Legislature(2017 - 2018)BARNES 124
03/02/2017 01:30 PM House TRANSPORTATION
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| Audio | Topic |
|---|---|
| Start | |
| SB33 | |
| HB132 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 73 | TELECONFERENCED | |
| + | SB 33 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 132 | TELECONFERENCED | |
HB 132-TRANSPORTATION NETWORK COMPANIES
1:50:06 PM
CO-CHAIR WOOL announced that the final order of business would
be HOUSE BILL NO. 132, "An Act relating to transportation
network companies and transportation network company drivers."
1:50:22 PM
REPRESENTATIVE DRUMMOND moved to adopt the proposed committee
substitute (CS) for HB 132, Version LS-0522\J, Wallace, 2/27/17,
as a working document. There being no objection, Version J was
before the committee.
1:51:06 PM
LAURA STIDOLPH, Staff, Representative Adam Wool, Alaska State
Legislature, on behalf of Representative Wool, prime sponsor of
HB 132, explained that the changes proposed to HB 132 through
Version J would mirror the changes made in the other body and
"clean up" some of the language to ensure the original intent of
the bill would be met. She explained that HB 132 was not
intended to add any additional cost to the state to regulate.
She noted that there was also a change made that would more
closely reflect a policy in place for a TNC rather than what is
in state statute. Ms. Stidolph read from the Explanation of
Changes, included in the committee packet which read as follows
[original punctuation provided]:
Add new Section 2: "AS 09.65 is amended by adding a
new section Sec. 09.65.350. Immunity for certain
actions related to transportation network companies.
(a) The state or municipality, and the officers,
employees, and agents of the state or a municipality,
are not liable in tort for damages for the injury to
or death of a person or property damage resulting from
an act, omission, or failure of a transportation
network company or driver to comply with the
requirements of AS 28.23 or other law
MS. STIDOLPH said that this section was added to relieve the
burden of cost to Alaska of having to regulate TNCs. She noted
that if a TNC driver were found to be at fault, the case would
go to civil court and the state has immunity from civil action.
She said the intention of HB 132 was for no departments to have
to do any active regulation or checking of insurance. She said
that Version J would remove the DMV position that was originally
included in the bill and carried a fiscal note.
MS. STIDOLPH continued to the next portion of the Explanation of
Changes, which read as follows [original punctuation included]:
Sections of the original bill are one section
sequentially ahead in the CS from Section 2 on.
Section 6: Page 7, Line 26, remove original language
from (i) and add "If the insurance carrier for the
transportation network company makes a payment for a
claim for physical damage to a personal vehicle that
is subject to a lien, the insurance carrier shall pay
the claim jointly to the owner of the personal vehicle
and the primary lienholder or directly to the business
repairing the personal vehicle"
MS. STIDOLPH explained that the original intent of this section
was to dictate payment terms and not coverage and requirements
which the old section got into and is already covered in Section
6, subsections (b) and (c). She added that the language was
just cleaned up to have payment terms.
MS. STIDOLPH read the conclusion of Explanation of Changes,
which read as follows [original punctuation provided]:
Section 7: Page 9, Line 27, Sec. 28.23.110 remove
original (a), (b), and (c) and add "(a) The
transportation network company shall adopt a policy
prohibiting discrimination based on destination or a
class or status protected under AS 18.80.210 with
respect to a rider or potential rider. The company
shall inform drivers of the policy. (b) A
transportation network company driver shall comply
with all applicable laws relating 1 to accommodation
of service animals. (c) A transportation network
company may not impose additional charges for
providing services to riders with physical
disabilities because of those disabilities."
MS. STIDIOLPH noted that the change was made to remove TNC
company policy and add Alaska Statute language in regard to
civil rights. She reminded the committee that the intention of
HB 132 is to allow TNCs to operate in Alaska and that TNCs
already operate in 49 other states. She surmised that not only
would HB 132 add convenience and ease of transportation for
constituents but could also provide opportunity to put revenue
into households that need help in tough fiscal times - like
Alaska and many Alaskans are currently experiencing. She said
that for drivers, TNC employment is a supplemental income with
an extremely flexible schedule and gives people the chance to
make extra money without jeopardizing the home life with set
hours. She alluded that for passengers HB 132 would mean
additional transportation options to better fit a modern
lifestyle. In regard to TNCs and local economies, she said that
more money gets spent at local businesses. She reported that in
California, from Lyft alone, $170 million was added to the 2014
California economy. She pointed out that TNCs would contribute
to greater public safety. She said that one study found 90
percent of passengers felt more likely to avoid impaired driving
because of choosing a ride share option. She said that she
would like to touch on one last point that had not previously
been discussed regarding TNCs and national savings. She
reported that a Journal of American Medical Association (JAMA)
study conducted on 500 TNC riders who used Medicare and/or
Medicaid to pay for rides to doctors showed a savings of 32
percent on the ride cost. She opined that that percentage of
savings could be very meaningful considering that $2.7 billion
is spent annually by Medicaid and/or Medicare on patient
transportation. She concluded that ride sharing is the future
of transportation and Alaska should show that it is open to
innovation.
