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What is a Transportation Network Company?
A TNC is an entity that uses an app on a phone or tablet device to connect a passenger to a driver. Taxis, charter buses, limousines and other for-hire vehicles are excluded. Uber and Lyft are examples of TNCs.
 
Who is regulating TNCs?
Under the new law, the South Carolina Office of Regulatory Staff has the primary responsibility and authority to regulate TNCs and their drivers.
 
The Act puts requirements in place regarding the following:
  • mandatory permitting from ORS
  • mandatory insurance coverage and annual vehicle inspections
  • mandatory trade dress identifying the TNC with which the driver is connected
    • must be readable from 50 feet in daytime and reflective, illuminated or otherwise viewable at night
  • mandatory background checks
  • prohibition against cash tips and against picking up or soliciting “street hails”
A municipality cannot pass local ordinances regulating TNCs or their drivers in areas addressed in the Act.
 
What role do municipalities play in regulating TNCs?
TNC drivers continue to be subject to local traffic and parking regulations as well as other municipal laws not addressed in the Act.
 
Example: City A wants to restrict cabs and TNC drivers from picking up passengers on certain streets to keep traffic on certain thoroughfares from becoming congested. This is an area that is not addressed by state law, and is, therefore, a permitted area of local regulation.
 
How does this impact local law enforcement?
Certified South Carolina law enforcement officers, including local law enforcement officers, are authorized to enforce the requirements of the Act. However, only magistrates have jurisdiction over contested violations. Fines are not less than $100, $500 or $1000 for first second and third offenses.
 
Is my municipality required to do anything under this law?
Municipalities must provide annexation information to the Revenue and Fiscal Affairs Office within 30 days after the annexation is complete.
 
What about business license tax revenue?
Within 30 days of the end of each calendar quarter, TNCs must remit to the ORS a local assessment fee equal to 1 percent of the total gross trip fare collected from TNC passengers during the quarter. ORS will keep 1 percent of this total fee for its expenses. Then ORS must remit to each municipality the percentage of the local assessment fee proportionate to the gross trip fares for trips originating in each municipality.
 
Example: Assume $100 million is the total gross trip fare collected by a TNC for rides originating in SC. Assume $20 million or 20 percent  of the total gross trip fares came from rides originating in City A. The total local assessment remitted to ORS would be $1 million. ORS would keep $10,000, leaving $990,000 in local assessment fees to be distributed. City A would receive 20 percent of the $990,000 or $198,000.
 
A municipality is not allowed to assess a tax against TNCs, TNC drivers or TNC vehicles, including a business license tax, unless the TNC is located within the municipality’s jurisdiction and receives revenue not otherwise subject to a business license tax or local assessment fee