MaaS

By Tamar Meshel

Cite as: Tamar Meshel, Mobile-Based Transportation Companies, Mandatory Arbitration, and the Americans with Disabilities Act, 2021 J. L. & Mob. 1.

Uber, Lyft, DoorDash and similar mobile-based transportation network companies (TNCs) have been involved in numerous legal battles in multiple jurisdictions. One contested issue concerns whether TNC drivers are employees or independent contractors. Uber recently lost this battle to some extent in the UK, 1 1. Uber BV and others v. Aslam and others, [2021] UKSC 5. The UK Supreme Court decided that Uber drivers are “workers” under English employment law, rather than self-employed independent contractors. The Court stopped short of finding the drivers are “employees”, which would have afforded them more rights. In Canada, the Supreme Court has recently struck down the arbitration clause in Uber’s service agreement with the plaintiff driver, who claimed to be an employee rather than an independent contractor. While the Court did not determine the employment issue, it found the arbitration clause to be unconscionable, leaving Uber to argue the merits of the dispute in the courts rather than in arbitration. Uber Technologies Inc. v. Heller, [2020] S.C.R. 16 (Can.). ×  but won it in California. 2 2. Kate Conger, Uber and Lyft Drivers in California Will Remain Contractors, N.Y. Times (Nov. 7, 2020), https://www.nytimes.com/2020/11/04/technology/california-uber-lyft-prop-22.html. × Another issue concerns the TNCs’ use of mandatory (pre-dispute) arbitration clauses in their standard form service agreements with both drivers and passengers. These arbitration clauses purport to obligate such future plaintiffs to resolve any dispute with the defendant TNC outside of court and, typically, on an individual rather than a class basis. TNCs have had mixed success enforcing arbitration clauses contained in service agreements with their drivers under the Federal Arbitration Act (FAA). 3 3. 9 U.S.C. §§ 1–16. Some federal courts have granted the TNCs’ motions to compel arbitration of drivers’ claims, while other courts have refused to do so. Compare Capriole v. Uber Techs., Inc., 460 F. Supp. 3d 919, 934 (N.D. Cal. 2020) (granting Uber’s motion to compel arbitration), with Cunningham v. Lyft, Inc., 450 F. Supp. 3d 37, 48 (D. Mass. 2020) (denying Lyft’s motion to compel arbitration and stay proceedings pending arbitration). × As for passengers, TNCs have been increasingly litigating disability-based discrimination claims brought against them and/or their drivers pursuant to the Americans with Disabilities Act (ADA). 4 4. Americans with Disabilities Act (ADA) of 1990, 42 U.S.C. § 12101. × These claims have largely arisen in two situations.

The first situation is where the plaintiffs have not downloaded or used the defendant TNC’s mobile application due to the absence of accessible vehicles. These “potential passengers” have brought discrimination claims against the defendant TNC in court for its failure to provide accessible vehicles that they could use. TNCs in such cases have raised two main lines of arguments: an ADA-based argument and an arbitration-based argument. The TNCs’ ADA-based argument posits that the plaintiffs do not have standing to bring the discrimination claims under the ADA since they had not in fact used the TNC’s mobile application and therefore have not suffered the required “injury” to have standing under the Act. Where the plaintiff potential passengers have been found to have such standing nonetheless, the TNCs have put forward an alternative arbitration-based argument––that the plaintiffs should be bound by the arbitration clause contained in the service agreement, which they did not sign, and that their claims should therefore be referred to arbitration. As the district court for the District of Columbia has noted, accepting this argument would ‎create “a Catch-22: to establish . . . standing to sue [a TNC] for an ADA violation, plaintiffs ‎must download the Uber app, but by doing so, they sign away their right to litigate their claims in ‎court.” 5 5. Equal Rights Center v. Uber Tech., Inc., 2021 WL 981011, *20 n.7 (D.D.C. ‎‎2021)‎. ×

The second situation in which disability-based discrimination claims under the ADA have been brought against TNCs is where the plaintiffs downloaded the mobile application, agreed to the terms of service, and used the ride-share services. These plaintiff passengers are then typically obligated to argue their discrimination claims in arbitration in light of the arbitration clause contained in the TNCs service agreement. 6 6. In some cases, courts have refused to compel such plaintiff passengers to arbitrate, for instance where the TNC’s terms of service “were not conspicuous enough reasonably to communicate the existence or terms of the agreement,” including the arbitration clause. Theodore v. Uber Tech., Inc., 442 F. Supp. 3d 433, 442 (D. Mass. 2020). × Indeed, TNCs seem to prefer arbitration to litigation in court, a preference that some have criticized as a strategy designed to prevent plaintiffs from vindicating their legal rights. However, a recent arbitration decision rendered against Uber in an ADA discrimination case (Irving v. Uber), 7 7. Press Release, Peiffer Wolf, Uber to pay $1.1 Million in record award to blind rideshare passenger (Apr. 1, 2021), https://www.peifferwolf.com/uber-to-pay-1-1-million-in-record-award-to-blind-rideshare-passenger/. See also Sean Hollister, Uber will pay a blind woman $1.1 million after drivers stranded her 14 times, The Verge (Apr 3, 2021), https://www.theverge.com/2021/4/3/22365859/uber-blind-woman-win-arbitration-lisa-irving-guide-dog; Joseph Wilkinson, Uber to pay $1.1 million for drivers’ discrimination against blind woman, N.Y. Daily News (Apr 2, 2021), https://www.nydailynews.com/news/national/ny-uber-blind-woman-settlement-million-20210403-i47vr6cqqnberflnqrbe5llonm-story.html. × discussed below, illustrates that arbitration is able to provide the same legal protection to plaintiffs’ rights as a court. Therefore, while there are many good reasons for TNCs to prefer arbitration over litigation, such as speed and arbitrator’s expertise, 8 8. Christopher R. Drahozal & Stephen J. Ware, Why Do Businesses Use (or Not Use) Arbitration Clauses, 25 Ohio St. J. on Disp. Resol. 433, 451-52 (2010). × Irving v. Uber demonstrates that a guaranteed win on the merits is not one of them.

In this Essay, I examine the two situations described above in which arbitration issues intersect with discrimination claims made pursuant to the ADA in the TNC-passenger context. In so doing, I do not purport to analyze the merits of the plaintiff passengers’ ADA claims, but rather focus on the arbitration aspects of these claims. In Part I, I discuss recent ADA cases brought by potential passengers (those who have not downloaded or used the TNC’s services) before the courts, with partial success. 9 9. Cases that involve standing to bring ADA claims against TNC but do not engage with arbitration issues are not discussed in this Essay. See, e.g., Crawford v. Uber Tech., Inc., 2018 WL 1116725 (N.D. Cal. 2018); Equal Rts. Ctr., 2021 WL 981011. × I explain the defendant TNCs’ standing argument under the ADA and their alternative arbitration-based argument. In Part II, I turn to ADA cases involving plaintiff passengers. I discuss the Irving v. Uber arbitration and suggest that this case provides a rebuttal, albeit anecdotal, to some of the common criticisms of mandatory arbitration in the consumer context. In Part III, I offer brief conclusions.

I. Arbitration Issues in ADA Cases Against TNCs

Over the past few years, several cases have been decided by the federal courts involving discrimination claims brought against TNCs pursuant to the ADA. The plaintiffs in these cases have mobility disabilities and generally claim that the defendant TNC “pervasively and systematically” 10 10. Lowell v. Lyft, Inc., 352 F. Supp. 3d 248, 252 (S.D.N.Y. 2018). × excluded them from its ride-share services by failing to make available wheelchair accessible vehicles. However, these plaintiffs have never actually been passengers of the defendant TNCs. They have not downloaded the relevant TNC’s mobile application or agreed to its terms of service. As a result, the defendant TNCs have commonly argued that these plaintiffs do not have standing to bring their claims under the ADA. Alternatively, if the plaintiffs are found to have standing, TNCs have argued that the courts should enforce the arbitration clause contained in their service agreement, which the plaintiffs would have to––but did not in fact––agree to in order to use the TNC’s services on the basis of equitable estoppel. I examine each of these arguments in turn.

A. Standing

In order to have standing under the ADA, courts have generally required that a plaintiff show, among other things, an “injury in fact.” 11 11. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). × At the same time, courts must take a “broad view” of standing because “complaints by private persons are the primary method of obtaining compliance with the Act.” 12 12. Fiedler v. Ocean Prop., Ltd., 683 F. Supp. 2d 57, 65 (D. Me. 2010) (quoting Trafficante v. Metro. Life Ins., Co., 409 U.S. 205, 209, 93 S.Ct. 364, 34 L. Ed. 2d 415 (1972)). × Therefore, to demonstrate the required injury in a claim under the ADA, an individual with a disability is not required to “engage in a futile gesture if such person has actual notice that a person or organization covered by this subchapter does not intend to comply with its provisions.” 13 13. 42 U.S.C. § 12188(a)(1) (emphasis added). × Courts have held that “actual notice”––also referred to as “actual knowledge”––generally requires the plaintiff to personally experience the alleged accessibility issue 14 14. See, e.g., Perdum v. Forest City Ratner Cos., 174 F. Supp. 3d 706, 715 (E.D.N.Y. 2016). × but can also be satisfied by showing that the plaintiff was deterred from using a service because of alleged ADA noncompliance. 15 15. See, e.g., C.R. Educ. and Enf’t Ctr. v. Hosp. Prop. Tr., 867 F.3d 1093, 1098 (9th Cir. 2017). ×

This requirement of “actual notice” or “actual knowledge” by the plaintiff in order to show an injury is at the heart of TNCs’ argument that plaintiff potential passengers have no standing to bring their claims under the ADA. These plaintiffs, the TNCs argue, did not in fact use or attempt to use the ride-share services they complain of. Therefore, they cannot show “actual knowledge” in order to establish an injury for the purpose of standing to bring a claim under the ADA. The federal Court of Appeals for the Ninth Circuit, 16 16. Namisnak v. Uber Tech., Inc., 971 F.3d 1088 (9th Cir. 2020). × a federal District Court in New York, 17 17. Lowell v. Lyft, Inc., 352 F. Supp. 3d 248 (S.D. N.Y. 2018). × and a federal District Court in Pennsylvania, 18 18. O’Hanlon v. Uber Tech., Inc., 2019 WL 5895425 (W.D. Penn. 2019). The decision of the district court with regard to the applicability of the arbitration clause to the plaintiffs, discussed below, has been affirmed by the Court of Appeals for the Third Circuit. The Third Circuit found that it did not have jurisdiction to review the district court’s finding on standing. O’Hanlon v. Uber Tech., Inc., 2021 WL 1011201 (3rd Cir. 2021). × have all rejected this argument. In the context of access to transportation through a digital application, these courts have found that the plaintiff potential passengers were deterred from using the defendant TNCs’ mobile application and should not be required to engage in the “futile gesture” of downloading the application, request a ride, and be refused. The courts have further found that the plaintiffs already had plausible “actual knowledge” that the relevant TNC did not offer sufficient accessible transportation for those with mobility disabilities. Therefore, the plaintiffs in these cases were found to have standing to bring claims under the ADA against TNCs.

In contrast, the federal Court of Appeals for the Seventh Circuit has decided a similar case differently. 19 19. Access Living of Metropolitan Chicago v. Uber Tech., 958 F.3d 604 (7th Cir. 2020). × The plaintiff had not downloaded Uber’s mobile application. Rather, she concluded from ‎secondhand accounts and a screenshot of the application that, although Uber did use wheelchair ‎accessible vehicles where the plaintiff lived, she could not rely on the service for regular and ‎efficient use. The Court found that the plaintiff did not have standing to bring a discrimination ‎claim under the ADA since her complaint lacked any allegation of an “individualized” or ‎‎“personalized” experience with Uber. 20 20. Id. at 614 × Moreover, the Court found that it was “too ‎attenuated to conclude that the mere act of downloading Uber’s app and opening an account—‎without more—would subject her to harm from discrimination.” 21 21. Id. at 615. × Interestingly, the Court noted that the reason the plaintiff had not downloaded Uber’s mobile application and gained this ‎personalized experience with the use of its services likely came from a concern that, had she downloaded the application, ‎ordered the wheelchair accessible vehicle, and then sought to bring the lawsuit, Uber “would seek to compel ‎arbitration, as reportedly required by its customer service agreement.”‎ 22 22. Id. at 614. × Indeed, as I will discuss in the next Part, this is commonly the case with plaintiff passengers who have actually used the TNC’s ride-share services.

B. Equitable Estoppel

As noted above, the defendant TNCs have put forward an alternative argument in these cases once standing was established, which is rooted in arbitration rather than the ADA. They argued that the plaintiff potential passengers were bound by the arbitration clause in the TNCs’ service agreement, despite not having signed it. According to the TNCs, plaintiffs should be equitably estopped from denying the application of this arbitration clause either on the basis of “direct benefits” or “intertwined claims.”

Equitable estoppel on the basis of “direct benefits” may be used to compel a non-signatory to arbitrate where the non-signatory has benefited directly 23 23. Am. Bureau of Shipping v. Tencara Shipyard S.P.A., 770 F.3d 349, 353 (9th Cir. 1999). × from the contract or indirectly by “exploit[ing] the contractual relation of parties to an agreement” without assuming the contract itself. 24 24. Boroditskiy v. European Specialties LLC, 314 F. Supp. 3d 487, 495 (S.D.N.Y. 2018). × Equitable estoppel on the basis of “intertwined claims” may be used to compel a non-signatory to arbitrate where the non-signatory has put forward claims that are “dependent upon or inextricably intertwined with the obligations imposed by the contract containing the arbitration clause,” 25 25. JSM Tuscany, LLC v. Superior Ct., 123 Cal. Rptr. 3d 429, 445 (Cal. Ct. App. 2011). × for instance when it relies on the terms of that contract in asserting its claims. Under both “direct benefits” and “intertwined claims,” a non-signatory is estopped from denying the applicability of an arbitration clause since it has in some way “embraced the contract despite [its] nonsignatory status but then, during litigation, attempt[s] to repudiate the arbitration clause in the contract.” 26 26. Ouadani v. TF Final Mile LLC, 876 F.3d 31, 38 (1st Cir. 2017). ×

Similar to the defendant TNCs’ standing argument, these equitable estoppel arguments have also been rejected in the cases discussed above. The plaintiff potential passenger, the District Court in New York found, had not received any benefit from the defendant TNC’s service agreement. Indeed, the fact that she could not receive the benefit of the TNC’s ride-share services was the reason for her discrimination action. 27 27. Lowell, 352 F.Supp. 3d at 260 (“[i]t seems supremely unjust to hold individuals to an arbitration clause buried in the verbiage of a terms of service of agreement for a service that they did not sign up for, particularly when those individuals have not received any benefits from the agreement, direct or indirect.”). × The District Court in Pennsylvania has also rejected the defendant TNC’s assertions that the plaintiffs had “embraced” its service agreement by making claims under the ADA, or that they “stand in the shoes” of passengers who have accepted the TNCs’ terms of the service, including the arbitration clause. 28 28. O’Hanlon, 2019 WL 5895425, at *6. × The Ninth Circuit has similarly rejected the defendant TNC’s argument that equitable estoppel should be applied on the basis of “intertwined claims.” The Court found that the plaintiff potential passengers did not allege any claim that was founded in or even tangentially related to a “violation of any duty, obligation, term or condition” imposed by the TNC service agreement. 29 29. Namisnak, 971 F.3d at 1095 (quoting Goldman v. KPMG, LLP, 92 Cal. Rptr. 3d 534, 551 (Cal. Ct. App. 2009)). × Rather, the Court held, plaintiffs’ claims arose from the ADA alone. Since the TNCs’ equitable estoppel arguments in these cases have all been rejected, the plaintiffs’ discrimination claims have proceeded to be determined by the courts rather than in arbitration.

These decisions contribute to the growing body of jurisprudence concerning the use of arbitration by TNCs in standard-form contracts, 30 30. See, e.g., Jill I. Gross, The Uberization of Arbitration Clauses, 9 Arb. L. Rev. 43 (2017); Tamar Meshel, Mobile-Based Transportation Employment Disputes: Corporate Chutzpa and the Potential ‎Resurrection of Class Arbitration, Chicago L. Rev. Online (June 5, 2020), https://lawreviewblog.uchicago.edu/2020/06/05/corporate-chutzpa-meshel/. × and shed light on the implications of such use in discrimination cases. They are particularly helpful in elucidating the circumstances in which it may be justified to apply equitable estoppel in cases involving non-signatories to arbitration agreements. 31 31. See generally, e.g., Tamar Meshel, Of International Commercial Arbitration, Non-signatories, and American Federalism: The Case for a Federal Equitable Estoppel Rule, 56 Stan. J. Int’l L. 123 (2020). × Since arbitration is founded on the principle of consent, 32 32. GE Energy Power Conversion France SAS, Corp. v. Outokumpu Stainless USA, LLC, 140 S. Ct. 1637, 1648 (2020) (Sotomayor, J., concurring). × it generally cannot be forced by or against a party who did not agree to it. Nonetheless, applying equitable estoppel to compel arbitration may be justified, for instance, where the non-signatory has benefited from the contract. The rationale is that a non-signatory should be estopped from relying on its lack of signature to preclude the enforcement of an arbitration clause when it has asserted that other beneficial provisions of the same contract do apply to it. 33 33. Int’l Paper Co. v. Schwabedissen Maschinen & Anlagen GMBH, 206 F.3d 411, 418 (4th Cir. 2000). × Applying equitable estoppel to compel arbitration by or against a non-signatory may also be justified where the issues to be resolved in the dispute are intertwined with the contract containing the arbitration clause. The rationale is that a party “cannot have it both ways. (It) cannot rely on the contract when it works to its advantage, and repudiate it when it works to (its) disadvantage.” 34 34. Hughes Masonry Co., Inc. v. Greater Clark Cty. Sch. Bldg. Corp., 659 F.2d 836, 839 (7th Cir. 1981) (quoting Tepper Realty Co. v. Mosaic Tile Co., 259 F. Supp. 688, 692 (S.D.N.Y. 1966)). ×

In other circumstances, however, equitable estoppel may be an improper basis for compelling arbitration by or against a non-signatory. For instance, where the non-signatory has neither benefited from the contract containing the arbitration clause nor is advancing claims in reliance on that contract. Indeed, a good example is provided in the cases discussed above, involving ADA claims brought against TNCs by potential passengers. Refusing to compel arbitration in such situations would not “disregard equity” or “contravene the purposes” of the FAA, in contrast to situations where enforcement of an arbitration clause on the grounds of equitable estoppel is truly called for. 35 35. Int’l Paper Co., 206 F.3d at 418 (quoting Avila Grp., Inc. v. Norma J. of California, 426 F. Supp. 537, 542 (S.D.N.Y. 1977)). × Rather, applying a measured approach to equitable estoppel in non-signatory arbitration cases and resorting to it only in appropriate cases would reinforce the doctrine and ensure that it is applied in line with the “FAA’s inherent consent restriction.” 36 36. GE Energy Power Conversion, 140 S.Ct. 1637, 1649 (2020) (Sotomayor, J., concurring). ×

II. Irving v. Uber: Arbitration in the Consumer Context

In 2018, Ms. Lisa Irving––a legally blind passenger––commenced an arbitration with the American Arbitration Association (AAA) against Uber. Ms. Irving claimed that Uber had violated the ADA as a result of its drivers’ repeated refusal to provide her appropriate transportation or harassment on the grounds of her blindness and/or seeing eye dog. 37 37. References in this Part to the factual background of the case, the procedural history of the arbitration, the arbitrator’s findings, and the outcome of the arbitration are based on the March 2021 merits arbitration award. Lisa Irving v. Uber Technologies, Inc., AAA Case No. 01-18-0002-7614 (2021) [hereinafter Merits Arbitration Award]. × The central bone of contention between the parties was the status of Uber’s drivers as employees or independent contractors, which both viewed as determinative of Uber’s liability.

However, the arbitrator found that this distinction between employees and independent contractors “is not primarily decisive because of overriding federal policy regarding ADA compliance.” 38 38. Merits Arbitration Award, at 3. × After conducting an evidentiary hearings and receiving detailed post-hearing opening and reply briefs from the parties, the arbitrator ruled that Uber is liable for the incidents complained of under “independent federal grounds” as well as “due to Uber’s contractual supervision over its drivers and for its failure to prevent discrimination by properly training its workers.” 39 39. Id. at 3-4. × In reaching these conclusions, the arbitrator examined the interpretation of the ADA in the case law as well as by the Department of Justice and the Department of Transportation. The arbitrator noted the non-delegable nature of duties arising under the ADA and found that these duties applied directly to Uber and by extension to its drivers. This conclusion, the arbitrator found, was further corroborated by––although not dependent upon––his finding that the drivers had an “employment relationship” with Uber given Uber’s control over them. 40 40. Id. at 7. While this finding was not the basis for the arbitrator’s decision, it is noteworthy given the multi-jurisdictional battle that TNCs have been fighting against the classification of their drivers as employees, referred to above. The status of drivers as employees or independent contractors is one of the main substantive issues that TNCs have been attempting to refer to arbitration pursuant to the FAA rather than resolve in the courts. However, whether this issue is to be resolved in arbitration does not depend on TNC drivers being employees or independent contractors. Rather, the application of the FAA to TNC drivers depends on whether they are “transportation workers” who are “engaged in interstate commerce” within the meaning of § 1 of the FAA and therefore exempt from the FAA. In this regard, see, e.g., Tamar Meshel, If Apps Be the Food of the Future, Arbitrate On!‎: Mobile-Based Ride-Sharing, Transportation ‎Workers, and Interstate Commerce, 15 Va. L. & Bus. Rev. 1 (2020). A Writ for Certiorari is currently pending before the Supreme Court on this question. See Waithaka v. Amazon.com, Inc., 966 F.3d 10 (1st Cir. 2020). × Examining Uber’s conduct, the arbitrator further found that Uber was aware of the discriminatory conduct of some of its drivers but failed to properly investigate, discipline, or train them.

