Legislature(2017 - 2018)CAPITOL 106

03/17/2017 03:15 PM House LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Recessed to 12:30 pm on Sat. 3/18/17 --
-- Location Change from Barnes 124 --
<Bill Hearing Canceled>
Heard & Held
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
Heard & Held
-- Public Testimony --
<Bill Hearing Rescheduled from 3/15/17>
            HB 132-TRANSPORTATION NETWORK COMPANIES                                                                         
3:42:50 PM                                                                                                                    
CHAIR KITO  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."   [Before                                                               
the committee was CSHB 132, version 30-LS0522\J.]                                                                               
3:43:14 PM                                                                                                                    
REPRESENTATIVE  WOOL  said  that   HB  132  provides  legislative                                                               
structure statewide  for transportation network  companies (TNCs)                                                               
to come to Alaska.                                                                                                              
3:44:09 PM                                                                                                                    
MICHAEL  FARREN,  Research  Fellow,  Project  for  the  Study  of                                                               
American  Capitalism, Mercatus  Center, George  Mason University,                                                               
advised that  his research  on the  ridesharing economy  over the                                                               
past  few years  has focused  on the  idea of  government-granted                                                               
privilege.    He   explained  that  government-granted  privilege                                                               
occurs  when  special  interest   groups  use  cronyism  to  have                                                               
regulations passed for its own  benefit, thereby hurting everyday                                                               
people  by  limiting  their opportunities  for  better  jobs  and                                                               
slowing down economic  growth.  In most cases,  he related, local                                                               
governments are  the best  rule making  authority because  it can                                                               
create   more   nuanced    regulations   and   avoid   unintended                                                               
consequences.    Although  in  this  case,  he  commented,  local                                                               
regulations are more  likely to be captured  by special interests                                                               
or  by the  regulated industries;  therefore, better  regulations                                                               
may come  from the state level.   He noted his  submitted written                                                               
testimony  that provided  his analysis  of  HB 132,  and said  he                                                               
would  discuss  the  preemption   of  local  municipalities  from                                                               
creating  its own  TNC regulations,  and the  preemption for  all                                                               
"for-hire  transportation services"  regulations.   Michigan,  he                                                               
explained,  has  already  taken this  approach  with  legislation                                                               
passed  last   December,  and  both  Texas   and  California  are                                                               
currently   considering  creating   their   own  statewide   taxi                                                               
regulations, which is  something Pennsylvania has had  for a long                                                               
time.  He said he is in favor  of this type of preemption for the                                                               
following three  reasons: transportation  services, such  as taxi                                                               
cabs, often  cross municipal boundaries  and it makes  sense that                                                               
the  state  regulates; there  is  an  extremely long  and  sorted                                                               
history  of  taxi cab  regulations  captured  by local  taxi  cab                                                               
special  interests;  and  preemption essentially  absolves  local                                                               
policy  makers  from  dealing with  the  problem  wherein  better                                                               
sustainable solutions can actually be created.                                                                                  
MR.  FARREN noted,  in  addressing the  first  point, that  state                                                               
level regulations make sense  for transportation services because                                                               
they  cross municipal  boundaries.   He  cautioned  the if  every                                                               
municipality in  a county [or  borough] created its own  taxi cab                                                               
regulations, the  taxi cab  driver would  have to  have literally                                                               
dozens  of  different local  licenses  just  to provide  service.                                                               
This  approach  can create  miniature  taxi  cab "thief-doms"  in                                                               
every town  because a city's  regulations can create  barriers to                                                               
entry, wherein  the few number  of local  firms end up  with some                                                               
degree  of monopoly  power resulting  in  reduced service,  lower                                                               
quality service,  higher prices, and fewer  job opportunities, he                                                               
3:48:14 PM                                                                                                                    
MR. FARREN turned to the second  point and advised that it builds                                                               
off of the first point, in  that local taxi cab firms often wield                                                               
excessive influence  and capture  the regulations,  twisting them                                                               
to  provide  protection  from  outside  competition  rather  than                                                               
serving the  public interest.   Preemption, he said, not  only of                                                               
the  TNC regulations  but  also for  taxi  cabs, limousines,  and                                                               
shuttles, is  a good way  to solve the  problem.  He  referred to                                                               
the  table located  at the  back  of his  written testimony  that                                                               
surveys some  of the  taxi cab regulations  in Alaska,  and noted                                                               
that  [Anchorage],  Juneau, and  Kodiak  really  do restrict  new                                                               
entrepreneurs   from   competing  with   established   companies.                                                               
Fairbanks and Juneau are approximately  the same size and because                                                               
Fairbanks has relatively mild regulations  compared to Juneau, it                                                               
