How to Start a Non-Medical Transportation Business in California

To start a non-medical transportation business in California, you form a legal entity with the Secretary of State, obtain a charter-party carrier permit from the California Public Utilities Commission, carry at least $750,000 in liability insurance, and enroll in the state’s driver monitoring and drug-testing programs before you can legally carry a single passenger. Budget several months from formation to first trip, and expect real money to go out the door for permit fees, commercial insurance, vehicle inspections, and testing enrollment. California regulates this industry closely because riders are frequently seniors and people with disabilities who depend on the service to reach medical appointments.

Form Your Business Entity First

Register with the California Secretary of State before anything else. Most operators choose an LLC or a corporation because both shield personal assets from business liabilities. An LLC files Articles of Organization online for $70.1California Secretary of State. Limited Liability Companies (LLC) – California A corporation files Articles of Incorporation. You also need to designate a registered agent with a physical California address who can accept legal documents during business hours.

Once the entity exists, apply for a federal Employer Identification Number with the IRS. The IRS recommends forming your state entity first, because applying for the EIN before the entity is registered can cause delays.2Internal Revenue Service. Get an Employer Identification Number The EIN itself is free. You’ll need it to open a business bank account, hire drivers, and file taxes.

Two recurring obligations start the day your entity is registered. California LLCs owe an $800 annual franchise tax to the Franchise Tax Board.3California Franchise Tax Board. 2026 Instructions for Form FTB 3522 LLC Tax Voucher You also must file a Statement of Information with the Secretary of State every two years, for a $20 fee, during a six-month window tied to your formation month.4California Secretary of State. Statements of Information Filing Tips Miss either one and the FTB can suspend your entity, which puts your CPUC authority in jeopardy.

Know Whether You’re Running NMT or NEMT

California draws a sharp line between two categories that sound alike. Non-medical transportation (NMT) is a ride in a standard vehicle for someone who has no other way to reach a medical appointment. Non-emergency medical transportation (NEMT) involves ambulances, wheelchair vans, or litter vans for people whose medical condition prevents them from riding in a regular vehicle.5Department of Health Care Services. Transportation Services Both require CPUC authority, but vehicle requirements, insurance minimums, and Medi-Cal billing pathways differ. Most new operators start with NMT because the vehicle rules are simpler and startup costs are lower.

Choose the Right CPUC Permit

The CPUC issues several classes of charter-party carrier permits. Choosing the wrong one either limits your operations or forces you to reapply, so this decision matters. Three classes are most relevant for NMT startups.

A TCP-A certificate is the broadest authority. Any vehicle size, statewide pickup, statewide drop-off, and the certificate is transferable, which adds resale value.6California Public Utilities Commission. Charter Party Carriers

A TCP-B certificate also allows statewide operation, but vehicles seating 10 or fewer (including the driver) can’t pick up riders more than 125 air miles from your home terminal. Larger vehicles have no mileage cap. This certificate is also transferable.6California Public Utilities Commission. Charter Party Carriers

A TCP-P permit covers charter service in vehicles seating fewer than 16 passengers (including the driver), with statewide point-to-point authority. Charges must be based on mileage, time, or a combination. If you later want to operate a vehicle seating 16 or more, you can’t do it under a P permit and would need to upgrade. This permit isn’t transferable.6California Public Utilities Commission. Charter Party Carriers

For a startup running sedans, minivans, or small wheelchair-accessible vehicles, a TCP-P permit is usually fine. If you plan to scale into larger vehicles or want a business you can sell later, the TCP-A carries the same $1,000 application fee and gives you more room.

Apply Through the CPUC Carrier Portal

Applications go through the CPUC Transportation Carrier Portal. The fee for a new charter-party carrier permit is $1,000.7California Public Utilities Commission. Table of Filing Fees Your application needs the business address, names of all owners or corporate officers, and fleet details. If you plan to hire employees, you also need proof of workers’ compensation insurance. Owner-operators structured as an LLC may qualify to file a workers’ comp waiver for themselves if they meet the ownership requirements and execute the waiver under penalty of perjury.8California Department of Insurance. SB 189 Notice to Insurers, FAQs, and Sample Waivers

After you submit, the application sits in pending status while CPUC staff reviews it. The commission flags deficiencies through the portal. Plan on several months of review time, and know that incomplete packages are the top cause of delay. Double-check every requirement before you file.

