SB 35-DELIVERY NETWORK COMPANIES  3:54:46 PM CHAIR KAWASAKI announced the consideration of SENATE BILL NO. 35 "An Act relating to transportation network and delivery network companies." 3:55:16 PM SENATOR BJORKMAN speaking as sponsor of SB 35 introduced the legislation: [Original punctuation provided.] SB 35 amends statutes related to workers compensation, aligning individuals who provide delivery services through delivery network companies with individuals who provide services through Transportation Network Companies. The legislation will define these workers as independent contractors, provided they meet statutory requirements. 3:55:48 PM SENATOR BJORKMAN continued with the introduction of SB 35: Currently, delivery network companies are not defined in statute, which has led to confusion and litigation across the country, threatening these services that customers value and depend on. People have built a dependence on Digital Network Companies, for food and other items. DNC's can deliver prescriptions, groceries, household supplies and even pick up prescriptions from a customer's home and get it filled at a pharmacy. Drivers will often swap between passenger transportation and goods delivery and sometimes are even logged onto multiple apps at once, depending on the demand of customers. Roughly 90 percent of drivers work less than 10 hours per week. These drivers usually provide delivery services to supplement their income, so they can work their full-time job, or go to school during the day, et cetera. The vast majority of door dashers prefer to remain working as independent contractors. Thus, creating a need for a path forward that requires drivers to have the ability to work as much or as little as they want, and whenever they want. 3:57:15 PM SAVAYA BIEBER, Staff, Senator Jesse Bjorkman, Alaska State Legislature, Juneau, Alaska, provided the sectional analysis for SB 35: [Original punctuation provided.] SB 35 Delivery Network Companies  Version A Sectional Analysis    Section 1: Amends AS 23.30.230(a) by adding a delivery network company courier that provides delivery services or is logged onto the digital network of a delivery network company under AS 28.23.080 to the list of individuals who are not covered by the Alaska Workers' Compensation Act. Section 2: Amends AS 28.23.080(a) to establish that delivery network companies are not an employer of transportation network drivers or delivery network couriers under AS 23.10.699, AS 23.20.520, or AS 23.30.395. It further clarifies that an independent contractor for all purposes is not an employee of the company if the company does not propose specific working hours, does not impose restrictions on the ability of the driver to use the digital network of other companies, does not restrict a driver from engaging in any other occupation, or if the company enters into a written agreement with the driver or courier stating that the driver is an independent contractor for the company. Section 3: Amends AS 28.23.180(1) by adding to the definition of "digital network" to include use by delivery network companies to facilitate offers for delivery services. Section 4: Adds definitions to AS 28.23.180, to define "company", "delivery network company", "delivery network company courier" or "courier", "delivery services", and "offer". 3:58:59 PM SENATOR WIELECHOWSKI asked if there is insurance coverage for a person driving a car used for delivery services. 3:59:11 PM MS. BIEBER answered she would have to get back to him with an answer. 3:59:24 PM SENATOR WIELECHOWSKI stated that delivery drivers are exempt from workers' compensation in Alaska if involved in an accident but when the driver gets sick or gets a disease from a passenger that they drove in their car, the driver may qualify for workers' compensation. He noted in Section 4, line 7, [AS 28.23.180] a company is defined as a transportation network company or a delivery network company and asked if UPS, FedEx, or the United States Postal Service be swept into that definition. 4:00:17 PM SENATOR BJORKMAN answered that his office can check with the Department of Labor and the Division of Insurance. 4:00:35 PM SENATOR YUNDT asked if Senator Bjorkman knows how many Alaskan customers Uber Eats, or similar delivery companies, serve on a daily or weekly basis. 4:00:51 PM SENATOR BJORKMAN answered that he doesn't have an exact number, but Uber Eats has about 16,000 thousand customers in Alaska and DoorDash has about 14,000 thousand customers. 4:01:19 PM SENATOR YUNDT asked if Senator Bjorkman's office knows of any states where the delivery drivers are considered employees. 4:01:35 PM SENATOR BJORKMAN answered that he is not aware of any states that consider delivery drivers to be employees. 4:01:43 PM MS. BIEBER added that none of the 50 states consider delivery drivers as employees. 4:01:54 PM SENATOR YUNDT asked if Senator Bjorkman has asked delivery drivers whether they would continue working for the delivery network companies if the drivers were classified as employees. 4:02:17 PM SENATOR BJORKMAN answered that the feedback from drivers indicated being classified as employees would not meet their expectations regarding the flexibility and freedom they currently experience as self-employed drivers. 4:03:02 PM CHAIR KAWASAKI announced invited testimony and opened public testimony on SB 35. 