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S.F. No. 2704 - Transportation Networking Company (TNC) regulations, 2nd Engrossment
Author: Senator John R. Jasinski
Prepared By: Priyanka Premo, Senate Counsel (651/296-3914)
Alexis C. Stangl, Senate Counsel (651/296-4397)
Date: March 28, 2018



S.F. 2704 establishes statewide regulations for transportation network companies, or TNCs (the statutory term for ride services like Uber and Lyft). The regulatory structure generally replaces ordinances and requirements set by municipalities. Among its provisions, the regulations cover state agency licensure and annual fee setting, fare and payment standards, minimum driver qualifications, standards for obtaining and providing rides, inspection of vehicles used in the service, mandated TNC policies on intoxicating substance and nondiscrimination, data practices and records retention, and local preemption.


Section 1 makes a conforming change, to create a cross reference to the location of data practices requirements for TNCs.

Section 2 prohibits TNCs from using a red light or any other light except as provided by law.

Section 3 exempts TNCs from seat belt and passenger child restraint system requirements.

Section 4 specifies that the term “motor carrier” does not include a person providing services for a TNC.

Section 5 excludes services provided from a TNC from the definition of “small vehicle passenger service.”

Section 6 excludes TNC drivers from hours of service rules.

Section 7 makes technical and conforming changes.

Section 8 provides the substantive regulatory framework for transportation network companies.

Subd. 1. Definitions. Defines terms for the section, including referencing some terms defined in an existing statute on TNC insurance requirements.

Subd. 2. Transportation network company account. Creates a transportation network company account in the special revenue fund (which is designed to hold fee revenue from annual TNC licensing with the state).

Subd. 3. Transportation network company; license, general requirements. Requires TNCs to obtain an annual license with the Department of Transportation, with an annual flat fee of $5,000. The license covers all of the TNC's drivers. A revoked license must not be reinstated for one year. A TNC must be authorized or registered to do business in Minnesota. A TNC already operating may continue to operate while the permit application is pending.

Subd. 4. Transportation network company; fare requirements. Sets requirements for information disclosed to riders, including fare calculation, information about the vehicle operator, and receipts.

Subd. 5. Driver qualifications. Sets a minimum driver age of 19, requires background checks, and identifies circumstances in which a person is disqualified from driving for a TNC.

Subd. 6. Driver operating requirements. Prohibits TNC drivers from: providing prearranged rides for a TNC unless the TNC has a license; providing prearranged rides not matched in the digital network; accepting rides that are not prearranged; accepting cash payments. The driver must display a distinctive sign on the TNC vehicle. The driver cannot refuse an orderly rider. Upon request of a peace officer, the driver must display digital ID and evidence the rider was matched through the digital network.

Subd. 7. TNC vehicle requirements; inspection. Requires a safety inspection of TNC vehicles prior to use and specifies minimum vehicle components that must be inspected.

Subd. 8. TNC vehicle requirements; vehicles and equipment. Requires a TNC vehicle to maintain certain features, include four doors, signage, and illumination.

Subd. 9. Zero-tolerance intoxicating substance policy. Requires a TNC to establish a zero-tolerance policy on intoxicating substance use by TNC drivers, including driver suspension during investigation of rider complaints.

Subd. 10. Nondiscrimination and accessibility. Requires a TNC to establish a nondiscrimination policy and notify drivers of the policy. Prohibits TNCs from imposing an additional charge due to a rider’s physical disability. Requires rider capability to request a wheelchair-accessible vehicle if available.

Subd. 11. Records; retention; inspections. Directs TNCs to retain records on compliance with the regulations in this section for two years from the date of documentation. Authorizes the Department of Transportation to visually inspect a random sample of records for the purpose of verifying compliance. The commissioner cannot conduct more than one inspection of the same TNC each year, unless based on a complaint. Authorizes the Department of Transportation to inspect records in response to a specific complaint against a driver or a TNC.

Subd. 12. Data practices; liability. Classifies data under this section as nonpublic data or private data on individuals. Mandates TNC notification upon a court order for data or a data breach. Authorizes a TNC to disclose a rider’s personal information under certain circumstances. Creates a liability exemption for TNCs from data practices violations.

Subd. 13. Violations; enforcement. The commissioner may order violations to be corrected. Authorizes the Department of Transportation to assess penalties of up to $500 per violation made by a TNC. Permits the department to suspend, revoke, or deny renewal of a TNC license. The commissioner may order a TNC to suspend a driver for a violation. The commissioner must follow the existing process for administrative orders in chapter 221. A person who violates this section is guilty of a misdemeanor.

Subd. 14. Uniform statewide regulation. Preempts local regulation specifically governing TNCs, their drivers, or vehicles. Applies retroactively. Prohibits political subdivisions from imposing fees on TNCs, their drivers, or vehicles or requiring licensure to operate within the political subdivision’s jurisdiction. Provides limited exemptions for airport rules and regulations.

Effective date. Effective on January 1, 2019 and applies to all transportation network companies operating on or after that date.

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