Noting that “Uber has not provided facts or arguments based in law to refute the discrimination by its drivers[,]” 41 41. Merits Arbitration Award, at 15. × the arbitrator proceeded to award Ms. Irving damages for 14 instances in which she had been discriminated against by Uber’s drivers, some in amounts higher than the statutory minimum under California law. 42 42. Cal. Civ. Code § 52(a). The minimum amount is $4,000 per incident. × These instances included several incidents in which Ms. Irving was denied rides and was “stranded by the Uber drivers” or suffered discriminatory remarks made directly at her while she was in the vehicle. 43 43. Merits Arbitration Award, at 16. × The arbitrator also awarded Ms. Irving damages for the “significant emotional distress” she had suffered after face-to-face interactions with drivers on several occasions, noting that she was “humiliated,” late for work, and left in a dark and dangerous area at a late hour. 44 44. Id. at 16-17. × The arbitrator further awarded Ms. Irving damages for the “additional emotional distress and significant inconvenience” she had suffered from several occasions in which she was denied rides by drivers who “brought her to tears” and left her in the rain. 45 45. Id. at 17-18. × Finally, the arbitrator awarded Ms. Irving damages for incidents that involved “verbally abusive drivers,” with respect to which he found that

Ms. Irving feared for her safety . . . [The driver] yelled at her to get out of his car at least fifteen times, at one point pulling over to demand she get out in a dangerous area, making her feel helpless by his intimidation and threats. [The driver] grabbed Ms. Irving’s phone and refused to return it, and then filed a police report against her. Ms. Irving was physically upset during the hearing while testifying about this incident. 46 46. Id. at 21. ×

Throughout his findings on damages, the arbitrator referenced case law and damages awards granted in similar cases. The total amount awarded to Ms. Irving in damages was $324,000, plus approximately $800,000 to cover her legal costs. 47 47. Id. at 22. ×

While this arbitration is admittedly anecdotal, 48 48. I conducted a search of AAA Consumer Arbitration Awards but did not find any other award involving a TNC and the ADA. It is not my intention to draw general conclusions from this single example. My goal is merely to use this case as an illustration that arbitration is not necessarily disadvantageous to consumers in this context. × it contributes to refuting some common criticisms of consumer arbitration in the TNC context and more broadly. First, the significance of the decision is not so much in the amount of damages awarded to Ms. Irving, but rather in the simple fact that the consumer––not the corporate “repeat-player”––prevailed. 49 49. The so-called “repeat player effect” is the alleged tendency of arbitrators to favor corporate parties that are more likely to repeatedly use arbitration. See, e.g., Lisa B. Bingham, Employment Arbitration: The Repeat Player Effect, 1 Emp. Rts. & Emp. Pol’y J. 189, 190-91 (1997). × This case therefore illustrates that, to the extent that TNCs and other corporate parties perceive mandatory arbitration in a standard form consumer contract as a method by which they could evade liability, 50 50. See, e.g., Shauhin A. Talesh & Peter C. Alter, The Devil is in the Details: How Arbitration System Design and Training Facilitate and Inhibit Repeat-player Advantages in Private and State-run Arbitration Hearings, 42(4) Law & Pol’y 315, 317 (2020) (finding that “managerial values influence the arbitration process and provide a pathway for subtle repeat-player advantages in actual hearings.”). × this perception does not necessarily reflect the reality of consumer arbitration. Moreover, while consumer arbitration has been criticized for being confidential and taking place behind closed doors, 51 51. See, e.g., Cynthia Estlund, The Black Hole of Mandatory Arbitration, 96 N.C. L. Rev. 679, 681 (2018) (“To the extent that firms do impose obligations on their employees (and customers) to arbitrate rather than litigate future legal disputes, they can often draw a heavy veil of secrecy around allegations of misconduct and their resolution.”); Erik Encarnacion, Discrimination, Mandatory Arbitration, and Courts, 108 Georgetown L.J. 855, 861 (2020) (“[F]ully protecting rights against discrimination requires making authoritative and public institutions available to protect them…”). × research has found that arbitrators, as in the Irving v. Uber case, tend to give detailed reasons, engage in substantial legal analysis, and make extensive use of precedent, mostly of published judicial opinions. 52 52. W. C. Mark Weidenmaier, Judging-Lite: How Arbitrators Use and Create Precedent, 90 N.C. L. Rev. 1091, 1095 (2012). × Finally, the alternative avenue that Ms. Irving would have to pursue had Uber’s service agreement not contained an arbitration clause must be considered. This alternative avenue would be court litigation, which would likely be longer and more expensive. 53 53. Sarah Rudolph Cole, On Babies and Bathwater: The Arbitration Fairness Act and the Supreme Court’s Recent Arbitration Jurisprudence, 48 Hous. L. Rev. 457, 470. ×

The Irving v. Uber arbitration is merely one real-world example, but it serves as a reminder of what passengers could gain from arbitration against TNCs, if done right. 54 54. See, e.g., Thomas J. Stipanowich, The Arbitration Fairness Index: Using a Public Rating System to Skirt the Legal Logjam and Promote Fairer and More Effective Arbitration of Employment and Consumer Disputes, 60 U. KAN. L. REV. 985, 991 (2012) (proposing “a public rating system assessing the fairness of arbitration programs associated with contracts for consumer goods or services or individual employment contracts what we call an ‘Arbitration Fairness Index.’”). × This is not to suggest that arbitration is a panacea for all disputes in all sectors and in all circumstances. There may well be situations where the arbitral process is abused by the parties, the arbitral institution, or the arbitrator. 55 55. See, e.g., Asaf Raz, Mandatory Arbitration and the Boundaries of Corporate Law (Dec. 23, 2020), at 14, online: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3754604 (providing examples of arbitration clauses that “purport to cover an unlimited range of future disputes in which the stronger party might be involved, even if they have nothing to do with, and could not be contemplated at the time of, the original contract where the arbitration mandate appears,” or that “declare that the arbitrator must defer to the very action being challenged in arbitration—thus creating what is known as ‘the firm always wins’ clause.”). × But as against such “parades of horribles,” 56 56. Arthur Andersen LLP v. Carlisle, 556 U.S. 624, 629 (2009). × the Irving v. Uber arbitration demonstrates what empirical studies 57 57. See, e.g., Christopher R. Drahozal & Samantha Zyontz, An Empirical Study of AAA Consumer Arbitrations, 25 Ohio St. J. Disp. Resol. 843 (2010). × have long shown––that not all mandatory consumer arbitrations are necessarily “unfair.” 58 58. Christopher R. Drahozal, “Unfair” Arbitration Clauses, 2001 U. Ill. L. Rev. 695, 771 (2001). ×

III. Conclusion

Courts retain a gatekeeping function in the context of arbitration and ultimately determine whether an arbitration agreement, even one that is “mandatory,” should be enforced. The intersection of ADA discrimination claims and arbitration in the TNC context is no different. Federal courts have consistently found that the non-signatory status of plaintiff potential passengers with respect to TNCs’ service agreements does not negate their standing to bring claims under the ADA, but does negate the imposition of the arbitration clause contained in these service agreements on them. While arbitration agreements are enforceable as any other contract, including on such grounds as equitable estoppel, arbitration is fundamentally rooted in consent. It should therefore be compelled by or against non-signatories only where it is just and appropriate to do so. The courts’ consistent refusal to compel plaintiff potential passengers to submit their claims against TNCs to arbitration therefore reinforces it as a valid and legitimate dispute resolution mechanism in this context.

Where TNCs’ service terms are accepted by passengers and arbitration is enforced as a result, this should not be viewed as a necessarily unfair or anti-consumer practice. As the Irving v. Uber case demonstrates, albeit anecdotally, arbitration can produce as “fair” an outcome, from the consumer’s perspective, as a court can. There may well be situations where other dispute resolution mechanisms, such as litigation or mediation, will prove more suitable or better reflect the parties’ intentions. Determinations of which mechanism is most appropriate should be made on the basis of the parties’ relationship, their undertakings and overall interests, and how each process is designed in context. 59 59. See Jill I. Gross, Arbitration Archetypes for Enhancing Access to Justice, 68 Fordham L. Rev. 2319, 2324 (2020) (proposing a framework to assess “whether a particular form of arbitration enhances disputants’ access to justice relative to litigation.”). × As the recent experience of ADA claims against TNCs––brought both before courts and arbitrators––illustrates, what ought to be avoided is a wholesale indictment of arbitration as an inadequate mechanism as a matter of principle in the TNC context.

Assistant Professor, University of Alberta Faculty of Law.

Last year I wrote about Uber and Lyft’s battle against a California law that required them to treat their drivers as employees, rather than contractors. Then, in November, California voters passed Prop. 22, which exempted app-based drivers from that law, something Claire covered in detail. Two recent actions from the Biden Administration, which has positioned itself as pro-worker and pro-organized labor, indicate that the fight over how to classify gig workers is far from over, and that the administration will throw their weight toward increasing the rights of gig workers. These actions come as Uber, Lyft, and other emerging transportation companies reckon with their labor practices overall, amid a changing atmosphere as we emerge from COVID lockdown.

Administration Moves

Last week the Department of Labor withdrew a Trump-era proposed rule change governing the definition of “independent contractor.” The Trump Administration’s proposed change would have deemphasized a number of factors that are used in deciding a worker’s classification, which would have weighted considerations toward classifying workers as independent contractors. By pulling the rule before it can go into effect, the existing rule, with six factors for consideration, remains in use under the Fair Labor Standards Act. This move comes in the same week in which the Secretary of Labor, Marty Walsh, voiced his support for gig workers being considered as employees and receiving benefits, like health insurance, in “a lot of cases.” While that’s far from a definitive course of action, when combined with the regulatory changes, the Secretary’s words indicate the Federal government will be paying attention to the classification fight going forward and is putting its weight behind pro-worker options. I’ll also note that in March Uber announced it will categorize its UK drivers (which total more than 70,000) as employees, bringing them into compliance with a recent court decision – meaning Uber is facing labor changes on both sides of the Atlantic.

Uber and Lyft Need Drivers

While Uber and Lyft gird themselves for possible regulatory changes, they are also dealing with a shortage of drivers. In 2020 COVID lockdowns and the continued threat of the virus (along with the threat of monstrous customers…) cratered demand for rideshares, leading many drivers to move on from ridesharing. Now, with demand for rides growing as the world opens back up, both companies find themselves in need of more drivers and having to turn to financial incentives to recruit them. On the ground the shortage has raised prices and increased wait times for users.

At the same time as they have been recruiting more human drivers, both Uber and Lyft have purged their in-house development of automated vehicles. In December, Uber sold its automation efforts over to automated vehicle developer Aurora for roughly $4 billion. Then last month Lyft offloaded it’s automation program to a Toyota subsidiary for $550 million. For a long time the conventional wisdom was that the end-goal of the ridesharing companies was to automate their fleets and escape from having to deal with human employees (or contractors). Yet given that automation is still years away from widespread deployment and that only a few major corporations can afford the long term development costs of AVs, it seems Lyft and Uber are cutting their losses. That said, if they can survive COVID losses and changing demands, I’m sure they’ll be first in line to buy production AVs.

Emerging Tech and Emerging Labor Issues

Of course, Uber and Lyft are far from the only transportation-tech related companies with labor issues that have become apparent over the past year. Last year, as grocery deliveries exploded in popularity, Amazon drivers were coming up with unique ways of ensuring they got a crack at incoming orders – hanging their phones from trees as close to a Whole Foods as possible. The idea was that by leaving phones closer to the building they would be the first to be offered a delivery job via the gig-app Amazon Flex. Depending on your point of view this is either ingenious, or demonstrative of the gig economy pitting workers against each other. More recently Amazon has taken flack for making the delivery drivers who operate Amazon branded vans (yet are wait for it… contractors…) sign biometric consent forms. The forms give Amazon permission to use cameras and sensors to monitor drivers “100%” of the time they are working, in the name of safety, as the system can give audio alerts to drivers in real time. I can’t imagine that an AI-enabled camera that can yell corrections at you as you drive is anyone’s ideal boss, but here we are.

The gig economy is clearly not going away anytime soon, even if some gig jobs become automated. And now there is momentum for dealing with the employment issues around these companies and their platforms. Just where that momentum takes the labor market, and how it may change the relationship between platforms and workers, remains to be seen.

In light of the 2021 Law and Mobility Conference’s focus on equity, the Journal of Law & Mobility Blog will publish a series of blog posts surveying the civil rights issues with connected and autonomous vehicle development in the U.S. This is the third part of the AV & Civil Rights series. Part 1 focuses on Title VI of the Civil Rights Act. Part 2 focuses on the Americans with Disabilities Act. Part 4 focuses on the Fourth Amendment.

As Bryan Casey discussed in Title 2.0: Discrimination Law in a Data-Driven Society, there are a growing number of studies that indicate racial disparities in wait times, ride cancellation rates, and availability for rideshares and delivery services like Uber, Lyft, and GrubHub. Given that, for the most part, humans are behind the wheel in these cars, these disparities are the aggregate result of both conscious and unconscious biases. Drivers can choose where they pick up passengers, meaning that neighborhoods associated with marginalized demographics have less cars available at any given moment. Drivers may see a passenger’s name and decline that passenger based on assumptions about their race. The passenger rating system is also a challenge. Drivers may—again, consciously or unconsciously—be more judgmental of a black passenger than a white passenger when rating them between 1 and 5 at the end of a ride. Ratings can undermine users’ ability to nab a car quickly and can even get users kicked off of platforms.

As Uber and other companies transition to connected and automated vehicles (AV), they have promoted the artificial intelligence (AI) that these vehicles will rely on as the solution to what they frame as a very human problem of bias. However, as growing numbers of studies are showing, AI can be just as discriminatory as people. After all, people with biases make machines and program algorithms, which in turn learn from people in the world, who also have biases. As the Wall Street Journal recently reported, “AI systems have been shown to be less accurate at identifying the faces of dark-skinned women, to give women lower credit-card limits than their husbands, and to be more likely to incorrectly predict that Black defendants will commit future crimes than whites.” And when AI is discriminatory, this can manifest on a broader scale than when it is just one discriminatory person behind a wheel. Accordingly, switching from human drivers to computer drivers will not end transportation access issues based on racial disparate impact, absent a concerted effort by AV companies, and perhaps by the government, to fight algorithmic discrimination.

Where does the law enter for this type of discrimination? It isn’t clear.

Title II of the Civil Rights Act of 1964 broadly mandates that all people in the U.S., regardless of “race, color, religion, or national origin,” are entitled to “full and equal enjoyment” of places of public accommodation, which are defined as any establishments that affect interstate commerce. Access to transportation undoubtedly affects participation in interstate commerce. And yet, as Casey reported, “[i]t is unclear whether Title II covers conventional cabs, much less emerging algorithmic transportation models,” including rideshare systems that have explicitly resisted categorization as public accommodations. It also remains unclear whether discrimination claims based on statistical evidence of race discrimination are cognizable under Title II, particularly given the judiciary’s increasing reluctance to remedy state and private action with a discriminatory impact, rather than clear evidence of racially discriminatory intent.

Professor Casey advocated updates to Title II as one manner to combat discrimination in rideshares. Particularly, Congress should clarify that the statute cognizes statistically based claims and that it covers “data-driven” transportation models. This is not unheard of; the Fair Housing Act covers disparate impact. Since we published Title 2.0, there have not been any litigation or policy updates in this area.

Accordingly, it will likely be up to AV companies themselves to ensure that people are not denied the benefit of access to AV on the basis of their race (or gender, socioeconomic status, or disability, for that matter) because of discriminatory algorithms. Experts have suggested reforms including frequent inventories of discriminatory impact of AI, adjusting data sets to better represent marginalized groups, reworking data to account for discriminatory impacts, and, if none of these steps work, adjusting results to affirmatively represent more groups. At a minimum, transparency is key for both the government and concerned individuals to assess whether AV has a discriminatory impact, and any data or findings should be widely published and shared by these companies.

Despite the downfalls of today’s rideshares discussed above, black users have still praised this technology as easier than hailing a cab on the street. In that way, AVs still have the opportunity to be another step towards transportation equity.

Last week I discussed the California Superior Court decision that ruled that under California law Uber and Lyft must classify their ridesharing drivers as employees, rather than independent contractors. In response to that ruling, both companies had threatened to shut down service across the state. Yesterday, an appeals court issued a stay on that ruling, allowing both companies to continue operations, “pending resolution” of their appeal of the initial order. As I mentioned in my last blog post, the rideshare giant’s strategy currently appears to be “run out the clock,” until the November election, when California voters will decide on Proposition 22, which would establish a new classification for drivers. So for now those Californians who are willing to brave getting into a rideshare will be able to do so – while Uber and Lyft also explore more creative solutions, in case Prop 22 doesn’t pass.

Also on Thursday, another court case tied to Uber was just starting. Federal prosecutors in San Francisco filed criminal charges against Uber’s former security chief, Joe Sullivan. Sullivan is charged with two felony counts for failing to disclose a 2016 Uber data breach to federal investigators who were investigating similar earlier incidents that had occurred in 2014. In the 2016 incident, an outside hacker was paid $100,000 by Uber after the hacker revealed they had acquired access to the information of 57 million riders and drivers. Beyond the payment, Uber faced further criticism for failing to reveal the incident for a full year. Two of the hackers involved later plead guilty to charges related to the hack, and they are both awaiting federal sentencing. In 2018 Uber paid $148 million to settle a suit brought by state attorneys general related to the hack, while the FTC expanded a previous data breach settlement in reaction to the incident. Beyond the lack of transparency (to the public and law enforcement) Uber’s major misstep, at least in my view, is the payment itself. While many companies, Uber included, sponsor “bug bounties,” where outside security researchers are rewarded for reporting security flaws in a company’s products, this payment fell outside of that structure. Rather, it seems more like a ransom payment to less than scrupulous hackers. While Uber is far from the only company to have faced data breaches (or to have paid off hackers), this case should be a wake-up call for all mobility companies – a reminder that they have to be very careful with the customer data they are collecting, least they fall prey to a data breach, and, just as importantly, when a breach occurs, they have to face it with transparency, both to the public and investigators.  

The third Uber-related this month involves another former Uber employee, Anthony Levandowski, who was sentenced to 18 months in prison for stealing automated vehicle trade secrets from Google. In 2016, Levandowski left Google’s automated vehicle project to start his own AV tech company, which was in turn acquired by Uber. Levandowski was accused of downloading thousands of Google files related to AVs before he left, leading to a suit between Google’s Waymo and Uber, which was settled for roughly $250 million. There are a lot more details involved in the case, but it highlights some of the many challenges Uber, and the mobility industry at large, face.

Mobility and AVs are a huge business, with a lot of pressure to deliver products and receive high valuations in from investors and IPOs. That can incentivize misbehavior, whether it be stealing intellectual property or concealing data breaches. Given how central mobility technologies are to people’s daily lives, the public deserves to be able to trust the companies developing and deploying those technologies – something undermined by cases like these.

This week a California Superior Court ruled that transportation network company (“TNC”) titans Uber and Lyft have to classify drivers as employees, rather than independent contractors. The suit, spearheaded by the state’s Attorney General, sought to bring the two ride-sharing companies into compliance with Assembly Bill 5 (“AB 5”), which reclassified an array of “gig economy” workers as employees. When gig economy workers are reclassified as employees, they gain access to minimum wage requirements, overtime and sick leave, workers’ comp, disability insurance, and (importantly, in the COVID-19 era) unemployment insurance. Given those added benefits, employees can cost a company 20 to 30 percent more than an independent contractor, which is in part fueling opposition to bill and the ruling.

The decision comes after months of COVID-19 related disruptions that have cratered the ridesharing services at the core of Lyft and Uber’s business models. Lyft has reported a 61% revenue drop in the second-quarter of 2020, though it also reported an uptick in ridership in July. Uber reported a 75% drop in US ridership over April, May, and June of this year. Various lockdowns contributed to that drop – indeed, according to Uber’s own reports, nearly a quarter of its entire business comes from four US metro areas – NYC, Chicago, LA, San Francisco – along with its London operations. While the company has claimed encouraging signs from markets in nations like New Zealand, where the virus is under control, it remains to be seen if that success can be replicated in the US, where the virus is still spreading. In May, Uber announced two rounds of layoffs, cutting roughly 25% of its workforce (around 6,700 people), while Lyft cut 20% of its workforce in April.

Uber’s precarious financial situation makes its response to the Superior Court ruling all the more interesting – toying with a potential state-wide shutdown of their services, a least temporarily. In an interview, Uber CEO Dara Khosrowshahi indicated that if the company’s appeal of this week’s ruling fails, Uber may have to shut down service as they adjust to the new rules – with reductions in service outside major markets upon the service’s reactivation. That shutdown period also times out with the November election, where California voters will decide on Proposition 22, which would exempt ridesharing drivers from being classified as employers under AB 5. In a New York Times op-ed, Khosrowshahi has proposed a “third way” between employee and independent contractor. This system would require all gig economy companies to establish funds to give their workers cash payments to be used for benefits, with payouts based on the hours worked. By requiring all gig companies to pay in, individuals working for multiple companies at the same time remain covered as they switch from app to app. In response to this proposal, critics point out that Uber could already establish such a system, at least for their own drivers, if it wanted to.

California is far from the only place where ridesharing companies are being pushed to change the relationship the companies have with their drivers. In June, Seattle passed a law requiring paid sick time for TNC drivers during the COVID-19 crisis (the leave requirement would expire 180 days after the crisis has ended…). The Seattle bill grants one paid day of leave for every 30 calendar days worked (either full or part time). In Washington, D.C., a Lyft driver has challenged the company’s lack of sick days, arguing drivers should be classified as employees under city law. Indeed, as the pandemic spread workers across the nation have spoken up about the difficulty of obtaining any sick leave from gig economy companies, even when they showed symptoms of COVID-19.