4:03:22 PM JOHN FINLEY, Public Policy, Uber Eats, San Francisco, California, testified by invitation on SB 35 and stated that SB 35 updates current law to affirm that delivery drivers have the same status as transportation network drivers. Many people use both Uber Eats and Uber rides, and this legislation ensures the drivers are treated the same under Alaska law. SB 35 protects worker independence and provides consistency. Flexibility is the top reason drivers choose platforms like Uber; the drivers set their own hours and can work across different delivery apps. He said in Alaska, the lack of clear law creates legal uncertainty, which may affect the services many residents and businesses rely on. He noted that since launching in Anchorage in 2020, Uber Eats has boosted local economic growth, empowered small businesses, and made essential items more accessible. Uber Eats offers more than just food; you can order groceries, prescriptions, and even use government food benefits for delivery. Uber Eats help small businesses grow without the cost of running their own delivery services. According to the latest report, 85 percent of restaurants said they couldn't offer delivery without Uber Eats. This helps local shops compete and stay open, especially during economic shifts. Customers can order from local favorites just as easily as big chains. Uber Eats believes delivery platforms strengthen local economies. 4:07:06 PM CHAIR KAWASAKI asked if all states follow Alaska's Uber Eats model or is there a model that considers a driver an employee. 4:07:18 PM MR. FINLEY answered that in the United States delivery drivers are all considered independent contractors and not employees. He stated that in some states there are statutes in place that give drivers certain benefits, Uber Eats calls this an independent contractor plus contract. 4:08:28 PM CHAIR KAWASAKI asked what happens when a driver gets injured on the job. 4:08:48 PM MR. FINLEY said he will need to verify occupational hazard insurance information, but Uber Eats provides a million dollars in liability coverage when a driver is in an accident. 4:09:44 PM PATRICK FITZGERALD, Political Coordinator, Teamsters Local 959, Anchorage, Alaska, testified on SB 35 and stated that this legislation would exempt delivery network companies like DoorDash and Amazon Eats from providing workers' compensation, aligning them with transportation companies like Uber and Lyft. SB 35 reclassifies these workers as independent contractors, responsible for their own insurance, equipment, and now workers' compensation. Teamsters Local 959 opposes this because these workers generate profit for the companies, which hold no liability. Companies like DoorDash and Amazon Eats have steadily shifted responsibilities away from themselves while earning billions. He said these contractors, expected to make around $58,000 a year, also cover fuel, maintenance, and other costs, now adding workers' compensation is unfair, especially given Alaska's risky road conditions. SB 35 gives global companies another way to avoid responsibility for the people who power their business. Workers' compensation is a basic standard all large companies should meet. He said while his company appreciates Senator Bjorkman's efforts to create consistency, its his belief that these companies should provide workers' compensation for their workforce. 4:11:50 PM CHAIR KAWASAKI referenced the definition of a delivery network company courier in Section 4 [AS 28.23.180] and asked if a FedEx employees might be considered a courier. 4:12:18 PM MR. FITZGERALD replied that Teamsters Local 959 represents UPS not FedEx. He said UPS drivers are considered employees and therefore are unaffected by SB 35. 4:12:54 PM JESSICA LYMAN, Government Affairs, Western U.S., Instacart, San Francisco, California, testified in support of SB 35. She paraphrased the following written testimony: [Original punctuation provided.] On behalf of Instacart, I am writing to thank you for introducing SB 35 and express our support for the legislation, which would preserve access to the independence and flexibility that shoppers on the Instacart platform and other app-based delivery workers consistently say they want and need and that rideshare drivers are already provided within the State of Alaska. Instacart is the leading grocery technology company in North America, and we are proud to offer access to flexible earning opportunities for the more than 1,600 Alaskans. Shoppers the individuals who pick, pack, and deliver orders are often caretakers, parents, students, or retirees seeking alternatives to traditional employment or ways to supplement other income. In fact, over 80 percent of shoppers say they choose to shop on Instacart because of the independence it provides. Nationally, the vast majority of people who earn through our platform including in Alaska shop less than 10 hours a week on average. They have the freedom to choose when, where, and for how long they work without any set schedule, minimum commitment, or obligation. 4:14:17 PM MS. LYMAN continued with her testimony of SB 35: In Alaska, Instacart partners with more than 25 retail banners in more than 130 stores, with almost half of those locations accepting EBT SNAP. By supporting these retailers, Instacart has helped add over 100 brick-and-mortar grocery jobs from cashiers to store managers across Alaska and approximately $5.1 million in additional revenue for Alaska's grocers2. Moreover, Instacart is happy to serve tens of thousands across the Frontier state. Senate Bill 35 meets the needs of a modern and independent workforce by clarifying that individuals delivering essential goods on app-based platforms are properly classified as independent contractors, provided they meet the same specific criteria applied to rideshare drivers. This workforce enjoys unprecedented flexibility and many may choose to operate on multiple platforms across delivery and rideshare. This clarity will preserve parity for these workers whether they are driving on a rideshare platform or delivering food, prescriptions or other essential goods and put an end to needless uncertainty, which can undermine the flexibility and freedom that shoppers want and deserve. Thank you again for introducing Senate Bill 35. By doing so, we can ensure a fair and equitable environment for the growing app-based workforce across Alaska. We urge the Legislature to pass this bill. 4:15:38 PM CHAIR KAWASAKI asked what Instacart does if a driver(shopper) claims an injury, given that drivers do not qualify for workers' compensation. 