02/28/2017 01:30 PM House TRANSPORTATION
| Audio | Topic |
|---|---|
| Start | |
| SB3 | |
| HB132 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 132 | TELECONFERENCED | |
| + | SB 3 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE TRANSPORTATION STANDING COMMITTEE
February 28, 2017
1:32 p.m.
MEMBERS PRESENT
Representative Louise Stutes, Co-Chair
Representative Adam Wool, Co-Chair
Representative Harriet Drummond
Representative Colleen Sullivan-Leonard
Representative David Eastman (alternate)
Representative Matt Claman
Representative Chuck Kopp
MEMBERS ABSENT
Representative Mark Neuman
Representative Gabrielle LeDoux (alternate)
COMMITTEE CALENDAR
SENATE BILL NO. 3
"An Act relating to the regulation of wastewater discharge from
small commercial passenger vessels in state waters; relating to
art requirements for certain public facilities; and providing
for an effective date."
- MOVED HCS SB 3(TRA) OUT OF COMMITTEE
HOUSE BILL NO. 132
"An Act relating to transportation network companies and
transportation network company drivers."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 3
SHORT TITLE: SMALL VESSEL WASTEWATER EXEMPTION; 1% ART
SPONSOR(s): SENATOR(s) STEDMAN
01/09/17 (S) PREFILE RELEASED 1/9/17
01/18/17 (S) READ THE FIRST TIME - REFERRALS
01/18/17 (S) RES
02/01/17 (S) RES AT 3:30 PM BUTROVICH 205
02/01/17 (S) Heard & Held
02/01/17 (S) MINUTE(RES)
02/06/17 (S) RES AT 3:30 PM BUTROVICH 205
02/06/17 (S) Moved SB 3 Out of Committee
02/06/17 (S) MINUTE(RES)
02/08/17 (S) RES RPT 3DP 3NR 1AM
02/08/17 (S) DP: GIESSEL, STEDMAN, MEYER
02/08/17 (S) NR: HUGHES, COGHILL, VON IMHOF
02/08/17 (S) AM: WIELECHOWSKI
02/17/17 (S) TRANSMITTED TO (H)
02/17/17 (S) VERSION: SB 3
02/20/17 (H) READ THE FIRST TIME - REFERRALS
02/20/17 (H) TRA, FIN
02/28/17 (H) TRA AT 1:30 PM BARNES 124
BILL: HB 132
SHORT TITLE: TRANSPORTATION NETWORK COMPANIES
SPONSOR(s): REPRESENTATIVE(s) WOOL
02/15/17 (H) READ THE FIRST TIME - REFERRALS
02/15/17 (H) TRA, L&C
02/23/17 (H) TRA AT 1:30 PM BARNES 124
02/23/17 (H) <Bill Hearing Canceled>
02/28/17 (H) TRA AT 1:30 PM BARNES 124
WITNESS REGISTER
DAVID SCOTT, Staff
Senator Bert Stedman
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented Senate Bill 3 on behalf of
Senator Stedman, prime sponsor.
MATT GRUENING, Staff
Representative Louise Stutes
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented a House committee substitute to
Senate Bill 3.
BRIAN GEBHARDT, General Manager
Uber Technologies Inc.
Seattle, Washington
POSITION STATEMENT: Answered questions during the hearing on HB
132.
LAURA STIDOLPH, Staff
Representative Adam Wool
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented House Bill 132 on behalf of
Representative Wool, prime sponsor.
RENA DAVIS, Public Policy Manager
Lyft, Inc.
San Francisco, California
POSITION STATEMENT: Testified in support of HB 132.
MICHAEL RICKER, Actuary P/C
Division of Insurance
Department of Commerce, Community & Economic Development (DCCED)
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
132.
ACTION NARRATIVE
1:32:35 PM
CO-CHAIR LOUISE STUTES called the House Transportation Standing
Committee meeting to order at 1:32 p.m. Representatives
Drummond, Eastman (alternate), Sullivan-Leonard, Wool, and
Stutes were present at the call to order. Representatives Kopp
and Claman arrived as the meeting was in progress.
SB 3-SMALL VESSEL WASTEWATER EXEMPTION; 1% ART
[Contains mention of HB 117.]
1:33:32 PM
CO-CHAIR STUTES announced that the first order of business would
be SENATE BILL NO. 3, "An Act relating to the regulation of
wastewater discharge from small commercial passenger vessels in
state waters; relating to art requirements for certain public
facilities; and providing for an effective date."
