Statement of Emergency
601 KAR 1:113E
This emergency administrative regulation establishes
the requirements for a Transportation Network Company to apply for and maintain
operating authority in the Commonwealth. The current lack of oversight of
businesses that use web-related mobile applications to connect drivers using
their personal vehicles with potential passengers has created a public safety
concern. An increasing number of people in the Commonwealth rely on the
transportation network companies and their drivers as a means of
transportation. This emergency administrative regulation has been promulgated
to address an imminent risk to public safety caused by a lack of oversight of
businesses on which the public increasingly relies for transportation. It will
include the requirement of a criminal background check for TNC drivers, and
will ensure that safety inspections are performed on vehicles used to transport
the public. In this emergency regulation, regulatory requirements are
established for the operation of a Transportation Network Company with an
emphasis on public safety. Substantial changes have been made to 601 KAR 112E
that incorporate the provisions of Senate Bill 153 from the 2015 legislative
session. This emergency administrative regulation shall be replaced by an
ordinary administrative regulation which is being filed simultaneously with the
Regulations Compiler. The ordinary administrative regulation is identical to
this emergency administrative regulation.
STEVEN L. BESHEAR, Governor
MICHAEL W. HANCOCK, Secretary
TRANSPORTATION CABINET
Department of Vehicle Regulation
Division of Motor Carriers
(New Emergency Administrative Regulation)
601 KAR
1:113E. Transportation Network Company.
RELATES TO: KRS 17.500, 61.878(1)(c)1., 61.930(6), 61.931(6),
186.050, 186.281, 189.290, 189A.010, 281.600, 281.630, 281.6301, 281.631,
281.640, 281.650, 281.655, 281.656, 281.912, 281.990, 304.3-070,
304.10-010-304.10-070, 304.39-020(2), 304.39-040, 304.39-320, 532.060
STATUTORY AUTHORITY: KRS 281.600, 281.630, 281.655
EFFECTIVE: July 8, 2015
NECESSITY, FUNCTION, AND CONFORMITY: KRS 281.600
authorizes the Department of Vehicle Regulation to promulgate administrative
regulations to regulate and establish requirements for the safe operation of
motor carriers. KRS 281.630 authorizes the department to establish requirements
for a transportation network company to apply for authority to operate in
Kentucky. KRS 281.655 requires the department to establish standards for
pre-trip acceptance policies and prearranged ride liability policies for transportation
network companies. This administrative regulation establishes the standards and
application requirements for a transportation network company to operate in
Kentucky.
Section 1. Definitions. (1) "Basic reparation
benefits" is defined by KRS 304.39-020(2).
(2) "Certificate" is defined by KRS
281.010(8).
(3) "Driver" is defined by KRS 281.010(20).
(4) "Mobile application" is defined by KRS
281.010(30).
(5) "Motor carrier" is defined by KRS
281.010(31).
(6) "Motor carrier vehicle" is defined by
KRS 281.010(32).
(7) "Operating Authority" means the
authority granted to operate as a TNC in the commonwealth through the
application process with the department.
(8) "Passenger" is defined by KRS
281.010(36).
(9) "Personal information is defined by KRS
61.931(6)
(10) "Prearranged ride" is defined by KRS
281.010(39).
(11) "Pre-trip acceptance liability policy"
is defined by KRS 281.010(40).
(12) "Regular seat" is defined by KRS
281.010(44).
(13) "Street hail" is defined by KRS
281.010(45).
(14) "Transportation network company" or
"TNC" is defined by KRS 281.010(51).
(15) "Transportation network company driver"
or "TNC driver" is defined by KRS 281.010(53).
(16) "Transportation network company
service" or "TNC service" is defined by KRS 281.010(54).
(17) "Transportation network company
vehicle" or "TNC vehicle" is defined by KRS 281.010(55).
(18) "Underinsured vehicle coverage" is
defined by KRS 304.39-320(1).
(19) "Uninsured vehicle coverage" is defined
by KRS 304.20-020(2).
Section 2. Application and Renewal. (1) A TNC shall
register as a business organization with the Kentucky Secretary of State unless
the applicant is a sole proprietor.