Unemployment insurance has been a major focus in these disputes, especially as drivers have been unable to work due to lockdowns or COVID-related reductions in demand. Traditionally, when drivers are classified as independent contractors, they lose the ability to claim unemployment, as their “employer” doesn’t pay into the system. At the start of the COVID crisis, Congress set up a separate unemployment fund for self-employed workers, though that fund ran out at the end of July. Even while the funds were available,  however, many gig workers had a hard time obtaining them, as existing state unemployment systems struggled to adapt to new rules while being slammed with claims from millions of people newly out of work. In California, the issues surrounding Assembly Bill 5 complicated the process, as the Federal funds were marked for people classified as independent contractors, which, thanks to AB 5, now did not include many gig workers. Drivers in New York, frustrated at their inability to obtain unemployment funds sued the state government, and have won, at initially, building their arguments off two earlier rulings that deemed gig workers eligible for unemployment benefits. Part of the disputes in both California and New York involve the lack of earnings data for drivers, which the state needs to calculate their unemployment eligibility, with a lawyer for the State of New York accusing Lyft and Uber of “playing games” to prevent turning over said data. Elsewhere, the Pennsylvania Supreme Court ruled on a similar case – finding that an Uber driver was not “self-employed” for the purposes of unemployment benefits, while the Massachusetts A.G. has also recently brought suit to reclassify Uber and Lyft drivers as employees.

As the pandemic drags on, it’s hard to know what will happen next. The shortfalls of the current system have been made manifest – something clearly needs to change. Perhaps that could come in the form of Uber’s proposed “third way,” but such a system would need to be much better defined than it is now to prove it could offer a level of benefits comparable to those offered to employees. At the same time, if gig workers are to be counted as full employees, could that limit the entry of new gig companies? The massive growth of companies like Uber and Lyft was fueled in part by the cost savings that came from using independent contractors. Could new companies hope to cut into existing or new markets while also providing greater employee benefits?

For now, I’d say it’s more important to focus on the existing problem. Uber and Lyft are sophisticated technology companies, and both should be more than able to adapt their system to make their drivers employees. Given the COVID-19 related reductions in demand, the time seems right for them to make that change everywhere, not just in California. After all, according to their own plans, Uber won’t be dealing with human drivers forever, so future employee expenses will supposedly reduce with time. And while the pandemic may have harmed Uber’s ridesharing, it has helped grow its delivery service, UberEats. Even if automated vehicles replace gig drivers, they will be less able to replace workers for services like TaskRabbit or Instacart, where human labor is still central. And with expanded government-based safety nets seemingly a distant possibility, for the time being, workers will still need employer-based benefits of one form or another. Just as ridesharing companies disrupted the way people move through the world, it seems the time is right to disrupt the relationship between those companies and drivers that form the core of the TNC workforce.

An IBM report released earlier this month revealed some significant changes in consumer sentiment and public willingness to use certain mobility methods as a result of COVID-19. The study polled more than 25,000 adults during the month of April. Of the respondents that regularly used buses, subways, or trains: 20 percent said they no longer would utilize those options; an additional 28 percent said they would use public transportation less often. 17 percent of people surveyed said they will use their personal vehicle more; 25 percent of that 17 percent said it will be their exclusive method of transportation going forward.

Consumer perception of public transportation and the ways we move has shifted dramatically in just three short months. These results indicate that a significant number of U.S. consumers intend to drastically change the ways they travel in the aftermath of COVID-19. If these sentiments remain in place in the coming years, the decrease in public transportation ridership would mean decreased fee collections, which can lead to several options for cities to fund public transportation, including (1) an increase in ridership fees, (2) an increase in general tax revenue devoted to public transportation, or (3) a decrease in service offerings. All of these options are undesirable, especially in cities where private vehicle ownership is low, and many workers may have no option other than public transportation. The cities with the largest annual ridership numbers for subway or metro are New York City, Washington D.C., Chicago, Boston, and the San Francisco Bay Area.

City

Annual Metro/ Subway ridership (2019)

Population
(2018 Estimates)

Percent of Households without a vehicle (2016)

New York, NY

2,274 Million

8,398,748

54.4%

Washington, D.C.

237 Million

702,455

37.3%

Chicago

218 Million

2,705,994

27.5%

Boston

152 Million

694,583

33.8%

San Francisco

123 Million

883,305

29.9%

Removing 20 percent of public transportation riders completely and decreasing the usage of nearly 30 percent more would be financially catastrophic for any city transit authority. In 2019, the New York MTA brought in nearly $17 Billion. The current decrease in ridership (down 74 percent) has already required the MTA to seek billions in aid from the federal government and led to a first-ever decrease in working hours to sanitize trains overnight. A sustained decrease of more than 30 percent of rides per year would require a systemic overhaul of the metro system or some other drastic measures.

While some respondents indicated they will use their personal vehicles more, it is clear that in cities where public transportation is most utilized, many people do not have access to a personal vehicle. This will place a difficult decision on many underserved and minority communities: return to using public transportation and face an elevated risk of potential infection, struggle to find a job closer to home to avoid transportation, or save for a personal vehicle to avoid public transportation. Owning a vehicle in major cities can be prohibitively expensive for low-income households, and affordable parking can be nearly impossible to find. As transit authorities raise prices to compensate for lost riders, more riders may depart as the cost of ridership becomes too high for their budget. This could lead to a death spiral for public transportation. These systems simply cannot sustain 90 percent ridership decreases.

The same IBM survey also found that the decision to buy a personal vehicle after COVID-19 was “greatly” influenced by a constraint on their personal finances for more than 33 percent of respondents. 25 percent said they would hold off on buying a vehicle for more than 6 months. So for many people who wish to stop using public transportation, there is no safe and affordable option immediately available. Some may point to rideshare services as a safer alternative to the cramped quarters of public transportation. But according to the survey, of the respondents who used rideshare apps and services already, more than 50 percent said they would use the services less, or stop entirely. Uber and Lyft are going to see an incredible drop off in ridership; Uber and Lyft both halted their carpooling services in March. Uber trips were already down 70 percent in some cities in March. These numbers are sure to increase, and the companies will recover financially due to the increase in demand for UberEats during this crisis. However, the surge in ridership seen in recent years will take many years to reach 2019 peaks.

Finally, the IBM survey also asked about working from home, a topic I wrote about at the end of March.  Around 40 percent of respondents indicated they feel strongly that their employer should provide employees the option to opt-in to remote working from home going forward. 75 percent indicated they would like to continue working from home at least occasionally, and more than 50 percent indicated they would like working from home to be their primary work method. Perhaps companies will heed the desires of their employees. It is unlikely that many companies will offer the “work from home, forever” option that Twitter and Facebook have provided. But almost certainly we will see an increase in the ability of employees to work from home, now that their ability to do so has been demonstrated. Especially in cities like New York and San Francisco where the annual cost of office space is more than $13,000 per employee. If more tech companies follow Facebook’s lead and allow many employees to work remotely forever, we may even see housing prices start to decrease in some select areas and a further decrease in public transportation ridership in cities like San Francisco.

Mobility is going to change immensely once this crisis is over, whenever that may be. Public transportation must be overhauled in its current processes and operations if it hopes to regain public confidence and achieve ridership numbers anywhere near 2019 levels during the next decade.

Up to now, the way forward for roadways-based, commercial automated mobility remained somewhat of a mystery. Surely, we would not see AVs in the hand of individual owners anytime soon – too expensive. “Robotaxi” fleets commanded by the likes of Uber and Lyft seemed the most plausible option. There was, at least in appearance, a business case and that most industry players seemed to be putting their efforts towards an automated version of common passenger cars.

Over the course of 2019, the landscape slowly but steadily changed: public authorities started to worry more about safety and the prospects of seeing fleets of “robotaxis” beyond the roads of Arizona, Nevada or California seemed remote. This is how automated shuttles found their way to the front of the race towards a viable business model and a large-scale commercial deployment.

Many now mock these slow-moving “bread loafs,” ridiculing their low speed and unenviable looks. However, some of these comments appear slightly disingenuous. The point of the shuttles is not “to persuade people to abandon traditional cars with steering wheels and the freedom to ride solo.” I don’t see any of these shuttles driving me back home to Montreal from Ann Arbor (a 600 miles/1000km straight line). But I see them strolling around campuses or across airport terminals. The kind of places where I don’t quite care about the good looks of whatever is carrying me around, and also the kind of place where I wouldn’t take my car to anyway. There might be much to say about how certain electric vehicles marketed directly to the end-user failed because of their unappealing design, but I don’t plan to buy a shuttle anytime soon.

Looks aside, these automated “turtles” have a major upside that the “hare” of, say, Tesla (looking at you, Model 3!) may not dispose of. Something which happens to be at the top of the agenda these days: safety. While notoriously hard to define in the automated mobility context (what does safety actually imply? When would an AV be safe?) removing speed from the equation immediately takes us into a safer territory; public authorities become less concerned, and more collaborative, agreeing to fund early deployment projects. Conversely, scooters irked a lot of municipal governments because they go too fast (among other things). As a result, there was little public appetite for scooters and operators were forced to withdraw, losing their license or failing to become commercially viable.

As a result, it is the safe vein that various industry players decided to tap. Our turtles are indeed slow, with a top speed of 25mph, usually staying in the range of 15 to 20 mph. This is no surprise: that is the speed after which braking means moving forward several dozen if not hundreds of feet. Within that lower bracket, however, a vehicle can stop in a distance of about two cars (not counting reaction time) and avoid transforming a collision into a fatality. Hence, it goes without saying that such shuttles are only suitable for local transportation. But why phrase that as an only? Local transportation is equally important. Such shuttles are also suitable for pedestrian environments. Outside of the US, pedestrians have their place on the road – and many, many roads, across the globe, are mostly pedestrian. Finally, they can also be usefully deployed in certain closed environments, notably airports. In many places, however, deployment of such shuttles on roadways might require some additional work – creation of lanes or changes to existing lanes – in order to accommodate their presence. Yet the same observation can also be made for “robotaxis,” however, and the adaptations required there may be much more substantial. The limited applications of automated shuttles may be what, ultimately, makes them less appealing than our Tesla Model 3 and its promises of freedom.

Overall, turtle shuttles appear closer to a marginal development from widely used rail-based automated driving systems, rather than a paradigm shift. That might precisely be what makes them a good gateway towards more automation in our mobility systems; there is wisdom in believing that we will have a better grasp of the challenges of automated mobility by actually deploying and using such systems, but it is not written anywhere that we need to break things to do so.

Last week, the United States declined to sign the “Stockholm Declaration,” an international agreement to set targets for reducing road fatalities. The reason given for not signing the declaration was the U.S.’s objection to items within the document that referenced climate change, equity, gender equality, and other issues. For context, here is the paragraph they are referencing:

[Signatories resolve to] “[a]ddress the connections between road safety, mental and physical health, development, education, equity, gender equality, sustainable cities, environment and climate change, as well as the social determinants of safety and the interdependence between the different [Sustainable Development Goals (“SDGs”)], recalling that the SDGs and targets are integrated and indivisible;”

This is an abdication of responsibility on the part of the American government, and ignores the real social, economic, and climate issues that are deeply tied to transportation. This piece is the first in a series, in which I will touch on how transportation, especially the emerging mobility technologies we usually cover, are entwined with issues that the current Administration sees as beyond the scope of road safety. This is not meant to be an exhaustive list, but rather a few examples offered as proof of the complexity of the issues. For today we’ll consider the environmental issues that are tied to road safety.

Road Safety and the Environment

Much has been made of how CAVs and other new mobility technologies can reduce greenhouse emissions via electrification of transportation and gained efficiencies through coordination between vehicles and infrastructure. The pursuit of safer roads via CAV deployment is also the pursuit of “greener” roads. This is especially important in the face of a recent study that found the use of rideshares like Lyft and Uber are increasing emissions – by an estimated 69%. The study found that rideshare usage shifted trips that would have been undertaken by mass transit, biking, or walking. Any discussion of the future of road safety, especially in cities, will have to include discussions of ridesharing, and how to better integrate biking, walking, and things like micro-mobility services into our streets, an integration that has important environmental implications.

The deployment of electric vehicles, something that appears to be a goal of major auto manufacturers, is another area in which road safety and the environment meet. To start with, these vehicles reduce overall vehicle emissions, which themselves are a health hazard. While not traditionally part of the road safety discussion, recent studies have shown that outdoor air pollution reduces the average life expectancy world-wide by almost 3 years. Including emissions in the safety conversation is especially important as vehicles are now the largest carbon producers.

Electric vehicles have other positive safety features – their large batteries, for example, make them less likely to roll over in an accident. On the other hand, electric vehicles traveling at low speeds can be harder for pedestrians and others to hear. In response, NHTSA has now mandated that EVs be equipped to generate artificial sound to warn those around them.

These are just a few ways in which environmental issues cross over into road safety, as recognized by the signatories to the Stockholm Declaration, and it is imperative the U.S. government take them into consideration rather than dismissing them outright.

Imagine that you and your friends go out for a night on the town. By the time you are well and tired, it seems as though everyone else simultaneously had the same idea. With everyone around you clamoring to call an Uber or Lyft, you and your friends take one look at the gridlocked streets and agree that the roads are just not the way to go tonight. However, the skies look clear and traffic-free, so why not take a helicopter across town? While this may seem like the start of a very odd joke, it’s a future that Los Angeles-based startup up Skyryse is looking to bring to the present and a reality that is closer than you might think.

“Skyryse is on a mission to get people where they want to be quickly, affordably and safely.”

Skyryse, Our Vision

While this may be enough to start stirring up the questions in your mind, here’s another twist to Skyrise’s plans for urban travel: fully automated flight. In mid-December Skyrise held a demonstration highlighting a helicopter that took off, flew for fifteen minutes, and then landed, all fully automated.

The demonstration showed a lot of what Skyryse has in mind for making urban air mobility a widely adopted norm for traveling short distances. For one, Skyryse unveiled its Skyryse Flight Stack, which “comprises of technology that automates flight in [Federal Aviation Administration]-approved helicopters, safety and communication systems, and a network of smart helipads to ultimately create a new transportation system.”

“Unlike other companies building autonomous vertical takeoff and landing (VTOL) aircraft from scratch or only for the military, Skyryse refits existing consumer-grade, dependable and certified aircraft and technologies with software and hardware innovations.”

PRNewswire.com

Simply put, Skyryse isn’t building new aircraft, it’s taking what already works and adding a little bit of spice. The company’s goal is to develop a fully autonomous VTOL flight system that can be installed in both legacy and future helicopter models, as well as helipads capable of communicating with the outfitted aircraft information such as changing weather conditions or low-flying objects. Skyryse aims to become the first fully operational air taxi service available to the public that doesn’t break the bank.

Now, you may be thinking that a self-flying helicopter is a ride on which you would rather not be a passenger but have no fear. Passengers on aircraft in Skyryse’s fleet are accompanied by a trained and certified pilot who oversees the flight system and can take over the controls in the event of an emergency or potential malfunction. While this does leave open the potential for awkward conversation, it does add an extra layer of safety and checks on the autonomous system.

I personally think this sounds incredible, if it can–no pun intended–get off the ground. Why not take to the skies to avoid the mad rush of cars and congestion of city streets? And why not use already available aircraft to do it? It all makes sense and seems pretty logical. However, we all know that logic does not always guarantee success.

My main concerns surround public perceptions and pricing. For perception, I am curious about the projected amount of time it will take before there is enough demand to justify a supply. How long will air taxi companies have to advertise and ultimately wait before enough people know about and trust their autonomous aircraft? As for pricing, the concerns and questions are probably pretty clear. How is this going to be affordable for everyone, and when? It has been reported that Skyryse plans to release the details of how it will achieve affordable pricing at some point this year. I for one am looking forward to the day when I can hop in line at a helipad and quickly fly across town, all without breaking the bank.

If there are any ideas that the internet believes to be the truth in this modern day in age, I think that the following would at least make the list: the government is likely watching you through the camera in your laptop, and Facebook’s algorithm may know you better than anyone else. While the internet normalizes being surveilled – and George Orwell can be heard continuously rolling over in his grave – the collection, analysis, and sale of information and user data is something to, at the very least, keep in mind.

Target can predict when a shopper is due to give birth based on subtle changes in shopping habits (going from scented to unscented soap, for example); your phone tracks where you are and how often you go to the point that it recognizes your patterns and routines, suggesting certain destinations you visit regularly; and health insurance companies believe they can infer that you will be too expensive to cover simply from looking at your magazine subscriptions, whether you have any relatives living nearby, and how much time you spend watching television. It is both fascinating and startling in equal measure.

When we narrow our focus to transportation and mobility, there is still an entire world of information that is being collected, sold, and turned into, for example, new marketing strategies for companies purchasing that data from brokers. Other times, the actor using that data-turned-actionable intelligence is a government entity. Either way, it’s good know and understand some of what is being collected and how it may be used, even if it’s only the tip of the iceberg. Car insurance companies track and collect data on how often drivers slam on brakes or suddenly accelerate and offer rewards for not doing those things. People have been subjected to police suspicion or even been arrested based on incorrect geolocation data collected from their cell phones.

Despite the potentially grim picture I may have painted, user data isn’t always wielded for evil or surveillance. Recently, popular navigation app Waze added a feature that allows its users to report unplowed roads plaguing drivers during the winter months. The feature was developed through collaboration with the Virginia Department of Transportation (VDOT). Users in areas with inclement winter weather are now notified when they are coming upon a roadway that is reportedly in need of a snowplow. In addition to providing users with information and warnings, Waze also partners with transportation agencies across the U.S. and provides these agencies or local governments with this winter transportation information through the Waze for Cities Data program. The point is to make responsible parties aware of the areas that are still in need of a snowplow and assist them in prioritizing and deploying resources.

This sort of data collection is innocent enough and helpful in a person’s everyday life. According to Waze, the data is anonymized and contains no personally identifiable information (PII) when it becomes accessible to government agencies. However, as cars and cities become smarter the risk of an individual user’s data being used for more concerning purposes is likely to increase. This danger is in addition to the privacy risks that come from carrying around and depending upon personal devices such as cell phones.

“[Cars are] data-collecting machines that patrol the streets through various levels of autonomy. That means that our mobility infrastructure is no longer static either, that infrastructure is now a data source and a data interpreter.”

Trevor English, InterestingEngineering.com

Uber went through a phase of tracking users even while not using the app; a number of smart city technologies are capable of capturing and combining  PII and household level data about individuals; and the City of Los Angeles wants to collect real-time data on your individual e-scooter and bikeshare trips – California’s legislature doesn’t exactly agree. As these capabilities are advancing, so is the law, but that doesn’t necessarily mean that the race is a close one. So, while our cars and scooters and rideshare apps may not yet be the modern iteration of Big Brother, there’s always tomorrow.

Several major OEMs have recently announced scaling back of their shared or automated mobility ventures. Ford and Volkswagen are giving up investments in “robotaxis” – the CEO of their software partner, Argo, was quoted saying he “hates the word” anyway – and similar services operated by German automakers are withdrawing from various markets or shutting down altogether, after overextending themselves during the last 18 months.

Two separate trends seem to contribute to that movement. The first one, car ownership is still growing worldwide, albeit modestly – roughly 1% per year over the last ten years in Germany, for example – while sales of new cars is slumping. It is important to differentiate these two: while new car sales affect the revenues of OEMs, and may indicate changes in consumption patterns, car ownership rates indicate people’s attitude vis-à-vis car ownership better. In that sense, we see a continued attachment to personal car ownership, a cultural phenomenon that is much more difficult to displace or even disrupt than what some may have thought previously. Hence, the dreaded “peak car” that will relegate the iconic 20th century consumer good to museums may not materialize for a while.

The second trend has to do with an observation made time and again: OEMs are not naturally good at running mobility services: their business is making cars. As one bank analyst put it, no one expects Airbus or Boeing to run an airline. Why should it be any different with car OEMs? Thinking about the prospects of automation, it became commonplace for large industrial players to partner with specialized software developers to develop the automated driving system. That may result in a great product, but it does not give create a market and a business plan when it comes to the AVs themselves. As it turned out, the main business plan, which was to use these cars as part of large car-sharing services or sell them to existing mobility operators, ran into a some roadblocks: OEMs found themselves competing with already existing mobility operators in a difficult market; and putting an AV safely on the road is a much more daunting task than once thought. As 2019 comes to a close, we have yet to see an actual commercial “robotaxi” deployment outside of test runs.

This second trend puts a large question mark on the short and medium term financial viability of investments in “robotaxis” and automated mobility operations, generally. OEMs and their partners, looking for ways to put all those vehicle automation efforts to profitable use, look at other markets, such as heavy, non-passenger road and industrial vehicles. Nevertheless, no one seems poised to completely exit the automated passenger mobility market; they all keep a foot in the door, continuing their tests and “gathering more data,” in order to allegedly understand the mobility needs of road users. Beyond these noble intentions, however, there is an exit plan: if all else fails, they can monetize their data sets to data hungry software developers.

In the end, this comes back to a point frequently addressed on this blog, that of safety. Technological advances in automation (broadly speaking) are bringing increased safety to existing cars, and they will continue to do so. We might have become overly fixated by the golden goose of the “Level 5” robotaxi (or even Level 3), which may or may not come in the next ten years, neglecting the low-hanging fruit. While laugh at our ancestors dreaming about flying cars for the year 2000, our future selves scoff at us for chasing robotaxis by 2020.

Over the last few years, emerging mobility technologies from CAVs to e-scooters have become the targets of malicious hackers. CAVs, for example, are complicated machines with many different components, which opens up many avenues for attack. Hackers can reprogram key fobs and keyless ignition systems. Fleet management software used worldwide can be used to kill vehicle engines. CAV systems can be confused with things as simple a sticker on a stop sign. Even the diagnostic systems within a vehicle, which are required to be accessible, can be weaponized against a vehicle by way of a $10 piece of tech.

For mobility-as-a-service (“MaaS”) companies, the security of their networks and user accounts is also at threat. In 2015 a number of Uber accounts were found for sale on the “dark web,” and this year a similar market for Lime scooter accounts popped up. Hacking is not even required in some cases. Car2Go paused service in Chicago after 100 vehicles were stolen by people exploiting the company’s app (the company is now ending service in the city, though they say it’s for business reasons).

