Assembly Commerce, Economic Development and Agriculture Committee Statement to Assembly, No. 5870 (2026)

Summary

An Assembly Commerce, Economic Development and Agriculture Committee statement to Assembly, No. 5870, State of New Jersey, dated January 5, 2026, reporting the bill favorably with committee amendments. The bill sets requirements for on-demand micro transit programs in the State. The New Jersey Transit Corporation and other operators could use third-party contractors only if those contractors directly employ all drivers, meet federal and State wage and hour requirements, and drivers receive a federal W-2 form,. Services would have to be available to persons without a smartphone, Internet service or a credit card, and include accessibility features for persons with disabilities. The bill would take effect 180 days after enactment.

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ASSEMBLY COMMERCE, ECONOMIC DEVELOPMENT AND AGRICULTURE
COMMITTEE

STATEMENT TO

ASSEMBLY,
No. 5870

STATE
OF NEW JERSEY

DATED: JANUARY
5, 2026

The Assembly Commerce, Economic Development and
Agriculture Committee reports favorably and with committee amendments Assembly
Bill No. 5870.

As amended, this bill establishes
certain requirements for any on-demand micro transit program in the State. The
bill defines “on-demand micro transit” to mean shared public transportation services
provided by means of a motor vehicle to individuals selecting a pick-up and
drop-off location by telephone or through a software application, and which
transportation is provided at a time selected by the individual or as soon as
possible after the individual selects pick-up and drop-off locations for such
transportation.

Under the bill, the requirements for on-demand micro
transit programs include:

(1) the New Jersey Transit Corporation (corporation) may
provide micro transit services through a third-party contractor so long as
third-party contractors or subcontractors that provide the on-demand micro
transit services directly employ all on-demand micro transit drivers, meet all
federal and State wage and hour requirements, and drivers receive a federal W-2
form;

(2) any other entity operating an on-demand micro
transit program may provide services through a third-party contractor so long
as the third-party contractors or subcontractors that provide on-demand micro
transit services directly employ all on-demand micro transit drivers, meet all
federal and State wage and hour requirements, and drivers receive a federal W-2
form;

(3) any contract or agreement between an entity and
third-party contractor is required to include a precondition to require the
contractor and all subcontractors of the contractor to enter into a labor
harmony agreement with one or more labor organizations which represent or seek
to represent the contractor’s employees;

(4) existing employees of an entity that provides
on-demand micro transit service, and, if applicable, the entity’s existing
transportation contractors, and the corporation are not adversely affected by
the establishment and operation of the on-demand micro transit program;

(5) each on-demand micro transit program makes
reasonable attempts to create service to transit deserts;

(6) on-demand micro transit services are available to
persons without access to a smartphone, Internet service, or a credit card; and

(7) on-demand micro transit services include
accessibility features to accommodate the mobility needs of persons with
disabilities at the same service levels as the general population.

The bill would take effect 180
days after the date of enactment, except that certain micro transit programs
already operating as of the effective date of the bill, or that have entered
into a contract or have received federal grants, would be exempt from the
provisions of the bill for the life of the contract or federal grant, or an
additional 60 days, whichever is greater.

COMMITTEE AMENDMENTS :

The committee amended the bill to:

(1) clarify the definitions of “on-demand micro
transit,” “on-demand micro transit program,” and “transit desert”;

(2) allow the New Jersey Transit Corporation to
provide micro transit services through a third-party contractor or
subcontractor so long as the third-party contractor or subcontractor directly
employs all on-demand micro transit drivers, meets all federal and State wage
and hour requirements, and drivers have W-2 forms;

(3) allow any other entity operating an on-demand
micro transit program to provide services through a third-party contractor or
subcontractor so long as the third-party contractor or subcontractor directly
employs all on-demand micro transit drivers meets all federal and State wage
and hour requirements, and drivers have W-2 forms. As introduced, the bill
allowed a public entity that did not previously employ public employees as
transportation drivers to provide on-demand micro transit services through a third-party
contractor so long as certain requirements applied as outlined in the bill as
introduced;

(4) remove from the bill provisions that allow an
entity to outsource software services to one or more third parties and provide
that failure to comply with the requirements of the bill are regarded as a
failure to meet the wage and payment requirements of current law;

(5) remove from the bill provisions concerning data
reporting, establishing a Micro Transit Oversight Committee, and requiring
on-demand micro transit drivers to hold a commercial drivers license; and

(6) revise the effective date to be 180 days after the
date of enactment and to exempt, or delay from application, micro transit
programs already operating or under contract, or in receipt of a federal grant,
to provide micro transit services.

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