(2) The department may waive the filing of the
certificate of assumed name if a TNC:
(a) Demonstrates compliance with the relevant
provisions of KRS Chapter 365;
(b) Certifies in writing to the department that
Kentucky law either prohibits or does not require the filing; and
(c) States the reasons in writing why the filing is
not required.
(3) In order to apply for a certificate to operate, a
TNC shall submit to the Division of Motor Carriers:
(a) A completed Transportation Network Company
Authority Application, TC 95-627;
(b) An application fee of $250 pursuant to KRS
281.630(3)(b); and
(c) A vehicle qualification fee of thirty (30) dollars
per vehicle prorated for the month the vehicle is qualified pursuant to KRS
281.631(3)(a)1. and (8).
(4) A TNC shall annually submit the following to the
Division of Motor Carriers to renew a certificate:
(a) A completed Motor Carrier Passenger Certificate,
Vehicle Qualification and Renewal Application, TC 95-605;
(b) A certificate renewal fee of $250 pursuant to KRS
281.630(4)(d); and
(c) A vehicle qualification fee of thirty (30) dollars
per vehicle pursuant to KRS 281.631(3)(a)1. and (8).
(5) A TNC vehicle shall be added by submitting the
following to the Division of Motor Carriers:
(a) A completed Motor Carrier Passenger Certificate,
Vehicle Qualification and Renewal Application, TC 95-605; and
(b) A vehicle qualification fee of thirty (30) dollars
per vehicle prorated for the month the vehicle is qualified pursuant to KRS
281.631(3)(a)1. and (8).
(6) An application may be submitted electronically, by
mail, or by hand delivery.
(7) Operating authority obtained pursuant to this
section shall not be transferable.
(8) The TNC shall submit the following documents if
submitting an application for certificate, annual renewal, or adding a driver
during the year:
(a) An affidavit from the corporate officer in charge
of Kentucky operations certifying that the national criminal background check
of TNC drivers established in KRS 281.630 and 281.6301 shall be completed prior
to allowing the TNC driver to accept rides through the TNC mobile application;
and
(b) One (1) copy of the current contractual agreement
between the TNC and TNC drivers.
(9) A deficient application shall be returned to the
applicant with no formal action taken by the department.
Section 3. Demonstration of Financial Responsibility
and Insurance. (1) A TNC shall maintain primary automobile insurance that:
(a) Recognizes that a driver is a TNC driver or using
a vehicle to transport passengers for compensation; and
(b) Provides insurance coverage for a TNC driver who
is:
1. Logged on to the TNCs mobile application; or
2. Engaged in a prearranged ride.
(2) The following pre-trip acceptance liability automobile
insurance requirements shall apply if a TNC driver is logged on to the TNC's
mobile application and available to receive transportation requests but not
engaged in a prearranged ride:
(a) Primary automobile liability insurance in the
minimum amounts required by KRS 281.655(12);
(b) Basic reparation benefits;
(c) Uninsured vehicle coverage; and
(d) Underinsured vehicle coverage.
(3) The pre-trip acceptance liability insurance
coverage requirements of KRS 281.655(12) shall be satisfied by one (1) of the
following:
(a) Automobile insurance maintained by the TNC;
(b) Automobile insurance maintained by the TNC driver;
or
(c) A combination of paragraphs (a) and (b) of this
subsection.
(4) The following automobile insurance requirements
shall apply while a TNC driver is engaged in a prearranged ride:
(a) Primary automobile liability insurance in the minimum
amounts required by KRS 281.655(4);
(b) Basic reparation benefits;
(c) Uninsured vehicle coverage; and
(d) Underinsured vehicle coverage.
(5) The prearranged ride liability insurance coverage
requirements of KRS 281.655(4) shall be satisfied by one (1) of the following:
(a) Automobile insurance maintained by the TNC;
(b) Automobile insurance maintained by the TNC driver;
or
(c) A combination of paragraphs (a) and (b) of this
subsection.
(6) If the insurance maintained by a TNC driver has
lapsed or does not provide the required coverage, the TNC shall provide the
required insurance coverage beginning with the first dollar of a claim. The TNC
shall have the duty to defend a claim for damages.