The wireless systems used for vehicle connectivity are also a target. On faction in the current battle over radio spectrum is pushing cellular technology, especially 5G tech as the future of vehicle-to-vehicle communication. While 5G is more secure than older wireless networks, it is not widespread in the U.S., leaving vulnerabilities. As some companies push for “over-the-air” updates, where vehicle software is wirelessly updated, unsecure wireless networks could lead to serious vehicle safety issues.

So what can be done to deal with these cybersecurity threats? For a start, there are standard-setting discussions underway, and there have been proposals for the government to step up cybersecurity regulation for vehicles. A California bill on the security of the “internet-of-things” could also influence vehicle security. Auto suppliers are putting cybersecurity into their development process. Government researchers, like those Argonne National Labs outside Chicago, are looking for vulnerabilities up and down the supply chain, including threats involving public car chargers. Given the ever-changing nature of cybersecurity threats, the real solution is “all of the above.” Laws and regulations can spark efforts, but they’ll likely never be able to keep up with evolving threats, meaning companies and researchers will always have to be watchful.

P.S. – Here is a good example of how cybersecurity threats are always changing. In 2018, security researchers were able to hack into a smartphone’s microphone and use it to steal user’s passwords, using the acoustic signature of the password. In other words, they could figure out your password by listening to you type it in.

As audiences worldwide await the release of Star Wars: The Rise of Skywalker, a few recent developments in transportation technology are taking cues (directly or indirectly) from the technology of a galaxy far, far away.

Last week, the opening ceremony of a new ride at Star Wars: Galaxy’s Edge, the Star Wars themed land at Walt Disney World, included actual flying X-Wing starfighters, built from Boeing-made drones. There are two important things to take from this development: (1) Boeing is apparently now a supplier for General Leia Organa’s Resistance, and; (2) Boeing is confident enough in their “Cargo Air Vehicle” drone to allow a highly-publicized public display. The all-electric Cargo Air Vehicle flew for the first time earlier this year, and is designed to carry up to 500 lbs. of cargo at a time. I’ve written about aerial delivery drones before, in October and September, but this new Boeing vehicle has a much higher carrying capacity than the smaller drones those articles focused on. Of course, a highly controlled environment like a major theme park is perhaps not as challenging an environment as the vehicles would face elsewhere, the visibility of this deployment raises interesting questions about Boeing’s future plans for the testing and deployment of the vehicles.

Another emerging technology that is attempting to recreate the Star Wars universe here on Earth is flying taxis. A number of prototype flying taxis have been revealed over the past few years, though none have the smooth lines of those seen in Star Wars, or the retro-styling of another sci-fi mainstay, the Jetson’s car. In June, Uber showed off the design of their proposed air taxi, an electric vehicle they will be testing in LA and Dallas in 2020. Industry boosters see a future with many such vehicles crisscrossing major metro areas (hmmm…where have I seen that before…). However, there are a number of challenges:

  • How do you make them cost-effective? Aircraft are expensive, and the proposed air taxis are no different. So how do you make them efficient enough to justify their cost? Will making them electric do the trick, or will the cost of batteries and other equipment sink the concept?
  • What is the economy of scale for this type of transportation? Right now, Uber offers helicopter flights from Manhattan to JFK Airport for $200-225 a person. If an air taxi ride has similar costs, how many people will really take advantage of them?
  • What infrastructure will they need? Where are they going to land? Uber has mocked-up glossy “skyport” designs, which they say will combine street-level mobility with their aerial offerings, but how many of these will be necessary if more than one company operates in a given metro area? Will skyports proliferate? In some cities, like London, there is already a scramble for roof space to transform into landing pads for air taxis and drones.
  • How do we regulate these vehicles? Between the aerial taxis and delivery drones, the skies would seem to be primed for traffic jams. Does the FAA retain full control over everything flying, or will states and even municipalities have to step in to help regulate a proliferation of flying vehicles?

Just like connected and automate vehicles, air taxes mix promising new technology with a sci-fi edge. It remains to be seen if air taxis will actually prove cost-effective enough to function for anyone other than the wealthy, but if Disney World’s use of drone X-Wings is any indication, a new hope for aerial vehicles may be just around the corner.

P.S. – Those who are skeptical of self-driving vehicles may have found a new patron saint in The Mandalorian, who turns down a droid-piloted speeder in favor of one driven by a person (also, apparently Uber service in the Outer Rim involves flutes?). To be fair, Mando later has some issues with his adorable companion playing with the controls of his ship, proving that humanoid controlled vehicles are still prone to problems (Han could have told him that).

On November 19, the NTSB held a public board meeting on the 2018 Uber accident in Tempe, Arizona, involving an “automated” (actually level 3) Uber-operated Volvo SUV. One woman, Elaine Herzberg, a pedestrian, died in the accident. In the wake of the report, it is now a good time to come back to level 3 cars and the question of “safety drivers.”

Given that the purpose of the meeting was to put the blame on someone, media outlets were quick to pick up a culprit for their headlines: the “safety driver” who kept looking at her phone? The sensors who detected all kinds of stuff but never a person? Uber, who deactivated the OEM’s emergency braking? Or maybe, Uber’s “safety culture”? A whole industry’s?

The Board actually blames all of them, steering clear of singling out one event or actor. It is probably the safest and most reasonable course of action for a regulator, and it has relevant implications for how law enforcement will handle accidents involving AVs in the future. But because we are humans, we may stick more strongly with the human part of the story, that of the safety driver.

She was allegedly looking at her phone, “watching TV” as one article put it; following the latest episode of The Voice. The Board determined that she looked at the road one second before the impact. That is short, but under more normal circumstances, enough to smash the brakes. Maybe her foot was far from the pedal; maybe she just did not react because she was not in an “aware” state of mind (“automation complacency,” the report calls it). In any case, it was her job to look on the road, and she was violating Uber’s policy by using her phone while working as a safety driver.

At the time of the accident, the Tempe police released footage from the dash cam, a few seconds up to the impact, showing a poorly-lit street. The relevance of this footage was then disputed in an Ars Technica article which aims to demonstrate how actually well lit the street is, and how just the front lights of the car should have made the victim visible on time. Yet, I think it is too easy to put the blame on the safety driver. She was not doing her job, but what kind of job was it? Humans drive reasonably well, but that’s when we’re actually driving, not sitting in the driver seat with nothing else to do but to wait for something to jump out of the roadside. Even if she had been paying attention, injury was reasonably foreseeable. And even if she would have been driving in broad daylight, there remains a more fundamental problem besides safety driver distraction.

The [NTSB] also found that Uber’s autonomous vehicles were not properly programmed to react to pedestrians crossing the street outside of designated crosswalksone article writes. I find that finding somewhat more appalling than that of a safety driver being distracted. Call that human bias; still I do not expect machines to be perfect. But what this tells us is that stricter monitoring of cellphone usage of safety drivers will not cut it either, if the sensors keep failing. The sensors need to be able to handle this kind of situation. A car whose sensors cannot recognize a slowly crossing pedestrian (anywhere, even in the middle of the highway) does not have its place on a 45-mph road, period.

If there is one thing this accident has shown, it is that “safety drivers” add little to the safety of AVs. It’s a coin flip: the reactivity and skill of the driver makes up for the sensor failure; in other cases, a distracted, “complacent” driver (for any reason, phone or other) does not make up for the sensor failure. It is safe to say that the overall effect on safety is at best neutral. And even worse: it may provide a false sense of safety to the operator, as it apparently did here. This, in turn, prompts us to think about level 3 altogether.

While Uber has stated that it has “significantly improved its safety culture” since the accident, the question of the overall safety of these level 3 cars remains. And beyond everything Uber can do, one may wonder if such accidents are not bound to repeat themselves should level 3 cars see mass commercial deployments. Humans are not reliable “safety drivers.” And in a scenario that involves such drivers, it takes much less than the deadly laundry list of failures we had here to have such an accident happen. Being complacent may also mean that your foot is not close to the pedals, or that your hands are not “hovering above the steering wheel” as they should (apparently) be. That half second extra it takes to smash the brakes or grip the wheel is time enough to transform serious injury into death.

The paramount error here was to integrate a human, a person Uber should have known would be distracted or less responsive than an average driver, as a final safety for sensor failure. Not a long time ago, many industry players were concerned about early standardization. Now that some companies are out there, going fast and literally breaking people (not even things, mind you!), time has come to seriously discuss safety and testing standards, at the US federal and, why not, international level.

A University of Michigan Law School Problem Solving Initiative class on AV standardization will take place during the Winter semester of 2020, with deliverables in April. Stay tuned!

By Wesley D. Hurst and Leslie J. Pujo*

Cite as: Wesley D. Hurst & Leslie Pujo, Vehicle Rental Laws: Road Blocks to Evolving Mobility Models?, 2019 J. L. & Mob. 73.

I.          Introduction

The laws and regulations governing mobility are inconsistent and antiquated and should be modernized to encourage innovation as we prepare for an autonomous car future. The National Highway Traffic Safety Administration (“NHTSA”) has concluded that Autonomous Vehicles, or Highly Automated Vehicles (“HAVs”) may “prove to be the greatest personal transportation revolution since the popularization of the personal automobile nearly a century ago.” 60 60. Federal Automated Vehicles Policy, NHTSA 5 (2016), https://www.transportation.gov/sites/dot.gov/files/docs/AV%20policy%20guidance%20PDF.pdf. × Preparation for a HAV world is underway as the mobility industry evolves and transforms itself at a remarkable pace. New mobility platforms are becoming more convenient, more automated and more data driven—all of which will facilitate the evolution to HAVs. However, that mobility revolution is hindered by an environment of older laws and regulations that are often incompatible with new models and platforms.

Although there are a number of different mobility models, this article will focus on carsharing, peer-to-peer platforms, vehicle subscription programs, and rental car businesses (yes, car rental is a mobility platform). All of these mobility models face a host of inconsistent legal, regulatory and liability issues, which create operational challenges that can stifle innovation. For example, incumbent car rental, a mobility platform that has been in place for over 100 years, is regulated by various state and local laws that address everything from driver’s license inspections to use of telematics systems. Although physical inspection of a customer’s driver’s license at the time of rental is commonplace and expected in a traditional, face-to-face transaction, complying with the driver’s license inspection for a free-floating carsharing or other remote access mobility model becomes more problematic.

Part B of this article will review current federal and state vehicle rental laws and regulations that may apply to incumbent rental car companies and other mobility models around the country, including federal laws preempting rental company vicarious liability and requiring the grounding of vehicles with open safety recalls, as well as state laws regulating GPS tracking, negligent entrustment, and toll service fees. Part C poses a series of hypotheticals to illustrate the challenges that the existing patchwork of laws creates for the mobility industry. 61 61. Note: This article focuses on existing laws applicable to short-term rentals of vehicles, rather than long-term leases (including the federal Consumer Leasing regulations, known as “Regulation M,” which are set forth in 12 C.F.R., Part 213). For a more detailed discussion of long-term vehicle leasing laws, see Thomas B. Hudson and Daniel J. Laudicina, The Consumer Leasing Act and Regulation M, in F&I Legal Desk Book (6th edition 2014). × For instance, whether a mobility operator can utilize GPS or telematics to monitor the location of a vehicle is subject to inconsistent state laws (permitted in Texas, but not California, for example). And vehicle subscription programs are currently prohibited in Indiana, but permitted in most other states. Similarly, peer-to-peer car rental programs currently are prohibited in New York, but permitted in most other states. Finally, Part D of the article will offer some suggested uniform rules for the mobility industry.

First, however, we offer the following working definitions for this article:

  • Carsharing” – a membership-based service that provides car access without ownership. Carsharing is mobility on demand, where members pay only for the time and/or distance they drive. 62 62. About the CSA, Carsharing Ass’n., https://carsharing.org/about/ (last visited May 7, 2019). ×
  • Peer-to-peer Carsharing” or “Rentals” – the sharing of privately-owned vehicles in which companies, typically for a percentage of the rental charge, broker transactions among car owners and renters by providing the organizational resources needed to make the exchange possible (i.e., online platform, customer support, driver and motor vehicle safety certification, auto insurance and technology). 63 63. Car Sharing State Laws and Legislation, Nat’l Conf. of St. Legislatures (Feb. 16, 2017), http://www.ncsl.org/research/transportation/car-sharing-state-laws-and-legislation.aspx. Since most personal auto policies do not cover commercial use of personal vehicles, if the peer-to-peer platform does not provide liability and physical damage coverage, there likely will be no coverage if the vehicle is involved in an accident during the rental period. As noted above, peer-to-peer carsharing platforms currently do not operate in New York, based, in part, on the New York Department of Insurance’s findings that a peer-to-peer platform operator’s insurance practices (including sale of group liability coverage to vehicle owners and renters) constituted unlicensed insurance producing. See RelayRides, Inc. Consent Order (N.Y. Dep’t of Fin. Serv., 2014). Although a detailed discussion of insurance-related issues is beyond the scope of this article, the Relay Rides experience in New York illustrates the need for the insurance industry and insurance laws to evolve to accommodate new mobility models. See Part B.2.d. for a discussion of legislative approaches that several states have taken to address the insurance issues implicated by the peer-to-peer model (including a 2019 New York bill). ×
  • Subscriptions” – a service that, for a recurring fee and for a limited period of time, allows a participating person exclusive use of a motor vehicle owned by an entity that controls or contracts with the subscription service. 64 64. See Ind. Code § 9-32-11-20(e) (2018). The prohibition on vehicle subscription services in Indiana originally expired on May 1, 2019, but was recently extended for another year through May 1, 2020. The Indiana definition also provides that “[Subscription] does not include leases, short term motor vehicle rentals, or services that allow short terms sharing of a motor vehicle.” A bill pending in North Carolina uses similar language to define “vehicle subscription” for purposes of determining highway use tax rates. See H.B. 537 (N.C. 2019). As further discussed in Part C below, it is not clear whether other states would take the same approach and classify a subscription model as distinct from rental or leasing instead of applying existing laws. × Typically, the subscriber is allowed to exchange the vehicle for a different type of vehicle with a certain amount of notice to the operator. This is a developing model with a number of variations, including whether the subscription includes insurance, maintenance, a mileage allowance, or other features and services.
  • Vehicle Rental” – a customer receives use of a vehicle in exchange for a fee or other consideration pursuant to a contract for a period of time less than 30 days. 65 65. See Cal. Civ. Code § 1939.01 (Deering 2019). Although for purposes of this article, we use a traditional 30-day period to define short-term rentals, we note that the time period for rentals varies by state (or even by statute for a particular state) with some defining a short-term rental for periods as long as 6 months or even one year. See, e.g., Md. Code Ann., Transportation § 18-101 (LexisNexis 2019) (defining “rent” as a period of 180 days or less). Compare 35 Ill. Comp. Stat. 155/2 (2019) (defining “rent” as a period of one year or less for purposes of the Illinois Automobile Renting Occupation and Use Tax), with 625 Ill. Comp. Stat. 27/10 (defining “rental company” as one that rents vehicles to the public for 30 days or less for purposes of the Illinois damage waiver law). ×
  • Mobility Operators” – any person or entity that provides access to a vehicle to another person whether by an in-person transaction, an app-based or online platform, or any other means and whether the entity providing the access is the owner, lessee, beneficial owner, or bailee of the vehicle or merely facilitates the transaction.

II.          Existing Laws: Lack of Uniformity and Certainty

As noted above, a patchwork of federal, state (and in some cases city or county) laws regulate short-term car rentals (in addition to generally applicable laws affecting all businesses, such as privacy and data security laws, 66 66. In addition to general privacy and data security concerns applicable to all businesses, the advent of HAVs and connected vehicles may trigger additional privacy and data security issues for mobility operators. For example, issues surrounding the control, access, and use of vehicle-generated data is still unsettled and the subject of much debate. See, e.g. Ayesha Bose, Leilani Gilpin, et al., The Vehicle Act: Safety and Security for Modern Vehicles, 53 Willamette L. Rev. 137 (2017) for additional information on this topic. × the Americans with Disabilities Act (“ADA”), employment law, and zoning laws). Car rental laws have developed over time and typically address:

  1. State and local taxes and surcharges;
  2. Licensing and operational requirements, including airport concessions and permits for picking-up and dropping-off passengers;
  3. Public policy issues, such as liability insurance and safety recalls; and
  4. Consumer protection matters, like rental agreement disclosures, restrictions on the sale of collision damage waivers, prohibitions on denying rentals based on age or credit card ownership, and restrictions on mandatory fees. 67 67. See, e.g., Final Report and Recommendations of the National Association of Attorneys General Task Force on Car Rental Industry Advertising and Practices, 56 Antitrust & Trade Regulation Report No. 1407 (March 1989) at S-3 (“NAAG Report”). The NAAG Report includes “guidelines,” which were intended for use by states in providing guidance to car rental companies on compliance with state unfair and deceptive practice laws, Id. at S-5. ×

As is often the case with regulated industries, state and local vehicle rental laws vary considerably, which can lead to uncertainty and inefficiency. For example, a multi-state operator may need to vary product offerings and pricing, customer disclosures, and agreement forms, depending upon the state in which the rental commences. 68 68. Typically, a state law will apply to a transaction if the renter accepts delivery of the vehicle in that state, regardless of where the rental company’s physical offices are located, where the vehicle is typically parked, or where the vehicle is returned. See, e.g., 24 Va. Code Ann. § 20-100-10 (2019) (“The term [rental in this State] applies regardless of where the rental agreement is written, where the rental terminates, or where the vehicle is surrendered.”). × The uncertainty and inefficiency increases dramatically when considering whether and how existing vehicle rental laws apply to new mobility platforms and services since many of the existing laws do not address or even contemplate modern technology like self-service, keyless access to vehicles, digital agreements, or telematics fleet management.

The following paragraphs provide a brief overview of some of the existing laws.

A.         Federal Law

1. Graves Amendment

The federal Graves Amendment, 69 69. 49 U.S.C.S. § 30106 (LexisNexis 2019). × passed in 2005, preempts any portion of state law that creates vicarious liability for a vehicle rental company based solely on ownership of a vehicle. Specifically:

An owner of a motor vehicle that rents or leases the vehicle to a person . . . shall not be liable . . . by reason of being the owner of the vehicle . . . for harm to persons or property that results or arises out of the use, operation, or possession of the vehicle during the period of the rental or lease, if– (1) the owner . . . is engaged in the trade or business of renting or leasing motor vehicles; and (2) there is no negligence or criminal wrongdoing on the part of the owner . . . 70 70. Before passage of the Graves Amendment, many car leasing and renting companies ceased activities in states with unlimited vicarious liability laws based solely on ownership, such as New York. See Graham v Dunkley, 852 N.Y.S.2d 169 (App. Div. 2008); see also Susan Lorde Martin, Commerce Clause Jurisprudence and the Graves Amendment: Implications for the Vicarious Liability of Car Leasing Companies, 18 U. FLA. J.L. & Pub. Pol’y 153, 162 (2007). ×

Determining whether the Graves Amendment applies to a particular case involves an analysis of both factual and legal issues. The factual issues include a determination of whether:

(A) the claim involves a “motor vehicle”;

(B) the individual or entity is the “owner” of the motor vehicle (which may be a titleholder, lessee, or bailee) or an affiliate of the owner;

(C) the individual or entity is “engaged in the trade or business of renting or leasing motor vehicles”; and

(D) the accident occurred during the rental period. 71 71. Johnke v. Espinal-Quiroz, No. 14-CV-6992, 2016 WL 454333 (N.D. Ill. 2016). ×

    The legal issues include:

(A) whether the owner is being sued in its capacity as owner (as opposed to the employer or other principal of another party); and

(B) whether there are allegations that the owner was negligent or criminal. 72 72. Id. ×

Perhaps not surprisingly, the Graves Amendment has been highly litigated, from early challenges to its constitutionality, 73 73. See, Rosado v. Daimlerchrysler Fin. Servs. Trust, 112 So. 3d 1165 (2013); Garcia v. Vanguard Car Rental USA, Inc., 540 F.3d 1242 (2008); Rodriguez v. Testa, 993 A.2d 955 (Conn. 2009); Vargas v. Enter. Leasing Co., 60 So. 3d 1037 (Fla. 2008). × to later assertions that it does not apply to a particular case because the vehicle’s owner was not “engaged in the business of renting or leasing,” 74 74. See e.g., Minto v. Zipcar New York, Inc., No. 15401/09 (N.Y. Sup. Ct., Queens County Mar. 17, 2010); Moreau v. Josaphat, et al., 975 N.Y.S.2d 851 (N.Y. Sup. Ct. 2013). × or that an accident did not occur during the “rental period.” 75 75. Currie V. Mansoor, 71 N.Y.S.3d 633 (App. Div. 2018); Chase v. Cote, 2017 Conn. Super. LEXIS 3533 (2017); Marble v. Faelle, 89 A.3d 830 (R.I. 2014). ×

Two New York cases are instructive to operators of newer mobility models. In Minto v. Zipcar New York, Inc. 76 76. See Minto v. Zipcar New York, Inc., No. 15401/09. × and Moreau and Duverson v. Josaphat, et al., 77 77. See Moreau, 975 N.Y.S.2d 851. × a New York court examined whether carsharing company Zipcar was “engaged in the trade or business of renting or leasing motor vehicles” for purposes of the Graves Amendment – despite the fact that it touted itself as an alternative to car rental.