1:34:08 PM
DAVID SCOTT, Staff, Senator Bert Stedman, Alaska State
Legislature, on behalf of Senator Stedman, prime sponsor of SB
3, explained that the proposed legislation would permanently
reinstate the Department of Environmental Conservation (DEC)
current best practices permit program for wastewater for state
ferries and small cruise ships. He noted that there would be no
reduction in current standards or requirements in addition to no
change in DEC authority to restrict when and where discharges
can occur. He said that water quality would continue to improve
as DEC applied its best practices requirements. He added that
DEC would continually review its best practices requirements.
He shared that the Department of Transportation & Public
Facilities (DOT&PF) estimates that without the passage of SB 3,
it would cost millions to install advanced wastewater treatment
systems (AWTS) on state ferries. He explained that the United
States Coast Guard (USCG) closely monitors weight and balance
changes which could make the installation of an AWTS not even
possible or economically viable on small cruise passenger
vessels.
MR. SCOTT continued on to discuss Sections 8 and 9 of SB 3. He
explained that those sections would exempt the two new Alaska
Class Ferries (ACFs) and the replacement vessel for the motor
vessel (M/V) Tustemena from the "one percent for art"
requirement. He elaborated that the current estimated cost for
the "one percent for art" would be $3.5 million. He said that
DOT&PF would instead like to use those funds for safety and
navigational equipment. He noted that the Alaska State Council
on the Arts does not oppose the specific waiver that would be
included in SB 3.
1:36:40 PM
The committee took an at-ease from 1:36 p.m. to 1:37 p.m.
1:37:41 PM
CO-CHAIR STUTES shared that her constituents have raised
concerns about the "one percent for art" included in SB 3. She
reported that she asked DOT&PF to conduct an inventory of the
art currently on the M/V Tustemena and that she would like to
await the results from the department before acting on the "one
percent for art" portion of SB 3. She stated that she does not
want to impede the progress of the small vessel wastewater
exemption. She opined that the two issues would probably best
be addressed separately. She declared that she had a committee
substitute already drafted that would address only the
wastewater exemption and then the committee could address the
"one percent for art" at a later date with HB 117.
1:39:00 PM
CO-CHAIR WOOL moved to adopt the proposed House committee
substitute (CS) for SB 3, Version 30-LS0046\O, Nauman, 2/27/17,
as a working document. There being no objection, Version O was
before the committee.
1:39:27 PM
MATT GRUENING, Staff, Representative Louise Stutes, Alaska State
Legislature, said that the committee had previously heard the
issues but in two separate bills. He explained that the
committee substitute, included in the committee packet, would
remove the "one percent for art" component and leave SB 3 as a
standalone small vessel wastewater exemption bill. He
elaborated that the entirety of the changes under Version O
would remove Sections 8, 9 and 10 to separate the two issues.
CO-CHAIR WOOL moved to report SB 3, Version 30-LS0046\O, Nauman,
2/27/17, out of committee with individual recommendations and
the accompanying fiscal notes. There being no objection, HCS SB
3(TRA) was moved out of the House Transportation Standing
Committee.
1:40:48 PM
The committee took an at-ease from 1:40 p.m. to 1:43 p.m.
1:43:42 PM
HB 132-TRANSPORTATION NETWORK COMPANIES
1:43:46 PM
CO-CHAIR STUTES 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."
1:44:25 PM
REPRESENTATIVE WOOL, speaking as sponsor of HB 132, explained
that HB 132 would allow the operation of transportation network
companies (TNCs) and rideshares that include well-known
companies, such as Uber Technologies Inc. ("Uber") and Lyft,
Inc. ("Lyft") in Alaska. He clarified that HB 132 is not "the
Uber bill" but rather is an act relating to TNCs and TNC
drivers. He alluded that HB 132 is a bill intended to help
Alaska keep up with the changing times. He noted that society
changes and evolves with technology. He gave Airbnb, Inc.
("Airbnb") as an example of another recent industry change
similar to the introduction of rideshare networks. He
emphasized that he has heard increasingly from his constituents
asking when TNCs would be operating in his district. He said
that ridesharing is currently available in 49 other states. He
noted that even though Uber does not operate in Alaska, 20,000
people in Alaska have the application ("app") for use when
traveling and another 60,000 try to call on Uber when visiting
Alaska.
