Transportation Network Company Division Overview
On August 5, 2016, Governor Baker signed House Bill 4570, An Act regulating transportation network companies (“TNC Law”) into law, creating a statewide regulatory framework for transportation network companies (“TNCs”). The TNC Law created a new division (“TNC Division”) within the Department of Public Utilities to oversee TNCs, transportation network services, and transportation network drivers in the Commonwealth. The TNC law became effective on November 3, 2016.
The TNC Law requires the Department to promulgate regulations, by November 3, 2017, in a number of different areas, including: driver qualifications, suspensions, revocations, and appeals; vehicle suitability and identification; TNC regulation and appeals; equal access; reporting requirements; and other areas that require Department guidance.
In addition to the TNC Law, the Department, along with several other state agency stakeholders, negotiated a Memorandum of Understanding (“MOU”) with TNCs operating in the Commonwealth. The MOU focuses primarily on the background check system and public safety. The Department will move forward with the regulatory process, which involves development of draft regulations, a series of opportunities for public engagement, and final adoption of the DPU regulatory framework, expected by November 2017.
What is a Transportation Network Company or TNC?
A Transportation Network Company or “TNC” is a corporation, partnership, sole proprietorship, or other entity that uses a digital network to connect riders to drivers to pre-arrange and provide transportation.
Is the new law regulating Transportation Network Companies currently in effect?
An Act Regulating Transportation Network Companies (Chapter 187 of the Acts of 2016) was signed by the Governor on August 5, 2016. Certain parts of the law became effective on November 3, 2016. However, under the law, TNCs are not required to apply to the Department of Public Utilities (“Department”), Transportation Network Company Division (“TNC Division”) until after the Department promulgates regulations. The Memorandum of Understanding (“MOU”) allows the Commonwealth to conduct an important public safety function until the Department promulgates regulations.
What is the Memorandum of Understanding or MOU?
The MOU is an agreement between the Department and TNCs regarding background checks for drivers, and also includes certain automobile requirements. The Department has entered into individual MOUs with Uber, Lyft, Wuleeb, and Fasten.
How do I become a driver for a Transportation Network Company?
A driver must first apply through a TNC, not through the TNC Division. Once a driver applies through a TNC, that TNC must obtain consent for the TNC Division to conduct a background check of the driver’s personal information, which includes a review of available Criminal Offender Record Information (“CORI”), Sex Offender Registry Information (“SORI”), warrant information, and Registry of Motor Vehicles’ (“RMV”) driving history. After obtaining consent, the TNC will submit the driver’s personal information to the Division for review, after which the Division will make a suitability determination and will either issue, or deny, the driver a Background Check Clearance Certificate ("BCCC").
What is a Background Check Clearance Certificate?
The BCCC is the verification issued by the Division to the driver indicating that the driver has passed the background check requirements under the MOU. No person can drive for a TNC without a valid BCCC.
How does the background check work under the MOU?
Under the MOU, there is a two-part background check process for drivers, which is required under the law. First, the TNC to which the driver applied must conduct a national background check for criminal history, sex offender information, and driving information. Second, if the driver passes that background check, the Department will conduct a state background check on the driver’s CORI, SORI, warrant information, and RMV driving information. Each background check will be measured against a list of Disqualifying Conditions . In addition, the MOU allows TNCs and the TNC Division to deny a driver from providing services if their background information demonstrates a risk to public safety. Drivers may appeal a negative determination.
How are drivers prevented from providing Transportation Network services?
In order to provide TNC services, each driver must have a BCCC issued by the TNC Division. If, at any time, the Division determines a driver is not suitable to provide services, the TNC Division will notify all TNCs and the TNCs will prevent the driver’s access to their platforms.