Ms. Louise H. Renne
City Attorney
City and County of San Francisco
Room 206 City Hall
San Francisco, California 94102-4682

Attention: Ms. Robin Reitzes

Re: Taxicab service; contract service; incidental overlap; continuing Federal interest under 49 CFR Parts 653 and 654

Dear Ms. Renne:

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 that safety-sensitive employees 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 San Francisco Municipal Railway ("MUNI") contracts with Cerenio Management Group (CMG), a broker, to provide paratransit service. The service is funded from a variety of sources, including Federal operating assistance under FTA's formula grant program for urbanized areas. Various subcontractors to CMG provide the paratransit service, including five taxicab companies and twelve other companies, which provide three kinds of van service: lift van service, group van service, and group van service for seniors.

The five taxicab companies daily operate 500-600 taxis and ramp-equipped vans, providing 45,000 one-way paratransit trips, in addition to trips provided to the general public. Approximately 2,000 drivers, dispatchers, and maintenance personnel are involved in this service. According to the terms of the subcontract between CMG and the five taxicab companies, cab drivers must accept scrip as payment for taxi rides by disabled persons. Other cab companies that meet MUNI's criteria also may become part of the program.

The lift van service is provided by a single subcontractor. A passenger, who must make a reservation a day in advance, pays a flat monthly rate of $8.00, which purchases up to 45 one-way trips, with the City of San Francisco subsidizing the remaining cost of the trips. The subcontractor employs 75 drivers and owns 50 lift vans, which are maintained in-house. Approximately 800 wheelchair passengers use this service.

The group van service is provided by four subcontractors, which provide scheduled trips, coordinated with social service agencies, for groups of 7 to 15 disabled persons from multiple pick-up points to a single destination. The social service agencies pay the fare directly to the subcontractors. In 1993, these four subcontractors provided 267,000 one-way group trips.

The senior group van service is funded entirely by the local Commission on Aging to provide free mini-van service for approximately 800 senior citizens. Seven subcontractors provide this service.

Issue

You ask to what extent these services are subject to FTA's drug and alcohol testing regulations, and also ask when a recipient of an FTA capital grant no longer is required to comply with the Federal requirements.

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 MUNI 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, MUNI contracts with CMG, which in turn uses five different taxicab companies comprising some 2,000 drivers, dispatchers, and maintenance personnel. Because a passenger may choose among a variety of taxicab companies, FTA's rules on drug and alcohol testing would not apply to these drivers.

Van service/lift van service. On the other hand, passengers of the lift van service and the group van service do not choose the paratransit provider at random. A single company provides the lift van service and a social service agency arranges the transportation on behalf of the passenger for the group van service. Hence, the subcontractors providing these services would be subject to FTA's drug and alcohol testing program.

Group van service for seniors. FTA's rules apply to a recipient of certain kinds of FTA funding and to an entity that provides a safety-sensitive function on behalf of such a recipient. In many instances, such entities operate non-FTA funded transportation programs in addition to the FTA-funded services. Some of these entities keep the FTA-funded programs separate from the non-FTA funded programs; others commingle the programs to some extent.

When an entity keeps the two programs separate (i.e., separate personnel, budgets, and equipment), the rules apply only to the FTA-funded programs. When the two programs overlap (i.e., drivers who operate vehicles for both programs), the rules will also apply to the non-FTA funded programs, unless the programs only incidentally overlap. An example of an "incidental overlap" would be the shared use of a dispatcher.

From your letter, it appears that the CMG program overlaps incidentally with the group van service for seniors' program, which is funded by the local Commission of Aging. If this is the case, the FTA's rules would not apply to the group van service for seniors.

Application of the rules to capital grant fund programs. As noted above, the rules apply to recipients of FTA capital or operating assistance grants. According to the preambles to the rules, "once a recipient has received an FTA capital grant . . . it must comply with the rule (and other Federal requirements) during the useful life of the equipment or facility funded under the grant." 59 FR 7543 and 7582. This requirement would end only after the vehicle or other capital asset has reached its useful life or no longer is used for the purposes for which the grant was made, a circumstance that requires prior FTA approval.

If you have any questions about these matters, please call Daniel Duff or Nancy Zaczek in this Office; they may be reached at (202) 366-4011.

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