Making Headway Against Transit’s Driver Shortage MV Transportation, Inc.

State Minimum Wage History In 2016, new legislation was introduced to amend SEC. 3. Section 1182.12 of the Labor Code to phase in new state-wide minimum wage rates. Over the five year span starting in 2017, required minimum wage will increase by 48%. Minimum wage level for employers with more than 25 employees During this 5-year period employers with 25 employees or less can offer a lower minimum wage Souce: https://www.dir.ca.gov/iwc/minimumwagehistory.htm

2018 Local Minimum Wages Beyond State-Mandated minimums, a growing number of counties and cities have established local ordinances relating to minimum wage, exceeding State requirements. Of the 38 cities & counties with Local Minimum Wage Ordinances in place today, 22 are in California. Source: http://laborcenter.berkeley.edu/minimum-wage-living-wage-resources/inventory-of-us-city-and-county-minimum-wage-ordinances/

Contracted Services And Minimum Wage Pricing required for RFP responses consider: Base year + extension years; typically 3 year base + option years; or 5 year base + option years May require base year pricing only, with state CPI assumptions for option years

California Minimum Wage: Increases Over Prior Year Example: A project bid in 2012 with a 4-year base and 2, 24 month options, there was no way to predict a 25% increase to mandated minimum wage over the first four years (75% increase over entire term).

Competition Matters 5 Years Ago Today While minimum wage is a concern, competition for jobs has strained the public transit industry. 5 Years Ago Transit Freight Taxi Today TNCs Distribution Centers Directly impacts transit costs relating to: Recruiting Wages/Benefits Hiring incentives Turnover

California Unemployment History The Q1 2018 Unemployment rate is at 4.4% - the lowest level in a decade. Highest point 3/1/2010 12.3% Lowest point 1/1/2018 4.4%

CDL Drivers: Supply and Demand In Irvine, the supply to demand ratio for CDL drivers is 1:93. 90+% of employers are paying more than 15% more than minimum wage; 25% of employers are paying 38% more than minimum wage to hire quality drivers.

Considerations for RFPs Contract language to allow for price readjustment based on minimum wage rules Prevents agencies from having to preemptively go to bid Ensures fully staffed operations – improving quality of service with tenured operators Mandate specific wage minimums to provide equitable scoring without sacrificing service