Legislature(2017 - 2018)BELTZ 105 (TSBldg)
02/09/2017 01:30 PM Senate LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| SB14 | |
| Presentation: Administrative Order 281 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
| += | SB 14 | TELECONFERENCED | |
SB 14-TRANSPORTATION NETWORK COMPANIES
1:40:14 PM
CHAIR COSTELLO announced the consideration of SB 14 and noted it
is the second hearing. She stated the intent is to conclude
public testimony, adopt a committee substitute (CS), and look to
the will of the committee. She asked if anyone wanted to
testify.
1:41:15 PM
NANCY ALLRED, Senior Counsel, Uber, San Francisco, California,
offered to answer questions related to SB 14.
1:41:38 PM
CHAIR COSTELLO closed public testimony.
1:41:50 PM
SENATOR HUGHES moved to adopt the CS for SB 14, labeled 30-
LS0250\U, as the working document.
CHAIR COSTELLO objected for discussion.
1:42:23 PM
WESTON EILER, Staff, Senate Labor & Commerce Committee, Alaska
State Legislature, explained the changes in version U for SB 14
on behalf of the sponsor. He said the committee substitute makes
several changes after consultation with stakeholders, insurance
companies, the Department of Law, Uber, Lift, and a variety of
others. Many of the changes are technical and based on model
language from the National Council of Insurance Legislators.
He described the following changes:
Page 1, line 13, changing "offered" to "afforded," and adding
the language "notwithstanding any requirement under AS 28.20."
is added.
Page 2, the first sentence on lines 9-10 is deleted, and
language is added in the new subsection (b)(2)(A) and (B) on
lines 17-22 of version U. It reads: "may be construed to require
an insurer to use specific policy language or to refer to this
section in order to exclude any and all coverage for any loss or
injury that occurs while a driver (A) is logged onto the digital
network of a transportation network company; or (B) provides a
prearranged ride."
Page 3, line 10, adds the language "Insurers potentially
providing coverage" and deletes "to one another a clear
description" and adds "upon request of any insurer involved in
the claim, the applicable coverages".
Page 5, line 1, is a change made at the request of the
Department of Law. It moves the regulation of rideshare
companies under the Department of Commerce because they are
technology companies, not transportation companies.
Page 8, lines 12-17, provides certificate of insurance.
Page 9, line 8, [Sec 28.23.100. Transportation network company
driver requirements] adds the language "or a third party,".
1:47:11 PM
SENATOR STEVENS asked Mr. Eiler if he was referring to version
U, adding that he was having trouble following the changes.
MR. EILER answered yes. He continued to say the final changes
are in Sections 6 and 7 on page 11. Section 6 amends AS 2910.200
by adding a new paragraph (66). It reads, "AS 29.35.148
(regulation of transportation network companies or drivers).
Section 7 adds a new Sec. 29.35.148. Regulation of
transportation network companies or drivers.
CHAIR COSTELLO asked Mr. Eiler to go over the memo that provides
follow up answers to questions members posed during a previous
hearing.
1:49:55 PM
MR. EILER read the following questions and answers:
Senator Stevens:
What is the cause and effect of rideshare companies
entering a municipal transportation market?
A: four-month pilot study in Portland, Oregon showed
that despite an initial decline of 16% in taxi
traffic, combined for-hire Transportation business
grew 40% after the introduction of rideshare services.
Senator Gardner:
What constitutes an Independent Contractor?
A: Alaska law does not define "Independent Contractor"
in statute. AS 23.20.230(a) provides a list of job-
types/occupations that are exempt from the State's
Workers' Compensation program.
Can Uber drivers decline passengers? What are Uber's
policies for confirming insurance coverage?
A: Yes - Please see attached letter from Uber
regarding their verification procedures and driver
protection policies.
Senator Hughes:
Can drivers display proof of insurance electronically?
A; Yes - AS 28.22.019(a) allows for Alaskans to
display proof of insurance on a mobile electronic
device.
1:53:09 PM
CHAIR COSTELLO noted Senator Gardner had questions for the Uber
representative.
SENATOR GARDNER asked if Uber could provide a sample contract
and an employee handbook. She also asked how large or small
Uber's role is in purchasing cars for drivers.
1:55:16 PM
BRIAN GEBHARDT, Uber, responded that Uber does not have a
handbook, but it does have Uber Community Guidelines that lay
out expectations for both the rider and the driver. He noted
there is also information available on the internet.