4:15:55 PM MS. LYMAN answered that Instacart provides occupation accidental insurance that will cover a shopper if they are injured while shopping for Instacart. 4:16:29 PM KARI NORE, Director, External Affairs, Alaska Chamber of Commerce, Anchorage, Alaska, testified in support of SB 35 and read the following testimony: [Original punctuation provided.] The Alaska Chamber (the Chamber) writes in support of Senate Bill 35, an act relating to transportation network and delivery network companies. The Alaska Chamber is the state's largest statewide business advocacy organization. Our mission is to promote a healthy business environment in Alaska. The Chamber has more than 700 members and represents businesses of all sizes and industries from across the state, representing 58,000 Alaskan workers and $4.6 billion in wages. Delivery network companies provide convenient and affordable delivery of goods to Alaskans. They also provide economic opportunity to people who can use this avenue to garner additional income. It is estimated that one delivery network company operating in Alaska has 14,500 Alaskans working on their platform and 89 percent of those Alaskans work less than 10 hours per week. This highlights how delivery network companies provide opportunities for Alaskans to make a supplemental income on their terms. SB 35 would establish standards that reflect the reality of app-based work -- the same standards that the state already uses for rideshare drivers -- and provide delivery network companies and delivery drivers in Alaska with greater regulatory certainty. Furthermore, this would ensure Alaska stays in line with developments in other states where marketplace platform workers across all platforms are treated uniformly. Businesses need consistency in the laws and regulations governing them to thrive in the economy. SB 35 is a free enterprise and good-for-business bill, and we encourage swift passage. 4:18:20 PM CHAIR KAWASAKI stated that SB 35 would extend the list of persons who are not covered by the workers compensation law. He said there are 13 different job classes that aren't covered by workers compensation law, food delivery services being one of them. He asked why the Chamber of Commerce is supportive of SB 35 when typically it wants fairness for everyone and SB 35 wouldn't give drivers workers compensation. 4:19:12 PM MS. NORE responded that she will have to get back to the committee with an answer. 4:19:25 PM CHAIR KAWASAKI Senator Gray-Jackson joined the meeting. 4:19:39 PM ANNA POWELL, Senior Manager, Government Relations, Door Dash, Seattle, Washington, testified in support of SB 35 and read the following testimony: [Original punctuation provided.] We are a technology company that empowers the local economy by connecting consumers with their favorite local businesses. In this state alone, we partner with more than 700 merchants and more than 14,000 couriers or, as we call them, "Dashers" who chose to earn supplemental income by delivering food, groceries, and other goods throughout their communities. DoorDash stands with the Dasher community who overwhelmingly prefer to remain independent contractors and offers the following comments in support of SB 35. Dashers and the Importance of Independence and  Flexibility  Alaska Dashers value the independence and flexibility that dashing provides. A Dasher never needs to commit to a schedule to be online, is free to decline any offer for work they are sent, and can leave the platform for weeks or months at a time and come back whenever a new need arises. 4:20:49 PM MS. POWELL continued with her testimony: Time and time again, Dashers tell us that the top motivation for using platforms like DoorDash is the ability to create their own schedule and work as much or as little as they want. Why? Because most Dashers do relatively little work on the platform: in 2023, on average, Dashers in Alaska only spent five hours per week on delivery, and almost 90% delivered less than 10 hours per week. The vast majority have other primary sources of income or responsibilities and only use the platform for supplemental work. In a survey last year, 82% of Dasher respondents say they have a full-or part-time job, are self-employed, students, stay-at-home caregivers or retired. SB 35 Protects App-Based Delivery Worker Independence  The flexibility and independence that Dashers highly value is incompatible with traditional employment. That's why in a survey last year, more than 90% of Dasher respondents said they preferred to remain independent contractors. SB 35 would protect the independence of Dashers and other app-based delivery workers. Many existing worker classification standards were not created with app- based work and workers in mind. SB 35 would establish a classification test for app-based delivery workers that recognizes the unique nature of this work. This standard is already used in Alaska for rideshare drivers and is similar to standards for app-based workers that have been adopted in numerous states including Arizona, California, Florida, Indiana, Iowa, Kentucky, Tennessee, and Utah. DoorDash strongly supports SB 35 that would protect the flexibility this type of work provides to the thousands of Alaskan Dashers who choose it. 4:23:00 PM CHAIR KAWASAKI closed public testimony on SB 35. 4:23:21 PM SENATOR BJORKMAN reiterated that SB 35 aims to treat delivery network companies the same as transportation network companies, allowing people to take on delivery work freely without the added restrictions on being classified as employees. 4:23:53 PM CHAIR KAWASAKI held SB 35 in committee.