In the 2010 Minto case (which the Moreau case closely followed), the court stated that Zipcar’s advertising, which contrasted the company to “‘traditional car rental cars’, d[id] not foreclose the possibility that it is nevertheless also in the rental car business, although not of a traditional sort.” 78 78. See Minto v. Zipcar New York, Inc., No. 15401/09 at 2. × The court then noted that the Graves Amendment did not define “trade or business of renting or leasing motor vehicles.” 79 79. Id. × As a result, it analyzed the “constituent terms” of “renting” and “leasing” to determine whether Zipcar was a rental company for purposes of the Graves Amendment 80 80. Id. See also Moreau, 975 N.Y.S.2d at 855-856. × and concluded that the key features of a “lease” or rental” were the “transfer of the right to possession and use of goods for a term in return for consideration.” 81 81. See Minto v. Zipcar New York, Inc., No. 15401/09 at 2-3. × With these definitions in mind, the court focused on the requirement that Zipcar members pay fees in exchange for the right to use Zipcar vehicles, which it found to be “little different from ‘traditional rental car’ companies, notwithstanding Zipcar’s marketing statements that contrast it with those companies” and held that Zipcar was covered by the Graves Amendment. 82 82. Id. at 3. × As further support of its conclusion, the Minto court noted that the Zipcar marketing “shows that the company competes with traditional car-rental companies and serves a similar consumer need.” 83 83. Minto v. Zipcar New York, Inc., No. 15401/09 at 4. ×

2. Safe Rental Car Act

The Raechel and Jacqueline Houck Safe Rental Car Act of 2015 (“Safe Rental Car Act”) 84 84. Raechel and Jacqueline Houck Safe Rental Car Act of 2015, S. 1173, 114th Cong. (2015) (codified as amended in scattered sections of 49 U.S.C.). × places limits on the rental, sale, or lease of “covered rental vehicles”. 85 85. 49 U.S.C.A. § 30120(i) (2017). × A “covered rental vehicle” is one that: (A) has a gross vehicle weight rating (“GVWR”) of 10,000 pounds or less; (B) is rented without a driver for an initial term of less than 4 months; and (C) is part of a motor vehicle fleet of 35 or more motor vehicles that are used for rental purposes by a rental company. 86 86. 49 U.S.C.A. § 30102(a)(1) (2017). × A “rental company” is any individual or company that “is engaged in the business of renting covered rental vehicles,” and “uses, for rental purposes, a motor vehicle fleet of 35 or more covered rental vehicles, on average, during the calendar year.” 87 87. 49 U.S.C.A. § 30102(a)(11) (2017). ×

Under the Safe Rental Car Act, after receiving notice by electronic or first class mail of a NHTSA-approved safety related recall, a rental car company may not rent, sell, or lease an affected vehicle in its possession at the time of notification, until the defect has been remedied. The rental car company must comply with the restrictions on rental/sale/lease “as soon as practicable,” but no later than 24 hours after the receipt of the official safety recall notice (or within 48 hours if the notice covers more than 5,000 vehicles in its fleet). 88 88. 49 U.S.C.A. § 30120(i)(1) and (3) (2017). The 24-hour/48-hour time requirement applies only to vehicles in the possession of the rental company when the safety recall is received, and does not require rental companies to locate and recover vehicles that are on rent at that time. × If the safety recall notice indicates that a remedy is not immediately available, but specifies interim actions that an owner may take to alter the vehicle and eliminate the safety risk, the rental company may continue to rent (but not sell or lease) the vehicle after taking the specified actions. 89 89. 49 U.S.C.A. § 30120(i)(3)(C) (2017). Once a permanent remedy becomes available, the rental company may not rent affected vehicles until those vehicles have been repaired. ×

Despite the federal recall legislation, several states have introduced bills for similar legislation with California passing a law in 2016 that extends the restrictions on rental, sale, and lease to fleets of any size, as well as to cars loaned by dealers while a customer’s own vehicle are being repaired or serviced. 90 90. Cal. Veh. Code § 11754 (Deering 2019). × Effective January 1, 2019, the California prohibitions on the rental, lease, sale, or loan of vehicles subject to safety recalls also apply to “personal vehicle sharing programs,” which are defined as legal entities qualified to do business in the State of California that are “engaged in the business of facilitating the sharing of private passenger vehicles for noncommercial use by individuals within the state.” 91 91. Cal. Veh. Code § 11752 (West 2019); Cal Ins. Code § 11580.24(b)(2) (West 2011). ×

B.         State Law

Several states, including California, 92 92. Cal. Civ. Code §§ 1939.01 – 1939.37 (West 2017). × Hawaii, 93 93. Haw. Rev. Stat. Ann. §437D (West 2019). × Illinois, 94 94. 625 Ill. Comp. Stat. 27 (West 2019); 625 Ill. Comp. Stat. 5/6-305 (West 2019). × Nevada, 95 95. Nev. Rev. Stat. Ann. §§ 482.295–482.3159 (West 2019). × and New York, 96 96. N.Y. Gen. Bus. Law § 396-z (McKinney 2019). × have comprehensive vehicle rental laws that regulate a variety of issues, including minimum age requirements; sales of damage waivers; limitations on amounts recoverable from renters, fees that a vehicle rental company may charge; recordkeeping practices; general licensing or permit requirements; 97 97. See, e.g., Conn. Gen. Stat. Ann. § 14-15 (West 2018); D.C. Code § 50-1505.03 (2019); Del. Code Ann. Tit. 21 § 6102 (West 2019); Haw. Rev. Stat. Ann. § 251-3 (West 2019); Minn. Stat. Ann. § 168.27 (West 2019); Nev. Rev. Stat. Ann. § 482.363 (West 2019); N.J. Stat. Ann. § 45:21-12 (West 2019); Okla. Stat. tit. 47, § 8-101 (2004); 31 R.I. Gen. Laws Ann. § 31-5-33 (West 2019); W. Va. Code Ann. § 17A-6D-1 (West 2019); Wis. Stat. Ann. § 344.51(1m) (West 2018). × imposition of short-term rental taxes and surcharges; airport concession and permit requirements; limitations on the use of telematics; deposit and credit card restrictions; required display of counter signs; and required disclosures on rental agreements (including specified language, font size/style, and placement on written agreements). California even requires rental companies to warn their customers that operation of a passenger vehicle can expose individuals to certain chemicals that are known to cause cancer and birth defects, and therefore the customers should avoid breathing exhaust and take other precautions. Other states regulate one or more of these issues, with most states varying the specific requirements. For example, approximately 21 states regulate the sale of damage waivers with states taking different approaches on several key issues, including the permissibility of selling partial or deductible waivers, customer disclosures, and the permissible bases for invalidation of a waiver. 98 98. The typical damage waiver statute requires vehicle rental companies to disclose the optional nature of the waiver on the front of the rental agreement form and/or signs at the rental counter. Some statutes also regulate the content of the waiver and its exclusions. See, e.g., Cal. Civ. Code § 1939.09 (Deering 2019). Hawaii, Illinois, Maryland, New York, and Wisconsin require the distribution of brochures summarizing the damages waiver and its terms, and rental companies selling damage waivers in Louisiana and Minnesota must file a copy of the rental agreement before using it. Haw. Rev. Stat. Ann. § 437D-10 (LexisNexis 2019); 625 Ill. Comp. Stat. Ann. 27/20 (LexisNexis 2019); La. Stat. Ann. § 22:1525 (2018); Md. Code Ann. Com. Law § 14-2101 (LexisNexis 2019); Minn. Stat. Ann. § 72A.125 (West 2019); N.Y. Gen. Bus. Law § 396-z(4) (Consol. 2019); and Wis. Stat. Ann. § 344.576 (West 2018). ×

In addition to the issues noted above, most states prohibit rental of a vehicle without first inspecting the renter’s driver’s license to confirm that it is “facially valid” and (1) comparing the signature on the license with the renter’s signature written at the time of rental; and/or (2) comparing the photo with renter. 99 99. See, e.g., Fla. Stat. Ann. § 322.38(1-2) (LexisNexis 2018); 625 Ill. Comp. Stat. Ann. 5/6-305(b) (LexisNexis 2019); Nev. Rev. Stat. Ann. § 483.610 (LexisNexis 2019); Md. Code Ann. Transp. § 18-103(a), (b) (LexisNexis 2019); Wash. Rev. Code Ann. § 46.20.220 (LexisNexis 2019); W. Va. Code Ann. § 17B-4-6 (LexisNexis 2019). × Moreover, case law from various states provide guidance on what may or may not constitute negligent entrustment (which is excluded from the Graves Amendment). Finally, some states have begun to recognize the emergence of new mobility models and have either amended existing laws or passed new legislation to address the new models.

The paragraphs below summarize typical state laws (and how they vary) on several of these issues, including use of telematics systems; tolls and other fees, negligent entrustment, and peer-to-peer car sharing programs.

2. Telematics Systems and Vehicle Technology

Many mobility operators equip their rental vehicle fleet with global positioning systems (GPS) or other telematics systems (collectively “Telematics Systems”) to track vehicles for a variety of purposes, including fleet management; locating and recovering vehicles that are not returned by the due-in date (or that have been reported missing); calculating information related to the use of the vehicle, such as mileage, location, and speed; and providing services to renters, such as roadside assistance, maintenance, and navigation. Connected cars and HAVs will provide even more data that mobility operators can use to manage their fleets and enhance the user’s experience. 100 100. See, e.g., Avis Budget Group Boosts Fleet of Connected Cars with 75,000 In-Vehicle Telematics Units From I.D. Systems, Avis Budget Group (Dec. 17, 2018), https://avisbudgetgroup.com/avis-budget-group-boosts-fleet-of-connected-cars-with-75000-in-vehicle-telematics-units-from-i-d-systems-2/. (last visited May 8, 2019). ×

At the same time, mobility operators that use Telematics Systems to impose fees related to vehicle use (e.g., fees for traveling outside a geographic area or excess speeding), may face customer complaints or even litigation. For example, rental companies have been subject to suit in the past when they used GPS to collect location or speed information about a vehicle while on rent and impose additional fees on customers who violated geographic limitations of the rental agreement or state speed limits. 101 101. See Turner v. American Car Rental 884 A.2d 7 (Ct. App. Ct. 2005); Proposed Judgment, People v. Acceleron Corp., (Cal. Super. Ct. 2004), https://oag.ca.gov/system/files/attachments/press_releases/04-129_settle.pdf. ×

Four states, including California, Connecticut, Montana, and New York, currently have laws that specifically regulate “rental company” use of Telematics Systems. Specifically:

CaliforniaCalifornia generally prohibits rental companies from using, accessing, or obtaining information about a renter’s use of a rental vehicle that was obtained from “electronic surveillance technology” (“a technological method or system used to observe, monitor, or collect information, including telematics, . . . GPS, wireless technology, or location-based technology”), including for the purpose of imposing fines or surcharges.  However, electronic surveillance technology may be used if:

(1) The rented vehicle is missing or has been stolen or abandoned;

(2) the vehicle is 72 hours past the due-in date (and the company notifies the renter and includes required disclosures in the rental agreement);

(3) the vehicle is subject to an AMBER Alert; or

(4)  in response to a specific request from law enforcement pursuant to a subpoena or search warrant. 102 102. See Cal. Civ. Code § 1939.23(a) (West 2019). ×

Rental companies that use electronic surveillance technology for any of the reasons identified above also must maintain certain records of each such use for one year from date of use. 103 103. Id. The records must include any information relevant to the activation of the GPS, including: (1) the rental agreement; (2) the return date; (3) the date and time the electronic surveillance technology was activated; and (4) if relevant, a record any communication with the renter or the police. The record must be made available to the renter upon request, along with any explanatory codes necessary to read the record. × Rental companies may also use telematics at the request of renters, including for roadside service, navigation assistance, or remote locking/unlocking – as long as the rental company does not use, access or obtain information related to the renter’s use of the vehicle beyond that which is necessary to render the requested service. 104 104. See Cal. Civ. Code § 1939.23(b) (West 2019).  In addition, rental companies may obtain, access, or use information from electronic surveillance technology for the sole purpose of determining the date and time of the start and end of the rental, total mileage, and fuel level. × Like most of the other provisions of the California Vehicle Rental law, customers cannot waive these requirements. 105 105. See Cal. Civ. Code § 1939.29 (West 2019). The only provisions of the California vehicle rental law that a customer may waive are those related to business rentals, rentals of 15-passenger vans, and driver’s license inspection exceptions for remote access programs. ×

ConnecticutConnecticut’s non-uniform version of UCC Article 2A, 106 106. Conn. Gen. Stat. § 42-2A-702 (2013). × (which applies to both short-term and long-term consumer and commercial leases) regulates the use of “electronic self-help,” including the use of GPS devices to track and locate leased property to repossess the goods (or render them unusable without removal, such as remotely disabling the ignition of a vehicle). Before resorting to electronic self-help, a lessor must give notice to the lessee, stating:

      • That the lessor intends to resort to electronic self-help as a remedy on or after 15 days following notice to the lessee;
      • The nature of the claimed breach which entitled the lessor to resort to electronic self-help; and
      • The name, title, address and telephone number of a person representing the lessor with whom the lessee may communicate concerning the rental agreement.

In addition, the lessee must separately agree to a term in the lease agreement that authorizes the electronic self-help. A commercial lease requires only that the authorization is included as a separate provision in the lease, which implies that a consumer lease requires the express, affirmative consent of the lessee. 107 107. Conn. Gen. Stat. § 42-2A-702(e)(2)-(3) (2013). Lessees may recover damages, including incidental and consequential damages, for wrongful use of electronic self-help (even if the lease agreement excludes their recovery). Conn. Gen. Stat. § 42a-2A-702(e)(4). In addition, a lessor may not exercise electronic self-help if doing so would result in substantial injury or harm to the public health or safety or “grave harm” to third parties not involved in the dispute – even if the lessor otherwise complies with the statute. Conn. Gen. Stat. § 42a-2A-702(e)(5). ×

Montana Montana requires a “rental vehicle entity” providing a rental vehicle equipped with a GPS or satellite navigation system to disclose in the rental agreement (or written addendum) the presence and purpose of the system. 108 108. See Mont. Code Ann. 61-12-801(1)(a) (2019). For purposes of the Montana law, a “rental vehicle entity” is a business entity that provides the following vehicle to the public under a rental agreement for a fee: light vehicles, motor-driven cycles, quadricycles, or off-highway vehicles. Mont. Code Ann. 61-12-801(2)(b)-(c) (2019). A “rental agreement” is a written agreement for the rental of a rental vehicle for a period of 90 days or less. Mont. Code Ann. 61-12-801(2)(a) (2019). × If the GPS or satellite navigation system is used only to track lost or stolen vehicles, disclosure is not required.

New York – New York prohibits a “rental vehicle company” from using information from “any” global positioning system technology to determine or impose fees, charges, or penalties on an authorized driver’s use of the rental vehicle. 109 109. N.Y. Gen. Bus. Law 396-z(13-a). New York defines a “rental vehicle company” as “any person or organization . . . in the business of providing rental vehicles to the public from locations in [New York]. NY Gen. Bus. Law 396-z(1)(c). × The limitation on use of GPS, however, does not apply to the rental company’s right to recover a vehicle that is lost, misplaced, or stolen.

More recently, vehicle infotainment systems, which may include Telematics Systems like GPS, have come under scrutiny. In a putative class action filed against Avis Budget Group in December 2018, the plaintiff asserted that:

(a) a customer’s personal information may be collected and stored automatically by a vehicle each time the customer pairs his or her personal mobile device to the vehicle infotainment system to access navigation, music streaming, voice dialing/messaging, or other services; and

(b) failure to delete the customer data after each rental violated customers’ right to privacy under the California constitution, as well as the California rental law electronic surveillance technology provisions.

As of the date of this article, the defendant had removed the case to federal court and filed a motion to compel arbitration based on the terms and conditions of the rental agreement. 110 110. See Complaint, Kramer v. Avis Budget Group, Inc., Case No. 37-2018-00067024-CU-BT-CTL (Ca. Super. Ct., San Diego County 12/31/2018). The federal case number is 3:19cv421 (S.D. Cal.). Similar claims have been filed against other companies in California and all were initially removed to federal court, however, one of the cases has been remanded to state court. ×

2. Tolls and Other Fees

Several states, including California, Nevada, and New York, limit the types and even the amounts of fees that rental companies can charge. For example, California prohibits additional driver fees, and Nevada and New York cap those fees. In other states, a fee that appears to be excessive or punitive may be unenforceable. Generally, a fee is more likely to be enforced if it is fully disclosed, and the customer can avoid paying it by either not selecting a particular product or service (such as supplemental liability insurance or an additional driver) or not engaging in a particular behavior (such as returning the car late or with an empty gas tank). 111 111. See, e.g., Blay v. Zipcar, Inc., 716 F. Supp. 2d (D. Mass. 2010); Reed v. Zipcar, Inc., 883 F. Supp. 2d 329 (D. Mass. 2012). Cf. Bayol v. Zipcar, Inc., 78 F.Supp.3d 1252 (N.D. Cal. 2015). ×

Although disgruntled customers may complain about any fee that they believe is excessive or “hidden,” over the past several years, toll program charges have been among the most disputed in the car rental industry. Indeed, several class action claims have been filed against rental companies alleging inadequate disclosure of toll payment terms, failure to disclose use of third parties, unauthorized charges to the customer’s credit card, breach of contract, and similar claims. 112 112. See Doherty and Simonson v. Hertz, No 10-359 (NLH/KMW) 2014 WL 2916494 (D.N.J. Jun. 25, 2014) (approving over $11 million settlement of class action case based on assertions that inadequate disclosure of a rental company’s toll program violated consumer protection laws and breached the rental agreement); see also Mendez v. Avis Budget Group, Inc., No. 11-6537(JLL), 2012 WL 1224708 (D. N.J. Apr. 10, 2012); Readick v. Avis Budget Group, Inc., No. 12 Civ. 3988(PGG), 2013 WL 3388225 (S.D. N.Y. Jul. 3, 2013); Sallee v. Dollar Thrifty Automotive Group, Inc., et al., 2015 WL 1281518 (N.D. Okla. Mar. 20, 2015); Maor v. Dollar Thrifty Automotive Group, Inc., 303 F.Supp.3d 1320 (S.D. Fla. 2017). × State and local attorneys general have also investigated or filed civil claims against rental companies based on similar allegations. 113 113. See infra, note 55. ×

The increase in customer complaints and litigation likely stems from innovations in both toll collection methods and rental car toll payment processing (both of which seem likely to become an integral part of the connected car/HAV ecosystem). For example, an increasing number of toll roads and bridges are all-electronic. At the same time, many rental companies have introduced optional toll service products that permit renters to use electronic toll roads and lanes during the rental, some of which are provided by third parties. Often, a renter who declines to purchase the toll service at the time of rental will be subject to higher fees if he or she incurs toll charges by driving on an all-electronic road or lane during the rental.

The typical complaint focuses on alleged lack of or inadequate disclosure of the toll payment-processing program. For example, in recent settlement agreements with the Florida Attorney General, Avis Budget Group, Inc., and Dollar Thrifty Automotive Group, Inc. both agreed to disclose that Florida has cashless tolls, along with details about the rental company’s toll service options, and how the toll service charges can be avoided (such as by paying in cash, programming a GPS to avoid toll roads, contacting local authorities for other payment options, or using a personal transponder that is accepted on the toll road). 114 114. In February 2019, Hertz settled a case with the City Attorney of San Francisco for $3.65 million. The case alleged that the Hertz toll fee program as applied to the Golden Gate Bridge (an all-electronic toll road) failed to adequately disclose the fees or to provide customers the ability to opt-out. See Julia Cheever, Hertz Reaches $3.65 Million Settlement with SF over Golden Gate Bridge Tolls, San Francisco Examiner (Feb. 19, 2019), http://www.sfexaminer.com/hertz-reaches-3-65-m-settlement-sf-golden-gate-bridge-toll-fees/. See also Office of the Att’y Gen. of Fla.v. Dollar Thrifty Automotive Group, Inc., No. 16-2018-CV-005938 (Fla. Cir. Ct Jan. 7, 2019), https://myfloridalegal.com/webfiles.nsf/WF/TDGT-B8NT5W/$file/Final+Signed+DT AG+Settlement+Agreement+1+11+19.pdf.; In re Investigative Subpoena Duces Tecum to Avis Budget Group, Inc. and Payless Car Rental System, Inc., No 2017 CA 000122 (Fla. Cir. Ct. Jul. 7, 2017), http://myfloridalegal.com/webfiles.nsf/WF/JMAR-AP6LZQ/ $file/Settlement+Agreement+Avis.pdf. ×

Finally, state legislatures are taking notice of the tolling issues with several states proposing new legislation to regulate rental company toll programs and fees. As of January 1, 2019, Illinois became the first state to directly regulate toll programs by establishing maximum daily fees for toll programs if the rental company fails to notify the customer of the option to use a transponder or other device before or at the beginning of the rental. 115 115. See 625 Ill. Comp. Stat. 5/6-305. ×

3. Negligent Entrustment.

As noted above, the federal Graves Amendment protects “rental” or “leasing” companies from vicarious liability for their customers’ accidents based solely on ownership of the vehicle; however, the rental or leasing company is still liable for its own negligence or criminal wrongdoing. As a result, one common challenge to a rental or leasing company’s assertion of the Graves Amendment as an affirmative defense is a claim that the rental or leasing company somehow negligently entrusted the vehicle to the customer.

A vehicle owner may be liable for negligent entrustment if: (1) it provides a vehicle to a person it knows, or should know, is incompetent or unfit to drive; (2) the driver is in an accident or otherwise causes injury; and (3) that injury is caused by that person’s incompetence. 116 116. See Osborn v. Hertz Corp., 205 Cal.App.3d 703, 708-709 (1989). × To be found liable for negligent entrustment in the vehicle renting or leasing context, the rental or leasing company generally must have some special knowledge concerning a characteristic or condition peculiar to the renter that renders that person’s use of the vehicle unreasonably dangerous. Plaintiffs’ counsel typically allege that negligent entrustment is at issue where the driver appears to be intoxicated at the time of the rental or has a known substance abuse problem; where a renter is known by the rental company and its agents to be a reckless driver; or  where the rental company has reason to know that the renter may cause injury to others.

