What are the target goals?
The City of Dallas took an open approach to ridesharing services, aiming to embrace the new technologies first and then establish regulations to govern those activities. To achieve this, the city opted to accept transportation network companies (TNCs) as widely used and desired by the public, and convened stakeholders to determine how best to regulate their services.
While many cities are choosing to draft brand new regulations in response to ridesharing services, some, like Dallas, have found utility in incorporating ridesharing regulations into broader transportation ordinances. Due in part to the success of the stakeholder working group, Dallas was able to draft an umbrella ordinance that outlined regulations for taxis, limousines and TNCs.
What does the ordinance cover?
Under the ordinance, traditional taxis will still have maximum rates, while fares for other vehicles-for-hire will be unregulated. All drivers must hold an operating permit and a valid driver’s license, have limited traffic violations, and get a background check. Dallas periodically audits these background checks to ensure that they meet city standards. Vehicles must undergo a 31-point inspection.
The city found that resolving questions of insurance was one of the most difficult aspects of crafting the new legislation. Dallas chose to develop a comprehensive system of insurance requirements for TNC drivers mandating that they have insurance coverage 24/7, as is the case with taxis in the city. However, unlike the “one-size-fits-all” commercial insurance used by taxis, Dallas created a three-phase system of insurance to ensure different “ride phases” have unique coverage. Phase 1 occurs when a TNC driver is driving but does not have the app for his or her company turned on. In this phase, drivers must have their own private personal insurance. Phase 2 occurs when a driver turns on the app, indicating he or she is available to provide a ride but has not accepted a ride. During this phase, Dallas requires that the TNC provides contingent (or “drop-down”) insurance to cover claims that might not be covered by a driver’s personal insurance. Finally, Phase 3 occurs when a driver accepts a ride and is on the way to pick up their passenger; in this phase, the driver or company must have primary insurance in the event of an accident.
When was the ordinance launched?
The ordinance was passed by the city council in December of 2014, and it went into effect April 30, 2015. The ordinance can be found at: http://citysecretary.dallascityhall.com/resolutions/2014/12-10-14/14-2203.pdf
What are the financial implications?
Dallas decided not to address the issue of revenue capture of ridesharing when drafting sharing economy legislation, believing that the increased economic activity is enough of a boon to the local economy.
While the North Central Texas Council of Governments also proposed a regional TNC regulatory policy, coordination attempts between Dallas, Fort Worth and the Dallas/Fort Worth International Airport have not lead to a regional framework. The cities have fundamentally different views on insurance coverage for drivers.
NLC Contact Information
City Solutions and Applied Research
(Last Modified: July 2015)