(7) Coverage under an automobile insurance policy maintained
by the TNC shall not be dependent on a personal automobile insurer or policy
first denying a claim.
(8) The insurance required by this section shall be
placed with an insurer licensed pursuant to KRS 304.3-070, or with a surplus
lines insurer eligible under KRS 304.10-010 through KRS 304.10-070.
(9) A TNC driver shall carry proof of insurance
coverage satisfying KRS Chapter 304, KRS 281.655, and this administrative regulation
during his or her use of a vehicle in connection with a TNC's mobile application.
In the event of an accident, and upon request, a TNC driver shall provide this
insurance coverage information directly to interested parties, automobile
insurers, and investigating police officers.
(10) A TNC driver shall disclose directly to interested
parties, automobile insurers, the department, and investigating police officers,
whether he or she was logged on to the TNC's mobile application or on a
prearranged ride at the time of an accident.
Section 4. Insurance Exclusions. (1) A Kentucky automobile
insurer may exclude the following coverage under a TNC driver's insurance
policy for loss or injury that occurs while a TNC driver is logged on to a
TNC’s mobile application or while a TNC driver provides a prearranged ride:
(a) Liability coverage for bodily injury and property
damage;
(b) Personal injury protection coverage as established
in KRS Chapter 304;
(c) Uninsured and underinsured motorist coverage;
(d) Medical payments coverage;
(e) Comprehensive physical damage coverage; and
(f) Collision physical damage coverage.
(2) Nothing in this administrative regulation shall
require a personal automobile insurer to provide coverage while a driver is:
(a) Logged on to the TNC mobile application;
(b) Engaged in a prearranged ride; or
(c) Using a vehicle to transport passengers for
compensation.
(3) Nothing in this administrative regulation shall
preclude an insurer from providing coverage for the TNC driver’s vehicle.
(4) An automobile insurer whose policy excludes
coverage for a TNC vehicle or TNC driver shall have no duty to defend or
indemnify a claim for personal or property damages.
(5) An automobile insurer that defends or indemnifies
a claim against a TNC driver that is excluded under the terms of its policy
shall have a right of contribution against other insurers that provide
automobile insurance to the same driver.
(6) In a claims coverage investigation, the TNC and an
insurer potentially providing coverage shall cooperate to facilitate the exchange
of relevant information with directly involved parties.
(7) Information relevant to a claims coverage
situation may include:
(a) The name of the insurer or potential insurer of
the TNC driver;
(b) The precise times the TNC driver logged off and on
the TNC mobile application in the twelve (12) hour period immediately before
and after the incident; and
(c) A complete description of the insurance coverage
including the exclusions and limits.
Section 5. Vehicles. (1) A vehicle used by a driver
for TNC services shall be qualified by the department to operate by submitting
a completed Transportation Network Company Authority Application, TC 95-627 and
submitting the fees required in Section 2 of this administrative regulation.
(2) The TNC shall ensure that the vehicles used by TNC
drivers to transport passengers shall be subject to an annual inspection by an
automotive technician who holds a valid automotive service excellence (A.S.E.)
certification from the National Institute for Automotive Service Excellence.
(3) The annual inspection shall be completed on one
(1) of the following forms:
(a) The vehicle inspection form provided in
Transportation Network Company Authority Application, TC 95-627;
(b) Motor Carrier Passenger Certificate, Vehicle
Qualification and Renewal Application, TC 95-605; or
(c) An equivalent form provided by the TNC and
approved by the Division of Motor Carriers.
(4) A TNC shall collect and maintain information on
the vehicles being used to provide service by TNC drivers including:
(a) The VIN and license plate number; and
(b) Records of official vehicle inspections by the
automotive technician.
(5) Records of vehicle inspection and VIN and license
plate numbers shall be kept by the TNC for a minimum of three (3) years from
the date of inspection and the TNC shall make the records available to the
department or its representative on request. The information and records may be
submitted as personal or proprietary information pursuant to KRS 61.878(1)(c)1
and 61.931(6).
