denials and/or discrimination;
(d) As dispatch businesses, smartphone applications may not charge any fees, costs or expenses to the passenger (or payor) and shall not permit its affiliated drivers to charge any fees, costs or expenses in excess of either:
(i) the fare displayed on the meter or taximeter, as applicable, or
(ii) the flat fare prearranged, or
(iii) the hourly rate for the service provided; and
(e) A smartphone application may not act in lieu of a taximeter or meter until it receives approval based on the National Institute of Standards and Technology ("NIST") Handbook 44 requirements and such other regulatory approvals as applicable.
In any event, there shall only be one taximeter or meter in any taxicab, and no taximeter or meter shall be permitted in any limousine/executive sedan. A copy of the model regulations may be found at:
www.windelsmarx.com/resources/documents/IATR%20Model%20Regulations%20(10890808).pdf
Left to right, Dr. Camille Kamga of the University Transportation Research Center, IATR keynote speaker Gregory Winfree - Administrator of the
Research Innovation and Technology Administration of the U.S. Department of Transportation, and IATR President - Professor Matthew W. Daus.
In the IATR's model regulations, each sector has a defined role in the for-hire industry substantially reducing or eliminating the gray areas, loop holes and unfair competition while encouraging greater competition with the advent of legally compliant smartphone and other technology. We believe the distinctions are vital elements to a socially responsive and economically successful for-hire industry. In fact, the most notorious complaint about "rogue" for-hire services - whether that refers to unlicensed drivers and/or vehicles or drivers and/or for-hire companies operating outside the regulatory apparatus – is that they create consumer safety concerns and public service gaps and deficiencies, as well as an uneven playing field in providing transportation services.
As smartphone applications evolve and their use is further incorporated into transportation services, there is a continuing need to ensure public safety and to protect consumers by creating regulations that appropriately reflect and incorporate the use of such technology. Currently, there are smartphone applications being used in the transportation industry operating in the "gray areas" of the regulatory apparatus with limited or no regulatory oversight depending on the jurisdiction. As such, this innovation commands adoption of new regulations authorizing the use of smartphone applications as a means of connecting passengers and transportation services. Such regulations will provide licensure for smartphone applications, and ease or eliminate public safety concerns providing for a fair community wide service.
In the time period, while we have undertaken this process to research, revise, and complete the model regulations, regulatory challenges and changes have arisen in California, Colorado, Maryland, Florida, Texas and New York City. In my capacity as the IATR President, I have testified or submitted written comments in each of these proceedings to assist the regulators as they adapt to challenges from apps, including ridesharing services.
In consideration of the challenges in these proceedings since the Apps Committee began its work, the regulations set forth new definitions creating two separate and distinct sectors in the for-hire industry: limousine/executive sedan and taxicab.
- First, as a premium service, the proposed regulations define a limousine and executive sedan as a luxury service that will assess fares exclusively based on time hired or a prearranged amount with the payor or customer in advance of providing such service.
- Second, the proposed regulations define a taxicab as a for-hire vehicle that accepts fares by street hail or prearrangement (depending on the jurisdiction), and assesses fares through the use of an approved taximeter thereby requiring compliance with the most recent version of Handbook 44. Also, such smartphone applications should be traceable to an active National Type Evaluation program ("NTEP") Certificate of Conformance issued by the National Conference on Weights and Measures ("NCWM") consistent with Publication 14 published by the NCWM[4] (collectively "Handbook 44") depending on the jurisdiction. [5]
IATR President Daus (far left) and 2012 IATR Regulator of the year from New Orleans - Malachi Hull (2nd from left) - present the
2013 IATR International Regulator of the Year Award to Christiane Hayashi (third from left), of the San Francisco MTA. The regulator from Abu Dhabi
and sponsor of the crystal taxi regulator of the year award (second from right) and IATR Board Chair Tom Drischler (far right) also join in the presentation.
NIST has formed a U.S. National Working Group ("USNWG") to examine these issues, and has invited the IATR to take part in its work. The IATR serves on the working group representing the interests of regulators. For the minority of jurisdictions that have not adopted NIST Handbook 44, the model regulations may be amended to delete all references to Handbook 44 and incorporate the state regulatory scheme with which such jurisdictions comply.