offers  a sense  of the  impact anti-competitive  regulations can                                                               
have on  the supply  of transportation services.   In  this case,                                                               
Fairbanks has over three times the  number of taxi cab permits as                                                               
Juneau, about  226 to 71 permits.   Looking at this  another way,                                                               
he commented,  Anchorage is approximately  ten times the  size of                                                               
Fairbanks, and yet, Fairbanks has  more taxi cabs than Anchorage.                                                               
Actually, he  explained, applying the taxi  cab driver population                                                               
ratio in Fairbanks to Anchorage,  Anchorage would have over 2,000                                                               
taxi cab  drivers rather than the  188 taxi cabs it  actually has                                                               
due to  the existing medallion.   This  is a serious  problem for                                                               
Anchorage, he  warned, because  it means  people who  really need                                                               
service  are   not  receiving  service,   such  as   people  with                                                               
disabilities  receiving   accessible  taxi  cab  services.     He                                                               
reminded  the committee  that last  December, the  Anchorage City                                                               
Council, after  great difficulty  and years of  struggle, finally                                                               
passed a measure  allowing for a mild expansion in  the number of                                                               
taxi  cab  medallions,  and that  expansion  included  wheelchair                                                               
accessible taxi  cabs.   Except, he expressed,  due to  the local                                                               
taxi cab special interests, those  taxi cab interests have put on                                                               
the April 4th  ballot a measure that would repeal  the change and                                                               
essentially keep their market closed and protected.                                                                             
3:50:53 PM                                                                                                                    
MR. FARREN said that as to  the third point, preemption is a good                                                               
idea when it helps local  leaders deal with these competing local                                                               
interests.   Obviously,  he  said, local  policy  makers want  to                                                               
serve  their constituents  in  the right  manner,  but they  face                                                               
strong  pressure to  maintain  the  status quo  by  the taxi  cab                                                               
special interests.   State preemption allows  these local leaders                                                               
to essentially rail against the  overbearing state authority that                                                               
is  stealing  away  their  power,  but at  the  same  time  being                                                               
secretly pleased  that the problem is  being solved and it  is no                                                               
longer their problem.                                                                                                           
MR.  FARREN stated  that these  are three  reasons Alaska  should                                                               
consider  state  preemption  for  all  "for  hire  transportation                                                               
services."  Preemption is an  idea that Michigan and Pennsylvania                                                               
have  already implemented,  California  and  Texas are  currently                                                               
considering preemption, and Alaska  should consider whether it is                                                               
wise to do the same.                                                                                                            
3:52:14 PM                                                                                                                    
REPRESENTATIVE JOSEPHSON  noted that  his concern about  the bill                                                               
relates  to the  rights of  the  drivers, and  asked whether  Mr.                                                               
Farren was taking  any position.  For example, he  pointed out, a                                                               
couple of months ago the  Federal Trade Commission fined Uber $20                                                               
million for advertising  that its drivers would  make $90,000 per                                                               
year when, in  fact, nothing like that generally  happens, and in                                                               
the end,  there was an  agreement not  to litigate.   He surmised                                                               
that  Mr.   Farren  was   not  saying   that  TNCs   are  perfect                                                               
institutions,  but  rather  he was  merely  saying  "that  states                                                               
should regulate them and cities shouldn't."                                                                                     
MR. FARREN  agreed, and he said  the way that he  would argue for                                                               
it in  terms of regulating TNCs,  the state should be  equally as                                                               
careful in terms  of avoiding the situation  to create government                                                               
granted  privilege  from the  existing  TNCs  because that  is  a                                                               
problem  just as  much as  treating government  granted privilege                                                               
for local taxi cab merchants.   He related that one of the things                                                               
he appreciates  about Alaska's proposed TNC  regulations compared                                                               
to  what  exists in  many  states  throughout the  United  States                                                               
currently,  is that  it has  not enshrined  the current  business                                                               
model of  Uber or Lyft  into the  regulations.  He  remarked that                                                               
the regulations  are relatively  open and  he described  that the                                                               
regulations say,  "this is what  you need  to do, but  they don't                                                               
tell them how to  do it," and that allows for  other TNCs to come                                                               
in and compete.   Therefore, he explained, the state  may up with                                                               
an Alaska  specific TNC  that is  aware of  the special  needs of                                                               
Alaskan citizens better than the TNCs coming in from outside.                                                                   
3:55:23 PM                                                                                                                    
REPRESENTATIVE  SULLIVAN-LEONARD asked  how  it was  that he  was                                                               