(6) A vehicle used to provide TNC services shall be
readily identifiable by the following:
(a) A decal affixed to the front windshield on the
passenger side of the vehicle provided by the department to the TNC to
distribute to qualified vehicles;
(b) An optional decal or trade dress that is company
specific and issued by the TNC; and
(c) A vehicle fee receipt card that shall be presented
on inspection.
(7) A driver who is no longer providing TNC service
shall return the department issued decal and the vehicle fee receipt card to
the TNC who shall return it to the Division of Motor Carriers.
(8) A TNC shall ensure that the vehicles used by
drivers to provide TNC services shall:
(a) Have at least four (4) doors;
(b) Be designed to carry no more than eight (8)
persons including the driver; and
(c) Be no more than ten (10) model years old with an
odometer reading of less than 200,000 miles.
Section 6. TNC Drivers. (1) A TNC shall require each
driver to undergo a national criminal background check before providing TNC
services pursuant to KRS 281.6301.
(2) The TNC shall certify the criminal background
check during the application process established in Section 2 of this administrative
regulation. The national criminal background check shall be either:
(a) A comprehensive background check using fingerprint
analysis; or
(b) An individual analysis using a social security
number.
(3) The analysis required in subsection (1) of this
section shall be conducted by a business or firm engaged in determining
criminal background history.
(4) A TNC shall also require that each TNC driver:
(a) Is at least twenty-one (21) years old;
(b) Is the owner or lessee of the TNC vehicle or has a
statement from the registered owner authorizing the use of the vehicle for TNC
services pursuant to KRS 281.631;
(c) Is listed as an insured of the TNC vehicle;
(d) Has a valid state-issued driver’s license and
vehicle registration;
(e) Has personal automobile insurance coverage as
established in Section 3 of this administrative regulation;
(f) Has completed an annual driver safety training
course approved by the department;
(g) Provides a written or electronic affirmation that
he or she is fit and able to operate a motor vehicle to provide TNC services;
and
(h) Is in compliance with applicable state law and
local ordinances.
(5) A current list of drivers shall be kept on file
with the TNC and made available for inspection by the department on request. A
TNC driver's electronic file shall include the following:
(a) A current driving history record to be updated
annually;
(b) The current address of the driver;
(c) A copy of a valid state-issued driver’s license
and the operator's license number;
(d) Proof of his or her personal automobile insurance
coverage;
(e) Proof of personal vehicle registration;
(f) Proof of the written or electronic affirmation
that a TNC driver is fit and able to operate a motor vehicle to provide TNC
services;
(g) Verification of the criminal background check
required in subsection (1) of this section;
(h) Records indicating whether a driver has refused to
accept a prearranged ride and the reason for doing so; and
(i) Records of complaints against a driver.
Section 7. Passenger Service. (1) A TNC shall adopt a
policy of non-discrimination based on the following:
(a) Destination;
(b) Race or color;
(c) National origin;
(e) Religious belief or affiliation;
(f) Sex and sexual orientation or identity;
(g) Disability;
(h) Age; and
(i) The presence of a passenger's service animal.
(2) A TNC shall notify TNC drivers of the adopted policy
of non-discrimination established in subsection (1) of this section.
(3) After acceptance, a TNC driver may refuse to
transport a passenger who is acting in an unlawful, disorderly, or endangering
manner but shall comply with the non-discriminatory policy in subsection (1) of
this section. A driver may also refuse to transport a passenger with a service
animal if the driver has a documented medical allergy.
(4) A TNC driver shall not transport a passenger under
the age of fourteen (14) unless accompanied by a person over the age of
eighteen (18).
(5) A TNC shall establish policies regarding TNC
driver behavior that shall include the following prohibitions:
(a) Being under the influence of alcohol or another
substance or combination of substances that impair the driving ability while
providing TNC services;
(b) Accepting a street hail by a potential rider;
(c) Directly soliciting a passenger or responding to a
direct solicitation; and
(d) Providing services for cash.
(6) A driver shall immediately report the following to
the driver’s affiliated TNC:
(a) A refusal to transport a passenger and the reasons
for the refusal within forty-eight (48) hours after the refusal where the refusal
occurred after the ride had been accepted by the driver;
(b) Information regarding a driving citation,
incident, or accident within twenty-four (24) hours after the event; or
(c) Information regarding a conviction within
twenty-four (24) hours.