On the other hand, courts around the country have found that the following circumstances did not constitute negligent entrustment:

(1) failure to research the renter’s driving record; 117 117. See Flores v. Enterprise Rent-A-Car Co., 116 Cal. Rptr. 3d 71, 78 (2010). ×

(2) failure to recognize the signs of habitual drug use (when renter was not under the influence at the time of rental); 118 118. See Weber v Budget Truck Rental, 254 P.3d 196 (Wash. Ct. App. 2011). ×

(3) renting to an individual whose license had been suspended, but who had not yet received notification of the suspension; 119 119. See Young v. U-Haul, 11 A.3d 247 (D.C. Cir. 2011). ×

(4) failure to administer a driving test or to ensure that the driver is capable of actually operating the vehicle; 120 120. See Reph v. Hubbard, No. 07-7119, 2009 WL 659910 at *3 (E.D. La. 2009). ×

(5) renting to an individual who does not speak English fluently; (6) renting to an individual with an arm splint who did not indicate that the splint would interfere with his ability to drive; 121 121. See Mendonca v. Winckler and Corpat, Inc., No 1-5007-JLV, 2014 WL 1028392 (D.S.D. 2014). ×  and

 (7) renting to a former customer who previously reported an accident in a rental car and also allegedly returned a car with illegal drugs left behind. 122 122. See Maisonette v. Gromiler, No. FSTCV176031477S, 2018 WL 3203887 (Conn. Super. Ct. 2018). ×

4. State Laws Addressing New Mobility Platforms

More recently, some states have begun to recognize the emergence of new mobility models and have amended existing laws or passed new laws to address some of the issues. For example:

  • In 2011, California amended its insurance code to include a “personal vehicle sharing” statute, which regulates insurance aspects of “personal vehicle sharing programs” that facilitate sharing of private passenger vehicles (i.e., vehicles that are insured under personal automobile policies insuring a single individual or individuals residing in the same household) for non-commercial purposes, as long as the annual revenue received by the vehicle’s owners from the personal vehicle sharing does not exceed the annual expenses of owning and operating the vehicle (including the costs associated with personal vehicle sharing). 123 123. See Cal. Ins. Code 11580.24 (West 2018). Oregon and Washington have similar laws. ×
  • In 2012, California amended its driver’s license inspection statute to exempt membership programs permitting remote, keyless access to vehicles from driver’s license inspection requirements. 124 124. Cal. Civ. Code § 1939.37 (Deering 2019). × As of the date of this article, a similar draft bill is pending in Massachusetts. 125 125. H.D. 4139 (Mass. 2019). A similar bill came into effect in Florida on July 1, 2019. See Fla. Stat. Ann. § 322.38 (West 2019). ×
  • In 2015, Florida and Hawaii amended their laws to impose modified car rental surcharges on “carsharing organizations” (i.e., membership programs providing self-service access to vehicles on an hourly or other short-term basis). 126 126. Fla Stat. Ann. § 212.0606 (LexisNexis 2019); Haw. Rev. Stat. Ann. § 251 (LexisNexis 2019). ×
  • Maryland passed the first comprehensive “Peer-to-Peer Car Sharing Program” law in 2018. The Maryland law defines a “peer-to-peer car sharing program” as, “a platform that is in the business of connecting vehicle owners with drivers to enable the sharingof motor vehicles for financial consideration” 127 127. Md. Code Ann., Ins. § 19-520(a)(9) (LexisNexis 2019). Illinois also passed a peer-to-peer car sharing/rental law in 2018, but that law was vetoed by then-Governor Rauner. Michael J. Bologna, Illinois Governor Pumps the Brakes on Car-Sharing Taxes, Bloomberg; Daily Tax Report: State (August 31, 2018), https://www.bna.com/illinois-governor-pumps-n73014482161/ (last visited May 15, 2019). × and extends a number of vehicle rental law requirements, including those related to safety recalls, 128 128. Md. Code Ann., Transp., § 18.5-109 (LexisNexis 2019). ×  collision damage waiver sales, 129 129. Md. Code Ann., Com. Law, § 14-2101 (LexisNexis 2019). ×  limited lines licensing in connection with the sale of car rental insurance, 130 130. Md. Code Ann., Ins., § 10-6A-02 (LexisNexis 2019). × airport concession agreements, 131 131. Md. Code Ann., Transp. § 18.5-106 (LexisNexis 2019). ×  and recordkeeping requirements, to peer-to-peer car sharing programs. 132 132. Md. Code Ann., Ins. § 19-520 (LexisNexis 2019). × It also exempts the Peer-to-Peer Car Sharing Program operator and the shared vehicle’s owner from vicarious liability based solely on vehicle ownership in accordance with the Graves Amendment. 133 133. Md. Code Ann., Ins. § 19-520(e) (LexisNexis 2019). ×

 As of June 2019, the following states have pending, or have passed, peer-to-peer car sharing/car rental (or personal motor vehicle sharing) legislation: Arizona, California, Colorado, Georgia, Hawaii, Indiana, Iowa, Massachusetts, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, Washington, and West Virginia. 134 134. Arizona H.B. 2559 (Ariz. 2019) and S.B. 1305 (Ariz. 2019); A.B. 1263 (Cal. 2019); S.B. 090 (Colo. 2019); H.B. 378 (Ga. 2019); H.B. 241 HD2 SD 1 (Haw. 2019) and S.B. 662 SD2 (Haw. 2019); Pub. L. No. 253 (Ind. 2019) (to be codified at Ind. Code § 9-25-6-3); H.F. 779 (Ia. 2019); H.D. 4139 (Mass. 2019); L.B. 349 (Neb. 2019); S.B. 478 (Nev. 2019); H.B. 274 (N.H. 2019); A.B. 5092 (N.J. 2019); S.B. 556 (N.M. 2019); S.B. 5995 (N.Y. 2019); H.B. 2071 (Wash. 2019); H.B. 2762 (W. Va. 2019). × The scope of the pending bills ranges from extension of rental tax obligations to peer-to peer rentals to more comprehensive schemes similar to that passed in Maryland in 2018.

III.          The Challenge of Compliance

As demonstrated in the brief survey of existing rental laws above incumbent vehicle rental companies (especially those that operate in several states) must navigate numerous and often-inconsistent federal and state laws in their day-to-day operations. In addition to the challenges created by inconsistencies in the substantive requirements of the laws, not all of the laws use the same definition of “vehicle rental company” (which may vary depending upon the length of the transaction and the type of vehicle rented), so it is possible for an entity or transaction to be considered a “rental” in some, but not all, states or for some, but not all, purposes. 135 135. See Minto v. Zipcar New York, Inc., No. 15401/09 (N.Y. Super. Ct., Queens County Mar. 17, 2010). ×

In recent years, the challenge of compliance with existing laws – most of which did not contemplate anything other than a face-to-face handover of vehicle and keys — has increased as new entrants and incumbent operators attempt to innovate and take advantage of new technology to improve operations and customer experience. For example, use of kiosks, keyless access and GPS fleet management are all innovations that can improve the customer experience, which existing vehicle rental laws fail to facilitate. Enter the newer mobility operators, and things become even more interesting, with a close analysis of the definition of “rental company,” “rental vehicle,” and other key terms becoming even more important. To provide some context, consider a few hypotheticals:

Hypothetical 1 A 26-year old driver with a facially valid, but recently suspended driver’s license, rents a car in Arizona and is involved in an accident injuring a third party. Under Arizona law and indeed the law of all states, the rental car operator meets its statutory obligations by inspecting the driver’s license and confirming that it is facially valid. There is no duty to conduct any further investigation into the status of the driver’s license or the driving record of the prospective renter. Under this simple fact pattern, the rental car company has no liability to the injured third party for the negligence of the renter (beyond any state mandated minimum financial responsibility limit). Should the outcome be the same for a carsharing operation where the user accesses the vehicle through an app without any direct in-person contact with personnel of the operator? What about an owner of small fleet of cars who “rents” his vehicles through a peer-to-peer rental platform? How about a subscription program where an employee delivers a vehicle to a “lessee” or “renter” who has elected to switch the model of car being used?

Hypothetical 2 A California carshare member has had possession of a vehicle for three days and the operator receives notice that the member’s credit card is expired. The member has not responded to inquiries from the operator. If the carsharing transaction is considered to be a rental, as noted above, in California and a few other states, the mobility operator is precluded by statute from utilizing the vehicle’s GPS to locate the vehicle (at least until certain time periods have expired). Should that same limitation apply to the carshare operator? What if the purpose was to make sure that vehicles are properly distributed around a region so that it can serve its members’ anticipated demands? What about the renter of a peer-to-peer vehicle who is late with the car – can either the owner of the car or the peer-to-peer platform assist in locating the car via the vehicle’s GPS system? Can the operator of a subscription program utilize GPS to track the location of vehicles?

Hypothetical 3 A 30-year old renter with a valid license rents a vehicle through a peer-to-peer platform and two days later causes an accident resulting in substantial property damage and injuries. Pursuant to the federal Graves Amendment, if a peer-to-peer rental is characterized as a car rental transaction, the vehicle owner might argue there is no vicarious liability for the actions of the driver (assuming there was no negligence in how the transaction was handled). It is possible the arguments would vary if the owner of the vehicle operated a small fleet of cars, which it placed on a peer-to-peer platform. A few courts have concluded that the Graves Amendment protection extends to carshare operations. 136 136. See id. × Should that protection extend to the individual or small fleet owner that utilizes a peer-to-peer platform? Is there any basis to extend the Graves Amendment protection to the platform operator given that it typically does not own the vehicles?

Currently, the answers to many of the questions raised above are unclear with scant guidance from state legislatures or courts. As a result, a mobility operator generally must look to the definition of “rental company” to determine whether its model is or may be covered by a particular law. And that inquiry may lead an incumbent car rental operator to argue that it should no longer be subject to the outdated vehicle rental laws and regulations either.

IV.          Proposal

There is an ongoing debate in the mobility industry as to the extent that some models need to comply with existing laws and regulations related to the rental car industry. In particular, some peer-to-peer companies resist the application of those rules to their operations and argue that they are merely a technology company providing a platform to connect drivers with cars, and therefore are not subject to taxes, licensing requirements, or consumer protection laws governing incumbent rental companies. 137 137. See Turo, Inc. v. City of Los Angeles, 2019 U.S. Dist. LEXIS 6532 (C.D. Cal. 2019) (dismissing as unripe a peer-to-peer platform provider’s claim that it is immune from liability for state law violations under Section 230 of the Communications Decency Act and denying motions to dismiss claims that the City of Los Angeles misclassified the peer-to-peer platform provider as a rental company). × However, others urge that if all mobility operators are offering essentially the same services (use of a non-owned vehicle), then it seems more accurate to consider all mobility operators in the same business – mobility. As the New York Supreme Court noted in the Zipcar cases discussed in Part B, the services provided by a carsharing company (Zipcar) served a similar consumer need and were “little different from ‘traditional rental car’ companies, notwithstanding marketing statements that contrast it with those companies.” 138 138. See Minto v. Zipcar New York, Inc., No. 15401/09; see also Orly Lobel, “The Law of the Platform,” 101 Minn. L. Rev. 87, 112 (November 2016). ×

Setting aside those differences, there is some value to the mobility industry as a whole in consistent laws and regulations on some issues across the country and, of course, in protecting the safety and privacy of users. What follows are a few recommendations that could form the basis for a set of uniform laws applicable to the mobility industry. 139 139. The authors are unaware of any existing model laws for car rental or the broader mobility industry. Although the National Association of Attorneys General issued the NAAG Report on car rental practices and “guidelines” in 1989, those Guidelines were not intended to serve as model and uniform law, but rather guidance on compliance with state unfair and deceptive trade practice laws. See supra note 8. In addition, the NAAG Guidelines are now 30 years’ old and somewhat outdated in light of the changes in technology and the evolution in the mobility industry discussed in this article. ×

A.         Standardized Terms and Definitions 

Mobility operators, consumers, and regulators would benefit if federal and state laws used more consistent definitions for key terms and phrases. The definitions of the different platforms at the beginning of this article could be a starting point (which we repeat here without citations for ease of reference):

  • “Carsharing” – a membership-based service that provides car access without ownership. Carsharing is mobility on demand, where members pay only for the time and/or distance they drive.
  • “Peer-to-Peer Carsharing or Rentals” – the sharing of privately-owned vehicles in which companies, typically for a percentage of the rental charge, broker transactions among car owners and renters by providing the organizational resources needed to make the exchange possible (i.e., online platform, customer support, driver and motor vehicle safety certification, auto insurance and technology).
  • “Subscriptions” – a service that, for a recurring fee allows a participating person exclusive use of a motor vehicle owned by an entity that controls or contracts with the subscription service. Typically, the subscriber is allowed to exchange the vehicle for a different type of vehicle with a certain amount of notice to the operator. The term of the subscription can vary, but should be subject to a periodic renewal by the subscriber (user).
  • “Vehicle Rental” – a customer receives use of a vehicle in exchange for a fee or other consideration pursuant to a contract for an initial period of time less than 30 days.
  • “Mobility Operators” – any person or entity that provides access to a vehicle to another person whether by an in-person transaction, an app-based or online platform, or any other means and whether the entity providing the access is the owner, lessee, beneficial owner, or bailee of the vehicle or merely facilitates the transaction.

In addition, standard definitions for the terms, “rental” and “rental company” would provide additional clarity for all mobility operators, and to the extent feasible, the more narrow term “rental” and its derivatives should be replaced with “mobility.”

“Rental” should focus on the service provided and be distinguished from long-term leases (which are subject to additional laws and regulations, including federal Regulation M). As a starting point, “rental” could be defined as the right to use and possess a vehicle in exchange for a fee or other consideration for an initial period of less than 90 days. 140 140. Although the definition of “consumer lease” is a transaction for a period exceeding 4 months, we note that other federal laws, such as Graham-Leach-Bliley impose additional requirements on leases of at least 90 days. See 12 C.F.R. § 213.2(e)(1) (2011); 16 C.F.R. § 313.3(k)(2)(iii) (2000). ×

“Rental Company” or “Mobility Company” should be defined as “any corporation, sole proprietorship or other entity or person who is engaged in the business of facilitating vehicle rental transactions.” 141 141. See, e.g., H.B. 2762 (W. Va. 2019). × A de minimis exemption for individuals renting private vehicles through a peer-to-peer or other private vehicle program could apply (e.g., no more than X vehicles available for rent during a 12-month period). 142 142. See id. ×

A more uniform definition for “Rental Vehicle” or “Mobility Vehicle” also could produce more consistency across or even within states since some existing vehicle rental laws currently apply only to “private passenger vehicles,” while others apply more broadly to “motor vehicles.” Before proposing model language, however, we believe that regulators and industry experts need to consider several important (and somewhat thorny) issues.

For example, consider the rental of a pick-up truck to a contractor for use at a construction site. If a law applies only to rentals of “private passenger vehicles,” then the pick-up truck likely would not be subject to the law. On the other hand, if the law applies more broadly to “motor vehicles,” then the pick-up truck rental likely would be covered. The policy argument for covering our hypothetical pick-up truck rental may be weaker for consumer protection statutes, like required disclosures for sales of damage waiver or child safety seat rules. On the other hand, using a broader definition of “rental vehicle,” which would include the hypothetical pick-up truck, may better serve the general public policy goals of the Graves Amendment, the Safe Rental Act, and laws related to liability and insurance.

B.         Use of GPS and Telematics Technology

The use of this technology for locating and monitoring vehicles for a legitimate business, operational, maintenance or safety purpose should be permitted. Those states that have restricted the use of GPS tracking have done so to protect the privacy of renters. Operators in states where there is no statutory limitation often provide a full disclosure to users that vehicle location and other data may be monitored. We believe there are certain mobility models and circumstances where location and other data should be monitored – as long as there is full disclosure. For example, a free-floating carshare operator should be allowed to monitor vehicle location for the purpose of serving anticipated demand. Similarly, an operator of an EV fleet should be allowed to monitor a vehicle’s battery charge and location to ensure an adequate charge level for the next user. Finally, mobility operators should have the right to use GPS or other technology to locate vehicles that have not been returned on time or when the operator otherwise has reason to believe that the vehicle has been abandoned or stolen, or to track mileage driven or fuel used for purposes of charging associated fees (provided there is appropriate notice and full disclosure to the user). On a broader scale, uniform regulation that permits some vehicle monitoring, as long as done in a manner to protect the privacy of a user and with full disclosure, should be adopted across all mobility platforms.

C.         Vehicle Access

Provided there is an initial verification of a driver’s license, a mobility operator that either allows access to vehicles without in-person contact or does not require signing of a rental agreement at the time of rental should be subject to a provision similar to the following:

If a motor vehicle rental company or private vehicle rental program provider facilitates rentals via digital electronic, or other means that allow customers to obtain possession of a vehicle without in person contact with an agent or employee of the provider, or where the renter does not execute a rental contract at the time of rental, the provider shall be deemed to have met all obligations to physically inspect and compare a renter’s driver license pursuant to this article when such provider:

  1. At the time a renter enrolls, or any time thereafter, in a membership program, master agreement, or other means of establishing use of the provider’s services, requires verification that the renter is a licensed driver; or
  2. Prior to the renter taking possession of the rental vehicle, the provider requires documentation that verifies the renter’s identity.

D.         Graves Amendment    

The Graves Amendment, by its language, applies to the business of “renting or leasing” vehicles. A few state court cases have confirmed that Graves applies to carsharing. That application should be expressly adopted on a national basis and extended to all mobility models that involve a vehicle “owner’s” grant of the right to possess and use a vehicle in exchange for a fee or other consideration (including loaner vehicles).

Similarly, subscription programs which operate somewhere between incumbent car rental and vehicle leasing programs, at their core involve the short-term use of a vehicle in exchange for payment. Provided the subscription program complies with state rental car laws or applicable subscription legislation, the operation should be subject to the Graves Amendment. For that reason, we recommend that state legislatures either refine the Indiana/North Carolina definition of “subscription” to clarify that the model is a rental or lease for purposes of the Graves Amendment or simply state that subscription models are exempt from state vicarious liability laws based on vehicle ownership.

Peer-to-Peer platforms raise some issues when considering the Graves Amendment. On the one hand, an end-user is paying money to use a vehicle that belongs to someone else much like an incumbent rental car operation. On the other hand, a true “peer”-or individual- who occasionally lists his or her personal vehicle for rent when not using it may not really be in the business of renting cars. Much of the recent Peer-to-Peer legislation addresses this and related issues. Our suggestion is that Peer-to-Peer be subject to express state legislation and that such legislation impose sufficient operational, safety and economic obligations on operators, including required insurance coverage. In the absence of Peer-to-Peer legislation, an operator should have to comply with existing state rental car regulations especially if the operator somehow claims it is subject to the Graves Amendment.

E.         Americans with Disabilities Act

    Compliance with and exceptions to the ADA is complex. However, we propose that all mobility operators with fleets above a certain size must provide adaptive driving devices for selected vehicles, as long as the customer provides advance notice (which may vary depending upon the operator’s location and fleet size) and the adaptive driving devices are compatible with vehicle design and do not interfere with the vehicle’s airbag or other safety systems.

F.         Disclosure Requirements

All operators must provide sufficient disclosures to users regarding the following matters: fees, charges, damage waivers, added insurance, and vehicle technology. However, typical requirements in the existing state rental laws, including specified placement and font size for disclosures and in-person acknowledgment of receipt of those disclosures, simply do not contemplate modern technology, including digital agreements and remote access.  We propose the 2018 amendment to the New York vehicle rental law as the model for addressing required disclosures and formatting in electronic and/or master, membership agreements. That amendment provides:

(a) Notwithstanding any other provision of this section, any notice or disclosure of general applicability required to be provided, delivered, posted, or otherwise made available by a rental vehicle company pursuant to this section shall also be deemed timely and effectively made where such notice or disclosure is:

(i)       provided or delivered electronically to the renter at or before the time required provided that such renter has given his or her expressed consent to receive such notice or disclosure in such a manner; or

(ii)      included in a member or master agreement in effect at the time of rental.

(b)  . . . Notices and disclosures made electronically pursuant to this subdivision shall be exempt from any placement or stylistic display requirements, including but not limited to location, font size, typeset, or other specifically stated description; provided such disclosure is made in a clear and conspicuous manner.

G.         Other Issues

There are, of course, other issues the industry can consider. For example, some states (New York and Michigan) have laws requiring rental car companies to make vehicles available to younger drivers, subject to certain conditions. Some uniformity on the ability of mobility operators to set minimum age requirements would reduce risk. Additionally, there are inconsistent laws across the country regarding the amount of time a rental car company must wait after a renter fails to return a car before it can notify law enforcement. Appropriate and consistent rules as to when an operator can start to recover a valuable (and mobile) asset would help promote growth in the industry.

The mobility revolution involves a number of different players with disparate and sometimes competing interests. Not all the participants will agree on all the issues, however, we offer the above suggestions to encourage discussion and to advance some level of consistency on a few points.


Wes Hurst is an attorney with a nationwide Mobility and Vehicle Use Practice. He represents rental car companies, carsharing companies, automobile manufacturers and companies pursuing new and emerging business models related to mobility and the use of vehicles. Wes is a frequent speaker and author on mobility related topics. Wes is in the Los Angeles office of Polsinelli and can be reached at whurst@polsinelli.com.

Leslie Pujo is a Partner with Plave Koch PLC in Reston, Virginia. In her Mobility and Vehicle Use Practice, Leslie regularly represents mobility operators of all types, including car rental companies, RV rental companies, automobile manufacturers and dealers, carsharing companies and other emerging models. Leslie is a frequent speaker and author on car rental and other mobility topics and can be reached at lpujo@plavekoch.com.

* The authors wish to thank Naila Parvez for her assistance

In my previous posts, I have written a lot about city
design
and integrating
emerging forms of transit
, primarily automated vehicles, into the
transportation landscape of a city. I am spending this summer in Washington,
DC, and am getting an up-close look at this city’s transit options. I left my
car behind for the summer, so for the first time in years, I am entirely
reliant on public transportation, ridesharing apps, and my own feet to navigate
the city. In the process, I have learned a few things that I plan to explore in
more depth over the course of the summer. For now, here are the highlights:

1. Scooters do provide important transit for at least some people:

My house is about 0.6 miles from the bus line I take to work. So far, I have walked to that stop every morning. Along the way though, I see people riding by on scooters between the metro or bus station and their homes. It may yet be the case that scooters are a passing fad, and for now they appear – at least anecdotally – to have been adopted primarily by younger people. And to be sure, regulating them has been controversial in cities across the nation, which I plan to address in a coming post. For now though, they do show promise as a “last-mile” transit option for people who prefer not to drive.