To the second question, he explained that Uber does not provide
vehicles for its drivers. In some places there is a separate
operating entity called Exchange Leasing for driver partners. He
did not anticipate having an exchange program in Alaska.
SENATOR GARDNER asked for a sample contract that clarifies
whether the drivers are employees or independent contractors.
1:57:37 PM
SENATOR GARDNER referred to a letter the committee received from
Daniel McHugh, Senior Vice President of Alaska USA Federal
Credit Union. She read:
Comp and Collision coverage works hand in hand to help
repair and replace one's car in the event of physical
damage. Personal auto insurance carriers exclude
carriers for Comp and Collision when the automobile is
being used for ride sharing purposes. (TNC driver)
Ridesharing Comp and Collision insurance is available
to some, not all, carriers in the Lower 48, only if
the TNC driver elects to pay the additional
endorsement or rider.
She asked if that issue is addressed in version U.
MR. EILER said he was sure it was. He said they met with Alaska
USA and forwarded their language for inclusion in version U.
1:59:25 PM
MEGAN WALLACE, Legislative Council, Division of Legal and
Research Services, Legislative Affairs Agency, pointed to
language on page 2, subsection (b), line 9, "Nothing in this
section .... (3) precludes an insurer from providing coverage
for the personal vehicle of a transportation network company
driver if the insurer chooses to provide coverage by contract or
endorsement."
She said this allows insurance companies to exclude or endorse
coverage.
2:01:18 PM
SENATOR GARDNER asked if the language about Uber confirming that
drivers have appropriate coverage includes the optional contract
or endorsement.
MS. WALLACE replied the insurance provision in Section 2 opens
it up for private insurers to either exclude or provide
endorsements, but in Section 5, pages 4 and 5, specifically line
line 22, sets the coverage requirement for drivers and
transportation network companies. The protection for the riders
mandates that the driver or the company provide coverage. On
page 6, subsection (d), it says if the driver does not have
coverage the transportation network company's Insurance must
provide it.
2:04:09 PM
SENATOR STEVENS asked when the driver is plugged in to the
digital network.
MR. EILER deferred to Uber to answer.
2:04:53 PM
MR. GEBHARDT explained that drivers are considered logged in to
the app when they have opened the application and declared
themselves available. From an insurance perspective, that is
when Period I starts.
2:05:45 PM
At ease
2:06:12 PM
CHAIR COSTELLO reconvened the committee. She noted Mr. Gebhardt
would address Senator Stevens' question about when the insurance
kicks in.
MR. GEBHARDT clarified that Period I starts when drivers log in
to the platform and make themselves available to provide rides.
Once the request has been accepted by the driver and he or she
is enroute to pick up the driver, Period II begins. Period III
begins when the ride starts, after the passenger enters the
vehicle. After the trip concludes, it is back to Period I. He
referred to a handout for further details.
MS. ALLRED added that the drivers have a separate app and when
they choose to go online, insurance coverage begins.
CHAIR COSTELLO requested that Ms. Allred state the insurance
that is provided to drivers in each period.
MS. ALLRED explained that Period I provides primary automobile
insurance of about $50,000 for one person for bodily injury,
$100,000 for all people, and $25,000 for property damage. For
Periods II and III, there is primary automobile liability
coverage of $1 million. The National Conference of Insurance
Legislation (NCOIL) has adopted this as model legislation.
2:08:55 PM
SENATOR MEYER referred to page 7, line 19, "In the event of a
loss involving a personal vehicle used in connection with a
transportation network company and if the personal vehicle is
subject to a lien, the insurance carrier for the transportation
network company shall pay a claim covered under collision
physical damage coverage or comprehensive physical damage
coverage directly to the business repairing the personal vehicle
or jointly to the owner of the personal vehicle and the primary
lienholder on the covered personal vehicle." He questioned
whether the payment should just go to the lien holder who owns
the vehicle.
CHAIR COSTELLO clarified that it says, "of the personal vehicle
and the primary lien holder."
SENATOR MEYER said he understood that the insurance company
would pay both the owner of the vehicle and the lien holder.
CHAIR COSTELLO asked for clarification.
MS. WALLACE responded that the provision requires that the check
or money to pay for the collision repair is either sent directly
to the repair shop or in a check to the lien holder and the
owner jointly to be issued to whoever repairs the vehicle. She
recalled that was part of the model language.