invited  to provide  this  type of  research  to this  committee,                                                               
whether he  was paid to provide  the research, or whether  it was                                                               
research he provided for other states.                                                                                          
MR. FARREN  responded that  this is the  topic his  research team                                                               
has been researching for the last  several years, and he has made                                                               
himself available  to policy  makers considering  TNC regulations                                                               
in each  state.   He explained  that this  has grown  through his                                                               
team's work on government-granted privilege  because the taxi cab                                                               
industry and  taxi cab regulations  represent a  literal textbook                                                               
example of  how overbearing  regulations create  situations where                                                               
it is a near monopoly, if not  an exact monopoly.  He pointed out                                                               
that Uber, Lyft,  and sharing economy type firms offer  a new way                                                               
forward,  and described  it  as the  reason  for their  research,                                                               
which is how he came to provide this testimony.                                                                                 
3:56:56 PM                                                                                                                    
REPRESENTATIVE   SULLIVAN-LEONARD  related   that  his   research                                                               
appears to be  a one-sided study when he states  that his goal is                                                               
to communicate  how these government-granted privileges  harm the                                                               
economy of  the very fabric of  society.  She said  it causes her                                                               
pause  and asked  whether  he  has spoken  with  any of  Alaska's                                                               
municipalities and received  feedback not only on  the effects of                                                               
the  TNCs coming  into Alaska,  but how  they operate  and manage                                                               
other rideshare or taxi cab industries in the municipalities.                                                                   
MR.  FARREN  responded  that  he  has a  lot  of  experience  and                                                               
knowledge regarding  what has  happened as  TNCs have  moved into                                                               
communities across  the United  States, as well  as Alaska.   The                                                               
supply of transportation services  skyrocketed because more rides                                                               
were being offered  and the prices were actually  decreasing.  He                                                               
related that that  is exactly what economic  theory would predict                                                               
would happen because  when there is a  closed market, essentially                                                               
a monopolist or a taxi cartel,  when a new competitor arrives and                                                               
offers rides for cheaper than  the regulated prices previously in                                                               
effect,  many more  people purchase  the service  and the  market                                                               
expands.   He advised,  that means  there are  areas of  New York                                                               
City,  Chicago,   and  other  places  that   are  finally  seeing                                                               
transportation   services   offered   wherein   the   supply   of                                                               
transportation   services  had   been  so   restricted  by   city                                                               
regulations with  the concentration  on serving the  airports and                                                               
downtown  areas  with  the low-income  areas  being  left  alone.                                                               
Platform firms such  as Uber, Lyft, and other  TNCs, allow people                                                               
to drive as  the demand exists in communities,  and that probably                                                               
Alaska  and   other  rural   areas  will   see  a   provision  of                                                               
transportation  services  where  none   has  ever  been  provided                                                               
previously, he said.                                                                                                            
3:59:44 PM                                                                                                                    
REPRESENTATIVE  SULLIVAN-LEONARD  reiterated   her  question  and                                                               
asked whether he had spoken  with some of Alaska's municipalities                                                               
for feedback.                                                                                                                   
MR. FARREN answered that he  had not spoken to any municipalities                                                               
in Alaska  on this  particular issue;  however, he  believes that                                                               
the fact he has spoken with  dozens of taxi cab regulators across                                                               
the United States is sufficient.                                                                                                
4:00:23 PM                                                                                                                    
REPRESENTATIVE  BIRCH noted  that  from a  local perspective,  he                                                               
served on the Anchorage Municipal  Assembly for a number of years                                                               
and was  a supporter of  de-regulating the taxi cab  industry and                                                               
addressing some  of the  concerns Mr. Farren  pointed out  in his                                                               
spreadsheet.    From  the standpoint  of  concerns  and  overlap,                                                               
Anchorage  includes  the  communities  of  Eagle  River,  Palmer,                                                               
Wasilla, and  upwards of 40,000  people per day commute  into the                                                               
Anchorage   municipality.      There   is  a   demand   for   the                                                               
transportation component  in one  form or another,  he said.   He                                                               
then referred  to the phrase  "government granted  privilege" and                                                               
commented  that  it  resonates  with  him in  that  there  is  an                                                               
opportunity here  to open the  market and engage  new competitors                                                               
in  the business,  and asked  the downside  of this  approach and                                                               
opening up this opportunity.                                                                                                    
MR.  FARREN replied  that whenever  there is  new innovation,  it                                                               