2. A wide range of transit options improves access and reliability:

I ride the bus to and from work every day. When I want to explore the city on weekends, I take the metro downtown. I was running late to meet a friend the other day, and got an Uber. Others use scooters or the city’s bike-share program to get where they need to go. All of these options will work better or worse for different people, and for different purposes. All of them operating together can create a more functional, accessible transit system that serves the entire city.

3. Walkable neighborhoods ease the burden on a city’s transit system:

I live in a neighborhood with a grocery store, a Target, and a handful of bars and restaurants within a few blocks radius. As a consequence, I can walk just about everywhere I have to go except my office. Later this summer, I plan to explore ways in which cities can encourage development of walkable neighborhoods, thus easing the burden on overtaxed public transit systems and reducing the use of personal cars in the long run.

4. Affordable housing is directly linked to transit equity:

Perhaps this goes without saying, but a good, comprehensive transit network within a city does little good for the people who cannot afford to live in that city. This week, I’ve spoken with a couple people in my office who live an hour outside the city because it’s more affordable than living here. They drive to the farthest out metro stations, park there then ride into the city. To be sure, this still reduces congestion within the city. But good, reliable public transit is primarily important for the quality of life, cost savings, and environmental benefits that come with reduced use of personal automobiles and shorter commutes. People who have to commute a long way to even get to the public transit system in the city where they work are largely left out of those benefits.

By Bryan Casey

Cite as: Bryan Casey, Title 2.0: Discrimination Law in a Data-Driven Society, 2019 J. L. & Mob. 36.

Abstract

More than a quarter century after civil rights activists pioneered America’s first ridesharing network, the connections between transportation, innovation, and discrimination are again on full display. Industry leaders such as Uber, Amazon, and Waze have garnered widespread acclaim for successfully combating stubbornly persistent barriers to transportation. But alongside this well-deserved praise has come a new set of concerns. Indeed, a growing number of studies have uncovered troubling racial disparities in wait times, ride cancellation rates, and service availability in companies including Uber, Lyft, Task Rabbit, Grubhub, and Amazon Delivery.

Surveying the methodologies employed by these studies reveals a subtle, but vitally important, commonality. All of them measure discrimination at a statistical level, not an individual one. As a structural matter, this isn’t coincidental. As America transitions to an increasingly algorithmic society, all signs now suggest we are leaving traditional brick-and-mortar establishments behind for a new breed of data-driven ones. Discrimination, in other words, is going digital. And when it does, it will manifest itself—almost by definition—at a macroscopic scale. Why does this matter? Because not all of our civil rights laws cognize statistically-based discrimination claims. And as it so happens, Title II could be among them.

This piece discusses the implications of this doctrinal uncertainty in a world where statistically-based claims are likely to be pressed against data-driven establishments with increasing regularity. Its goals are twofold. First, it seeks to build upon adjacent scholarship by fleshing out the specific structural features of emerging business models that will make Title II’s cognizance of “disparate effect” claims so urgent. In doing so, it argues that it is not the “platform economy,” per se, that poses an existential threat to the statute but something deeper. The true threat, to borrow Lawrence Lessig’s framing, is architectural in nature. It is the algorithms underlying “platform economy businesses” that are of greatest doctrinal concern—regardless of whether such businesses operate inside the platform economy or outside it. Second, this essay joins others in calling for policy reforms focused on modernizing our civil rights canon. It argues that our transition from the “Internet Society” to the “Algorithmic Society” will demand that Title II receive a doctrinal update. If it is to remain relevant in the years and decades ahead, Title II must become Title 2.0.


Introduction

For the rational study of the law the blackletter man may be the man of the present, but the man of the future is the man of statistics.

—Oliver Wendell Holmes, Jr. 143 143. Oliver Wendell Holmes, The Path of the Law, 10 Harv. L. Rev. 457, 469 (1897). ×

The future is already here—it is just unevenly distributed.

—William Gibson 144 144. As quoted in Peering round the corner, The Economist, Oct. 11, 2001, https://www.economist.com/special-report/2001/10/11/peering-round-the-corner. ×

It took just four days after Rosa Parks’ arrest to mount a response. Jo Ann Robinson, E.D. Nixon, Ralph Abernathy, and a little-known pastor named Martin King, Jr. would head a coalition of activists boycotting Montgomery, Alabama’s public buses. 145 145. Jack M. Bloom, Class, Race, and the Civil Rights Movement 140 (Ind. U. Press ed. 1987). × Leaders announced the plan the next day, expecting something like a 60% turnout. 146 146. Id. × But to their surprise, more than 90% of the city’s black ridership joined. The total exceeded 40,000 individuals. 147 147. See History.com Editors, How the Montgomery Bus Boycott Accelerated the Civil Rights Movement, History Channel (Feb. 3, 2010), https://www.history.com/topics/black-history/montgomery-bus-boycott. ×

Sheer numbers—they quickly realized—meant that relying on taxis as their sole means of vehicular transport would be impossible. Instead, they got creative. The coalition organized an elaborate system of carpools and cabbies that managed to charge rates comparable to Montgomery’s own municipal system. 148 148. Id. × And so it was that America’s first ridesharing network was born. 149 149. More precisely, the first large-scale ridesharing network making use of automobiles. ×

Fast forward some sixty years to the present and the connections between transportation, innovation, and civil rights are again on full display. Nowadays, the networking system pioneered by Montgomery’s protestors is among the hottest tickets in tech. Newly minted startups launching “ridesharing platforms,” “carsourcing software,” “delivery sharing networks,” “bikesharing” offerings, “carpooling apps,” and “scooter sharing” schemes are a seemingly daily fixture of the news. And just as was true during the Civil Rights Movement, discrimination continues to be a hot-button issue.

Industry leaders such as Uber, Amazon, and Waze have garnered widespread acclaim for successfully combating discriminatory barriers to transportation that stubbornly persist in modern America. 150 150. See infra Part I. × But alongside this well-deserved praise has come a new set of concerns. Indeed, a growing number of studies have uncovered troubling racial disparities in wait times, ride cancellation rates, and service availability in the likes of Uber, Lyft, Task Rabbit, Grubhub, and Amazon Delivery. 151 151. See infra Part I(A). × The weight of the evidence suggests a cautionary tale: The same technologies capable of combating modern discrimination also appear capable of producing it.

Surveying the methodologies employed by these reports reveals a subtle, but vitally important, commonality. All of them measure discrimination at a statistical—not individual—scale. 152 152. See infra Part I(A). ×

As a structural matter, this isn’t coincidental. Uber, Amazon, and a host of other technology leaders have transformed traditional brick-and-mortar business models into data-driven ones fit for the digital age. Yet in doing so, they’ve also taken much discretion out of the hands of individual decision-makers and put it into hands of algorithms. 153 153. See infra Part II(D). × This transfer holds genuine promise of alleviating the kinds of overt prejudice familiar to Rosa Parks and her fellow activists. But is also means that when discrimination does occur, it will manifest—almost by definition—at a statistical scale.

This piece discusses the implications of this fast-approaching reality for one of our most canonical civil rights statutes, Title II of the Civil Rights Act of 1964. 154 154. Civil Rights Act of 1964, tit. II, 42 U.S.C. § 2000a (2018). × Today, a tentative consensus holds that certain of our civil rights laws recognize claims of “discriminatory effect” based in statistical evidence. But Title II is not among them. 155 155. See infra Part II(B). Major courts have recently taken up the issue tangentially, but uncertainty still reigns. × Indeed, more than a quarter century after its passage, it remains genuinely unclear whether the statute encompasses disparate effect claims at all.

This essay explores the implications of this doctrinal uncertainty in a world where statistically-based claims are likely to be pressed against data-driven companies with increasing regularity. Its goals are twofold. First, it seeks to build upon adjacent scholarship 156 156. Of particular note is a groundbreaking piece by Nancy Leong and Aaron Belzer, The New Public Accommodations: Race Discrimination in the Platform Economy, 105 Geo. L. J. 1271 (2017). × by fleshing out the specific structural features of emerging business models that will make Title II’s cognizance of disparate effect claims so urgent. In doing so, it argues that it is not the “platform economy,” per se, that poses a threat to the civil rights law but something deeper. The true threat, to borrow Lawrence Lessig’s framing, is architectural in nature. 157 157. Lawrence Lessig, The Law of the Horse: What Cyberlaw Might Teach, 113 Harv. L. Rev. 501, 509 (1999) (describing “architecture,” “norms,” “law,” and “markets” as the four primary modes of regulation). × It is the algorithms underlying emerging platform economy businesses that are of greatest doctrinal concern—regardless of whether such businesses operate inside the platform economy or outside it. 158 158. And, needless to say, there will be a great many more companies that operate outside of it. ×

Second, this essay joins other scholars in calling for policy reforms focused on modernizing our civil rights canon. 159 159. See, e.g., Leong & Belzer supra note 14; Andrew Selbst, Disparate Impact in Big Data Policing, 52 Georgia L. Rev. 109 (2017) (discussing disparate impact liability in other civil rights contexts). × It argues that our transition from the “Internet Society” to the “Algorithmic Society” will demand that Title II receive a doctrinal update. 160 160. See Jack Balkin, Free Speech in the Algorithmic Society: Big Data, Private Governance, and New School Speech Regulation, 51 U.C. Davis L. Rev. 1149, 1150 (noting that society is entering a new post-internet phase he calls the “Algorithmic Society”). × If the statute is to remain relevant in the years and decades ahead, Title II must become Title 2.0.

I.          The Rise of Data-Driven Transportation

Today, algorithms drive society. They power the apps we use to skirt traffic, the networking systems we use to dispatch mobility services, and even the on-demand delivery providers we use to avoid driving in the first place.

For most Americans, paper atlases have been shrugged. Algorithms, of one variety or another, now govern how we move. And far from being anywhere near “peak” 161 161. Gil Press, A Very Short History of Digitization, Forbes (Dec. 27, 2015), https://www.forbes.com/sites/gilpress/2015/12/27/a-very-short-history-of-digitization/#1560b2bb49ac (describing digitization technologies in terms of “peak” adoption). × levels of digitization, society’s embrace of algorithms only appears to be gaining steam. With announcements of new autonomous and connected technologies now a daily fixture of the media, all signs suggest that we’re at the beginning of a long road to algorithmic ubiquity. Data-driven transportation might rightly be described as pervasive today. But tomorrow, it is poised to become the de facto means by which people, goods, and services get from Point A to B.

Many have high hopes for this high-tech future, particularly when it comes to combating longstanding issues of discrimination in transportation. Observers have hailed the likes of Uber and Lyft as finally allowing “African American customers [to] catch a drama-free lift from point A to point B.” 162 162. E.g., Latoya Peterson, Uber’s Convenient Racial Politics, Splinter News (Jul. 23, 2015), https://splinternews.com/ubers-convenient-racial-politics-1793849400. × They’ve championed low-cost delivery services, such as Amazon and Grubhub, as providing viable alternatives to transit for individuals with disabilities. 163 163. See, e.g., Winnie Sun, Why What Amazon Has Done For Medicaid And Low-Income Americans Matters, Forbes (Mar. 7, 2018), https://www.forbes.com/sites/winniesun/2018/03/07/why-what-amazon-has-done-for-medicaid-and-low-income-americans-matters/#7dbe2ff1ac76; Paige Wyatt, Amazon Offers Discounted Prime Membership to Medicaid Recipients, The Mighty (Mar. 9, 2018), https://themighty.com/2018/03/amazon-prime-discount-medicaid/. × And they’ve even praised navigation apps, like Waze, for bursting drivers’ “very white, very male, very middle-to-upper class” bubbles. 164 164. E.g., Mike Eynon, How Using Waze Unmasked My Privilege, Medium (Oct. 2, 2015), https://medium.com/diversify-tech/how-using-waze-unmasked-my-privilege-26 355a84fe05. × It is through algorithmic transportation, in other words, that we’re beginning to glimpse a more equitable America—with our mobility systems finally exorcised of the types of discrimination that stubbornly persist today, some fifty years after the passage of modern civil rights legislation.

A.         Out With the Old Bias, In With the New?

As with seemingly all significant technological breakthroughs, however, algorithmic transportation also gives rise to new challenges. And discrimination is no exception. Already, multiple studies have revealed the potential for racial bias to infiltrate the likes of Uber, Lyft, Grubhub, and Amazon. 165 165. See infra notes 14 – 28. See also, e.g., Jacob Thebault-Spieker et al., Towards a Geographic Understanding of the Sharing Economy: Systemic Biases in UberX and TaskRabbit, 21 ACM Transactions on Computer-Human Interaction (2017). × The National Bureau of Economic Research’s (“NBER”) groundbreaking study revealing a pattern of racial discrimination in Uber and Lyft services is one such exemplar. 166 166. Yanbo Ge, et al., Racial and Gender Discrimination in Transportation Network Companies, (2016), http://www.nber.org/papers/w22776. × After deploying test subjects on nearly 1,500 trips, researchers found that black riders 167 167. Or riders with black-sounding names. × experienced significantly higher wait times and trip cancellations than their white counterparts.

The NBER’s piece was preceded—months earlier—by a similarly provocative report from Jennifer Stark and Nicholas Diakopoulus. 168 168. See Jennifer Stark & Nicholas Diakopoulus, Uber Seems to Offer Better Service in Areas With More White People. That Raises Some Tough Questions., Wash. Post (Mar. 10, 2016), https://www.washingtonpost.com/news/wonk/wp/2016/03/10/uber-seems-to-offer-better-service-in-areas-with-more-white-people-that-raises-some-tough-questions/. × Using a month’s worth of Uber API data, the scholars found a statistical correlation between passenger wait times and neighborhood demographic makeup. The upshot? That Uber’s patented “surge pricing algorithm” resulted in disproportionately longer wait times for people of color, even after controlling for factors such as income, poverty, and population density.

Another example comes from Bloomberg, which reported in 2017 that Amazon’s expedited delivery services tended to bypass areas composed of predominantly black residents. 169 169. See David Ingold & Spencer Soper, Amazon Doesn’t Consider the Race of Its Customers. Should It?, Bloomberg (Apr. 21, 2016), https://www.bloomberg.com/graphics/2016-amazon-same-day/. × Bloomberg’s findings were subsequently buttressed by a Washington Post piece revealing that the “delivery zones” of services such as Grubhub, Door Dash, Amazon Restaurants, and Caviar appeared highly limited in low-income, minority-majority areas. 170 170. Tim Carman, D.C. has never had more food delivery options. Unless you live across the Anacostia River., Wash. Post (Apr. 2, 2018), https://www.washingtonpost.com/news/food/wp/2018/04/02/dc-has-never-had-more-food-delivery-options-unless-you-live-across-the-anacostia-river/?utm_term=.dead0dca9e8a. ×

B.         Discrimination’s Digital Architecture

While the patterns and practices uncovered by these reports vary dramatically, they share one commonality whose importance cannot be overstated. Each of them measures racial bias at a statistical—not individual—scale.

As a structural matter, this observation is in some sense unavoidable. When discrimination occurs in traditional brick-and-mortar contexts, it generally does so out in the open. It is difficult to turn someone away from Starbucks, 171 171. This example is pulled from an all-too-recent headline. See Rachel Adams, Starbucks to Close 8,000 U.S. Stores for Racial-Bias Training After Arrests, N.Y. Times (Apr. 17, 2018), https://www.nytimes.com/2018/04/17/business/starbucks-arrests-racial-bias.html. × after all, without them being made aware of the denial, even if the precise rationale is not clear.

But as the means by which Americans secure their transportation, food, and lodging goes increasingly digital, the “architecture” 172 172. See Lessig, supra note 15. × of discrimination will take on a different face. Our interactions with cab companies, public transportation providers, and delivery services will be mediated by algorithms that we neither see nor necessarily understand. And face-to-face interactions with service providers, meanwhile, will become a thing of the past.

In countless respects, this transition is cause for celebration. A society driven by algorithms is one that holds genuine hope of eliminating the types of overt discrimination that drove civil rights reforms of past eras. But in its stead, an emerging body of evidence suggests that subtler forms of discrimination may persist—ones that could challenge the doctrinal foundations on which our civil rights laws currently rest.

II.         When Blackletter Civil Rights Law Isn’t Black and White

When it comes to holding private entities that provide our transportation, food, and lodging accountable for racial discrimination, the usual suspect is Title II of the Civil Rights Act. Title II sets forth the basic guarantee that “[a]ll persons [are] entitled to the full and equal enjoyment of the goods, services, facilities, privileges, advantages, and accommodations of any place of public accommodation. . . without discrimination or segregation on the ground of race, color, religion, or national origin.” 173 173. Civil Rights Act of 1964, 42 U.S.C. § 2000a(a) (2018). × The statute defines “public accommodation” broadly as essentially any “establishment affecting interstate commerce.” 174 174. See id (with the exception of a few carve outs—private clubs being one such example). ×

Pursuing a Title II claim requires, first, establishing a prima facie case of discrimination. To do so, claimants must show they: (1) are members of a protected class; (2) were denied the full benefits of a public accommodation; and (3) were treated less favorably than others 175 175. Id (specifically, “. . . treated less favorably than others outside of the protected class” who are similarly situated). × outside of the protected class. 176 176. Having established a prima facie case, the burden of persuasion then shifts to the defendant. For simplicity’s sake, this piece strictly analyzes prima facie claims and does not delve into the complexities of burden shifting and justifying legitimate business decisions under modern antidiscrimination law. ×

A.         The Intent Requirement and the Man of Statistics

At first blush, establishing these prima facie elements using the types of evidence documented by the reports noted in Part I(A) may seem straightforward. But there’s just one tiny detail standing in the way. As it turns out, no one knows whether Title II actually prohibits the kinds of racial disparities uncovered by the studies.

Not all civil rights laws, after all, allow claimants to use statistically-disparate impacts as evidence of discrimination. Title VI, for example, does not, whereas Title VII does.

This distinction owes, in large part, to the antidiscrimination canon’s “intent requirement,” which draws a doctrinal dividing line between acts exhibiting “discriminatory intent” and those, instead, exhibiting “discriminatory effects.” 177 177. See Implementation of the Fair Housing Act’s Discriminatory Effects Standard, 78 Fed. Reg. 11,460 (Feb. 15, 2013) (codified at 24 C.F.R. § 100.500(1) (2014)). × To oversimplify, acts of intent can be understood as overt, “invidious acts of prejudiced decision-making.” 178 178. Susan Carle, A New Look at the History of Title VII Disparate Impact Doctrine, 63 Flo. L. Rev. 251, 258 (2011). × Acts of effect, meanwhile, are those that “actually or predictably . . . result[] in a disparate impact on a group of persons” even when the explicit intent behind them is not discriminatory. 179 179. See Implementation of the Fair Housing Act’s Discriminatory Effects Standard, supra note 35. ×

Ask Rosa Parks to give up her seat for a white passenger? The civil rights claim filed in response will likely take a narrow view of the interaction, examining the discrete intent behind it. Systematically route buses in such a way that they bypass Rosa Parks altogether? Under the right circumstances, this could be evidence of discrimination equally as troubling as in the former scenario. But the civil rights claim it gave rise to would likely entail a far wider view of the world—one that couched its arguments in statistics. 180 180. Title VII offers plaintiffs a “disparate impact” framework under which they may prove unlawful discrimination alongside the more traditional “disparate treatment” model. 42 U.S.C. § 2000e-2(k)(l)(A) (1994). ×

Today, a tentative consensus holds that theories involving discriminatory effects are available under the Fair Housing Act, the Age Discrimination and Employment Act, certain Titles of the Americans With Disabilities Act, and Title VII of the Civil Rights Act. When it comes to Title II, however, the jury is still out. Neither the Supreme Court, a major circuit court, nor a federal administrative body has resolved the issue to date, and “there is a paucity of cases analyzing it.” 181 181. Hardie v. Nat’l Collegiate Athletic Ass’n, 97 F. Supp. 3d 1163, 1163 (S.D. Cal. 2015), aff’d, 861 F.3d 875 (9th Cir. 2017), and superseded by, 876 F.3d 312 (9th Cir. 2017). ×

B.         Hardie’s Open Question

Uncertainties surrounding Title II’s scope most recently came to a head in Hardie v. NCAA. The case involved a challenge to the collegiate association’s policy of banning convicted felons from coaching certain tournaments. The plaintiff, Dominic Hardie, alleged that the policy disparately impacted blacks, putting the question of Title II’s “discriminatory effect” liability at center stage.

The court of first impression ruled against Hardie, finding that Title II did not cognize such claims. But on appeal, the case’s focal point changed dramatically. In a surprise turn of events, the NCAA abandoned its structural argument against disparate impact liability outright. Instead, it conceded that Title II did, in fact, recognize statistical effects but asserted that the NCAA’s policy was, nonetheless, not a violation. 182 182. See id. (“On appeal, the NCAA does not challenge Hardie’s argument that Title II encompasses disparate-impact claims. . . . Instead, the NCAA asks us to affirm entry of summary judgment in its favor on either of two other grounds advanced below, assuming arguendo that disparate-impact claims are cognizable under Title II.”). ×

Thus, when the case came before the 9th Circuit, the question of whether Title II encompassed discriminatory effects was, essentially, rendered moot. The court ruled in favor of the NCAA’s narrower argument but went out of its way to emphasize that it had not decided the question of discriminatory effect liability. And no other major appeals court has addressed the issue since.

C.         Title II’s Fair Housing Act Moment

It was not long ago that another civil rights centerpiece—the Fair Housing Act of 1968 (FHA)—found itself at a similar crossroads. The FHA makes it illegal to deny someone housing based on race. But a half century after the statute’s passage, the question of whether it prohibited disparate effects had not been tested in our highest court.

By 2015, the Supreme Court had twice taken up the issue in two years. 183 183. See Gallagher v. Magner, 619 F.3d 823, (8th Cir. 2010), cert. dismissed, 565 U.S. 1187, 132 S.Ct. 1306 (2012); Mt. Holly Gardens Citizens in Action, Inc. v. Twp. of Mt. Holly, 658 F.3d 375 (3rd Cir. 2011), cert. dismissed, 571 U.S. 1020, 134 S.Ct. 636 (2013). × And twice, the cases had settled in advance of a ruling.

