TNC Operations Guide
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A Transportation Network Company (TNC) is a company that allows a passenger to arrange a ride through a digital network.
The driver receives compensation for this service that is more than the driver’s costs of providing the ride.
Providing ride-sharing services via social media qualifies as a TNC (and thus requires a permit), provided that the driver’s fee exceeds the cost of providing the ride.
TNCs do not include street-hail taxicabs, limousines, shared expense carpool/vanpool arrangements or where the fee received does not exceed the cost of providing the ride.
Permits to Operate
The TNC permit issued by TDLR will allow the TNC to operate statewide; however, airports and governing bodies with jurisdiction over cruise ship terminals may adopt additional regulations and fees for a TNC operating at their location. These additional regulations may not conflict with state law.
For more information on how to obtain a permit, please see the Apply for a New Transportation Network Company Permit webpage.
TNC drivers do not need a permit or license from TDLR. However, drivers must be approved by a TNC to drive for that company in accordance with state law.
See the Information for Drivers page for more details.
Contracting of Drivers
Under Texas Occupations Code 2402.114 TNC driver is considered an independent contractor if the company does not:
- Prescribe the hours the driver is required to be logged into the digital network; or
- Impose restrictions on the driver’s ability to use other transportation network companies’ digital networks; or
- Limit the territory the driver may provide digitally prearranged rides; or
- Restrict the driver from engaging in another occupation or business.
The TNC and driver may agree in writing that the driver is an independent contractor.
A TNC company is required to maintain an Intoxicating Substance Policy that prohibits a driver who is logged in to the company’s digital network from any amount of intoxication. A pre-screen drug test for application is not required by TDLR. However, a TNC may choose to require a pre-screen drug test for its drivers.
Standard insurance companies may choose to deny coverage while operating as a TNC driver. Check with your insurance company and TNC to determine what coverage is provided.
A TNC driver or a TNC on the driver’s behalf must maintain primary automobile insurance as required by Texas Insurance Code 1954 while the driver is logged on to the TNC’s digital network and while engaged in a prearranged ride. The requirements for insurance may be satisfied by the TNC’s insurance, the TNC driver’s insurance or a combination of both.
See Texas Insurance Code 1954 for a full list of insurance requirements.
TNCs are required to keep all individual ride records for five years and driver records for at least five years after the date the driver ceases to be authorized as a driver for the TNC. A TNC is also required to keep records showing evidence of compliance with all state requirements for two years.
A TNC must provide the passenger an opportunity to indicate whether the passenger requires a wheelchair-accessible vehicle. If a wheelchair-accessible vehicle cannot be provided, the TNC must direct the passenger to an alternate provider of wheelchair-accessible service.
TNCs must also implement an Accessibility Pilot Program and submit certain reports periodically.
Working with Municipalities
Contracting for Events
A TNC may contract with a municipality or other entity for coordination of large events occurring in the municipality or entity’s jurisdiction. An agreement with the municipality or entity may not exclude a TNC from providing services at the event and must have comparable terms for each TNC providing services at the event.
A TNC may voluntarily enter an agreement with a municipality to share its data.