CO-CHAIR WOOL shared that it is the intent of HB 132 to help
make it easier for TNCs to operate in Alaska. He opined that
TNCs would boost jobs in the state. He added that most TNC
drivers only drive part-time and have other jobs. He said that
it appeals to individuals who want to make their own hours and
work when they want. He said that currently 85 percent of Lyft
drivers only work 15 hours or less per week. He commented that
TNCs increase public safety because TNCs reduce the likelihood
of drinking and driving. He said that compared to often
expensive cab fares, Uber and Lyft tend to be about 50 percent
less than regular taxis. He noted that there have been studies
done in metropolitan areas that show once TNCs come in there is
an increase in economic stimulation because more people take
rides to do things. He said that TNCs help to serve underserved
areas or places where regular taxis don't want to work. For
example, he shared that he has heard that locally it is hard to
get a cab in Anchorage to go to Eagle River. He said that part
of that problem would be solved because Uber drivers usually
serve in areas where they live. He surmised that some people
who are on a limited income might find TNCs helpful, such as the
elderly population needing to get to the store or an
appointment. He concluded that TNCs are a technology, more or
less a platform, and just an app on smart phones. He opined
that Alaska should join the other 49 states and jump on the TNC
bandwagon and pass HB 132.
1:50:41 PM
CO-CHAIR STUTES inquired whether the rates in TNCs are regulated
the same way cab fares are regulated.
CO-CHAIR WOOL said that cab rates are not often regulated. He
elaborated that cities and/or municipalities, such as Fairbanks,
don't determine the taxi rates.
CO-CHAIR STUTES offered her understanding that taxis could
arbitrarily raise or lower the rates.
CO-CHAIR WOOL shared his understanding that the rates set by
Uber and Lyft are determined using an elaborate algorithm, and
prices are not set by TNC drivers.
CO-CHAIR STUTES stated that TNC representatives Rena Davis and
Brian Gebhardt were available to answer questions.
1:51:54 PM
CO-CHAIR STUTES asked for confirmation whether Uber rates are
regulated or if the drivers have the ability to arbitrarily
increase or decrease rates.
BRIAN GEBHARDT, General Manager, Uber Technologies Inc.,
answered that drivers do not have the ability to change rates.
He elaborated that the rates are predetermined by Uber and are
based on market analysis and market dynamics at the time of the
request. He added that driver's payments, from the company, for
rides are also a function of the aforementioned situation.
CO-CHAIR STUTES asked whether, when calling a ride from Uber, if
the rider would know what the rate would be prior to the vehicle
arriving.
1:52:58 PM
MR. GEBHARDT answered yes. He explained that once the app is
opened and a pick-up location is confirmed the algorithm
computes the ride amount and the user then has the ability to
confirm or deny the fare request.
REPRESENTATIVE SULLIVAN-LEONARD inquired whether there were
other companies beside the two primarily discussed so far, Uber
and Lyft, included in a list of TNCs.
CO-CHAIR WOOL explained that there is a myriad of other
companies. He added that any TNC would qualify under HB 132; it
would not be solely for one company.
REPRESENTATIVE KOPP offered his understanding that TNC drivers'
own personal insurance would cover the driver when not logged on
to a fare.
CO-CHAIR WOOL confirmed that is correct. He said that more
details on the specific mechanics of insurance would be
forthcoming.
1:55:19 PM
LAURA STIDOLPH, Staff, Representative Adam Wool, Alaska State
Legislature, presented HB 132 on behalf of Representative Wool,
prime sponsor. She noted that HB 132 is also called the "Let's
Ride Alaska Act" and would bring Alaska into the new age of
transportation options with the tap of a phone screen. She
noted that in many areas of Alaska transportation needs are
often underserved. She said that HB 132 would provide clarity
in law for the operation of TNCs. She surmised that TNCs have
created a platform to connect drivers and riders. She noted the
transaction between TNC drivers and riders is quick and cashless
and they self-select each other through the app.
MS. STIDOLPH said that the first step for users would be to
download a TNC app. She noted that there is a wide variety of
ridesharing companies to choose from; some donate a portion of
the network's proceeds to charities and some networks only serve
women. She said that the apps would allow users to match the
car type to specific needs, such as requesting a sport-utility
vehicle (SUV) for a large group of riders. She said that there
is a map on the app that allows users to track where the car and
driver are.
