FTA’s Taxicab Exception: Modernizing Public Transit for a Multi-Modal Future (Aug. 2025)
The International Association of Transportation Regulators (IATR) is pleased to announce the release of its latest report, FTA’s Taxicab Exception: Modernizing Public Transit for a Multi-Modal Future.
For decades, the Federal Transit Administration (FTA) has excluded taxicab and Transportation Network Company (TNC) drivers from FTA drug and alcohol testing requirements when passengers use publicly subsidized vouchers and retain the ability to choose among multiple providers. The FTA’s newly proposed policy would significantly narrow this exception, asserting that prior guidance mischaracterized the rule and that only services without any contractual or informal relationship with a transit agency—and with trip-by-trip customer choice—should qualify for exemption.
The FTA’s proposal to change the “taxicab exception” aims to clarify ambiguity and standardize safety protocols, but it has ignited controversy. There is strong support from safety advocates and equally strong opposition from transit agencies, TNCs, and accessibility advocates and stakeholders. Critics argue that the change would dismantle well-functioning, innovative mobility partnerships, impose costly and impractical compliance burdens on public agencies, and reduce access for paratransit and underserved populations, without demonstrable safety benefits.
This report outlines how existing state-level TNC laws, including zero-tolerance substance policies and background checks, may already serve the safety goals the FTA seeks to promote. In addition, the report questions the FTA’s legal and procedural justification for the policy shift, citing decades of consistent agency guidance that supports the broader exemption.