Dems: Transportation – week of April 11, 2016

April 18, 2016

HF 2414 – Regulation of transportation network companies (e.g., Uber, Lyft)



HF 2414passed the House on March 3. The bill creates a new chapter (321N) in the Iowa Code for regulation of Transportation Network Companies (TNCs), including as Uber and Lyft; and amends other Code sections to reflect operation of TNCs in Iowa.


The Senate adopted a strike-after amendment that makes significant additions to the bill. It takes a comprehensive approach to TNCs by providing statewide consistency for a new type of business, while offering safe, convenient transportation options and job opportunities for Iowans.


In short, the strike-after amendment protects drivers, passengers, the public and other businesses by:

  • Creating a new chapter in Iowa Code to regulate TNCs
  • Leveling the playing field for taxicabs
  • Establishing oversight and licensing through the state Department of Transportation (DOT)
  • Laying out insurance and disclosure requirements
  • Clarifying financial responsibilities
  • Setting driver qualifications
  • Requiring a zero-tolerance drug and alcohol policy
  • Requiring criminal and driving background checks
  • Setting standards for vehicle safety
  • Setting standards for how TNCs interact with passengers and protect their privacy
  • Establishing penalties for non-compliance


Section-by-section summary of strike-after amendment

Section 1. Clarifies that TNC and taxi drivers are not chauffeurs.


Section 2. No renewal of vehicle registration for drivers who fail to pay civil penalties related to TNC violations.


Section 3. Limits local authority to regulate taxis.


Section 4. Establishes the same standards for taxis as are being established for TNCs.


Section 5. Establishes responsibility in TNC vehicles for ensuring children are properly restrained. Same as currently exists for taxis.


Section 6. Definitions related to TNCs.

  • Digital network
  • Personal vehicle
  • Prearranged ride
  • Transportation network company
  • Transportation network company driver
  • Transportation network company rider
  • Department of Transportation


Section 7. Requires TNC to apply to the DOT and be issued a permit to operate in Iowa if they meet standards set out in this section; DOT will ensure compliance with new Code chapter; annual permit fee for company will be $5,000.


Section 8. Driver requirements:

  • Clarifies that a TNC, a TNC driver or the vehicle used to provide rides is not a motor carrier, private carrier, charter carrier or common carrier.
  • Driver must apply to the company with name, address, age, and copies of their driver’s license, vehicle registration and proof of financial responsibility.
  • Driver must prove to TNC that they have financial liability coverage on the vehicle they will use for driving.
  • TNC must do a criminal background check, and search sex offender registry.
  • TNC must review driving history.
  • Driver must notify bank of TNC driving if there is a loan on the vehicle being used or face $250 fine, which will go to the RUTF.
  • Driver must notify owner of vehicle of TNC driving if the vehicle is owned by another person (for example, a college student using their parents’ car). The penalty for noncompliance is a $250 fine, which will go to the RUTF.
  • Driver must have valid driver’s license with no restrictions.
  • Driver must not be convicted of more than 3 moving violations in prior 3 years.
  • Driver must not be convicted in the previous 3 years of operating without valid driver’s license or when disqualified; reckless driving; or driving while license suspended, denied, revoked or barred.
  • Driver must not be convicted in the previous 7 years of a felony, operating while under the influence of alcohol or a drug, or any crime involving resisting law enforcement, dishonesty, injury to another person, damage to the property of another person, or operating a vehicle in a manner that endangers another person.
  • Driver must not be on the national sex offender registry.
  • TNC must have zero-tolerance drug and alcohol policy for drivers on the job, as well as provisions for investigating alleged violations and suspension of drivers under investigation.
  • Vehicle must comply with all applicable motor vehicle equipment requirements.


Section 9. Financial responsibility.

  • Insurance must acknowledge that a driver uses vehicle to transport riders for compensation.
  • When a driver is logged on to the TNC network and is available, but not engaged in a prearranged ride: primary automobile liability coverage of at least $50,000/$100,000/$25,000 for per person/per incident/property damage.
  • When the TNC driver is providing a prearranged ride: primary automobile liability coverage of at least $1 million for death, bodily injury and property damage.
  • Coverage may be satisfied by TNC, driver or a combination of the two.
  • Amendment strikes requirement for driver to have comp and collision coverage if there is a loan on the vehicle. TNC covers this.
  • TNC insurance requirements are in addition to any other auto insurance the driver is required to have.
  • If a driver’s insurance lapses or a driver does not provide the required coverage, TNC must provide coverage.
  • Coverage by TNC does not depend on a driver’s insurance first denying a claim.
  • Insurance must be provided by an insurer authorized to do business in Iowa.
  • Driver must carry proof of insurance, and provide it if an accident occurs.


Section 10. Disclosure requirements. TNC must disclose to a driver what insurance coverage it provides, and that the driver’s personal policy may not provide coverage for TNC driving.


Section 11. Insurers.

  • Insurers may are not required to provide coverage for TNC driving.
  • Insurers are not precluded from providing coverage for TNC driving.
  • Insurers that defend a claim have the right of contribution against other insurers that cover the same driver.
  • Insurers and TNCs must cooperate to provide relevant information in the event of an investigation.


Section 12. Identification of driver and vehicle will be supplied to the passenger via the app before they agree to accept the ride.


Section 13. An itemized electronic receipt will be sent to passenger shortly after ride.


Section 14. Street hails are prohibited. All TNC rides must be arranged through the app.


Section 15. TNC must not disclose passengers personal information to a third party unless passenger agrees to it or it is required for an investigation.


Section 16. This bill sets statewide standards for TNCs with no local exceptions, though airports retain right to regulate vehicles on their property.


Sections 17, 20, 21 & 22. Clarifies that TNCs are not subject to Code regulations for motor carriers, private carriers, charter carriers or common carriers.


Section 18. This bill sets statewide standards for taxis with limited home rule exceptions.


Section 19. Makes insurance standards for taxis the same as will be required for TNCs.


Sections 23 & 24. Bill takes effect January 1, 2017.


Section 25. Applicability of insurance provisions. Insurance provisions are effective upon Insurance Commissioner approving the necessary products.

[4/13: 50-0]

Tags: ,

TCR's Iowa Legislative Updates provides content from the leadership of each party's caucus in both the Iowa House and Iowa Senate. We hope you find this to be a valuable resource.

We'd love to hear from you! Feel free to email us by clicking here.