1:56:26 PM
CO-CHAIR WOOL opened public testimony on HB 132.
1:57:18 PM
EVAN EADS opined that travelers have an expectation of a certain
level of transportation service and that Alaska should be able
to provide those services. He spoke in support of TNCs in
relation to public safety. He cited a Temple University study
from 2009-2014 that showed a 3.6-5.6 percentage reduction in
drinking and driving related deaths in cities where TNCs were in
operation. He pointed out that other studies have shown that
TNCs would likely play a larger role in places where there are
fewer public transportation options, such as here in Alaska. He
noted that one may think there are multiple options in his
community of Fairbanks but in actuality the various cabs are all
the same company. He surmised that HB 132 would allow for a
broader support network for businesses and events. He added
that TNCs would provide essential transportation services to the
elderly and indigent populations.
2:00:20 PM
JIM BRENNAN, Attorney, Anchorage Taxi Cab Permit Owners
Association, stated that his first issue with HB 132 is the
municipal preemption provision in Section 7. He said that
cities and towns in Alaska have traditionally regulated
passenger transportation for hire. He pointed out that
regulations are different from city to city because Alaska does
not lend itself to the "one-size-fits-all approach". He opined
that there should be a somewhat level playing field between
competing TNCs and taxi companies. He declared that to
implement HB 132 without any administration or enforcement would
be a joke. He added that nowhere in HB 132 would TNC compliance
be assigned to a state agency. He opined that TNCs would need
regulation just like taxi companies. He said that the city of
Anchorage has four employees that deal with taxi and limousine
("limo") regulations. He opined that the fiscal note in the
amount of $280 thousand that was originally included with HB 132
would not even be enough for a statewide TNC regulatory
administration. He said that his final point was in relation to
a previous comment about TNCs adding part time jobs to Alaska.
He stated that those part time jobs would come at the expense of
long-time local taxi cab drivers. He stated that 20 percent of
TNC fares would go to a San Francisco-based, multibillion-dollar
corporation. He reiterated his opposition to HB 132.
2:03:59 PM
MICHELLE NAPPLIER stated her concurrence with Mr. Brennan's
testimony. She reported, as a taxi driver, that taxis get
routine mechanical checks and Alaska cab drivers have to receive
medical clearance to drive. She added that taxi drivers
generate both city and state revenue through fees for licenses
and registrations. She recognized the importance of being
regulated and said that for Uber to try to come in unregulated
would be unreasonable and would not generate any city or state
revenue.
2:05:49 PM
KATHIE WASSERMAN, Executive Director, Alaska Municipal League,
shared her opposition to HB 132, as currently written, because
Section 7 would take away the ability for municipalities to
regulate a business within its own jurisdiction. She stated her
belief that to regulate the taxi industry and then bring in
unregulated competition would be wrong. She noted that just
like any other business, TNCs come with some issues as well as
benefits to a community. She added that if the cities and
boroughs in a state don't have the ability to fix those issues
and are dependent on the state and the state doesn't budget any
money then there would be a real problem. She raised the issue
of parking. She mentioned that Juneau, in particular, has a
very limited number of parking spots available downtown and that
cabs are regulated to only park in designated cab spaces while
waiting for a fare. She pointed out that Uber drivers would be
able to park anywhere and would potentially take up parking
spots for other individuals who may have come downtown to shop.
She opined that each city should be able to decide, through its
own residents, what TNC regulations should be.
2:07:54 PM
REPRESENTATIVE CLAMAN asked Ms. Wasserman whether, in talking
with city managers, any of the localities expressed the desire
to have the ability to make local laws regulating TNCs or if
they all are prohibited from doing so by state legislation.
MS. WASSERMAN reported that some of the city managers she talked
to shared stories similar to the way regulations would be set
under HB 132, where municipalities were not allowed to regulate
at the local level. She added that many states have changed
state laws and are now allowing local regulation.
REPRESENTATIVE CLAMAN asked Ms. Wasserman whether she opined
that contrary to claims by representatives of TNCs that they
would not be able to operate in Alaska if there were local
control, in actuality many counties and municipalities
nationwide have implemented local TNC regulations and the TNCs
are still operational in those areas.
MS. WASSERMAN offered her understanding that some of the
communities she was in conversation with were allowed to have
local control of TNC regulations.
