SAN JOSE CAPITAL OF SILICON VALLEY

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Johnathan Conley
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1 CITY OF C: *2 SAN JOSE CAPITAL OF SILICON VALLEY TO: HONORABLE MAYOR AND CITY COUNCIL COUNCIL AGENDA: 6/23/15 ITEM: 6.2 Memorandum FROM: Kimberly J. Becker SUBJECT: TRANSPORTATION NETWORK DATE: COMPANY (TNC) MANAGEMENT AND OPERATING PLAN Approved Date SUPPLEMENTAL REASON FOR SUPPLEMENTAL On June 1, 2015, Mayor Liccardo submitted a memorandum recommending deferral of this item to June 23, 2015, and Council directed staff to answer a list of 15 questions from the Mayor's memorandum. This Supplemental Memorandum is written to address those questions. OUTCOME The Mayor and City Council will have additional information that may be used in the discussions and decisions related to the approval of the Airport TNC Management and Operating Plan. BACKGROUND On June 1, 2015, Mayor Liccardo recommended deferral of this item, which was on the June 2, 2015 Council agenda, and requested staff to answer 15 questions related to the item. The item was deferred to the June 23 rd Council meeting. ANALYSIS The following information is provided to answer the questions submitted by Mayor Liccardo. 1. a) Can the City prohibit the operation oftncs at Mineta San Jose International Airport with outstanding CPUC enforcement of disciplinary actions? Yes. Municipal Code Section provides that the Director may deny, suspend or revoke an Airport ground transportation permit if the permittee or applicant has failed to

2 Page 2 of 6 conform to airport rules and regulations pertaining to the permittee's operations at the Airport, or applicable federal, state or city laws. b) Can the airport easily determine which TNCs remain subject to those proceedings? Yes. The CPUC's carrier investigations are available on the following website. However, it is not clear that the website is kept completely current regarding all investigations. Airport staff can contact the CPUC to request the current status of TNC companies In light of CPUC regulatory preemption, does the City have the ability to assess fees upon TNCs above the standard $2.30 per trip fee at the Airport? Yes, however the existing Rate Resolution would need to be amended to accommodate the increased trip fee. Any adjustment to TNC trip fees should be related to additional costs to regulate and monitor TNC operations at the Airport. 3. Will TNC drivers be required to obtain a San Jose business license and pay a license fee to the City? If not, why not? Section of the Municipal Code requires all businesses in the City to obtain Business Licenses. Section states in part "The term "business" shall include all activities engaged in or caused to be engaged in within this city including...independent contractors..." Currently, all City permitted taxicab drivers are required to obtain business licenses. If TNC drivers are independent contractors and not employees of the companies, TNC drivers at the Airport should obtain a Business License as a condition to issuance of a ground transportation permit at the Airport. Additionally, it is not clear to staff if other Ground Transportation providers such as limousine, charter bus, courier, door to door shuttle, hotel/motel and off-airport parking courtesy van drivers are employees or independent contractors. 4. Which of the regulatory requirements listed on pages 2-3 of the Staff Report are imposed by CPUC, and which will be imposed by the City? Criminal Background Check: CPUC requirement. Drug and Alcohol Use / Zero Tolerance Policy: CPUC requirement. DMV Pull Notice Program: This is contemplated in Assembly Bill 24 and if passed, would be required. CPUC requires TNC's to conduct DMV driving record checks.

3 Page 3 of 6 Inspections: CPUC requirement - 19-point vehicle inspection Insurance: CPUC requires $1,000,000 insurance policy for vehicles up to seven (7) passengers. The City/Airport will require that insurance remain in effect while the TNC vehicle is on Airport property, regardless of whether the passenger is in the vehicle or not and that the TNC insurance policy is primary and noncontributory to the City. Driver Training: CPUC requires reporting on mandatory driver training program. Mandatory Reporting to the CPUC: CPUC requires reporting on the Accessibility Plan (ADA), services provided broken out by zip code, problems with drivers, hours logged by drivers and proof of drivers completing training courses. 5. Are taxis subjected to more or less stringent regulations over such safety issues as driver fingerprinting, background checks, vehicle inspections, driver safety classes, and the like? Vehicle Inspections: TNC - CPUC requirement - 19-point vehicle inspection Taxi - SJPD inspection - Exterior, interior, lights, mileage (brake and lamp check) Driver Fingerprinting: TNC - not required Taxi - Title 6 requires taxi drivers to submit fingerprints. Background Checks: TNC - CPUC requires a national criminal background check, including national sex offender database, using the driver's social security number Taxi - Title 6 requires Department of Justice fingerprint based criminal background check. Driver Safety Classes: TNC - CPUC required driver safety training program Taxi - Title 6 requires driver to demonstrate ability to safely operate taxicab; SJPD administered written test

