THE COMMONWEALTH OF MASSACHUSETTS DEPARTMENT OF PUBLIC UTILITIES REGISTRY OF MOTOR VEHICLES CHARLES D. BAKER MATTHEW A. BEATON GOVERNOR SECRETARY OF ENERGY AND ENVIRONMENTAL AFFAIRS KARYN E. POLITO LIEUTENANT GOVERNOR STEPHANIE POLLACK SECRETARY OF TRANSPORTATION From: The Department of Public Utilities and the Registry of Motor Vehicles To: William F. Welch Steven T. James Clerk of the Senate Clerk of the House of Representatives State House, Room 335 State House, Room 145 Boston, MA 02133 Boston, MA 02133 Date: August 1, 2017 RE: Feasibility Report of the Department of Public Utilities and Registry of Motor Vehicles Clerks of the Senate and House: Pursuant to Chapter 187 of the Acts of 2016, Section 14, the Department of Public Utilities and the Registry of Motor Vehicles submit this joint feasibility report regarding statewide criminal offender record checks and notification systems of ride for hire motor vehicle operators. FAX: (617) 345-9101 www.mass.gov/dpu I. BACKGROUND On August 5, 2016, Governor Baker signed into law Chapter 187 of the Acts of 2016, An Act regulating transportation network companies (“Act”), creating a statewide regulatory framework for transportation network companies (“TNCs”). The Act created the Transportation Network Company Division (“Division”), within the Department of Public Utilities (“Department”), to oversee TNCs, transportation network services, and transportation network drivers in the Commonwealth. Certain provisions of the Act became effective on November 3, 2016. Among other things, the Act directs the Department to consult with several state entities to implement its various provisions and to promulgate regulations by November 3, 2017, in numerous areas, including: permitting processes for TNCs; driver suitability and background checks, suspensions and revocations; records retention; mandatory auditing; enforcement provisions; and an appeals process for TNCs and drivers aggrieved by a Division decision. The Act also requires the Division to levy a surcharge and an assessment on TNCs on an annual basis. Recognizing the Act’s public safety impetus, the Division, Registry of Motor Vehicles (“Registry”), and several impacted agencies negotiated Memoranda of Understanding (“MOU”) with several TNCs. The agreements are public safety oriented and primarily address driver background checks. The first agreements were executed on November 18, 2016, with the largest TNCs operating in the Commonwealth: Fasten, Lyft, and Uber. Pursuant to these agreements, the Division completed background checks for all existing drivers (approximately 80,000) in a period of three months. The Department has since executed agreements with several other 2 TNCs: Embarque, Housecar, SAFR, Wingz, and Wuleeb. As of July 28, 2017, the Division has conducted 128,779 TNC driver background checks. The Division is currently in the process of promulgating final regulations for the oversight of TNCs and TNC drivers. The Division opened a formal rulemaking on March 24, 2017. A public hearing was held on the proposed regulations on May 23, 2017 and public comments were accepted until June 6, 2017. The TNC permit process will commence once the Division promulgates final regulations, which involves an in-depth review of the TNCs’ business operations and compliance performance. Once permitted, the Division will audit TNC practices and initiate enforcement protocols when necessary. Lastly, prior to promulgation of final regulations, Section 14 of the Act requires the Division and Registry to collaborate and submit a report to the Clerks of the Senate and House of Representatives by August 1, 2017. Chapter 187 of the Acts of 2016, Section 14, requires that the Division and Registry submit a feasibility report (“Report”) to the clerks of the Senate and House of Representatives by August 1, 2017. Section 14 provides as follows: Not later than August 1, 2017, the department of public utilities and the registry of motor vehicles shall submit a report to the clerks of the senate and house of representatives examining the feasibility of: (i) conducting statewide criminal offender record information checks for each operator of a ride for hire vehicle; and (ii) establishing a statewide roster of all livery and taxicab drivers, along with a convenient means for municipalities to notify the division of any livery or taxicab drivers registered within their municipality, including reciprocal reporting between municipalities and the department regarding any driving infractions, criminal convictions, suspension or ban of all livery drivers and taxicab drivers on the statewide roster. 