The IATR's model definitions draw clearer distinctions between taxicab service and limousine/executive sedan service venturing beyond what is currently evidenced in many jurisdictions, thereby substantially reducing or eliminating any loopholes that may exist in some existing local definitions around the United States and beyond.
IATR President Matthew Daus (2nd from Right) and IATR Board Chair Tom Drischler (far right), dedicate the IATR Regulator Scholarship Fund to
the memory of recently deceased Chicago Consumer Affairs Commissioner Norma Reyes, and presents a memorial plaque to Norma's siblings,
far left to right, Edwin Reyes, former IATR Membership Director Karen Cameron and Lillian Reyes.
It is our intention to provide local regulators with the tools they need to incorporate these model definitions and regulations, if desired, in part or in total, to permit the use of safe and accountable technology enhancements while also fostering a fair and even playing field for all. These model regulations are not intended to re-write each jurisdiction's regulations or requirements with regard to any specific information not already included. Generally speaking, the model regulations are tailored to address the regulatory concerns of smartphone applications and bring legal clarity to any potential gray areas in the regulation of each for-hire transportation sector.
As such, the model regulations do not address or attempt to address the broader and more general scope of regulating the for-hire transportation industry. These model regulations should not be taken alone, but rather incorporated, as applicable, into existing regulations to form a more complete symmetry among the individual for-hire transportation industry sectors, and address the local needs of the regulatory jurisdiction and the existing paradigm.
The IATR conducted workshops at the 2013 conference to coincide with the release of the final version of the model regulations on September 23 and 24th, 2013. The workshops were led by regulators for fellow regulators and other stakeholders to explain and discuss the model regulations. The workshops also offer assistance or peer review guidance to assist each individual regulator as they contemplate potential drafting or implementation plans designed to bring order to their distinct solar systems within the broader app universe.
In the weeks and months ahead, the IATR will continue to provide drafting and other assistance to those regulators who need peer review or legal guidance, and who request our help as a benefit of IATR membership. So, even though the regulations were issued, the job is not done. The regulations are a living and breathing document from which communities can find language that is flexible enough to deal with today's challenges and be of use in the future. As the ever changing and innovative transportation world rolls on, we have a guidepost and valuable resource for every community to use, all for the ultimate benefit of consumers and the enhancement of competition.
The IATR's Rocking Regulators, left to right, Chris Hayashi (vocals, San Francisco), Matt Daus (guitar, NYC) and Tom Drischler (keyboard, Los Angeles),
jam with the longest running blues band in St. Louis - the Soulard Blues Band.
1. The report, entitled "Rogue" Smartphone Applications for Taxicabs and Limousines: Innovation or Unfair Competition? - A National Regulatory Review of Safety, Accountability and Consumer Protection Legal Issues, can be found at http://www.windelsmarx.com/news_detail.cfm?id=127
2. A summary setting forth the regulations in each jurisdiction reviewed will be separately available, upon request.
3. The term "mobile application" is defined and used in the model regulations since these applications are available for smartphones, tablets and other mobile devices.
4. NTEP evaluations are performed according to the policies, checklist, and test procedures found in NCWM Publication 14. Publication 14 is based on the specifications, tolerances, and other requirements found in NIST Handbook 44. NTEP evaluations are therefore based on Handbook 44, however, the type evaluation process and a field examination performed by local authorities will most likely not be identical. Type evaluations will most often include tests that would not be practical to perform in a "field" environment where conditions are not completely controlled.
5. It should be noted that neither NIST nor NCWM are regulatory bodies. As such, they do not enforce or declare any type of device or practice to be legal or illegal and it is both the responsibility and obligation of the applicable taxicab regulatory authority to adopt the standards developed by and through NCWM and NIST. However, to date, smartphones are not authorized under the most recent version of Handbook 44 or Publication 14 as applicable measuring devices. Because most, if not all, jurisdictions refer the most recent publication of Handbook 44 or portions thereof as their standard for measuring devices, smartphones are currently illegal.