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Definition: transportation network company


An organization such as Uber and Lyft that uses mobile apps to enable people to secure individual and carpooling rides from drivers who use their own vehicles. The GPS capability in the smartphone identifies the pick-up location and keeps the customer informed in real time when the car will arrive.

No Cash
Billing is automatically handled via pre-registered credit cards, and although tipping is enabled in the app, nothing prevents the passenger from handing the driver cash. Initially treated as contractors, drivers became classified as employees in Britain. The transportation companies are increasingly challenged by jurisdictions to change driver status to employee.

Also called a "ridehailing" or "ridesharing" service, in 2013, the California Public Utilities Commission created the transportation network company category to deal with these services. See Uber and Lyft.