RD496 - Feasibility of Using Private Operators and Independent Contractors for ADA Paratransit Services - November 2015

Executive Summary:

This document responds to a directive of the Virginia General Assembly that the Department of Rail and Public Transportation (DPRT) report to the Chairmen of the House Appropriations and Transportation Committees and the Senate Finance and Transportation Committees on the feasibility of increasing the use of private operators and independent contractors, including but not limited to transportation network companies (TNCs), in the provision of paratransit services throughout the Commonwealth. The assessment is to determine potential costs and feasibility of, as well as identify potential liability and risks associated with, increasing the provision of paratransit services through private providers.


Paratransit, more formally known as ADA paratransit, is mandated by the federal Americans with Disabilities Act (ADA) of 1990. All public transit agencies that provide fixed route service must also provide complementary ADA paratransit service for individuals with disabilities who are prevented from using traditional fixed route service due to their disability and who have been certified as eligible. Regulations require that ADA paratransit be provided on a next-day basis with no capacity constraints. ADA paratransit has benefitted many individuals with disabilities with increased mobility, but rising demand and costs for the service are concerns for transit agencies, both in Virginia and nationwide.

The most recent available data show increasing ADA paratransit ridership at Virginia’s transit agencies, with a five-year increase over 2008 to 2013 ranging from 7% to 68%. Costs are also increasing. Over the same five years, ADA paratransit costs increased 33% to more than 100%. The cost per ADA paratransit trip in Virginia ranges from $19.61 to $51.04, according to the 2013 data.


Transit agencies use different approaches to provide their ADA paratransit service in Virginia. Somewhat less than one-half use private providers, with the others providing the service in-house with their own employees.

The private providers include the large national transportation companies, smaller more local transportation companies, non-profit organizations, and taxi companies. The latter are used by three transit agencies in Virginia, which includes the Washington Metropolitan Area Transit Authority (WMATA) that provides ADA paratransit in the Northern Virginia suburbs.

Taxi companies use independent contractors as drivers, and they have been providing ADA paratransit for many years. The TNCs are a new transportation resource, with individuals driving their personal cars and providing for-hire, on-demand transportation. The drivers are independent contractors.


Current Use

Taxis are used by almost 10% of the country’s urban transit agencies for ADA paratransit, primarily to take advantage of taxis’ lower cost structure compared to in-house service or contracting with a transportation company with direct employees. Research shows that the cost of ADA paratransit trips provided by taxi ranges from $23.29 to $28.17 per trip, compared to transit agency costs shown in national data, with an average of $34.06 per trip and $43.65 per trip for the country’s 50 largest transit agencies.

Transit agencies use taxis in three ways. First, transit agencies contract with a taxi company to operate ADA paratransit service. This requires the taxi company to meet all the requirements that convey with federal funding, which are identified in the Certifications and Assurances (see Appendix D). These include, among others, the Civil Rights statutes of Equal Employment Opportunity (EEO), Title VI, and ADA. Also included is the requirement to have a drug and alcohol testing policy and program, with testing for safety sensitive employees, which include drivers regardless of whether they are independent contractors. And it means the taxi company must meet the mandatory ADA service criteria, which includes accepting trip reservations from riders the day before desired trips.

Second, transit agencies may use taxis to provide back-up service on the day-of-service. In this way, the transit agency sends trips to the taxi company on an immediate response basis to provide trips that the transit agency’s own drivers or the drivers of a private transportation company under contract cannot meet due to operational or scheduling issues. For this second use, the taxi company must also agree to the federal requirements set out in the Certifications and Assurances, which include compliance with drug and alcohol testing.

Third, transit agencies may use taxis to provide a service supplemental to required ADA paratransit with a same-day user-side subsidy program for ADA riders. Because the service is same-day, it is optional, and the ADA paratransit service criteria do not apply. Transit agencies can set the subsidy at an amount significantly below the cost for next-day ADA trips. Such sameday taxi programs can serve the trips of ADA-eligible riders more cost-efficiently than trips provided by the next-day ADA paratransit service. Same-day user-side subsidy programs for ADA riders are not a common practice of transit agencies, and to our knowledge they are not used by any Virginia transit agency for ADA paratransit.