4 Page 4 of 6 Drug Test: TNC - CPUC requirement to maintain a zero-tolerance controlled substance and alcohol policy and methods to report a driver whom the rider reasonably suspects was under the influence of drugs or alcohol during the ride Taxi - Title 6 requires that drivers submit to an initial drug test and random follow up after that test. 6. Are there additional safety or other regulatory requirements that other cities impose upon TNCs that San Jose is intentionally declining to impose? If so, why? Within the State of California, cities can not place additional requirements on TNC's except while on Airport property. Staff understands that San Diego Airport is contemplating fingerprinting random TNC drivers. Additionally, San Francisco International and Orange County Airports have no current plans to implement additional TNC driver requirements. 7. To what extent does the siting ofpick-up locations at the airport favor one model or another of operation? Ground Transportation pick-up locations at the Airport have always been allocated based on service levels of passengers. For example, the modes of transportation used by the highest percentages of passengers are closer to passenger exits to ensure the shortest walking times for the highest numbers of passengers. The pick-up locations can be changed when passenger demand increases for any particular modes of transportation. The locations are always based on customer demand. Currently, the taxi on-demand pick-up areas at Terminals A and B are the closest practical spaces for the taxi operations. The Airport can allow pre-arranged taxis to pick up passengers in the same area assigned to TNCs at both Terminals A and B, as well. 8. Staff has determined that TNCs and taxis will be accorded specific areas in the Airport for passenger pick-ups. Yet TNC operators today routinely pick up passengers at our airport, in violation of the law, and they routinely do so in front of the baggage claim entrances, evading the monitoring of staff. Will we need additional staff to monitor TNC operators to ensure that they7/ restrict their operations to the designated areas, rather than gaining an unfair advantage over taxis? TNC's are not authorized at the Airport, so currently there are no pick-up locations assigned. Once TNC's are authorized, pick-up locations will be specified and staff will be able to focus enforcement activities on areas outside the designated pick up areas. If unauthorized pickups continue, additional staff will be needed and fees will be adjusted accordingly.

5 Page 5 of 6 9. Are there other unique regulatory burdens that TNC operators impose on our Airport? a) Additional data-collection burdens? TNC's are proposing a technology based data collection process for trips. There will be additional cost to the Airport to use a high-technology reporting system. Cost estimates for such systems are $.05 to $.10 per trip. b) Additional monitoring such as at designated pick-up areas? As stated in question # 8, fees will be adjusted if additional staffing is needed for enforcement. 10. Will taxis utilizing an on-call app be able to 'opt-out' of the dispatch model, and dispatch fees, and thereby pick up passengers in the same areas as TNCs? Yes, participation in the on-demand system at the airport has always been the choice of the individual. All permitted operators can operate on a pre-arranged basis. Not all taxi drivers choose to operate in the on-demand system and the requirements and fees associated with the on-demand system are only charged to the users in the on-demand system. 11. Is the City able to require more stringent background checks for drivers servicing the airport, such as those that are fingerprint based? Yes, the City is able to require more stringent background checks for drivers servicing the Airport. 12. Is the City able to place a cap on the mileage of the vehicles used to service the airport? Yes, the City is able to place a cap on the mileage of the vehicles used to service the Airport. 13. Is the City able to collect data on license suspensions for those drivers servicing the airport? Yes, The City can require that the companies supply driver's license suspension data to the Airport, but only on drivers servicing the Airport 14. Will airport staff collect any data required by the CPUC, such as? a) Reports providing accessible vehicles? b) Service by zip code? c) Problems with drivers? d) Drivers completing a training course?

6 Page 6 of 6 Yes, the Airport recommends requiring the data listed above from authorized TNC's, as the PUC has determined that Public Information Requests would need to be submitted in order to view the data reported to them. 15. Does staffpropose conducting audits of any of the reports / data produced? Yes, as in all Airport permits and contracts, staff has the right to audit information provided to the Airport. The Airport supports a fair regulatory environment for all Ground Transportation operators. These and other equality concerns can be added to the Airport TNC Management and Operating Plan, as needed. EVALUATION AND FOLLOW-UP Upon approval by the City Council, Airport Ground Transportation Permits will be issued to all TNC companies meeting the Permit requirements. COORDINATION This item has been coordinated with the City Attorney's Office. /s/ KIMBERLY J. BECKER Director of Aviation For more information, contact Kimberly J. Becker, Director of Aviation, at (408)

AIRPORT ACCESS PERMIT # FOR ON-DEMAND TAXICAB SERVICES AT MINETA SAN JOSE INTERNATIONAL AIRPORT BETWEEN AND THE CITY OF SAN JOSE

CONDITIONAL: PERMANENT: (Airport Staff: check one) AIRPORT ACCESS PERMIT # FOR ON-DEMAND TAXICAB SERVICES AT MINETA SAN JOSE INTERNATIONAL AIRPORT BETWEEN AND THE CITY OF SAN JOSE This Airport Access Permit