Get Liability Insurance in Place

Insurance is where the bulk of your ongoing money goes. Under General Order 115-G, the CPUC sets minimum liability coverage by seating capacity:

Your insurance company must file the coverage electronically through the CPUC Transportation Carrier Portal. You can’t upload the certificates yourself. If coverage lapses, the CPUC suspends your operating authority, and you can’t legally carry passengers until it’s reinstated. Fail to fix the lapse within 90 days of suspension and you face revocation.10California Public Utilities Commission. Insurance Requirements – Passenger Carriers Commercial passenger vehicle premiums in California are steep, and a missed payment can shut you down overnight.

Set Up Driver Compliance

DMV Employer Pull Notice Program

Every charter-party carrier must enroll in the California DMV’s Employer Pull Notice program, even a one-person operation driving under an LLC. Enroll by submitting Form INF 1104. The program costs $5 per enrolled driver plus $1 per report generated.11California State Department of Motor Vehicles. Employer Pull Notice Program FAQs The DMV then sends automatic alerts whenever a driver picks up a violation, suspension, or other reportable action. Failing to enroll every driver is grounds for the California Highway Patrol to recommend the CPUC suspend your permit.

Drug and Alcohol Testing

The CPUC won’t issue or renew your permit without a controlled substance and alcohol testing program in place. This applies to all charter-party carriers operating vehicles seating 15 or fewer, including the driver. You need pre-employment testing, random testing, post-accident testing, reasonable-suspicion testing, and return-to-duty testing. Solo drivers must enroll in a random testing pool managed by an independent consortium.12California Public Utilities Commission. Controlled Substances and Alcohol Testing Certification Program (PL 706-J) You can’t test yourself. Testing program details are submitted with your CPUC application.

Prepare Your Vehicles

Vehicles seating 10 or more, including the driver, are subject to inspection by the California Highway Patrol. For smaller vehicles, an inspection by a mechanic certified through the National Institute for Automotive Service Excellence generally satisfies the requirement. Wheelchair-accessible vans must meet federal ADA specifications covering boarding devices such as lifts or ramps and wheelchair securement systems.13eCFR. 49 CFR Part 38 – Americans with Disabilities Act (ADA) Accessibility Specifications for Transportation Vehicles

Every vehicle in your fleet must display your TCP number on the exterior. General Order 157-D requires the full identification, including the “TCP” prefix, the authority number, and the permit class suffix. Vehicles seating more than 15 passengers display the number on each side. Vehicles seating 15 or fewer display it on the front and rear bumpers. The lettering must be in sharp color contrast to the background and legible from 50 feet in daylight.14California Public Utilities Commission. General Order 157-D

Enroll With Medi-Cal If You Want Those Riders

Medi-Cal beneficiaries are a large share of the demand for NMT in California. To bill for those trips, you enroll separately with the Department of Health Care Services through PAVE, the state’s Provider Application and Validation for Enrollment system.15Department of Health Care Services. Medical Transportation Provider and Non-Emergency Transportation Provider Application Information If you’re already a Medi-Cal provider for another service and want to add NMT, file a Supplemental Change request through the same system. Medi-Cal enrollment isn’t required to operate under your CPUC permit, but skipping it walks away from a major revenue stream.

Penalties for Operating Without a Permit

The CPUC’s enforcement branch investigates unauthorized carriers, and the fines aren’t small. Recent enforcement actions have brought $1,500 citations for operating as a charter-party carrier without authority, $2,000 for advertising transportation services without a valid permit, and the maximum citation of $20,000 for operating after a permit has expired.16California Public Utilities Commission. Safety Assurance These are per-occurrence penalties. Each trip and each advertisement can count as a separate violation. The CPUC can also suspend your permit immediately, without a hearing, when the Highway Patrol recommends it for safety failures like unenrolled drivers or unsafe vehicles.

Staying Compliant After You Launch

Getting the permit is the beginning, not the finish. Liability insurance must stay active continuously, with your insurer keeping the electronic filing current. Drug and alcohol testing records need to be preserved for state audits. Every new driver has to be enrolled in the Pull Notice program before their first shift.

You also file an annual PUCTRA report with the CPUC by January 15 if your gross intrastate revenue was under $100,000 in the prior calendar year. Carriers above that threshold file quarterly. Missing the deadline by more than 30 days triggers a 25% penalty on any amount owed.17California Public Utilities Commission. PUCTRA – How to Submit a PUCTRA Fees Report Charter-party carriers currently owe no fee under the CPUC’s fee schedule, but filing the report is still mandatory.18California Public Utilities Commission. Passenger Carrier FAQs

Don’t lose sight of the Secretary of State side either. The biennial Statement of Information and the $800 annual LLC tax both need to stay current, because a Franchise Tax Board suspension of your entity puts your CPUC authority at risk.4California Secretary of State. Statements of Information Filing Tips Build a calendar of every deadline during your first year. The compliance load catches new operators off guard more often than the startup costs do.