2:09:42 PM
DAVID O'MAILEY stated that in 2015, after a year of soliciting
Uber to come to Alaska, he was the first Uber driver in
Anchorage. He added that now he is a taxi driver and is trying
to get Uber to return. He opined that Alaska needs TNCs and the
people of Anchorage want TNCs. He added that TNCs would bring
needed competition and innovation to a broken and closed
industry. He shared his understanding that TNCs do not dump all
the liabilities and responsibilities on municipalities. He
declared that people are sick and tired of dealing with
monopolies. He remarked that TNCs would not only benefit locals
but visitors from villages as well as from the cruise ship
industry. He maintained that Anchorage cab drivers want TNCs
and TNCs would not hurt the cab industry. He suggested that
cartels run the cab industry in Anchorage. He reported that he
constantly gets asked when Uber and Lyft are coming back to
Anchorage. He expressed that the transportation situation in
Anchorage is bad.
2:11:38 PM
BRETT FRAZER opined that Uber belongs in Alaska for three
reasons: first, it is good for consumers; second, it is good
for public safety; and third, it is good for Alaska. He
surmised that testimony in opposition of TNCs because of fear of
losing cab jobs speaks to the evidence that Uber can offer
competitive pricing to indigent consumers and other riders who
may have a hard time getting to appointments. He shared that
when he was a college student at the University of Alaska
Anchorage (UAA) he occasionally had to cancel appointments
because his car was not functioning, and he could not afford the
expensive cab fares. He declared that the people who need TNCs
the most are individuals who cannot afford cab fares. He
recognized that decreases in drunk driving had already been
discussed and put on the record. He shared that having
personally lost friends and acquaintances to drunk driving, he
opines that any policy which prevents that type of damage from
occurring in a community is good. He maintained that Uber would
be good for Alaska and its image. In regard to the discussion
about the municipal preemptive clause, he said that he sees
nothing in Section 7 that would actually insulate TNC drivers
from civil liability if involved in an accident. He shared his
understanding that auto insurance companies now offer a phase
one insurance coverage for TNC drivers who are logged onto the
network but have yet picked up the fare. He surmised that
nothing in HB 132 would prevent insurance companies from
providing phase one coverage in Alaska. He said that it is a
"red herring or a straw man" to suggest TNC drivers would be
unregulated, because TNC drivers would be subject to the same
liabilities as everyone else.
2:14:05 PM
JACQUELINE RANSOM urged the committee to vote against HB 132
because it would take away the right for city self-governance.
She noted that all the cities in Alaska are very diverse and can
decide locally in regard to safety, fares, inspections, et
cetera. She said that under HB 132 Uber would be allowed to
operate anywhere in Alaska, unregulated, regardless of what
local municipalities want. She surmised that HB 132 would not
give the public the safe guards in which it is entitled. She
alluded that HB 132 would allow TNCs to bypass already existing
regulations for cabs in Anchorage. She opined that Uber is
notorious for not following rules and that is the reason it left
Anchorage. She mentioned that Anchorage recognizes vehicle
cameras are needed for increased safety and already requires
them for taxis.
2:16:56 PM
AGNES FARMER asked that the committee vote no on HB 132. She
opined that the state does not need to take away local control
from municipalities to regulate the transportation industry.
She added that communities have already voted on the laws they
would like to have in place. She shared that she could not
understand why the state would want to fund the introduction of
TNCs when 20-25 percent of the money earned would be going
directly to the Lower 48. She explained that as a taxi driver,
when she collects fares in Anchorage and pays her lease fee to a
local owner, who then pays a local dispatcher, the money stays
in Alaska, which is essential during a recession. In regard to
public safety, she declared that she would not want to ride or
drive in a taxi without a camera.
2:19:09 PM
KIRSTEN MYLES, Director, Cook Inlet Cabaret, Hotel, Restaurant
and Retailers Association (CHARR), stated that Cook Inlet CHARR
wholeheartedly supports HB 132, which would open up the market
for TNCs and ultimately improve transportation for Alaska. She
said there was a recent Anchorage Assembly hearing where the
issue of increasing the number of cabs was heard and passed, cab
owners and drivers complained that it was not economically
feasible to service areas like Eagle River and Girdwood and that
there are "too many cabs on the street and not enough fares to
go around." Conversely, she said that consumers testified about
unanswered calls, long wait times, excessive fares, cabs in poor
condition, and subpar customer service. She surmised that
opening up public transportation to ride sharing programs would
take care of a lot of the aforementioned problems and would
allow locals in both Eagle River and Girdwood communities to
service their own. She added that TNCs would let consumers
decide what kind of service to put their money toward. She said
that ride sharing is good for public safety. She cited two
separate studies in 2015 by Temple University and Fox School of
Business that found ride sharing programs attributed to a
reduction in alcohol related homicides by as much as 5.6 percent
annually. She also pointed out that after banning ride sharing
services, Uber and Lyft, in 2015 the city of Austin, Texas,
reported a 7.5 percent increase in driving under the influence
(DUI) compared to the previous year, according to a
[indiscernible] article from 6-17-16. She stated that Cook
Inlet CHARR is always interested in finding ways to provide
responsible service and keep patrons safe. She surmised that HB
132 would improve the potential availability and competitive
pricing of transportation services by opening the market for
more rivalry and is a positive move that Cook Inlet CHARR
supports. She urged the committee to move HB 132 for the
betterment of Alaska.