MS. STIDOLPH said that TNCs can be very helpful when a user is
in a city he/she has never visited before, because the user
wouldn't need to know street names and routes would be
predetermined, which would eliminate the need to ask or tell the
driver where to go. She said that TNC technology would give
Alaskans the opportunity to earn extra money when some are
losing jobs or facing cutbacks. She said that in a time when
the popular thought is to diversify Alaska's economy, TNCs would
be a perfect fit. She said that this easy form of self-
employment would be ideal for working parents, students, and
active duty military personnel. She stressed that TNC driver
employment is suitable for a wide range of demographics. She
reiterated the bill sponsor's previous statement that most TNC
drivers have other sources of income. She added that 85 percent
of Lyft drivers only work 15 hours or less a week. She opined
that TNCs could be particularly helpful in aiding the elderly as
well as increasing public safety by reducing the incidence of
driving under the influence (DUI).
MS. STIDOLPH said that HB 132 would pave the way for TNCs to
operate in Alaska by adding language to Alaska's insurance and
worker's compensation statutes. She explained that much like
taxi drivers, rideshare drivers are also classified as
independent contractors and are exempted from worker's
compensation. She noted that rideshare drivers use their own
cars and phones and have no scheduled shift and work on their
own time. She stated that HB 132 would codify in state law the
same quality and safety standards that are adhered to by TNCs.
She added that HB 132 would require background checks, have a
zero-tolerance substance abuse policy, as well as have numerous
other safe guards already provided by company policy as well.
Ms. Stidolph explained that state policy rather than municipal
policy is needed because TNCs are such a new technology.
2:00:34 PM
CO-CHAIR STUTES interjected to recognize Representative Eastman
was present and acting as an alternate member.
2:00:50 PM
MS. STIDOLPH continued that TNC state policy is also necessary
so that TNCs can cross municipal boundaries. She gave examples
of a user catching a ride from the Matanuska-Susitna (Mat-Su)
Valley to Anchorage or from Big Lake to the Alaska State Fair
grounds with a TNC. She said that rural Alaskan areas would
benefit because HB 132 would allow the platform to come to
regions where a separate set of rules would not justify the
expense. She concluded that enabling rideshare services through
HB 132 would be an innovative way to create jobs for Alaskans
and improve transportation and public safety in Alaska. She
stated that Alaska should join the rest of the nation in
allowing the services TNCs have to offer to benefit Alaskans.
2:01:30 PM
MS. STIDOLPH paraphrased from the HB 132 sectional analysis,
which read as follows [original punctuation provided]:
Section 1: Describes legislative intent of the
bill is to clarify the Alaska Workers' Compensation
Act and its relationship to transportation network
company drivers.
Section 2: Amends AS.96 by adding a new section
21.96.018 relating to transportation network company
insurance provisions. Allows for automobile insurance
writers to exclude any driver who is logged onto the
digital network of a transportation network company or
while a driver provides a ride.
Section 3: Amends AS 23.30.230(a) to exclude
transportation network company drivers from the Alaska
Workers' Compensation Act.
Section 4: Amends AS 23.30.230(c) by adding the
definitions for "digital network," "prearranged ride,"
"transportation network company," and "transportation
network company driver."
Section 5: Amends AS 28 by adding a new chapter,
Chapter 23, Transportation Network Companies and
Drivers 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 28.23.010. Relates to fares
collected by transportation network companies for
services. AS 28.23.030. Governs identification
required for transportation network vehicles and
drivers. AS 28.23.040. Requires electronic receipts.
AS 28.23.050. Sets insurance requirements for
transportation network companies and drivers. AS
28.23.060. Requires transportation network companies
to provide automobile insurance disclosures to
drivers. AS 28.23.070. Requires that transportation
network companies to file a certificate of insurance
with the division of insurance. AS 28.23.080. Provides
that transportation network companies are not
employers and that drivers are independent
contractors, not employees. AS 28.23.090. Requires
implementation of zero tolerance drug and alcohol
policy. AS 28.23.100. Sets transportation network
company driver requirements. AS 28.23.110. Relates to
mandatory rules and policies governing
nondiscrimination and accessibility. AS 28.23.120.
Provides for maintenance of records. AS 29.23.180.
Provides definitions for the chapter. AS 28.23.190
States that the short title of the chapter may be
cited as the "Transportation Network Companies Act."
Section 6: Amends AS 29.10.200 to add paragraph
(66), adding AS 29.35.148 (regulation of
transportation network company or drivers) as home
rule prohibitions on acting otherwise.
