In 2013, the California Public Utilities Commission defined, for regulation purposes, transportation network company as a company that uses an online-enabled platform to connect passengers with drivers using their personal, non-commercial, vehicles.
Virginia defines a TNC as a company that "provides prearranged rides for compensation using a digital platform that connects passengers with drivers using a personal vehicle."
TNC platforms have sometimes been called "ridesharing", but transportation experts prefer the term "ridesourcing" to clarify that drivers do not share a destination with their passengers. The term "ridesourcing" means the outsourcing of rides.
Legality of TNCs and opposition from taxicab operators
Taxi industry groups have argued that TNCs are illegal taxicab operations which take away their business. Several communities, governments, and organizations have established rules and regulations that specifically govern TNCs and, in some jurisdictions, TNCs are completely illegal to operate. For information, see Uber protests and legal actions.
TNCs allegedly reduce congestion because, since the cars "can't accept street hails, they do much less unnecessary driving-around than either yellow cabs (who are cruising for hails) or individuals (who are looking for a parking spot)."
One study showed that having a TNC operating in a city reduced drunk driving rates; however, another study reported that TNCs do not reduce drunk driving rates.
Another variation of a TNC is to use online marketplaces to provide drivers who drive the customer's personal vehicle for them. Examples include Dryver, IDriveYourCar.com, and WeDrive. In these models, customers typically reserve a driver who arrives at their location, takes them wherever they need to go in their own car, and then returns the car and the customer home at the end of the reservation.