2:21:43 PM
RYAN MCKEE shared his support for HB 132. He said he finds it
interesting that public testimony regarding TNCs is mainly heard
from taxi drivers in opposition and opposition is rarely heard
from the customers paying for taxi services. He noted that most
people testify regarding long wait times, poor service, and
unreliable service because those issues are what have impacted
people. He commented on the high price of taxis and said that
from south Anchorage to downtown is easily $20-$30 one way. He
pointed out that with TNCs the cost is a fraction of cab fares.
He added that many times cab drivers have to be directed to the
destination since many do not have onboard navigation systems.
He recognized that there are a lot of reasons why rideshares
should come to Alaska and one is that it is one of the last
states to welcome TNCs. He concluded that now would be a great
time to introduce TNCs, when the state is looking for additional
ways to raise revenue.
2:23:34 PM
JAIME BEGUYOS pointed out the high level of safety for both the
rider and driver with TNCs because of the use of credit cards
over the system. He alluded that TNCs are convenient because
the vehicles can park anywhere and are not generally limited to
designated spots. He added that TNCs are affordable because the
application gives riders an option to pay later.
2:25:36 PM
JEREMY PRICE, Alaska State Director, Americans for Prosperity,
opined that HB 132 is a great piece of legislation. He said
that HB 132 is fundamental to providing a better service and a
better product to consumers in Alaska. He shared a recent
personal story where he waited almost 30 minutes for a taxi from
his house in Bay Shore to Ted Stevens Anchorage International
Airport. He explained that based on uncertainty the taxi would
even show, he ended up taking his truck and incurring five days
in parking fees. He reported that meanwhile in Washington,
D.C., he has been using Uber and finds it to be reliable and
friendly. He noted that there are countless instances of bad
service from taxis in Anchorage. He said that he is in
opposition to Ms. Wasserman's comments, because he feels that
local jurisdiction created the taxi cartel problem in Anchorage
by limiting the amount of permits that could be issued. He
opined that HB 132, as written, would keep Alaska's various
jurisdictions from messing up the introduction of TNCs to the
state.
2:28:20 PM
JOELLE HALL, Director of Operations, Alaska American Federation
of Labor - Congress of Industrial Organizations (AFL-CIO), told
the committee that Alaska AFL-CIO represents over 50,000 workers
across the state. She voiced that her organization is opposed
to HB 132 because of the bill's misclassification of workers.
She explained that the actions in HB 132 would exclude TNC
drivers from worker's compensation and unemployment insurance
(UI) as a special class of worker. She opined that it would set
a dangerous precedent because TNC drivers do not meet the
standard definition of a true independent contractor.
MS. HALL said that even in analyzing the name "transportation
network company," the heart of Alaska AFL-CIO's objection is
revealed to expose a network of workers doing the same job, with
a significant portion of control over the work being dictated by
a single corporate entity: TNC drivers do the exact same job as
100s of other drivers for the same company; the TNC tells
drivers who to pick up; the TNC pays for the insurance when a
rider is in the vehicle; and all money is collected and goes
directly to the TNC. She surmised that adding TNC drivers to a
list of exempted workers who fail to meet the standards of an
independent contractor would be entering a slippery slope. She
added that the Alaska AFL-CIO opposes the preemptive language in
HB 132. She concluded that since TNCs are in direct competition
to taxis, individual communities would be best suited to handle
the industry and determine the issues of fair competition in
each jurisdiction.
CO-CHAIR WOOL inquired whether taxi drivers are considered
employees or independent contractors.
MS. HALL answered that taxi drivers are independent contractors.
2:30:40 PM
REPRESENTATIVE CLAMAN asked Ms. Hall to explain the distinction
drawn between taxi drivers and TNC drivers in relation to
exemptions to worker's compensation and UI.
MS. HALL explained that while each type of driver has his/her
own vehicle, the issue relates to command and control.