3 I. STATEWIDE CRIMINAL OFFENDER RECORD INFORMATION CHECKS FOR RIDE FOR HIRE VEHICLE OPERATORS The Division and Registry conclude that new legislation and significant technological resources are required to establish a comprehensive, statewide system for criminal offender record information (“CORI”) checks for each operator of a ride for hire vehicle. We begin by observing that term “ride for hire” is nowhere defined. Accordingly, based on our experience with the Act and for purposes of this report only, we refer to ride for hire operators as those individuals who provide TNC, taxi, and livery services – individuals engaged in the transport of passengers for payment. Second, our conclusion is based on an overview of each respective industry. Each industry is regulated differently and while statewide CORI checks for TNC vehicles are clearly defined by statute, taxi and livery standards are not as clear. Taxis and liveries have minimal state oversight and therefore any statewide background check across the ride for hire industry would require new legislation. Further, the Division’s suitability standard was not developed in isolation. The Division worked closely with the Executive Office of Technology Services and Security, Energy and Environmental Affairs Information Technology, Department of Criminal Justice Information Services, Registry of Motor Vehicles, the Sex Offender Registry Board, and others to design and create an interconnected platform to extract, synthesize, and disseminate driver background information to the Division. The Division continues to work with various stakeholders to adjust the database for efficiency and foresight. Accordingly, any statewide background check system will need to account for significant resources and investments in technology. 4 Lastly, we provide a brief overview of the regulatory landscape of drivers of TNC vehicles, taxis, and liveries: Transportation Network Company Screening for TNC drivers is provided for by G.L. c. 159A½, which requires that the Division create a suitability standard by which to measure each individual’s background information. The background check is a two-step background check process. First, a TNC performs a multi-state criminal and driving background check, as well as a check of the United States National Sex Offender Public website. A TNC is required to disqualify any driver who does not meet the Division’s suitability standard. Second, if a driver passes the TNC’s check, the TNC then forwards the driver’s information to the Division. The Division provides the information to the Registry, Department of Criminal Justice Information Services, Sex Offender Registry Board, and the Warrant Management System. Based on the results from those agencies, the Division determines whether the driver is suitable. Taxi Background checks for taxi drivers are regulated at a municipal level. General Laws c. 40, §22 provides as follows: a city or town may make ordinances or bylaws, . rules and orders, for the regulation of carriages and vehicles used therein, and may set penalties for the violation thereof; and may set and receive an annual fee for each license granted to a person to use any such carriage or vehicle therein. With the exception of motor vehicle registration, taxi companies are not subject to state regulation. And while the Registry issues taxi license plates to individuals and companies who 5 have the requisite insurance, there is no state agency or regulatory body that oversees taxi drivers. As of July 19, 2017, the Registry had 3,434 active taxi registrations. The background check regulations vary amongst municipalities. For example, the cities of Boston and Cambridge promulgated their own local regulations that cover a wide range of topics related to the operation of both a taxi company, the vehicle, and the operator. See City of Boston Ordinance Rule 403; City of Cambridge Ordinance, c. 5.20. Conversely, many cities and towns, like Belmont and Scituate, have no requirements beyond registering with the municipality and obtaining a business certificate. Livery Similar to taxis, no state agency has statutory authority to conduct background checks for livery drivers.1 Livery companies and drivers are not required to be regulated at the municipal level. The Registry’s authority over livery is limited to the issuance of livery plates to individuals and companies that have requisite commercial insurance. See 540 C.M.R. § 2.05(4)(i). As of July 19, 2017, the Registry had 13,299 active livery vehicle registrations. II. STATEWIDE ROSTER AND RECIPROCAL REPORTING OF LIVERY AND TAXI DRIVERS As previously mentioned, there is no state agency that performs background checks for taxi or livery drivers. Moreover, there is not a statewide list of livery and taxi drivers in each 1 The Transportation Oversight Division, a separate division within the Department of Public Utilities, regulates the common carriers