Mr. David E. Kempner, Esquire
Pear, Sperling, Eggan & Muskovitz, P.C.
Domino's Farms
24 Frank Lloyd Wright Drive
Ann Arbor, Michigan 48105

RE: Taxicab service; contract service under 49 CFR Parts 653 and 654.

Dear Mr. Kempner:

Thank you for your letter asking about the application of the Federal Transit Administration's (FTA) drug and alcohol testing regulations. 59 FR 7531 (1994) (to be codified at 49 CFR Parts 653 and 654). Those rules require that a recipient of funds under FTA's discretionary capital grant program, formula grant programs for urbanized and nonurbanized areas, or interstate transfer program implement a program requiring safety-sensitive employees to be tested for five controlled substances and for the misuse of alcohol. Large transit operators must implement the drug and alcohol rules beginning on January 1, 1995, while small transit operators must begin implementation on January 1, 1996.

Background

The Ann Arbor Transportation Authority (AATA) operates a transit system in Ann Arbor, Michigan. In addition to the fixed and special service AATA provides using its own vehicles and drivers, it also contracts with Yellow Cab Company (Yellow Cab) to provide paratransit service, including shared ride taxi service for senior citizens, door-to-door paratransit service for persons with disabilities, and late night shared ride taxi service. The service is funded, in part, by Federal operating assistance under FTA's formula grant program for urbanized areas. The paratransit drivers all drive vehicles identified as Yellow Cab, either as employees of Yellow Cab or its affiliate or as lessees or independent owner/operators. All drivers serve the general public as well as AATA customers, and may refuse to take a call at any time and go out of service.

Yellow Cab operates a State-licensed maintenance facility and maintains all the vehicles owned by it or its affiliate. Although the independent owner/operators and lessees may also use this maintenance facility, most do not, preferring instead either to maintain the vehicles themselves or have them serviced at local garages, auto dealerships, or other facilities.

Issue

You recognize that the employees at the maintenance facility are subject to FTA's drug and alcohol testing regulations, but ask whether the independent owner/operators and lessees, who are not employees of Yellow Cab, are covered by the rules. You also ask whether mechanics who maintain vehicles for the independent owner/operators or lessees are covered by the rules.

Interpretation

Taxicab service.FTA's drug and alcohol testing rules apply not only to direct recipients of certain kinds of FTA funding, but also to "any entity that provides mass transportation service or which performs a safety-sensitive function for such recipient or other entity." 49 CFR 653.7 and 654.7. This includes a contractor, which is defined as "a person or organization that provides a service for a recipient, subrecipient, employer, or operator consistent with a specific understanding or arrangement. The understanding can be a written contract or an informal arrangement that reflects an ongoing relationship between the parties." 49 CFR 653.7 and 654.7.

Regarding the taxicab service, the preambles to the rules state that "[t]o the extent that a taxi operator does not provide service under an arrangement with the FTA recipient, but is chosen at random by the passenger, it would not be subject to the rule. If, however, the taxicab company or private operator does provide service under an arrangement with an FTA recipient, it is covered by the rule as a contractor, as defined by the rule." 59 FR at 7542-7543 and 7582.

In our view, this discussion indicates that the intent of the rules is to cover only those situations in which a transit operator has a contract or arrangement with only one or two taxi operators. In these instances, the public knows that to take advantage of certain publicly funded services it must deal with a particular taxicab company; this provides a sufficient nexus for the transit operator to require the taxi drivers to be subject to drug and alcohol testing. On the other hand, where a passenger randomly chooses among a variety of different taxicab companies the preamble discusses the practical difficulties of trying to administer a drug and alcohol testing program in connection with all of those companies; accordingly, FTA's rules on drug and alcohol testing would not cover such services. In this instance, AATA contracts with Yellow Cab, which, in turn, provides the paratransit service. Because a passenger may not choose among a variety of different taxicab companies, FTA's rules on drug and alcohol testing apply to all Yellow Cab drivers who may respond to a request for paratransit service, regardless of their status as employees, independent owner/operators, or lessees. As suggested in the preamble, Yellow Cab may minimize the effect of the rules by designating certain drivers to provide the paratransit service and limit the application of the drug and alcohol testing program to those drivers.

Maintenance contractors. You also ask whether workers maintaining vehicles for the owner/operators and lessees are covered under the rules. You write that most of the owner/operators and lessees, at their own option, either maintain the vehicles themselves or use local garages, auto dealerships, or other facilities. You contend that because of the nature of taxicab service it would be difficult, if not impossible, for Yellow Cab to require these workers to be subject to FTA's drug and alcohol testing program.

In general, contract maintenance workers are covered by the rules. The preambles to the rules state that "mechanics who repair [revenue service] vehicles or perform routine maintenance are the types of maintenance workers covered by the rules." 59 FR 7535 (1994). In our view, however, there is not a sufficient nexus for the rules to apply to contract mechanics for independent owner/operators or lessees of taxicabs providing paratransit service on behalf of an FTA recipient. In many instances these mechanics are maintaining a taxicab not for a public entity or a publicly subsidized private entity, but for a private citizen, who owns the taxicab and earns a living serving the general public and only incidentally provides paratransit service. These drivers select a mechanic on their own, and Yellow Cab has no relationship directly or indirectly with such mechanics.

I trust this is responsive to your inquiry. If you have any questions regarding this letter, please contact either Daniel Duff or Nancy Zaczek of this Office at (202)366-4011.

Very truly yours,
(Signed)
Berle M. Schiller
Chief Counsel