(7) A TNC shall provide the following information to
the public on its Web site and mobile device application software:
(a) A schedule of its rates or the method used to
calculate rates and peak pricing; and
(b) Information indicating a zero tolerance policy
related to drug and alcohol usage by its drivers while performing TNC services
and a passenger support telephone number or email address where a suspected
violation may be immediately reported.
(8) A TNC shall provide the following information to a
person requesting a ride through its mobile application:
(a) The expected cost of the trip if requested by a
potential passenger;
(b) The first name and a photograph of the TNC driver
accepting the ride request; and
(c) A photograph or description, including license
plate number, of the vehicle that will be used for the ride.
(9) At the completion of the prearranged ride, a TNC
shall electronically provide the passenger with a receipt showing:
(a) The point of origin and destination of the ride;
(b) The duration and distance of the ride;
(c) The cost of the ride broken down into base fare
and additional charges; and
(d) The driver’s first name.
(10) Hours of service for a TNC driver shall be the
same as established in KRS 281.730(1).
Section 8. Terms of Service. (1) The TNC shall not
require a hold harmless or indemnification clause in the terms of service for a
TNC driver or passenger that may be used to evade the insurance requirements of
this administrative regulation and KRS Chapter 281.
(2) A TNC shall not disclose to a third party the
personally identifiable information of a user of the TNC's mobile application
unless:
(a) The TNC obtains the user's consent to disclose
personally identifiable information;
(b) The disclosure is required to comply with a legal
obligation; or
(c) The disclosure is required to protect or defend
the terms of use of the service or to investigate violations of the terms of
use.
(3) A TNC may disclose a passenger's name and
telephone number to the TNC driver in order to facilitate correct
identification of the passenger by the driver, or to facilitate communication
between the passenger and the driver.
Section 9. Penalties. (1) A TNC that operates in
violation of the requirements of this administrative regulation shall be fined
$200 pursuant to KRS 281.990(1).
(2) A TNC that operates in violation of the terms of
its certificate or permit or operates without a valid permit shall be fined
$500 per occurrence pursuant to KRS 281.990(2).
(3) A TNC that fails to produce requested records and
information pursuant to KRS 281.820 within forty-eight (48) hours of the
request by the department shall be fined $200.
(4) A TNC shall be responsible for an affiliated TNC
driver's failure to comply with this administrative regulation if the driver’s
violation has been previously reported to the TNC in writing and the TNC has
failed to take action within ten (10) days of the report.
Section 10. Incorporation by Reference. (1) The
following material is incorporated by reference:
(a) "Transportation Network Company Authority
Application," TC 95-627, November, 2014; and
(b) "Motor Carrier Passenger Certificate, Vehicle
Qualification and Renewal Application," TC 95-605, May, 2015.
(2) This material may be inspected, copied, or
obtained, subject to applicable copyright law, at the Department of Vehicle Regulation,
200 Mero Street, Frankfort, Kentucky 40622, Monday through Friday, 8:00 a.m. to
4:30 p.m. This material may also be obtained by accessing the department's Web
site at http://transportation.ky.gov/.
MICHAEL W. HANCOCK, P. E., Secretary
RODNEY KUHL, Commissioner
D. ANN DANGELO, Office of Legal Services
APPROVED BY AGENCY: June 30, 2015
FILED WITH LRC: July 8, 2015 at noon
CONTACT PERSON: D. Ann DAngelo, Asst. General Counsel,
Transportation Cabinet, Office of Legal Services, 200 Mero Street, Frankfort,
Kentucky 40622, phone (502) 564-7650, fax (502) 564-5238.
REGULATORY IMPACT ANALYSIS AND TIERING STATEMENT
Contact person: Ann DAngelo
(1) Provide a brief summary of:
(a) What this administrative regulation does: This
administrative regulation establishes the requirements for a transportation
network company to operate in the state of Kentucky.
(b) The necessity of this administrative regulation:
This administrative regulation is necessary to address the growing use of
online mobile applications to connect riders with vehicles for hire.