Additionally, as long as a user-side subsidy program provides riders a choice among taxi companies, the federal requirements for drug and alcohol testing do not apply. However, ADA regulations that require equivalent service for individuals with disabilities do apply.

What is the Feasibility of Increased Use of Taxis for ADA Paratransit?

It is feasible to promote increased use of taxis for ADA paratransit service. An objective of increased use should consider the following:

• Taxi companies have greater capacity to provide ADA paratransit service when they have accessible vehicles, which cost more to purchase compared to a taxi sedan.

• Incentives for taxi drivers to use accessible taxis and provide accessible trips are important. An accessible vehicle also costs more to operate than a taxi sedan, and it takes more driver time to provide trips for riders in wheelchairs which is not charged by the drivers. Pay incentives for drivers can address these issues and are typically provided by the taxi company and often by the contracting transit agency.

• Liability and risks can be addressed in several ways:

* Each transit agency needs to require liability insurance at a level the transit agency deems sufficient for its risk management program, which often is a limit higher than set by the regulatory body. A taxi company can partition its service so that only those drivers who have volunteered to serve ADA trips are insured at the higher level.

* Risks can be addressed by ensuring that the local jurisdiction conducts comprehensive driver background screening of taxi drivers, to include a driving record check as well as a fingerprint-based criminal history check. These are typical for drivers in the taxi industry.

* Each transit agency can require the taxi drivers to participate in training to serve the specialized needs of ADA riders, which is particularly important for drivers of accessible taxis.

* The taxi vehicles should be inspected regularly, particularly the safety features. Virginia’s annual state inspection program is an appropriate baseline requirement. A transit agency may require more frequent inspections and may stipulate that that it can inspect vehicles at any time and remove a vehicle from the agency’s service if it deems a vehicle unsafe.

• If a transit agency plans a user-side subsidy program for ADA riders, it should set controls over its use to ensure demand does not escalate beyond the agency’s budget. Same-day service is popular and may induce trip volumes that become financially unsustainable.

Transportation Network Companies

Current Use

There are no known examples of TNCs providing ADA paratransit service. However, the transit agencies in Dallas and Atlanta are coordinating with Uber to provide an option for “first mile/last mile” service for their rail systems. This refers to trips from an origin, such as the transit rider’s home, to the rail station and from the rail station to the transit rider’s final destination.

The TNCs are also developing services for riders who need assistance with transportation. In selected cites, Uber has what it calls “UberASSIST,” designed for seniors and people with disabilities, including those who use a mobility device that can be folded and placed in the trunk or back of a passenger car. In a few cities, Uber provides accessible service to serve riders who use wheelchairs that cannot be folded, though the service is not provided by the TNC itself, but rather by accessible taxis or another company.

What is the Feasibility of Using TNCs for ADA Paratransit?

With their current business model, it may be feasible to use TNCs and their independent contractor drivers to provide a same-day subsidy program for ADA-eligible riders. A number of transit agencies around the country currently provide such a service, giving subsidies to the ADA riders to use taxis. This is one of the three ways that transit agencies now use taxis.

Transit agencies use these taxi-based user-side subsidy programs as a way to serve trips of ADAeligible riders more cost-effectively than with the required next-day ADA paratransit. Because same-day service is not an ADA requirement, transit agencies can set parameters that help control the cost of the service. Importantly, since TNCs do not operate accessible vehicles, transit agencies using TNCs for a same-day subsidy program would need to ensure a level of accessible service for ADA riders needing a lift or ramp-equipped vehicle.

With the current TNC business model and based on available information at the time of writing this report, it does not appear that TNCs could be used in the other two ways that transit agencies now use taxis and which would require a TNC to enter into a contract with the transit agency to provide the required ADA paratransit. These two approaches – provision of ADA paratransit service and provision of back-up ADA paratransit service – require agreement to comply with the federal requirements that convey with the transit agency’s funding. These requirements are set out in the Certifications and Assurances and include Civil Rights statutes such as ADA as well as drug and alcohol testing, which apply even for independent contractor drivers. A company must have a drug and alcohol policy and program, which includes pre-employment, random, postaccident, and reasonable suspicion testing, as well as follow-up and return-to-duty testing for all safety sensitive employees.

