Shifting Gears: Private Solutions for Senior Transportation
By Amelia Myers and Jaime Rall | Vol . 22, No. 25 / July 2014
Did you know?
- An estimated 79 percent of Americans age 65 and older live in car-dependent neighborhoods, and 88 percent of those do not plan to move.
- States are working to improve access to insurance for volunteers and nonprofits, allow seniors to trade their cars for rides and encourage market-based ride-sharing services.
- Federal law contains a grant program—unfunded to date—that could help nonprofits develop economically sustainable senior transportation programs.
The “silver tsunami” is approaching. America’s 65-and-older population is projected to reach 83.7 million in 2050, almost double the number in 2012. These seniors will need transportation options to access shopping, medical care, social activities and community services, since one of five adults over age 65 does not drive. At the same time, 79 percent of Americans age 65 and older live in car-dependent neighborhoods where there are no effective or accessible public transit options, and 88 percent of those do not plan to move.
As policymakers seek transportation solutions for America’s aging population, policies that remove barriers and create incentives to use private resources can play an important role. These resources can include vehicles owned and operated by volunteers, nonprofit organizations, and private taxi or ride-sharing companies. Supporting private transportation options to supplement public sector solutions not only can help ensure lifelong mobility and quality of life for seniors, but also can encourage economic growth.
States support use of private resources for senior transportation in many ways. Public policies include those that improve access to insurance for volunteer drivers and nonprofits, allow seniors to exchange their cars for rides and encourage market-based ride-sharing services.
Improving Access to Insurance. Volunteer drivers are essential to providing an economically sustainable transportation solution for older adults, but volunteers who drive their own vehicles may have concerns about higher insurance premiums in some states because of their frequent trips. To encourage volunteers, some states have adopted laws that protect volunteer drivers from increases in their insurance rates. A Maine law does not allow insurers to refuse to insure an applicant or increase policy rates solely because he or she is a volunteer driver. Similar laws exist in Connecticut, Florida and Illinois.
Nonprofits may be able to recruit volunteer drivers. In some states, however, if the drivers do not use personally insured vehicles, they may not be able to drive for a nonprofit. Hawaii created blanket disability insurance that lets nonprofits cover “all volunteer workers who serve without pecuniary compensation and the members of the organization against loss from accidents occurring while engaged in the actual performance of duties or activities of the policyholder organization.”
Allowing Older Adults to Exchange Cars for Rides. Besides a person’s home, the greatest non-liquid asset usually is a car. Seniors who no longer can use their cars can still reap their value by exchanging them for rides through a nonprofit. For example, ITNAmerica’s CarTrade program lets seniors exchange their car for rides with its network of volunteer drivers. ITN can either use the cars in its fleet or sell them to fund its ride program. Such programs not only help people make the transition from driving, but also help pay for alternative transportation. Nonprofits that trade rides for cars or resell them, however, may qualify under some state laws as a “car dealership” if it accepts or resells a certain number of cars annually. To address this issue, a California law exempts nonprofits from the definition of “dealer.” In Maine, nonprofit organizations that accept donated vehicles or take them in trade for transportation services are exempt from car dealership laws.
Encouraging Market-Based Ride-Sharing Services. New private companies, such as UberX and Lyft, provide technology-enabled ride-sharing services that are changing how people access rides. These new services are a hybrid between travel agents and taxis. Drivers own their vehicles and contract through the service provider, which connects open cars with riders via a smart phone application. Colorado classifies these hybrids as Transportation Network Companies (TNCs).
Both TNCs and nonprofits use independent drivers to provide rides, making them “common carriers” in many states. This classification presents additional barriers for cost recovery and mobility access because common carriers face many regulations and up-front costs. They must pay application fees, conduct background checks and meet safety standards, among other requirements. Many cities require carriers to have a “Certificate of Public Necessity and Convenience,” or a “medallion,” in order to drive passengers for a fee. Regulated by each city, medallions can cost anywhere from $65,000 to $1 million.
In 2014, Colorado became the first state to legislatively address TNCs by distinguishing TNCs from common carriers, while requiring driver and vehicle safety checks. Colorado defines a TNC as “a corporation, partnership or other entity that uses a digital network to connect drivers and passengers for the purpose of providing transportation.” Riders can access a TNC vehicle only through the smart phone application, which may present obstacles to older Americans. Similar provisions exist in California regulations adopted in 2013.
The Older Americans Act passed by Congress in 2006 includes a program that encourages innovative transportation solutions for older people. The program allows the secretary of Health and Human Services to award contracts or grants to nonprofits for demonstration projects or technical assistance activities, including those that improve “access by older individuals to transportation services, including volunteer driver programs, economically sustainable transportation programs, and programs that allow older individuals to transfer their automobiles to a provider of transportation services in exchange for the services.” The law also requires nonprofits to be economically sustainable: After no more than five years, the transportation service must be able to continue operations without public financial assistance. To date, this portion of the law has not been funded, and no grants have been awarded.