Furthermore, taxi drivers have the ability to decline a ride
within reason. She said that the Alaska AFL-CIO's main
objection is that the TNC insurance structure is entirely
unfair. She explained that the TNC itself pays for the
insurance, which is a primary cost of doing business. She added
that in this particular model of work the insurance is a primary
cost of doing business.
MS. HALL stated another distinction between TNC drivers and taxi
drivers is that at the end of a shift taxi drivers have all the
money in their hands to then pay the vendors used to run the
business, such as the dispatch company and the medallion owner.
She added that TNCs keep all the money and send drivers a check
at the end of the month. She pointed out that there was
recently a class action law suit filed against a TNC for wage
theft. She opined that a company cannot systematically defraud
an entire class of people if those people are not its employees.
She added that TNCs should not be allowed to have control of the
wages of TNC drivers since the drivers are independent
contractors. She surmised that TNCs are trying to ride right
down the middle between being an employee and an independent
contractor.
REPRESENTATIVE CLAMAN offered his understanding that at a
certain phase the TNC is paying for insurance for its drivers.
He asked who is responsible for paying for insurance coverage
for taxi drivers.
MS. HALL answered that she does not know. She offered her
assumption that it would be the taxi driver.
REPRESENTATIVE CLAMAN asked Ms. Hall whether she knew if taxi
drivers contribute to UI or if they are exempted like TNC
drivers would be under HB 132.
MS. HALL replied that she did not know. She reiterated that the
concern with HB 132 is the exemption TNC drivers would receive
from workers compensation and UI. She shared her belief that
TNC drivers do not meet the definition of an independent
contractor, as understood in Alaska or on the national level.
She concluded that the only person a taxi driver has a
responsibility to is the medallion owner.
2:35:28 PM
KEVIN RUSTON said that he is opposed to HB 132 because it would
throw out over 100 years of both customer and worker protection
and would completely abandon the disabled community. He opined
that the Americans with Disabilities Act (ADA) mandates that a
certain amount of responsibility falls on both the state and
municipalities. He said that since inception TNCs have been
full of nothing but empty promises. He opined that HB 132 would
decrease opportunities for transportation, education,
entertainment, and would basically segregate the disabled
segment of the population. In speaking to the issue of public
safety, he advised the committee to revisit the research on DUI
reductions and TNCs. He pointed out a recent article in The
Washington Post reported the initial studies from the University
of Southern California (USC) and Oxford University showing DUI
rates declined were flawed. He voiced that it is quite
laughable to have a budget item expected to come at no cost to
the state to regulate TNCs. Mr. Ruston said that he could not
help but to be reminded of the scene from the movie "The
Godfather" where Michael Corleone asked the corrupt senator to
pay for his casino license. He concluded that TNCs try to make
a legal argument with the ADA that responsibility doesn't rest
with the TNCs.
2:38:40 PM
JUSTIN SLATER opined that there is a taxi cab racket in
Anchorage. He added that cab service in Anchorage is just not
worth the hassle. He shared his experience that ride share
options would make it easier to get around in the absence of a
vehicle or when an individual is impaired. He noted that cab
drivers are in such opposition because they offer such poor
service and know that with other options available, taxi
companies would suffer. He surmised that if nothing else, HB
132 would make cab companies reevaluate their customer service.
2:40:25 PM
CO-CHAIR WOOL asked Mr. Matthews from Uber to speak to the
questions of whether payments all go directly to the TNC and how
TNC drivers get paid.
2:40:50 PM
MITCHEL MATTHEWS, Senior Operations Manager, Pacific Northwest
Region, Uber Technologies Inc., explained that Uber is a digital
network that connects riders with drivers. He noted that
independent contractor drivers enjoy the flexibility of the TNC
model which allows drivers to work when they want to work and
however long they want. He pointed out that Uber drivers could
even work for multiple competing TNCs. In regard to a previous
question about Uber drivers and pay, he explained that it is up
to drivers to choose whether they want to be paid daily, weekly,
or even within hours. He listed off a number of states that
have made statewide determinations that Uber drivers are
independent contractors for the purposes of unemployment
compensation. He added that TNC drivers being recognized as
independent contractors was further affirmed by the Florida
Court of Appeals.
MR. MATTHEWS, in speaking to insurance, said that Uber rides
operate in three periods: periods one, two, and three. He
reported that periods two and three have a one-million-dollar
coverage for liability. He said that in period one drivers have
the flexibility to be sitting at home waiting for a fare. He
added that the coverage in period one matches the current
coverage in Alaska, which he pointed out is the highest in the
nation for minimum coverages for property, bodily per accident
and per person. He shared Uber's opinion that the insurance
compromise adopted by the National Conference of Insurance
Legislators (NCOIL) meets Alaska minimum coverage. He explained
that since insurance coverage starts when the application gets
turned on, keeping the limit at the state limit would remove any
moral hazard or risk that a driver would turn on the application
simply to get better coverage while never intending to even
engage in ride sharing.