Section 7: Amends AS 29.35 by adding AS
29.35.148, which provides that the authority to
regulate transportation network companies and
transportation network drivers is reserved to the
state.
2:04:51 PM
REPRESENTATIVE CLAMAN said that he had questions regarding
Section 5 which addresses AS 28.23.050. He offered his
understanding that TNC drivers' insurance would cover the
drivers when not on a company fare and just running to the
grocery store. He continued that the TNCs insurance would then
have a policy to cover drivers once drivers were on the computer
network. He asked Ms. Stidolph if his understanding was
correct.
MS. STIDOLPH confirmed Representative Claman was correct.
REPRESENTATIVE CLAMAN offered a hypothetical scenario where an
Uber driver was at the airport [in Juneau] and had a fare to
pick up from the Capitol but had no passenger on the way to the
Capitol. He offered his understanding that the driver would be
under the first level of financial responsibility listed in the
bill under subsection (b) paragraph (1). He continued that once
the driver picked up the rider from the Capitol, the coverage
would shift to the coverage levels under subsection (c). He
asked Ms. Stidolph to confirm whether he was correct so far.
MS. STIDOLPH responded yes.
REPRESENTATIVE CLAMAN inquired why TNC drivers would have lower
coverage limits when on the network and without a passenger but
much higher coverage once the prearranged ride is actually
picked up.
MS. STIDOLPH explained that the reason for the lower coverage in
period one is for fear that with a higher-coverage level driver
could potentially drive around with the app on at all times,
just to have the TNC higher coverage policy versus his/her own
personal coverage.
REPRESENTATIVE CLAMAN shared that he does not like the idea that
there could be commercial drivers on the road who would only be
carrying $50,000 coverage.
2:07:27 PM
MS. STIDOLPH shared that there are currently other endorsements
being offered from other insurance companies, such as State
Farm, that are specifically for TNC drivers. She added that the
driver's personal insurance policy would be higher when logged
into the TNC network, phase one.
CO-CHAIR WOOL, in addition to Ms. Stidolph's answer, clarified
that there are three phases of insurance coverage. In response
to Representative Claman's question, he clarified that when no
one is in the driver's car, but a ride has been accepted on the
network there would be a higher phase, phase two. He elaborated
that the first phase would pertain to when the driver has the
app on but has neither yet accepted a ride nor is on his/her way
to pick up a prearranged rider. He said that phase two would
apply once the driver accepted a ride and was on his/her way to
pick up the rider. He explained that there is the higher level
of coverage, even without a passenger, because the driver is
then acting more in line with being a contracted driver. He
concluded that phase three would engage once the driver picks up
the rider.
REPRESENTATIVE CLAMAN offered his understanding that both phases
two and three are the same coverage listed under subsection (c).
2:08:49 PM
MS. STIDOLPH deferred to Mr. Gebhardt.
MR. GEBHARDT offered his understanding that Representative
Claman wanted to know why the level of coverage for period one
would be lower than in periods two and three.
REPRESENTATIVE CLAMAN clarified that he wanted to know whether
subsection (c) would address the coverage requirements for both
phases two and three.
MR. GEBHARDT answered that both periods two and three have a $1
million commercial coverage policy.
REPRESENTATIVE CLAMAN opined that the coverage limits of $50,000
and $100,000 are woefully inadequate. He shared his concern
that HB 132 would essentially put the state in the middle of a
private relationship between a driver and a company.
2:11:03 PM
MR. GEBHARDT inferred that the differences between periods one
and two have already been established. He alluded that period
one presents a unique situation where the driver could be doing
any number of things, such as driving to the store or sitting in
the living room at home waiting for a request. He explained
that the lower coverage for period one is mainly because there
is such a wide array of possible scenarios for drivers under the
first phase. He noted that it is not uncommon to see drivers
logged on to multiple platforms for multiple TNCs at one time.
He indicated that there are a number of other TNC providers that
could enter the Alaskan market once it is legal to do so. He
reiterated that the higher million-dollar coverage would not
make sense to implement in phase one when drivers could be just
sitting at home or driving around doing personal business. He
concluded that based on actuarial analysis, the risk is much
lower for drivers in phase one because they move less and could
be parked somewhere waiting for a ride or sitting at home.
