About Commercial Insurance Coverage and CA PUC Permitting…
I carry $1.5 million in commercial insurance and have an Active Class A TCP Permit (Transportation Charter Party), as required by the California Public Utilities Commission: my TCP number is 35785. I am compliant with records, drug and alcohol testing, and all reg’s as they pertain to my type of business.
For some strange reason folks seem to really start caring about this stuff only after something serious happens.
What the public doesn’t know about the transportation business in Paso Robles…
For years Paso Robles has been known as the Wild West of the California transportation industry, due to extremely limited oversight and enforcement by the California Public Utilities Commission and the CHP, and only basic traffic enforcement by local police and sheriffs. The CHP, which is the enforcement arm of the CA PUC, claims they are cracking down on various passenger transportation entities that offer wine tours and other types of transportation while coloring way outside the lines of legality- but that remains to be seen.
I’ve been in this business 15 years, and am tired of tiptoeing around this subject. By the magnitude of the numbers ignoring State Law, our situation locally has become a public safety issue.
At present there are more illegal transportation companies than legal in this region. Visitors to our area assume legitimacy, and proper consumer protection/commercial insurance simply because the owner has put up a Yelp or a Facebook page.
These illegal operators are easy to spot- the only means of contact they offer is a cell number. Overall, there is a noticeable lack of transparency. For many, the only platforms where their businesses are posted are Yelp and Facebook. There is no business address listed. Most do not have websites or an email address. And most importantly, there is no PUC TCP Permit number shown anywhere- having a TCP number is the prerequisite to obtaining commercial insurance coverage for a transportation business.
Displaying TCP numbers on the lower right front or lower left rear, or on the lower rear sides of the vehicle is required by law. If you charter a vehicle that does not have any number displayed in these locations, especially a larger capacity vehicle, there may be a good chance it’s registered as private, and is not listed on the PUC commercial transportation vehicle roll (PL664). Party busses and larger vehicles can be registered as motor homes in this case, to skirt paying for commercial insurance or complying with vehicle safety laws.
Taking the topic a couple layers deeper…
There’s a bit more to it than that, but when an attempt is made to bring the real facts forward, the average wine tourist’s eyes tend to glaze over with giddy anticipation of riding around in the soccer mom minivan at the bargain price of $45 an hour. Being an active TCP Permit holder means plunking down a large chunk of front money for annual insurance coverage for my business, plus a monthly payment of $557.00 (in my case), not to mention lots of other business expenses that go on month after month.
With the onset and popularity of ride hailing apps Uber and Lyft, everyone seems to have gotten into the act. If you’re riding in one of these vehicles, and logged in through the company app, you’re covered by their commercial insurance, the transportation network company’s CA TCP Permit, and everyone is protected. However, if you or the driver negotiates a payment that goes directly to the driver, this simple, seemingly harmless act bypasses the app that provides insurance coverage for your party, and evolves into a completely different realm. It puts you and your loved ones at serious risk. Once cash changes hands it becomes officially labeled a commercial job. Drivers diverting revenue from the app to themselves is costing Uber and Lyft millions annually, if not billions- just ask a driver if they do drives outside the app.
The Great Paradox: Avoiding a DUI by hiring illegal, un-insured or un-permitted transportation, but ending up having to sue them for damages over a serious accident
In reality, overcoming the hurdle of a DUI would take a fraction of the time and hassle that settling in court with an illegal transportation entity would require, should medical or physical damages occur due to either accident or even just getting in and out of the vehicle (I’ve seen a seriously sprained ankle with an elderly lady exiting a van whose family sued).
It’s a stunning irony people would never think of since they’re unfamiliar with how this business actually works. To recover damages of any kind, you will have to sue the driver personally in court, while Uber or Lyft plus their insurance just walk away.
There are many clever explanations rogue Ubers and scofflaws use to entice you into taking that risk, versus going on the app or hiring a legit TCP permitted transportation company. There are too many excuses to list in detail, but here’s a short recap: “I only need commercial insurance if there are more than 10 people”, “If something does happen, just say we’re friends and I’m driving you around- you’ll be covered by my personal insurance”, “You’re covered by my supplemental insurance”- ALL ARE FALSE!
One local scofflaw convinces clients that they are covered by commercial insurance…only it’s for a completely different business, and has nothing to do with transportation.
Is saving a few dollars by taking a major risk really worth it? The law of averages says someday the milk’s going to get seriously spilled around here, probably not on the scale of New York, but that’s always the time when people start taking proper permitting, licensing and real insurance very seriously…after the fact.
TCP Permit holders are required to do the following to stay legal:
- Drug and alcohol testing on demand (Ubers and Lyfts are exempted from this at the moment)
- Annual CHP vehicle inspections (Uber and Lyft vehicles initially receive a general inspection by a local mechanic)
- Maintain required Commercial Insurance
- Annual fees paid: CA PUC, local and State taxes, and Workman’s Comp
Bottom line: I comply- I’m too old for a do-over