Beyond the requirements that convey with the funding, contracting to provide ADA paratransit requires the private operator to meet the ADA service criteria, including accepting trips the day before the desired trip. The current TNC business model is not designed to accept advance reservation trips.

Costs and Benefits: Without any current TNC-provided ADA paratransit service, costs are not known. However, generally costs for TNC trips, when provided by private individuals driving their personal cars, are somewhat less than taxi service, except when the TNCs’ trip charges increase through what one TNC calls surge pricing.

While TNCs do not currently provide ADA paratransit service, there are many individuals in cities where TNCs operate who use the service, including people with disabilities.

But benefits of TNCs do not apply to all those with disabilities. Service for people with disabilities who use a wheelchair and need an accessible vehicle is available only in a very limited number of cities and at a cost that may be more than non-accessible TNC service.

Benefits also do not apply to those without a smartphone or credit or debit card. Research shows that only 27% of those age 65 and older have a smartphone and that almost 8% of households in the country (one in 13 households) are “unbanked” (no bank account). Some proportion of these population groups could be expected to have disabilities and thus not able to use TNCs.

Liability and Risks: Should TNCs become involved in the required ADA paratransit service at some point, liability and risks should be addressed through adequate insurance, driver background checks, driver training, and vehicle inspections. These issues are particularly important given that ADA riders are, by definition, individuals with disabilities.

• Insurance: Insurance for TNCs has been established through the Commonwealth’s regulations. The insurance levels required for the time periods when the TNC driver has accepted a trip and, importantly for rider protection, when the driver is transporting the passenger are $1 million. This level is considerably higher than what Virginia requires for taxis, but lower than what most transit agencies require for their ADA paratransit service from private transportation companies.

• Driver Background Checks: TNC driver background checks have been a contentious issue, in particular whether fingerprint-based criminal history record checks should be required or whether document-based criminal history record checks (that is, using a driver’s license, Social Security number, etc.) are sufficient. The TNCs use document-based criminal history record checks, not fingerprint-based checks. Many ADA riders, particularly those with intellectual disabilities, are more vulnerable than general public riders. Given this risk and potential liability, requiring fingerprint-based criminal history record checks as well as driving record checks for TNC drivers providing paratransit service may be prudent.

• Driver Training: Adequate TNC driver training should be required, including both classroom and hands-on training in serving the specialized needs of ADA riders. Transit agencies contracting with taxis for ADA paratransit may require the same training that is required for private transportation companies, which may involve 80 or more hours.

• Vehicle Inspections: TNC vehicles should undergo regular inspections, with Virginia’s annual state safety inspection a baseline requirement. A transit agency may require more frequent inspections and should have the right to remove any vehicle from its service that it deems unsafe.

Accessibility: ADA paratransit, both the mandatory service and any optional same-day user-side subsidy program, must ensure accessible service. If not provided by the TNC, the transit agency must ensure the provision of accessible service that is equivalent to the service provided to riders who do not need accessible service.

Concluding Comments

TNCs may be an option for transit agencies to provide a same-day subsidy program for ADA riders, in the same way that a number of transit agencies have used taxis for many years. Such service is not a requirement of the ADA, but provided by some transit agencies as an optional service to help meet trips for ADA-eligible riders more cost-efficiently. Should transit agencies consider the use of TNCs for required ADA paratransit service, various questions and issues should be addressed. In particular, potential liability questions remain about the adequacy of TNCs’ driver background checks. Other questions and issues to be addressed concern driver training as well as insurance, vehicle inspections, and the role of drug and alcohol testing, should TNCs be considered as providers of required ADA paratransit. These issues relate not just to requirements that convey with federal transit funding, but also help ensure the safety of ADA riders, many of whom are more vulnerable than the general public.

Paratransit and Evolving TNC Services

The country’s transportation landscape is changing rapidly. It may be – as TNCs’ services evolve, as attempts to regulate them continue, and as court cases are resolved – that these new transportation services become a more viable resource for transit agencies’ required ADA paratransit programs.