2:13:03 PM
REPRESENTATIVE CLAMAN noted that if someone is in the living
room, not driving a car, it is really a nonissue; however, if a
driver is in a car, logged on to three TNC networks, that makes
a case for why higher, not lower coverage limits, should be
imposed. He said that if the actuarial data shows the risk is
lower for drivers in phase one, then that is even more reason
the first phase should have higher limits. He opined that the
commercial company should not be getting off on $50,000-$100,000
coverage, because it is not appropriate for a commercial
enterprise.
CO-CHAIR STUTES asked Mr. Gebhardt whether the $50,000-$100,000
limit in phase one is provided by the TNC or if it is a
requirement for the driver to carry that amount of coverage on
his/her personal insurance.
2:14:39 PM
MR. GEBHARDT explained that would be part of the insurance
policy that Uber would provide. He added that the only
requirement for the driver is to have proof of insurance on the
vehicle.
REPRESENTATIVE SULLIVAN-LEONARD asked whether the insurance
structure mirrors that of what the taxi cab industry does.
MR. GEBHARDT said that he does not feel qualified to speak to
the insurance structure for the taxi cab industry. He pointed
out that the level of coverage in period one exceeds the Alaska
state minimums for someone just utilizing a vehicle around the
streets in Alaska which Uber feels is most similar to the type
of activity in which drivers in phase one would be
participating.
2:16:11 PM
REPRESENTATIVE CLAMAN offered his understanding that Section 7
of HB 132 would take municipalities out of the business of any
regulation relating to TNCs.
MS. STIDOLPH answered that is correct.
REPRESENTATIVE CLAMAN inquired whether it is the pattern in
other states for municipalities to be able to regulate the taxi
cab industry but not regulate TNCs.
MS. STIDOLPH responded that in 39 other states that is the case.
CO-CHAIR WOOL reiterated that all TNC drivers must have their
own insurance and some insurance companies offer additional
products to increase the amount of coverage specifically for TNC
drivers. He added that a driver's normal car insurance would
still be valid.
REPRESENTATIVE CLAMAN asked whether the driver's auto insurance
and the TNC's insurance would "stack" and, if so, which would
come first.
CO-CHAIR WOOL offered his understanding that it would depend on
the phase in which the driver was currently engaged.
MS. STIDOLPH read Section 5, subsection (e), which read as
follows:
Coverage under an automobile insurance policy
maintained by the transportation network company may
not be dependent on a personal automobile insurer
first denying a claim nor shall a personal automobile
insurance policy be required first to deny a claim.
MS. STIDOLPH stated that a driver would not have to go through
his/her personal insurance first.
2:19:02 PM
RENA DAVIS, Public Policy Manager, Lyft, Inc., stated that
Lyft's ride sharing app technology connects people with
efficient, friendly, and safe rides. She said to use Lyft is as
simple as downloading and registering an app onto a smartphone
then requesting a ride. She added that it all happens with just
the tap of a button. She opined that the innovative model of
transportation would enhance mobility for both Alaskans and
tourists. She said that Lyft would act as a compliment to the
already existing transportation networks in Alaska. She stated
that Lyft is all about giving individuals choices.
MS. DAVIS shared that Lyft's number one priority is user safety.
She said that before drivers can accept rides on the Lyft
platform, they must undergo a mandatory national background
check that is conducted by a third party nationally accredited
background check provider, Sterling Talent Solutions. She added
that Lyft drivers must also undergo a driving record check and
the vehicle must receive an in-person, 19-point vehicle
inspection. She pointed out what really distinguishes Lyft is
how it utilizes technology to provide consumers with
transparency and accountability features in addition to the
required background checks. She noted that every Lyft ride is
tracked with global positioning system (GPS). She said that
within the Lyft app users can see a picture and previous user
ratings of the driver, as well as the license plate and make and
model of the vehicle coming to pick up the rider. Ms. Davis
described that drivers also receive a photo and the name of the
passenger. She told the committee that the app even allows
users to send real-time route information to friends and family.
She explained that payment through the Lyft app is entirely
digital and there are never any cash exchanges, which she opined
enhances user and driver security. She said that every
passenger and driver can rate each other on a five-star system,
immediately after service. She noted that Lyft is the first TNC
to offer both background checks and the real-time tracker.