MR. MATTHEWS surmised that HB 132 would create a statewide
solution to allow for consistent statewide regulations for
drivers, independent contractors, and business owners without
having to navigate through a patchwork of local regulations that
would differ from city to city. He said that HB 132 would
eliminate the worry for drivers of being barred from picking up
fares in a certain location or deadheading, which could mean an
empty return from a possible long, one-way trip. He added that
Uber has observed an artificial restriction on the earnings
opportunities for drivers in states where drivers have to
navigate the patchwork of regulations. He voiced that a
consistent framework would enhance access to transportation in
rural communities and would connect underserved neighborhoods
and residents. He said that a consistent framework would also
allow for drivers to connect with riders without the burden of
multiple licensing and without the patchwork of regulations and
increased barriers to entry and opportunities to earn.
MR. MATTHEWS pointed out that Uber conducts a comprehensive
screening process done by a third party accredited and approved
by the National Association of Professional Background Screeners
(NAPBS). He said that the screen covers convictions based on
social security number (SSN) and driving records and does not
allow anyone to drive who is on the national sex offender list,
which is maintained by the U.S. Department of Justice. He added
that drivers must first provide Uber with their full name, date
of birth, SSN, a valid driver's license, valid vehicle
registration, proof of insurance, and a valid bank account. He
explained that Uber doesn't believe that safety ends at an
initial background check, so the Uber application logs
information for trips which can be used by the rider to alert
other people of his/her location and estimated time of arrival.
He concluded by sharing his excitement to bring Uber to Alaska.
2:45:40 PM
REPRESENTATIVE CLAMAN said that the committee previously heard
from Ms. Wasserman that there are several areas across the
country that have local rules and regulations regarding TNCs
separate from what has been done at the state level. In
response to a request for clarification, he rephrased his
question to ask whether there are some states that allow
municipalities, cities, and/or counties to have its own
regulations for TNCs that may be different from what may have
been passed on the state level.
MR. MATTHEWS explained that there are some states that have
statewide regulations that were adopted at the early onset of
TNCs. He gave an example that in the state of Washington there
is only a statewide insurance which prescribes insurance at a
set level. He noted that small jurisdictions have the ability
to regulate, which creates patchwork regulations that restricts
a driver's ability to provide service within a metropolitan
area.
REPRESENTATIVE CLAMAN offered his understanding that, in
Washington, the state has chosen to establish insurance coverage
levels for TNCs. In addition, the city of Seattle has created
its own regulations and laws that cover more than just
insurance. He asked Mr. Matthews if it would be safe to assume
that Uber is still happy operating in Seattle even with
conflicting municipal and state regulations.
MR. MATTHEWS noted that Seattle was the third city worldwide to
launch Uber, and at the time state regulations were not
considered. He said that there is currently a bill being worked
on that would implement a state regulation for all of
Washington. He said that there is an inability to provide TNC
products across a patchwork of regulations.
REPRESENTATIVE CLAMAN surmised that Mr. Matthews had just given
a long way of saying yes, Uber is offering rides in Seattle even
though the city has its own framework.
MR. MATTHEWS concurred. He elaborated that it is only because
Seattle was the third city to launch Uber.
2:49:41 PM
ERICA SIMPSON shared that she is a longtime travel industry
professional. She opined that HB 132 would promote free
enterprise and expand economic opportunity. She said that
Alaska, Juneau especially, with a high cost of living,
relatively stagnant wages, and a chronic need for better access
and more transportation options, would benefit tremendously from
Uber and Lyft. She noted that the full and part-time jobs
created by TNCs would help give Juneau residents an additional
employment option and supplemental income to help make ends
meet. She pointed out that taxi cab companies are going to
argue that TNCs would diminish wages. She opined that Juneau
taxis are so absorbed offering tours to summer visitors that
basic services to locals have suffered. To back up this claim,
she advised members to have a look at the number of taxis at the
glaciers on any given summer day. She surmised that TNCs would
offer a transportation option that would fill a void in Juneau's
current transportation system.
MS. SIMPSON reported that TNCs are elastic and adapt to on-
demand need. She said that Uber and Lyft would provide strictly
basic transportation during times of high demand. She noted
that one major problem in Juneau is trying to get a cab from the
airport and TNCs would fill that need. She mentioned another
often frequent situation in Juneau when ferries get delayed and
end up coming in in the middle of the night all the way out at
Auke Bay ferry terminal with no taxis in sight. She said that
she was curios how many DUI's have happened because of taxis
being overwhelmed at bar close in Juneau. She shared that she
has personally walked home from downtown Juneau to Douglas at 3
a.m., as a lone female, because she could not find a cab.