(c) How this administrative regulation conforms to the
content of the authorizing statutes: KRS 281.600 authorizes the cabinet to
promulgate administrative regulations to establish requirements for the safe operation
of motor vehicles and motor carriers. KRS 281.630 authorizes the department to
establish the requirements for a transportation network company to apply for
authority to operate in Kentucky. KRS 281.655 requires the department to set
standards for pre-trip acceptance liability policies and prearranged ride
liability insurance policies for transportation network company vehicles.
(d) How this administrative regulation currently
assists or will assist in the effective administration of the statutes: This
administrative regulation will establish the regulatory requirements for the
safe operation of a transportation network company.
(2) If this is an amendment to an existing
administrative regulation, provide a brief summary of: This is a new administrative
regulation.
(3) List the type and number of individuals,
businesses, organizations, or state and local governments affected by this
administrative regulation: This administrative regulation will affect companies
desiring to operate as a transportation network company and the cabinet's
Division of Motor Carriers.
(4) Provide an analysis of how the entities identified
in question (3) will be impacted by either the implementation of this administrative
regulation, if new, or by the change, if it is an amendment, including:
(a) List the actions that each of the regulated
entities identified in question (3) will have to take to comply with this
administrative regulation or amendment: A business desiring to operating as a
transportation network company will be required to submit an application and
attachments to the department; ensure that a criminal background check is
performed for each driver; ensure that a vehicle safety check has been
performed on vehicles used to transport the public; and maintain up to date
files on drivers.
(b) In complying with this administrative regulation
or amendment, how much will it cost each of the entities identified in question
(3): A transportation network company applying to operate in Kentucky will
submit a fee pursuant to KRS 281.630.
(c) As a result of compliance, what benefits will
accrue to the entities identified in question (3): If compliant with the
requirements of this regulation, businesses desiring to operate as
transportation network companies will be granted operating authority.
(5) Provide an estimate of how much it will cost the
administrative body to implement the administrative regulation:
(a) Initially: Approximately $7,500
(b) On a continuing basis: Approximately $1,000
annually
(6) What is the source of the funding to be used for
the implementation and enforcement of this administrative regulation: road
funds
(7) Provide an assessment of whether an increase in
fees or funding will be necessary to implement this administrative regulation,
if new, or by the change if it is an amendment: Fees shall be pursuant to
statute.
(8) State whether or not this administrative
regulation established any fees or directly or indirectly increased any fees:
Fees shall be pursuant to statute.
(9) TIERING: Is tiering applied? No. Tiering is not
applied. All TNC applications for operating authority will be handled the same.
FISCAL NOTE ON STATE OR LOCAL GOVERNMENT
(1) What units, parts, or divisions of state or local
government (including cities, counties, fire departments, or school districts)
will be impacted by this administrative regulation? KYTC Division of Motor
Carriers, Department of Vehicle Regulation
(2) Identify each state or federal statute or federal
regulation that requires or authorizes the action taken by the administrative
regulation. KRS 281.600, 281,630, 281.655
(3) Estimate the effect of this administrative
regulation on the expenditures and revenues of a state or local
government agency (including cities, counties, fire departments, or school
districts) for the first full year the administrative regulation is to be in
effect. Initial programming fees of approximately $7,500 will affect the expenditures
and revenue of the Division of Motor Carriers at KYTC.
(a) How much revenue will this administrative
regulation generate for the state or local government (including cities,
counties, fire departments, or school districts) for the first year? This
administrative regulation may generate approximate $9,000 annually. The amount
is dependent on the number of TNC vehicles qualified under the administrative regulation.
(b) How much revenue will this administrative
regulation generate for the state or local government (including cities,
counties, fire departments, or school districts) for subsequent years? This
administrative regulation is not expected to generate revenue.
(c) How much will it cost to administer this program
for the first year? Approximately $7,500.
(d) How much will it cost to administer this program
for subsequent years? Approximately $1,000.
Note: If specific dollar estimates cannot be
determined, provide a brief narrative to explain the fiscal impact of the
administrative regulation.
Revenues (+/-):
Expenditures (+/-):
Other Explanation:
