Legislature(2017 - 2018)SENATE FINANCE 532
02/13/2017 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB9 || SB9 | |
| SB14 || SB14 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 9 | TELECONFERENCED | |
| + | SB 14 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE BILL NO. 14
"An Act relating to transportation network companies
and transportation network company drivers."
9:48:48 AM
SENATOR MIA COSTELLO, SPONSOR, presented the context of the
bill. She stressed that Alaska was in a recession and
experiencing job losses. She felt that it was important to
diversify the economy, and pass legislation that would
create jobs for individuals. She stated that the
legislation was transportation services network companies
legislation called the "Let's Ride Alaska Act." The
companies were platforms that connected riders with
drivers. The bill defined and clarified that the drivers
were independent contractors and exempted the drivers from
the Workers Compensation Act, and other individuals who
were exempted from that act. She shared that the
legislature had surveyed Alaskans, and 30 percent of people
said that they wanted to diversify the economy. She felt
that the bill allowed for a job opportunity for a stay-at-
home mom or active duty military member.
9:52:16 AM
WESTON EILER, STAFF, SENATOR COSTELLO, explained the bill.
10:01:22 AM
Mr. Eiler discussed the Sectional Analysis (copy on file):
Section 1. Describes the legislative intent for the
bill.
Section 2. Amends AS 21.96 by adding a new section, AS
21.96.018, relating to transportation network company
insurance provisions. This section allows insurers who
write automobile insurance in the state to exclude
coverage while a driver is logged onto the digital
network of a transportation network company or while a
driver provides a prearranged ride. However, nothing
in the section precludes an insurer from providing
coverage for the personal vehicle of transportation
network company drier.
Section 3. Amends AS 23.30.230(a) to exclude
transportation network company drivers from the Alaska
Worker's Compensation Act.
Section 4. Amends AS 23.30.230(c) by adding the
definitions for "digital network," prearranged ride,"
and "transportation network company driver."
Section 5. Amends AS 28 by adding chapter 23, titled
"Transportation Network Companies and Driver."
AS 28.23.005. Provides the DCCED administer the
chapter.
AS 28.23.010. Provides that transportation
network company or driver is not a common carrier
and may not provide taxicab or for-hire services
and that they may not be required to register as
a commercial or for-hire vehicle.
AS 28.23.020. Related to fares collected by
transportation network companies for services.
AS 28.23.030. Governs identification required for
by transportation network vehicles and drivers.
AS 28.23.040. Requires electronic receipts.
10:05:46 AM
Co-Chair Hoffman wondered how the legislation interfaced
with communities that regulated cabs. Mr. Eiler responded
that the bill would set one set policy for rideshare
drivers. He explained that many of the services crossed
municipalities. He remarked that the platform could operate
statewide, and provide clarity for drivers that may move or
travel around the state.
Co-Chair Hoffman surmised that the Uber driver could not
drop the rider off in a different municipality. Mr. Eiler
disagreed. He stressed that the bill did not impact the
municipality's authority to regulate taxicabs.
Co-Chair Hoffman queried the parameters of an Uber driver
within a community that regulated the licenses. Mr. Eiler
responded that the taxicab regulations and Uber were two
very different things.
Co-Chair Hoffman remarked that many communities regulated
the number of licenses. He wondered what would occur if the
legislation were passed. He asked if an Uber driver could
operate in a community without that community's license.
Mr. Eiler replied in the affirmative. He stated that the
legislation complemented the possible reformation in some
communities for taxicabs. He stressed that it would be a
different service than a taxicab. The legislation related
to connecting drivers with riders.
Co-Chair MacKinnon wondered whether the taxicab drivers
could drive for the network providers. Mr. Eiler replied in
the affirmative.
Senator von Imhof wondered whether the legislation
addressed taxicab legislation. Mr. Eiler replied that the
legislation did not address taxi regulations.
10:10:35 AM
Vice-Chair Bishop queried the implementation and protocol
for the zero-tolerance drug and alcohol possible. Mr. Eiler
replied that the language was broad in the legislation, but
deferred to the companies' stringent set of policies.
Senator Micciche surmised that a typical Uber driver would
have normal insurance coverage for their own vehicle, that
the provider did not need to carry under the normal policy
while logged onto a digital network. He noted that there
was a separate policy between driving alone and carrying a
passenger. He wondered whether the more stringent policy
mirrored a taxicab requirement. Mr. Eiler agreed to provide
that information. He agreed that there were different
insurance coverages throughout the course of a rideshare
ride.
Senator Micciche wanted to know whether the insurance
mirrored that of taxicabs.
Senator Dunleavy wondered whether the bill required that
transportation network companies and its drivers to
purchase commercial insurance. Mr. Eiler replied in the
affirmative. He noted that there was an exclusion provision
was there for the master policies that Uber, Lyft, and
other companies held.
Senator Dunleavy asked whether the legislation protected
lien holding institutions in the event of damages or loss.
Mr. Eiler replied in the affirmative.
Co-Chair MacKinnon remarked that the current conversation
was not a debate, rather an attempt to understand the bill.
Vice-Chair Bishop queried the driver payback or fee to the
company. Mr. Eiler replied that an Uber driver would pay 25
cents for every dollar for using the service.
10:15:36 AM
KATHIE WASSERMAN, EXECUTIVE DIRECTOR, ALASKA MUNICIPAL
LEAGUE, JUNEAU, addressed concern with Section 7. She
stated that there was a concern about removing regulation
from municipalities, and only be given to the state. She
understood that there would be confusion when crossing
jurisdictions, but it could also be confusing to have two
types of transportation providers in the municipality that
were regulated separately. She stated that there had never
been a large issue related to taxicabs crossing between
jurisdictions. She urged the committee to remove Section 7.
She felt that it should be a local control issue. She
remarked that Section 10 of the Constitution gave local
control to municipalities.
Co-Chair MacKinnon wondered whether the mayors would
support not having a transportation network at all. Ms.
Wasserman replied that she did not know the answer to that
question.
Co-Chair MacKinnon wondered if there was a concern about
low ridership in the state in its entirety. Ms. Wasserman
agreed to address that issue with the mayors. She did not
know how state regulation would increase ridership.
10:18:53 AM
MITCHEL MATTHEWS, SENIOR OPERATIONS MANAGER, UBER
NORTHWEST, JUNEAU, spoke in support of the legislation. He
stated that over 20,000 Alaskans had downloaded the Uber
app, and over 60,000 people had opened the app looking to
connect with a ride in Alaska. He felt that the legislation
provided the appropriate number of safeguards for consumers
while allowing for a predictable, clear, and concise
operational environment for drivers and riders. He
described the Uber service, which provided a digital
network to connect riders with drivers.
10:24:37 AM
Co-Chair Hoffman queried the implementation of the
businesses in rural areas of the state. Mr. Matthews
wondered if Co-Chair Hoffman was referring to a driver.
Co-Chair Hoffman asked how the company would start in
Unalaska. Mr. Matthews stated that he did not know the
licensing requirements for an individual business in
Alaska.
Co-Chair Hoffman wondered how an Uber company would start
in the state. Mr. Matthews replied that the bill allowed
for Uber to operate in the state. He explained that a
driver would download the app and operate from there.
Co-Chair Hoffman wondered how the structure was started in
a community.
10:26:26 AM
AT EASE
10:27:23 AM
RECONVENED
10:27:31 AM
Mr. Matthews shared that Uber was a digital platform, so
the driver was responsible for setting up their company
within the community.
Senator Dunleavy queried the classifications of individuals
who would be prohibited from the platform. Mr. Matthews
responded that driver must submit their full name, date of
birth, social security number, valid driver's license,
valid vehicle registration, and insurance. Those documents
were verified for validity. The individuals were screened
using a social security trace and a comprehensive
background check for offenses related to alcohol. He stated
that there was also an evaluation against the National Sex
Offender registry, and those individuals would be excluded
from operating on the app.
Senator von Imhof asked whether there was a periodic
background check. Mr. Matthews replied that the internal
process involved an annual background check. He stated that
the compliance at Uber depended on the various expiration
dates on the documents.
