Assemblyman JOSEPH A. LAGANA
District 38 (Bergen and Passaic)
Assemblyman JOHN F. MCKEON
District 27 (Essex and Morris)
Assemblyman JACK M. CIATTARELLI
District 16 (Hunterdon, Mercer, Middlesex and Somerset)
Assemblyman CARMELO G. GARCIA
District 33 (Hudson)
Requires transportation network companies to obtain permit from MVC and maintain insurance coverage.
CURRENT VERSION OF TEXT
An Act concerning insurance coverage for certain motor vehicles and supplementing Title 39 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. The Legislature finds and declares:
a. The digital media age has created many new and innovative businesses made possible by the revolutionary means that allow us to communicate with one another at rapid speed;
b. One of the most popular new innovations is the ability of individuals to utilize an application on their mobile devices to summon limousines, taxis, sports utility vehicles, and personally owned private passenger automobiles at a moment’s notice;
c. This technology has benefited not only riders, but also those who become drivers of these vehicles affiliated with transportation network companies in order to make additional money in their spare time or, in some cases, to engage in it as a full-time job;
d. Notwithstanding the benefits of this system, which has arisen spontaneously, it is necessary, for reasons of public safety and the welfare of both drivers and passengers, that some measure of State regulation be established, as is the case with traditional taxis and limousines; and
e. One of the matters of concern regarding these “commercial ridesharing” programs in New Jersey is that a driver’s personal private passenger automobile insurance policy does not cover him or his passenger because the State’s “no-fault law” expressly excludes that coverage for any motor vehicle that is for hire, thus depriving the driver and the passenger, during transportation network trips, of the coverage and benefits that otherwise would be provided under the “no-fault law.”
f. It is therefore necessary that the State impose certain reasonable guidelines and requirements for the protection of the public as well as the drivers who have entered into this enterprise.
2. For the purposes of this act:
“Applicant” means a person applying to a transportation network company to become a third party transportation provider.
“Commission” means the New Jersey Motor Vehicle Commission.
“Passenger” means a person who prearranges a transportation network trip with a provider through a transportation network company’s online application program.
“Private passenger automobile” means an automobile required to be insured pursuant to the provisions of P.L.1972, c.70 (C.39:6A-1 et seq.).
“Third party transportation provider” or “provider” means a person who contracts with a transportation network company and who uses a commercial vehicle, including, but not limited to, a taxi, limousine, or commercial sports utility vehicle, or a personal private passenger automobile, to transport passengers on behalf of a transportation network company.
“Transportation network company” means a corporation, partnership, sole proprietorship, or other entity that uses a digital network to connect passengers to transportation providers to provide third party transportation at a premium fare on a dedicated, nonscheduled basis that is not conducted on a regular route.
“Transportation network trip” means a trip arranged by the transportation network company and begins when a transportation network provider makes itself available for hire by logging into the transportation network company’s application or by other means, continues when a transportation network provider accepts a prearranged trip request from a passenger and is dispatched through the transportation network company, continues while the transportation network provider transports the passenger to the passenger’s destination, and ends when the last passenger departs from the transportation network provider’s motor vehicle, or when the transportation network provider logs out and is no longer available for hire, whichever occurs last.
3. A transportation network company shall not operate in this State unless the transportation network company applies for, receives, and maintains in good standing a permit from the commission.
4. In order to obtain and maintain a transportation network company permit, the company shall:
a. for vehicle classifications which by law are otherwise covered by a commercial business motor vehicle liability policy purchased by third party transportation providers and for which a commercial drivers license may be required, maintain and submit to the commission a listing of those providers at least semi-annually, together with such other information as the commission may require.
b. for vehicle classifications for which the third party transportation provider is subject to the provisions of P.L.1972, c.70 (C.39:6A-1 et seq.) when not engaged in a transportation network trip, submit electronically to the commission, at least monthly, an updated list of the names of third party transportation providers residing in the State with which it has a current relationship;
c. conduct a driver’s license check on each third party transportation provider with whom it enters into a relationship, and subsequent driver’s license checks at such intervals as the commission may determine by regulation;
d. prohibit an applicant or third party transportation provider from providing a transportation network trip if the driver’s license record check reveals any disqualifying violations, which shall include but not be limited to: (1) reckless driving pursuant to R.S.39:4-96; (2) driving while intoxicated pursuant to R.S.39:4-50; (3) driving with a suspended or revoked license pursuant to R.S.39:5-30; (4) any violation incurred in any other state, territory, commonwealth, or other jurisdiction of the United States or another country which is comparable to the violations set forth in paragraphs (1) to (3) of this subsection.
e. conduct a criminal history record background check on an applicant and, subsequently, every three years on a third party transportation provider and prohibit the provider from making a transportation network trip if it is determined that the provider has been convicted of aggravated assault, arson, burglary, extortion, homicide, kidnapping, robbery, aggravated sexual assault, sexual assault, endangering the welfare of a child or other crime determined by the commission, in consultation with the Attorney General.
f. establish a program for the reasonable inspection of the condition of a motor vehicle used in the transportation network trip.
g. in the case of a third party transportation provider that drives a private passenger automobile subject to P.L.1972, c.70 (C.39:6A-1 et seq.), for the purposes of determining, in the event of an occurrence, whether the private passenger automobile insurance policy or the policy provided by the transportation network company pursuant to section 6 of this act is in effect, the company shall maintain a log, which shall be subject to discovery in any proceeding, that establishes the exact time that a transportation network provider receives a notification from the application on the provider’s mobile device from a dispatcher at the transportation network company, at which point the provider’s private passenger automobile insurance policy shall not be in effect. The log shall be kept for a period of at least three years.
h. if otherwise required by law, provide workers’ compensation coverage to third party transportation providers.
i. maintain a surety bond in the amount of $750,000 in favor of the State, to be filed with the Department of Banking and Insurance as a guarantee for fulfilling any obligations arising from its operations in the State. Alternatively, the transportation network company may deposit securities or an irrevocable letter of credit with the Commissioner of Banking and Insurance.