MS. SIMPSON said that HB 132 would promote accountability
because both TNC driver and rider are held accountable through
the TNC's rating system. She opined that taxi companies don't
offer that level of accountability because they are the only
ones in town. She surmised that TNCs would make taxi cab
companies step up their game. She concluded that TNCs are far
superior to using regular taxis because TNCs offer better
service, the cars are cleaner, and service is timelier and more
affordable.
2:53:24 PM
DENNIS HARRIS, Owner and Operator, Custom Juneau Tours, stated
that he carries a full commercial passenger transport insurance
policy. He noted that insurance coverage for his limousine
costs him about $6,000 per year. He indicated that for the ten
years before he acquired the limousines, he drove a cab in
Juneau and insurance cost him about $3,500 per year. He
predicted that Uber drivers would take flagged trips, which are
not legal under Uber's contract. He added, "They will be off
the app, passengers will flag them, or their friends will call
them for a ride." He opined that at that point a driver would
not be covered under an insurance policy. He advised that
unless something is added to HB 132 that includes commercial
passenger mandatory coverage, TNC drivers would find out the
hard way that Uber does not cover its drivers for collision, at
any phase.
2:55:20 PM
MR. D. HARRIS shared that various groups in Juneau spent many
years first passing a commercial passenger vehicle ordinance,
then refining it. He alluded that the ordinance works
especially well on a six-cruise ship day when there are an
additional 22,000-27,000 people in downtown Juneau for up to 12
hours. He said that at peak times Juneau usually has: 65 taxi
cabs, about 75 tour vans and mini buses, about 60-70 full-size
passenger coaches, as well as fright trucks and fuel trucks
coming through South Franklin [street].
MR. D. HARRIS reported that during this week's City and Borough
of Juneau Assembly Committee of the Whole work session, the
assembly told the city lobbyist it would oppose HB 132, unless
cities were given the right to opt out. He shared that he pays
for permits in order to park in downtown Juneau. He noted that
the permit fees go toward the operation of the parking/loading
facilities. He added that the same permitting happens at the
Juneau International Airport. He opined, with certainty, that
the airport counts on that fee-generated revenue. He surmised
that both Anchorage and Fairbanks, being state funded, also
count on revenue from commercial passenger fees. He related his
understanding that under HB 132 no one would be allowed to
charge TNCs with the commercial passenger fee and it would not
be a level playing field.
MR. D. HARRIS shared that he is also very concerned about Uber's
background checks and he finds them to be insufficient. He said
that he submitted an article to the committee that listed
various deaths, assaults, sexual harassment incidences, and a
number of other problems involving both Uber and Lyft drivers.
He advised the committee that unless police department
background checks are required, there would be a lot of
problems. He surmised that HB 132 would not allow any
opportunity for the state to make regulations regarding TNCs
and, without the ability to regulate, the state would be giving
carte blanche to an outside corporation that is looking to be
exempt from everything. He noted that 25 percent of TNC revenue
would automatically leave the state because that is the
percentage Uber charges its drivers for a dispatch fee. He said
that Uber is currently using $13 billion in investor venture
capital funds to underprice the market. He cautioned the
committee that the underpricing is intended to run cab companies
out of business and since there would be no regulations, TNCs
would be allowed to price fares at whatever they wanted.
MR. D. HARRIS opined that if the committee is going to pass HB
132, then it should amend the bill to include an opt out option
for cities. He added that the language in HB 132 pertaining to
the handicap and insurance requirements should also be
tightened. He said that when he drove a taxi, he took pride in
having the cleanest and nicest taxi in town. He added that he
always paid his city sales tax every time he took a personal
call.
3:00:37 PM
CO-CHAIR WOOL mentioned the limited cab situation at the Juneau
airport. He asked whether the number of cabs in Juneau is
limited in any way.
MR. D. HARRIS answered no. He explained that the problem at the
Juneau airport is due to Alaska Airlines, Inc., clustering plane
landings in a cost saving measure for paying cargo crew wages.
He added that the plane landings typically get clustered to into
sets of three in one hour, with multiple sets in any given day.
He declared that Juneau taxis have a priority for local fares.
REPRESENTATIVE CLAMAN asked whether Mr. D. Harris owns his own
taxis.
MR. D. HARRIS responded that he did but he no longer does.
REPRESENTATIVE CLAMAN inquired who paid the insurance when Mr.
D. Harris owned the taxis and whether he had other drivers or
just himself.