Then came Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, alleging that a state agency’s allocation of tax credits disparately impacted the housing options of low-income families of color. 184 184. Tex. Dep’t of Hous. & Cmty. Affairs v. Inclusive Cmtys. Project, Inc., 135 S. Ct. 2507, 2514 (2015) [hereinafter “Inclusive Communities”]. × This time, there was no settlement. And the ruling that followed was subsequently described as the “most important decision on fair housing in a generation.” 185 185. Kristen Capps, With Justice Kennedy’s Retirement, Fair Housing Is in Peril, Citylab (Jun. 28, 2018), https://www.citylab.com/equity/2018/06/what-justice-kennedys-retirement-means-for-fair-housing/563924/. ×

Writing for the 5-4 majority, Justice Kennedy affirmed that the FHA extended to claims of both discriminatory intent and effect. 186 186. But his ruling, according to some commenters, took a troublingly narrow view of viable disparate impact claims. × Kennedy was careful to note that the FHA’s passage occurred at a time when explicitly racist policies—such as zoning laws, racial covenants, and redlining—were the norm. But the Justice, nonetheless, stressed that more modern claims alleging racially disparate impacts were also “consistent with the FHA’s central purpose.” 187 187. See Inclusive Communities supra note 42. ×

D.        The New Back of the Bus

Much like the FHA, Title II arrived on the scene when discriminatory effect claims were far from the leading concern among civil rights activists. As Richard Epstein writes:

“Title II was passed when memories were still fresh of the many indignities that had been inflicted on African American citizens on a routine basis. It took little imagination to understand that something was deeply wrong with a nation in which it was difficult, if not impossible, for African American citizens to secure food, transportation, and lodging when traveling from place to place in large sections of the country. In some instances, no such facilities were available, and in other cases they were only available on limited and unequal terms.” 188 188. Richard A. Epstein, Public Accommodations Under the Civil Rights Act of 1964: Why Freedom of Association Counts as a Human Right, 66 Stan. L. Rev. 1241, 1242 (2014). ×

The paradigmatic act of discrimination, in other words, was intentional, overt, and explicitly racial.

Today, however, we are heading toward a world in which this paradigm is apt to turn on its head. Gone will be the days of racially explicit denials of service such as the well-documented phenomena of “hailing a cab while black,” “dining while black,” “driving while black,” or “shopping while black.” 189 189. See, e.g., Matthew Yglesias, Uber and Taxi Racism, Slate (Nov. 28, 2012), http://www.slate.com/blogs/moneybox/2012/11/28/uber_makes_cabbing_while_black_easier.html; Danielle Dirks & Stephen K. Rice in Race and Ethnicity: Across Time, Space, and Discipline 259 (Rodney Coates ed., 2004). × But as an increasing body of evidence suggests, inequality will not simply disappear as a consequence. Rather, discrimination will go digital. And when it does occur, it will likely manifest not as a discrete act of individual intent but instead as a statistically disparate effect.

With this future in view, forecasting the consequences for Title II requires little speculation. Absent the ability to bring statistically-based claims against tomorrow’s data-driven establishments, Title II could be rendered irrelevant. 190 190. In effect, this means that the greatest threat to the statute may not be the doctrinal uncertainty posed by “platform economy businesses,” per se. Instead, it could be the algorithmic “architecture” that drives such companies, regardless of whether they adopt a “platform” business model. ×

If America is to deliver on its guarantee of equal access to public accommodations, its civil rights laws must reach the data-driven delivery services, transportation providers, and logistics operators that increasingly move our society. 191 191. No matter one’s ideological view, the dismantling of legislation through mere technological obsolescence would be a troubling outcome. × Failing to do so simply because these business models were not the norm at the time of the statute’s passage could lead to tragic results. As Oliver Wendell Holmes, Jr. wrote more than a century ago:

“It is revolting to have no better reason for a rule of law than that it was laid down in the time of Henry IV. It is still more revolting if the grounds upon which it was laid down have vanished long since, and the rule simply persists from blind imitation of the past.” 192 192. See Holmes supra note 1 at 469. ×

To save one of our antidiscrimination canon’s most iconic statutes from such a fate, all signs now suggest it will need a doctrinal update. Title II, in software parlance, must become Title 2.0.

III.       A Policy Roadmap for Title 2.0

With the foregoing analysis in our rearview mirror, it is now possible to explore the road ahead. The policy challenges of applying Title II to a data-driven society appear to be at least threefold. Policymakers should establish: (1) whether Title II cognizes statistically-based claims; (2) what modern entities are covered by Title II; and (3) what oversight mechanisms are necessary to detect discrimination by such entities? The following sections discuss these three challenges, as well as the steps policymakers can take to address them through judicial, legislative, or regulatory reform.

A.         Statistically-based Claims in a Data-Driven Society

The first, and most obvious, policy reform entails simply clarifying Title II’s cognizance of statistically based claims. Such clarification could come at the judicial or regulatory level, as occurred with the FHA. Or it could come at the legislative level, as occurred with Title VII.

Though the question of whether litigants can sustain statistical claims under Title II may seem like an all-or-nothing proposition, recent experience shows this isn’t actually true. Short of directly translating Title VII theories to Title II, there exist numerous alternatives. Justice Kennedy himself noted as much in Inclusive Communities when he remarked that “the Title VII framework may not transfer exactly to [all other] context[s].” 193 193. See Inclusive Communities, supra note 42. ×

Nancy Leong and Aaron Belzer convincingly argue that one framing might involve adopting a modern take on discriminatory intent claims. The scholars assert that even if intent is deemed essential under Title II, statistically based claims could nevertheless satisfy the requirement. 194 194. See Leong & Belzer supra note 14, at 1313. × In their telling, the intent requirement could manifest through a company’s “decision to continue using a platform design or rating system despite having compelling evidence that the system results in racially disparate treatment of customers.” 195 195. See id. × Under this view, the claim would then be distinguishable from unintentional claims because “once the aggregated data is known to reflect bias and result in discrimination,” its continued use would constitute evidence of intent. 196 196. See id. Indeed, this argument may become especially compelling in a world where improved digital analytics enable much more customized targeting of individuals or traits. With more fine-grained control over data-driven algorithms, it may become much more difficult to justify the use of those that appear to perpetuate bias against protected groups. ×

Not only would this approach countenance Kennedy’s admonition in Inclusive Communities “that disparate-impact liability [be] properly limited,” 197 197. See Inclusive Communities, supra note 42. × it may also offer an elegant means of addressing the concerns raised by dissenting opinions that Title II claims demonstrate a defendant’s discriminatory “intent.” 198 198. See, e.g. id. (Justice Alito’s dissent highlighted Title II’s “because of” language). × Policymakers should, therefore, take this line of analysis into consideration when clarifying Title II’s scope.

B.         Public Accommodations in a Data-Driven Society

Although this essay has thus far presumed that large-scale algorithmic transportation services like Uber and Amazon are covered by Title II, even that conclusion remains unclear. As enacted, Title II is actually silent as to whether it covers conventional cabs, much less emerging algorithmic transportation models. 199 199. See, e.g., Bryan Casey, Uber’s Dilemma: How the ADA Could End the On Demand Economy, 12 U. Mass. L. Rev. 124, 134 (citing Ramos v. Uber Techs., Inc., No. SA-14-CA-502-XR, 2015 WL 758087, at *11 (W.D. Tex. Feb. 20, 2015)). × A second policy reform, therefore, would entail clarifying whether Title II actually covers such entities in the first place.

Here, understanding the origins of the Civil Rights Act of 1964 is again useful. The statute lists several examples of public accommodations that were typical of America circa 1960. 200 200. Civil Rights Act of 1964, tit. II, 42 U.S.C. § 2000a(b) (2018). × Some courts have suggested that this list is more or less exhaustive. 201 201. See Leong & Belzer supra note 14, at 1296. × But that view is inconsistent with the law’s own language. 202 202. Civil Rights Act of 1964, tit. II, 42 U.S.C. § 2000a(a) (2018) (prohibiting discrimination in “establishment[s] affecting interstate commerce”). × And numerous others have taken a broader view of the term “public accommodations,” which extends to entities that were not necessarily foreseen by the statute’s original drafters. 203 203. See, e.g., Miller v. Amusement Enters., Inc., 394 F.2d 342, 349 (5th Cir. 1968) (“Title II of the Civil Rights Act is to be liberally construed and broadly read.”). ×

Policymakers in search of analogous interpretations of public accommodations laws need look no further than the Americans With Disabilities Act (ADA). Like Title II, the ADA covers places of public accommodation. And, again like Title II, its drafters listed specific entities as examples—all of which were the types of brick-and-mortar establishments characteristic of the time. But in the decades since its passage, the ADA’s definition has managed to keep pace with our increasingly digital world. Multiple courts have extended the statute’s reach to distinctly digital establishments, including popular websites and video streaming providers. 204 204. See Nat’l Ass’n of the Deaf v. Netfix, Inc., 869 F Supp. 2d 196, 200-02 (D. Mass. 2012) (holding the video streaming service constitutes a “public accommodation” even if it lacks a physical nexus); National Federation of the Blind v. Scribd Inc., 97 F. Supp. 3d 565, 576 (D. Vt. 2015) (holding that an online repository constitute a “public accommodation” for the purpose of the ADA). But see Tara E. Thompson, Comment, Locating Discrimination: Interactive Web Sites as Public Accommodations Under Title II of the Civil Rights Act, 2002 U. Chi. Legal F. 409, 412 (“The courts, however, have not reached a consensus as to under what circumstances ‘non-physical’ establishments can be Title II public accommodations.”); Noah v. AOL Time Warner Inc., 261 F Supp. 2d 532, 543-44 (E.D. Va. 2003) (holding that online chatroom was not a “public accommodation” under Title II). ×

Policymakers should note, however, that Uber and Lyft have fiercely resisted categorization as public accommodations. 205 205. See Casey, supra note 57. The Department of Justice and numerous courts have expressed skepticism of this view. But, to date, there has been no definitive answer to this question—due in part to the tendency of lawsuits against Uber and Lyft to settle in advance of formal rulings. × In response to numerous suits filed against them, the companies have insisted they are merely “platforms” or “marketplaces” connecting sellers and buyers of particular services. 206 206. See id. × As recently as 2015, this defense was at least plausible. And numerous scholars have discussed the doctrinal challenges of applying antidiscrimination laws to these types of businesses. 207 207. See generally id.; Leong & Belzer supra note 14. × But increasingly, companies like Uber, Lyft, and Amazon are shifting away from passive “platform” or “marketplace” models into more active service provider roles. 208 208. See Bryan Casey, A Loophole Large Enough to Drive an Autonomous Vehicle Through: The ADA’s “New Van” Provision and the Future of Access to Transportation, Stan. L. Rev. Online (Dec. 2016), https://www.stanfordlawreview.org/online/loophole-large-enough/ (describing Uber’s and Lyft’s efforts to deploy autonomous taxi fleets). Other platform companies in different sectors are acting similarly. See, e.g., Katie Burke, Airbnb Proposes New Perk For Hosts: A Stake in The Company, San Francisco Bus. Times (Sept. 21, 2018), https://www.bizjournals.com/sanfrancisco/news/2018/09/21/airbnb-hosts-ipo-sec-equity.html. × All three, for example, now deploy transportation services directly. And a slew of similarly situated companies appear poised to replicate this model. 209 209. See Casey, supra note 66(noting the ambitions of Tesla, Google, and a host of others to deploy similar autonomous taxi models). × For most such companies, passive descriptors like “platform” or “marketplace” are no longer applicable. Our laws should categorize them accordingly.

C.         Oversight in a Data-Driven Society

Finally, regulators should consider implementing oversight mechanisms that allow third parties to engage with the data necessary to measure and detect discrimination. In an era of big data and even bigger trade secrets, this is of paramount importance. Because companies retain almost exclusive control over their proprietary software and its resultant data, barriers to accessing the information necessary even to detect algorithmic impacts often can be insurmountable. And the ensuing asymmetries can render discrimination or bias effectively invisible to outsiders.

Another benefit of oversight mechanisms is their ability to promote good corporate governance without the overhead of more intrusive command-and-control regulations. Alongside transparency, after all, comes the potential for extralegal forces such as ethical consumerism, corporate social responsibility, perception bias, and reputational costs to play meaningful roles in checking potentially negative behaviors. 210 210. See Bryan Casey, Amoral Machines; Or, How Roboticists Can Learn to Stop Worrying and Love the Law, 111 Nw. U. L. Rev. Onlineat 1358. There was, for example, a happy ending to the recent revelations regarding racial disparities in Amazon delivery services. See Spencer Soper, Amazon to Fill All Racial Gaps in Same-Day Delivery Service, Bloomberg (May 6, 2016), https://www.bloomberg.com/news/articles/2016-05-06/amazon-to-fill-racial-gaps-in-same-day-delivery-after-complaints. × By pricing externalities through the threat of public or regulatory backlash, these and other market forces can help to regulate sectors undergoing periods of rapid disruption with less risk of chilling innovation than traditional regulation. 211 211. As importantly, this encourages proactive antidiscrimination efforts as opposed to retroactive ones. See Mark Lemley & Bryan Casey, Remedies for Robots, U. Chi. L. Rev. (forthcoming 2019). Without meaningful oversight, the primary risk is not that industry will intentionally build discriminatory systems but that “[biased] effects [will] simply happen, without public understanding or deliberation, led by technology companies and governments that are yet to understand the broader implications of their technologies once they are released into complex social systems.” See Alex Campolo et. al, AI Now 2017 Report (2017). ×

Some scholars have proposed federal reforms—akin to those put forward by the Equal Employment Opportunity Commission, 212 212. 29 C.F.R. § 1602.7 (1991). × the Department of Housing and Urban Development, 213 213. 24 C.F.R. §§ 1.6, 1.8 (1996). × and the Department of Education —as a means of implementing oversight mechanisms for Title II. But state-level action, in this instance, may be more effective. A multi-fronted push that is national in scope provides a higher likelihood of successful reform. And much like the “Brussels Effect” documented at an international level, intra-territorial policies imposed on inter-territorial entities can have extra-territorial effects within the U.S. As the saying goes: “As goes California, so goes the nation.”

As a parting note, it cannot be stressed enough that mere “disclosure” mechanisms are not necessarily enough. For oversight to be meaningful, it must be actionable—or, in Deirdre Mulligan’s phrasing, “contestable.” That is, it must allow downstream users to “contest[] what the ideal really is.” Moreover, if oversight is to be accomplished through specific administrative bodies, policymakers must ensure that those bodies have the technical know how and financial resources available to promote public accountability, transparency, and stakeholder participation. Numerous scholars have explored these concerns at length, and regulators would do well to consider their insights.

Conclusion

Following any major technological disruption, scholars, industry leaders, and policymakers must consider the challenges it poses to our existing systems of governance. Will the technology meld? Must our policies change?

Algorithmic transportation is no exception. This piece examines its implications for one of America’s most iconic statutes: Title II of the Civil Rights Act of 1964. As algorithms expand into a vast array of transportation contexts, they will increasingly test the doctrinal foundations of this canonical law. And without meaningful intervention, Title II could soon find itself at risk of irrelevance.

But unlike policy responses to technological breakthroughs of the past, those we have seen so far offer genuine hope of timely reform. As Ryan Calo notes, unlike a host of other transformative technologies that escaped policymakers’ attention until too late, this new breed “has managed to capture [their] attention early [] in its life-cycle.”

Can this attention be channeled in directions that ensure that our most important civil rights laws keep pace with innovation? That question, it now appears, should be on the forefront of our policy agenda.


Legal Fellow, Center for Automotive Research at Stanford (CARS); Affiliate Scholar of CodeX: The Center for Legal Informatics at Stanford and the Stanford Machine Learning Group. The author particularly thanks Chris Gerdes, Stephen Zoepf, Rabia Belt, and the Center for Automotive Research at Stanford (CARS) for their generous support.

No matter how you get to work, chances are you’ve spent at least a handful of hours frustrated by the commute. At some point, construction, poor weather, or simply congested roadways have taken valuable hours from all of our days. Given the constant annoyance of bad traffic, it is unsurprising that people get excited about any technology that may reduce the problem. Such was at least part of the hope for ridesharing technologies like Uber and Lyft.

To date, that hope has been at least premature, if not misplaced entirely. Recent studies have shown that the introduction of Uber and Lyft to a city actually increases traffic. A study by transportation analyst Bruce Schaller found that popular ridesharing apps were responsible for 51% of the increase in traffic in San Francisco between 2010 and 2016. Results in other major metro areas were similar.

The increased traffic appears to be primarily attributable to two things. First, rideshare drivers spend around 40% of their road time between passengers, merely taking up space on the road without moving customers where they want to go. Second, Schaller’s research suggests that the convenience of ridesharing has increased the total number of trips taken. He finds that 60% of trips taken with rideshare apps replace trips for which people would have either taken public transit, biked, walked, or simply not made the trip. Uber and Lyft dispute some of Schaller’s methods, arguing that he does not adequately account for factors like increased tourism and freight delivery as causes of increased congestion.

Even if some of the companies’ criticisms are valid, the challenges of passenger-less rideshare vehicles and rideshare trips replacing non-car travel are almost certainly both real. It is possible that, as Uber, Lyft, and others collect more data about patterns of mobility, they will be able to effectively limit the amount of time their cars are on the road with no passengers. By contrast, increased traffic due to rideshare replacement of non-car travel will not be abated by the companies alone. Their incentives align with reducing the amount of time drivers have no passenger in the car, but not with ceding a share of their market to public transit or other modes of transportation.

The challenge of rideshare trips replacing non-car travel will require affirmative government action to overcome. Broadly, cities may take one of two paths, or a combination of both. First, they can design their infrastructure and public transit systems in such a way as to make walking or public transportation a more attractive option for the individual consumer than a solo car trip. Second, they may choose to limit the number of rideshare vehicles allowed on the road. Such a program would be similar to the grant of a set number of taxi medallions. Some cities, such as Chicago, have begun charging a tax on Uber and Lyft rides specifically to help fund improved public transportation. Such a scheme may enable the city to keep its other transit options competitive with rideshare and reduce overall traffic congestion.

To date, the growth of Uber and Lyft present a cautionary tale for tech optimists. On one hand, the growth of these companies has presented riders with a convenient way to travel, and has enabled some people to forgo owning their own car. However, there is evidence that the explosion of vehicles on the road has dramatically increased traffic congestion in the nation’s largest cities. While some of the traffic problems may be solved as the companies continue to collect data, it will likely take affirmative action by local governments to make other transportation options more compelling and abate the worst of the traffic problem.

The Battle For the Curb

Recently, Kevin wrote about how CAVs could alter the shape of cities. While CAV deployment is still in its infancy, the boom in ride sharing is already changing the design of cities. In Washington, D.C. the city government has announced the creation of five pickup and drop off zones that are reserved for ride shares 24 hours a day. The zones are also used for commercial loading and unloading, and are located near highly trafficked areas.

The creation of these zones in D.C. are part of a greater discussion of how cities use the curb. Right now, there is a lot of competition for the curb, from parking meters, to bike lanes, to drop off zones like the ones in D.C. And companies like Coord have started to keep track of everything that is going on near the curb, with an intent to build out a database that can be used by city planners and anyone else interested in what’s happening at street level. Any changes that CAVs make to cities will no doubt start at the curb – which means city governments need to figure out just what’s going to happen on the curb. Will cities be willing to give up their venue from street parking? Or will a boom in AVs cause that revenue to disappear on its own?

In the U.S., Thanksgiving represents the busiest travel period of the year, with AAA predicting that this year 54 million people will travel 50 miles or more before sitting down for turkey and stuffing. So how will CAVs and other mobility innovations change how we travel, not just at Thanksgiving, but yearlong? Lets take a look at a few recent stories that could point the way:

Waymo’s Self-Driving Service Hits the Bigtime

Back in August, Dan mentioned some issues Waymo’s automated vans had run into in Phoenix. Those issues don’t seem to have slowed the Alphabet (Google) owned company, as they have announced (as noted by Kevin) the launch of commercial service in December. The company is planning a slow roll out, and some cars will still have backup drivers, but by the Christmas travel season, some people in Arizona will be able to hail a driverless taxi to shuttle them to the airport.

Multimodality – Instead of a Taxi to the Airport, How About an E-Scooter and a Bus?

Uber has recently started to personalize suggestions on how to complete a trip. Depending on the distance to be traveled, the app will suggest you use a JUMP bike instead. Travelers in select cities can use Citymapper to plan trips across rideshares and public transit. In Chicago, for example, the app coordinates city buses, Divy bike shares, the ‘L’ system, and commuter rail. In London, Citymapper users can even hail a rideshare via the app’s own fleet. Meanwhile, bike and scooter startup Lime is expanding their services to include cars on their platform, and plans to deploy up to 500 cars in Seattle by the end of the year.

These companies are far from the only parties trying to synchronize how we use various mobility services. While the promise of a single app for all our mobility needs is yet to be fulfilled, the momentum is clearly there. Such an app would further enhance the congestion (and environmental) benefits that are projected to come with wider adoption of CAVs. While CAVs can better coordinate the cars that are on the road, multimodal programs can take even more cars off the road by pointing users to more efficient public transit or bikes/scooters.

Leaving Car Ownership Behind (Eventually…)

While some drivers may use self-driving cars and multimodality services to supplement their personal vehicles, there is an increasing push to replace vehicle ownership altogether. Lyft has launched a “ditch your car” challenge in a number of cities, encouraging users to try to live without their vehicles for a month. They’ve also launched a subscription service, offering 30 rides (up to $15 each) a month for $299.

Not interested in completely ditching your car? GM’s Maven platform lets you rent out your own vehicle, and is expanding in 2019 to include non-GM vehicles. Or you can opt for a more old-fashioned carpool, facilitated by Waze, which is slowly expanding a service to connect potential carpool members. So by next Thanksgiving, you may be able to snag a Waze carpool while leaving your personal vehicle behind to earn a little extra cash on Maven.

The point of this round up is not to provide a commercial for these platforms, but to highlight the ongoing disruption of the way people move through the world, a disruption that will only continue as CAVs reach greater deployment.