Vice-Chair Bishop asked for more information about drug
testing. He wondered whether there was random drug testing.
Mr. Matthews replied that Uber did not do drug testing. He
explained that a rider might notify Uber about a suspicious
driver, and then Uber would investigate that complaint.
Senator Dunleavy wondered whether the background checks had
been "tightened" since September 2016.
10:31:15 AM
LISA TSE, UBER TECHNOLOGY INC., SAN FRANCISCO (via
teleconference), introduced herself.
Senator Dunleavy wondered whether the issues in San
Francisco and Los Angeles had been addressed since
September 2016. Ms. Tse replied that California had changed
its background check requirements.
Ms. Tse restated that in September 2016 the California
legislature had adopted new legislation related to
background checks. The bill confirmed that criminal
background checks conducted by commercial services were
permissible. It also modified some of the adjudication
criteria. She stated that, as of January 1, 2017, Uber had
implemented processes in California to ensure compliance.
Senator Dunleavy surmised that the issue of those who had
bypassed the background checks at LAX was addressed. Ms.
Tse replied that she was not familiar with that issue, and
agreed to provide further information.
Senator Dunleavy stressed that the issue was in the news,
so he wanted to know what had changed in the background
checks protocol.
10:33:56 AM
ANNABEL CHANG, DIRECTOR, PUBLIC POLICY, LYFT (via
teleconference), spoke in support of the legislation. She
stated the number one priority at Lyft was the safety of
its users. She stated that Lyft had national criminal
background checks, a motor vehicle record check, and
nineteen-point vehicle inspection. She stated Lyft provided
consumers with new levels of transparency and
accountability. She shared that every Lyft ride was tracked
via GPS; and passengers could see a driver picture, user
rating of the driver, license plate, and make and model of
the vehicle. The drivers also received a photo and name of
the passenger. She stated that the app allowed to share
real time route information with others, providing for an
additional level of security.
Co-Chair MacKinnon CLOSED public testimony.
10:38:04 AM
Vice-Chair Bishop discussed the fiscal notes.
Co-Chair MacKinnon surmised that there was only an initial
request for insurance.
Vice-Chair Bishop continued to discuss the fiscal notes.
Vice-Chair Bishop requested a "scrub" of the vehicle pool,
computers, office panels, and furniture.
Co-Chair MacKinnon wondered whether there was new
requirements in other states for a network system.
10:44:39 AM
ANNA LATHAM, DEPUTY DIRECTOR, DIVISION OF INSURANCE,
DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT,
JUNEAU, explained that prior to the committee substitute,
the division had submitted a zero fiscal note. She stated
that the new version would put administration of the
legislation under the Department of Commerce, Community and
Economic Development (DCCED), which would require the
creation of two new positions. She stated that the
legislation prohibited municipalities from regulation, so
the regulation would be solely on the state.
Senator Dunleavy surmised that there would be a cost to the
state. Ms. Latham replied in the affirmative.
Senator Dunleavy wondered whether the cost would be offset
by fees collected by the companies. Ms. Latham replied that
the reason for general fund and not receipts was because
there was not a mechanism to collect funds for
administration of the program.
Co-Chair MacKinnon announced that she planned to recommend
zeroing the fiscal note.
Senator Micciche wondered how Uber made its revenue.
Co-Chair MacKinnon stated that Uber made 25 percent of each
dollar against the driver's revenue.
Senator Micciche felt that the cost would be handled like
any other license in the state.
10:48:01 AM
Senator Dunleavy wondered whether there could be multiple
passengers in one ride. Mr. Matthews responded that there
were opportunities to connect individuals who may not know
each other through the route of a trip.
Senator Dunleavy asked whether individual passengers may
not know each other. Mr. Matthews replied in the
affirmative.
Co-Chair Hoffman surmised that the parent companies did not
operate in Alaska. Co-Chair MacKinnon agreed.
Co-Chair Hoffman expressed concern that that the 25 percent
of the revenue would be leaving the state.
Co-Chair MacKinnon discussed committee business.
Co-Chair MacKinnon wished a happy birthday to her grandson,
Mason.
SB 14 was HEARD and HELD in committee for further
consideration.