MR. D. HARRIS answered that he was the only driver. He
recounted that it is always the taxi driver who pays for the
insurance.
REPRESENTATIVE CLAMAN asked about the policy limits Mr. D.
Harris carried and whether or not those were a requirement
according to local regulation.
MR. D. HARRIS explained that in Juneau there are two separate
limit requirements: first, the city requires $500,000 and
$50,000, liability and property; then the United States Forest
Service (USFS) requires a higher liability for passengers
exiting the vehicle. He noted that he typically carried $1
million-dollar coverage.
REPRESENTATIVE CLAMAN offered his understanding that additional
liability coverage would be separate from collision liability.
He asked Mr. D. Harris whether regulations in Anchorage would be
a function of local regulation.
MR. D. HARRIS confirmed both of Representative Claman's points.
REPRESENTATIVE CLAMAN asked whether taxi owners pay unemployment
insurance coverage for their drivers.
MR. D. HARRIS answered no. He explained that drivers are
independent contractors. He noted that a driver may lease a
taxi from a dispatch company or another driver.
3:04:22 PM
CO-CHAIR WOOL pointed out conflicting testimony from Mr. D.
Harris and Ms. Davis's previous testimony [during the House
Transportation Standing Committee's (2/28/17) hearing on HB 132]
regarding the effect the introduction of TNCs have on cab
companies in the area and asked Ms. Davis to speak to that.
3:04:54 PM
RENA DAVIS, Public Policy Manager, Lyft, Inc., said that in her
previous testimony she had cited an instance where Lyft, and a
competing TNC, and three cab companies launched at the same time
into a new market. She reported results showed it was the
highest year ever for the cab companies. She opined that TNC
introduction to a market does not impact the flow of business to
other forms of transportation.
CO-CHAIR WOOL asked Mr. Matthews to comment on the status of
taxis in the Seattle area since the introduction of TNCs.
MR. MATTHEWS explained that there are still taxis in Seattle and
there are even taxis on the Uber application. He added that
Seattle launched more medallions to better serve the market once
TNCs were introduced.
3:06:04 PM
The committee took a brief at-ease at 3:06 p.m.
3:06:46 PM
JAMES HARRIS, Dispatcher/Driver, Juneau Taxi & Tours, recognized
that there are reports of cab companies prospering, but he
pointed out that in several instances, such as in San Francisco,
cab companies have declared bankruptcy. He stated that taxis in
Juneau do try to accommodate people's arrival to the airport,
but it is difficult with the way the arrivals are clustered. In
regard to being implemented statewide, he said he saw no reason
other than for "bottom lines." He shared that he used to drive
cab in Anchorage and knew of instances where cabs dropped fares
off in Palmer and even Valdez during the oil spill. He stated
that it is all about the origin of the fare, not the
destination. He concurred with Mr. D. Harris that phase one
insurance coverage for TNCs needs to be increased. He said that
drivers would take trips when not on the application and when
friends call, as well as taking flagged trips, all the while not
being insured. He pointed out that a vehicle with six people in
it and only $100,000 in coverage would not suffice. He noted
that there have been several cases were pedestrians have been
struck and killed by a TNC driver without people in the car,
with the application open but not on a trip, and not covered by
insurance. He mentioned that although Lyft has a zero-tolerance
policy for drugs and alcohol, it does not test for them unless
told it must.
CO-CHAIR WOOL inquired how the local taxi companies test drivers
for drugs and alcohol.
MR. J. HARRIS answered that currently there are no substance
test requirements. He noted that he has been working for the
past year in trying to implement substance testing for Juneau
taxi drivers. He said that just like Uber drivers, taxi drivers
can sit home and wait for fares using a computer dispatch system
- so that concept is nothing new. He rehashed that everyone who
has spoken against Uber and Lyft has said the same thing:
cities need to be able to decide individual regulations. He
said that Anchorage drivers already adhere to drug testing and
so, too, should TNC drivers. He pointed out that TNCs were not
kicked out of Austin, Texas, but instead left on their own
accord to avoid strict regulations. He shared his understanding
that most cities do regulate TNCs. He noted that only eight
states were previously mentioned as having statewide openings
for Uber and Lyft. He pointed out that there is such a thing as
buyer's remorse. He said that TNCs are fighting with various
states and local governments because they want to be
unregulated. He declared that if he can abide by the rules and
run a small operation, a billion-dollar corporation should have
to as well. He recognized that a lot of people want Uber and it
doesn't offend him, but what does offend him is being told he
has to do one thing while his competition would be allowed to
come in and do whatever it wants.
CO-CHAIR WOOL announced that HB 132 was held over with public
testimony open.