5. Every transportation network company shall appoint an agent for service of process in this State, to be filed with the commission. Any change of the agent or the address or other contact thereof shall be filed within 10 days of the effective date of the change.
6. No policy of private passenger automobile insurance issued pursuant to P.L.1972, c.70 (C.39:6A-1 et seq.) shall be deemed to be in force for the transportation network provider’s vehicle during any transportation network trip unless the policy expressly states that it provides coverage for operation of the vehicle for hire, including transportation network company trips, pursuant to a rider, endorsement, or separate policy filed with the Department of Banking and Insurance. With respect to such vehicles, in lieu of the private passenger automobile insurance, a transportation network company shall provide coverage though a commercial motor vehicle liability policy to the provider contracting with the transportation network company, in the amount of at least $1,500,000 per occurrence, for liability, property damage and uninsured and underinsured motorist coverage, medical payments coverage in an amount not less than $10,000 per person per occurrence, and optional collision and comprehensive coverage, which shall be issued by an insurer licensed or authorized to do business in the State and which shall be in force during a transportation network trip. The policy shall be in force and effect from the time the transportation network provider makes itself available for hire by logging into the transportation network company’s application or by any other means and continuing during any transportation network trip from the exact time that the transportation network company contacts the third party transportation provider until the last passenger or passengers are discharged and the transportation network provider logs out and is no longer available for hire, whichever occurs last. The policy supplied by the transportation network company shall be deemed to meet the requirements of P.L.1972, c.197 (C.39:6B-1 et seq.). Every third party transportation provider shall carry with them in the vehicle being used to transport passengers for a transportation network company a copy of the certificate of insurance required by this section that shows the coverage applicable to the vehicle when the vehicle is operating as a third party transportation provider. A copy of the policy or policies, including all endorsements attached to the policies, shall be filed with the commission.
7. Every transportation network company doing business with third party transportation providers in New Jersey shall provide on a separate sheet of paper, in connection with any agreement between the company and a provider, a notice in 14-point bold type, to be signed by the provider, that under New Jersey law, no private passenger automobile insurance policy issued pursuant to P.L.1972, c.70 (C.39:6A-1 et seq.) includes coverage for the provider’s vehicle during the transportation network trip, and that the provider would no longer be covered by that policy’s personal injury protection coverage, liability insurance, including property damage coverage, collision and comprehensive coverage, and uninsured and underinsured motorist coverage, and that the provider could be exposed to personal liability from which the provider would otherwise be protected under his personal private passenger automobile insurance policy if he were not engaged in a transportation network trip, unless the policy expressly states otherwise pursuant to a separate policy, rider or endorsement filed with the Department of Banking and Insurance.
8. A transportation network company that violates the provisions of this act or any rule or regulation adopted pursuant thereto shall be subject to a civil penalty of $2,000 for the first offense, per driver, and up to $5,000 for each subsequent offense, per driver, to be collected in a civil action by a summary proceeding under the “Penalty Enforcement Law of 1999,” P.L.1999, c.274 (C.2A:58-10 et seq.).
9. The New Jersey Motor Vehicle Commission, in consultation with the Department of Banking and Insurance, shall promulgate rules and regulations to effectuate the purposes of this act pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).
10. This act shall take effect on the 30th day next following the date of enactment.
This bill provides for the registration of transportation network companies with the New Jersey Motor Vehicle Commission and establishes certain requirements for these companies with respect to the insurance protection given to the driver and passengers.
In New Jersey, the mandatory personal private passenger automobile insurance policy does not cover any vehicle for hire. Thus, the bill requires that the transportation network company provide liability insurance, property damage and uninsured nd underinsured motorist coverage, medical payments coverage, and optional -collision and comprehensive coverage. A full copy of these policies, together with any endorsements, must be filed with the commission.
This coverage applies to a third party transportation provider whose vehicle is otherwise covered by a private passenger insurance policy when the driver is not available for hire. The bill establishes a point at which the private passenger automobile insurance policy no longer is in effect and the policy supplied by the transportation network company supplants it. That point is established at the time the third party transportation provider logs on or is otherwise available for hire, until the provider logs out and is no longer available for hire or drops off the last passenger, whichever occurs last. The company is required to keep a log as to the time of the engagement and is required to keep that record for three years; the record is subject to discovery in the event of a dispute regarding which policy is in force to respond in the event of an accident. The provider is to keep a copy of the certificate of insurance for coverage supplied by the transportation network company in his vehicle.
The bill requires criminal history record background checks as well as checks on the provider’s driving record and would require periodic inspection of the vehicle.
Some transportation network companies also use vehicles that are otherwise licensed or registered as commercial vehicles, such as limousines, taxis, and commercially licensed sports utility vehicles. In that case, a commercial motor vehicle liability policy is already in effect for that particular vehicle, and the commercial policy would apply in the event of an accident.