MS. DAVIS said that Lyft is more than just a ride sharing app,
it provides a unique and flexible economic opportunity to anyone
who owns a vehicle. She listed off some of the types of drivers
Lyft typically has: single moms, retirees, students, and
families simply trying to make ends meet. She said that in 2016
alone drivers on the Lyft platform had earned over $1.5 billion
and over $100 million in tips. She claimed that access to Lyft
benefits the economic economy overall. To back that claim up,
she said that Lyft has contributed to an increase in annual
spending of over $750 million as users visit new restaurants,
neighborhoods, and bars.
2:23:00 PM
REPRESENTATIVE KOPP directed attention to proposed statutory
language, Sec. 28.23.060, on page 7, [lines 23-27], of HB 132,
which he offered his understanding would require that the
company provide a disclosure to the drivers before the drivers
would be allowed to accept a request for prearranged rides. He
noted that paragraph (2), on page 8, [lines 1-5], discusses a
disclosure that the policy might not provide coverage while the
driver is engaged in a prearranged ride. He asked under what
types of circumstances a driver for a TNC could be operating
without coverage.
2:25:22 PM
MS. DAVIS said that Lyft's default insurance ensures that there
is coverage the entire time the Lyft app has been engaged. She
shared that she does not currently know of any instances where
drivers were denied coverage while engaging in a prearranged
ride.
REPRESENTATIVE KOPP followed up that he is uncertain why the
aforementioned paragraph is included in HB 132. He surmised
that it sounds like, from an operational perspective, there is
always coverage from the company's insurance even if there was
something wrong with the driver's policy.
MS. DAVIS answered that is correct. She added that in period
one Lyft's coverage is the primary insurance.
2:26:31 PM
REPRESENTATIVE DRUMMOND shared her concerns regarding the
inadequacy of the period one policy. She shared her
appreciation for the requirements for liability coverage for
property damage and injury. She said that her main concern is
for the 20 percent of Lyft drivers who are full-time drivers.
She said that for the full-time drivers whose only source of
income is driving, an injury can be devastating since they would
not have worker's compensation coverage. She recognized that a
driver might be covered for his/her injuries and/or loss of
vehicle but wanted to know how Lyft might compensate that driver
if he/she is unable to return to work within a reasonable amount
of time.
MS. DAVIS explained that in following the basic framework that
has already been established in 38 other states for TNC
legislation, TNC drivers are considered independent contractors
and, as such, would not be subject to worker's compensation.
REPRESENTATIVE CLAMAN, in follow up to Representative Kopp's
question asking about paragraph (2), at the top of page 8, in HB
132, said that he is interested in paragraph (3), which
addresses when a driver's vehicle has a lien on it. He noted
the portion that discussed a TNC driver might be in violation of
a lien contract if using the vehicle for hired transportation
services without physical damage coverage. He asked whether
Uber and Lyft were in the business of not providing physical
damage coverage to the vehicle of their drivers.
MS. DAVIS explained that Lyft provides coverage in period one
that does not include the vehicle. In looking at the larger
picture, she said Lyft does provide coverage from beginning to
end. She pointed out that once TNCs get into a market the
insurance question works itself out through the industry
offering broader coverage options for TNC drivers.
REPRESENTATIVE CLAMAN provided his understanding that if Lyft
drivers are not satisfied with the amount of coverage provided
by Lyft, Lyft's answer is for the driver to go out and purchase
additional private insurance through any number of insurance
companies.
MS. DAVIS opined that Lyft does not leave its drivers out in the
cold and it does provide some level of coverage during all three
phases. She defended the variation of coverage among phases
given that a driver could be on the way to the store in the
course of his/her regular life. She surmised that the enhanced
insurance coverage could be inappropriate at times.
2:31:05 PM
CO-CHAIR STUTES asked Mr. Gebhardt whether Uber had the same
qualifications Ms. Davis previously stated are in place for Lyft
drivers, such as a background check.
MR. GEBHARDT explained that Uber's background checks use a
driver's social security number to check the past seven years
for major criminal offences and major traffic issues at the
national, state, and local levels. He added that the background
checks also look at the national sex offender registry and if
any red flags are raised the driver would not be allowed to join
the platform.
2:32:15 PM
REPRESENTATIVE KOPP, in follow up to Representative Claman's
previous comment regarding page 8, paragraph (3), shared his
interpretation that the language was just warning a driver that
then he/she didn't have personal property damage coverage, the
driver could lose the car to the lien holder. He opined that
the bill doesn't appear to be encouraging to that behavior. He
said that HB 132 might actually protect people who are
participating in TNCs.