2:11:27 PM
At ease
2:12:30 PM
CHAIR COSTELLO brought the meeting back to order.
SENATOR MEYER noted if the check is made out jointly it should
be ok.
He referred to Section 7, line 19, that says "transportation
network drivers is reserved to the state" and line 20 which says
that "a municipality may not enact or enforce an ordinance
regulating transportation network companies or transportation
network drivers." He said he understands the need for a
consistent, statewide law. He asked if Anchorage has weighed in,
considering the taxicab industry has been in place for so long.
SENATOR GARDNER said she tried to obtain that information, but
was unsuccessful.
2:14:03 PM
SENATOR GARDNER looked at the sectional summary for version U,
specifically AS 28.23.010, "Provides that a transportation
network company or driver is not a common carrier and may not
provide taxicab or for-hire services." She said that area gets
to the core of the bill because common carriers are regulated,
whereas transportation network companies are not. She summarized
that the bill removes TNCs as common carriers and removes
Workers Compensation from TNCs
MR. EILER responded that currently there is no definition for
independent contractors in statute. He noted that there are
additional distinctions between the two transportation modes.
2:15:59 PM
SENATOR HUGHES pointed out in the legislative intent language,
the wording "ensure the safety, reliability, and cost-
effectiveness of rides" on page 1, line 7. She suggested that
the legislature cannot guarantee the safety, reliability, and
cost-effectiveness of rides, but instead, could help encourage
and promote them. She emphasized that it does not guarantee
them.
2:17:00 PM
SENATOR STEVENS commented that insurance is complicated. He
asked if taxis can carry less insurance when they are not
carrying passengers. He also asked what level of insurance
drivers are on when they've ended a trip and what the process is
for changing the level of insurance.
2:18:16 PM
MR. EILER explained that the process is done through a computing
platform. When the driver is signed in he/she is on the
insurance. His understanding is that after a trip is completed,
the driver is back under Period I indicating they are available
or they can switch off line.
SENATOR STEVENS asked if the driver could end the ride and go
off the app and then sign in again if he/she was flagged down.
MR. EILER clarified that Uber drivers cannot be flagged down.
All transactions are done through the app.
SENATOR STEVENS commented on the advantage of being able to
switch levels of insurance coverage. He asked the Uber
representative to address his question.
2:20:34 PM
MR. GEBHARDT clarified that in Period I drivers are logged in
and once they completed the ride and Period III ends, they are
back to Period I coverage.
2:21:22 PM
SENATOR HUGHES commented that taxicabs are identifiable and Uber
cars are not. She wondered if a person could ever flag an Uber
car down.
MR. GEBHARDT said there should not be any markings on Uber
vehicles. The rider and driver partner by app.
2:22:31 PM
SENATOR HUGHES moved to report the CS for SB 14, labeled 30-
LS0250\U, from committee with individual recommendations and
attached zero fiscal notes.
SENATOR GARDNER objected. She said she hasn't had time to read
and understand the committee substitute. She said she likes the
idea of Uber and many Alaskans want it, but she is reluctant to
step into the dispute between taxicabs and Uber and choose
between two business models. She removed her objection, and
added that it doesn't mean that she would support the bill on
the Senate floor.
2:24:03 PM
CHAIR COSTELLO stated that without further objection, CSSB
14(L&C) is reported from the Senate Labor & Commerce Standing
Committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| CS SB 14 (L&C) - Ver. U.pdf |
SL&C 2/9/2017 1:30:00 PM |
SB 14 |
| 2017.02.09 - SB 14 Response to Senators' Questions.pdf |
SL&C 2/9/2017 1:30:00 PM |
SB 14 |
| 2017.02.09 - Uber Response to Senators Questions.pdf |
SL&C 2/9/2017 1:30:00 PM |
|
| 2017.02.09 - SB 14 - PBOT Study.pdf |
SL&C 2/9/2017 1:30:00 PM |
SB 14 |
| 2017.02.09 - Boston Consulting Group AO 281 Presentation.pdf |
SL&C 2/9/2017 1:30:00 PM |
|
| Admin. Order 281.PDF |
SL&C 2/9/2017 1:30:00 PM |
|
| 2016.08.10 - Alaska Dispatch News - AO 281 Press Story.pdf |
SL&C 2/9/2017 1:30:00 PM |