2:33:25 PM
CO-CHAIR WOOL, regarding the definition of "prearranged",
provided a scenario where a rider gets a driver's number and the
two make a side cash deal for a pick-up at a later time. He
offered his belief that cabs often do those sorts of side deals.
He asked Ms. Davis what Lyft's policy is in similar
circumstances.
2:34:08 PM
MS. DAVIS declared that Lyft strongly discourages those types of
transactions and that a driver would be in direct violation of
the terms of service. She concluded that if a driver were found
to be guilty of conducting off-app rides, he/she would be off-
boarded from the platform.
CO-CHAIR WOOL asked Ms. Davis what her experience has been with
taxi cab companies once TNCs come into a community.
MS. DAVIS reported that Lyft has actually seen that in some
markets new cab companies have opened up shop right along with
the introduction of TNCs. She noted that in those cases all of
the companies had profitable years. She added that the paradigm
is shifting about how people think about transportation. She
added that behaviors regarding transportation are changing as
well, such as leaving cars at home more. She concluded that
there is a shift to coalesce around a multimodal transportation
way of getting from point A to point B.
CO-CHAIR WOOL asked Mr. Ricker what the minimum coverage would
be that he would have to carry just as a private citizen to
drive in the state of Alaska.
2:36:11 PM
MICHAEL RICKER, Actuary P/C, Division of Insurance, Department
of Commerce, Community & Economic Development (DCCED), answered
that minimum requirements for insurance coverage in the state of
Alaska are $50,000-$100,000 for bodily injury and $25,000 for
property damage.
CO-CHAIR WOOL offered his understanding that TNC drivers would
have the same level of coverage in phase one as any driver in
the state of Alaska would be required to carry while driving.
MR. RICKER said that is correct. He noted that there are other
coverage minimums for commercial drivers. He shared that there
may be some concern that a personal policy would exclude period
one.
2:38:48 PM
CO-CHAIR WOOL offered his understanding that a TNC driver who
wanted more coverage than what was provided by the TNC could go
beyond the minimum and purchase a package of his/her own.
MR. RICKER, based on what has been said in this hearing,
concluded that would be the case. He pointed out that Alaska
has not seen any of those options yet, because the options are
not even on the market yet in Alaska.
2:39:40 PM
REPRESENTATIVE KOPP, in response to Representative Wool's
comment, offered his understanding that insurance requirements
are resolved a couple different ways. He surmised that a driver
would not be allowed to drive for a TNC unless his/her personal
policy recognized that he/she was driving people for hire. He
offered his understanding that the second a driver accepts a
ride is when the million-dollar coverage would begin.
MS. DAVIS said that Lyft does provide $1 million coverage for
both periods one and two.
REPRESENTATIVE KOPP restated his question asking whether or not
it is Lyft's policy to not accept drivers unless their personal
policy recognizes that they would be driving for a TNC.
MS. DAVIS offered her interpretation of the section Mr. Kopp is
referencing as saying that a TNC driver or the TNC, on behalf of
the driver, shall maintain insurance that recognizes the
insurance is for the TNC driver. She pointed out that Lyft
offers coverage in all three phases, just at varying coverage
amounts.
2:42:12 PM
REPRESENTATIVE DRUMMOND asked who would monitor the TNC drivers
since the entire service is provided through an online service.
MS. DAVIS offered her understanding Representative Drummond
meant in terms of how drivers would be conducting rides.
REPRESENTATIVE DRUMMOND confirmed that is correct.
MS. DAVIS said that Lyft uses a review system for both riders
and drivers. She noted that it is compulsory to rate the driver
in order to receive the next pick up service. She added that
the review process can automatically trigger any sort of trust
and/or safety investigation. She said the review process is
also used to provide the passengers with the drivers' star
ratings. She opined that the GPS monitoring technology is one
of the greatest monitors for a vehicle.
REPRESENTATIVE DRUMMOND inquired how Lyft guarantees that the
rider rates the driver.
MS. DAVIS said that before a rider would be able to order
another ride, he/she would have to hit a star rating for the
previous driver.
REPRESENTATIVE DRUMMOND offered her understanding that finishing
the transaction includes the star rating.
MS. DAVIS confirmed that is accurate. She added that riders
also have the option to leave a comment and/or a tip.
CO-CHAIR STUTES announced that HB 132 would be held over.
2:44:40 PM
ADJOURNMENT
There being no further business before the committee, the House
Transportation Standing Committee meeting was adjourned at 2:44
p.m.