essentially upends  the "old  order" and it  can be  difficult to                                                               
get  through.   This  requires some  deep  breathing and  saying,                                                               
"We're  not sure  how  we're going  to do  this,  we're not  sure                                                               
exactly what  the future looks  like, but ... we've  weathered it                                                               
in the past  and we will weather  it again."  He  said he guessed                                                               
the sense of  unease of not knowing exactly what  the future will                                                               
be is  probably the biggest  problem and hurdle many  people have                                                               
to overcome.                                                                                                                    
4:03:42 PM                                                                                                                    
REPRESENTATIVE  BIRCH noted  that, obviously  there is  a skilled                                                               
cadre of folks  that have driven in  their respective communities                                                               
in Alaska for  a number of years, and asked  how can such drivers                                                               
be assimilated into a TNC type of framework.                                                                                    
MR.  FARREN commented  that many  taxi cab  drivers have  shifted                                                               
over and  become TNC drivers.   The most  sense for drivers  is a                                                               
mixture  of   street  hailing  taxi  cabs   and  connecting  with                                                               
passengers through  online platform firms with  a better dispatch                                                               
system  than  has  ever  been  provided.    The  regulations,  in                                                               
general, prevent  taxi cab drivers  from becoming TNC  drivers in                                                               
most cities.   Except, he commented, taxi cab  drivers sitting at                                                               
airports, for example,  may have to wait two  hours between rides                                                               
rather than  having a new  ride every one-half hour  because they                                                               
are  matched with  a passenger  more quickly.   The  fact that  a                                                               
person can  be matched with a  taxi cab driver more  easily leads                                                               
more people  to use  this type  of services,  in addition  to the                                                               
prices  falling.    Areas  in  Alaska must  "make  do"  with  the                                                               
resources  available,  and  the   resources  become  better  when                                                               
allowing  for  this  connection   between  customer  and  service                                                               
provider that platform firms offer.                                                                                             
4:06:47 PM                                                                                                                    
REPRESENTATIVE JOSEPHSON asked who funds Mr. Farren's research.                                                                 
MR. FARREN  responded that  the Mercatus  Center is  a non-profit                                                               
research  center at  George Mason  University,  funded through  a                                                               
variety of charitable institutions, and  he said he was unsure of                                                               
the funding.   He explained that there is a  firewall between the                                                               
research side and the donations or  development side so he is not                                                               
certain what entity funds the work.                                                                                             
REPRESENTATIVE  JOSEPHSON surmised  that he  was unaware  whether                                                               
the Koch Brothers fund his work.                                                                                                
MR. FARREN responded  correct, and he reiterated that  there is a                                                               
firewall between the  two and essentially "we  are the equivalent                                                               
of  university professors"  doing  academic research  at an  econ                                                               
program  that  is double  blind  peer  reviewed.   Therefore,  he                                                               
explained, it  is the  highest quality  of academic  research and                                                               
"we created our own" research program.                                                                                          
4:08:19 PM                                                                                                                    
CHAIR KITO opened public testimony on HB 132.                                                                                   
4:08:56 PM                                                                                                                    
HENRY MOORE, Owner, Hank's Cab,  commented that he was puzzled by                                                               
Mr.  Farren's  statements wherein  he  compares  Alaska with  the                                                               
Lower-48 big cities,  and explained that passengers  in Sitka can                                                               
order pre-arranged rides.   He related that  Sitka is competitive                                                               
with  five different  businesses, and  they work  hard for  their                                                               
4:11:04 PM                                                                                                                    
SIGGURD RUTTER  commented that Mr. Farren's  testimony was cutoff                                                               
and he did not  hear whether Mr. Farren was paid  by Uber for his                                                               
testimony.   He  said the  taxi  cab business  is competitive  in                                                               
Sitka with  five taxi cab  providers in  a town of  9,000 people,                                                               
with  no problem  in  crossing municipal  boundaries  due to  its                                                               
isolation.   His concern with this  bill, he related, is  that it                                                               
is based  largely on  "outright untruths  and misrepresentations"                                                               
and  is   misguided  because  the  bill   would  usurp  municipal                                                               
management and  replace it with  a single state system  gained to                                                               
promote interstate ride providers.   In doing so, he stressed, it                                                               
would sacrifice  municipal oversight  regulating taxi  cab fares,                                                               
the screening of taxi cab  drivers, and would eliminate municipal                                                               
taxation,  and  work to  the  detriment  of  public safety.    He                                                               
described the  premise of  this as "an  outright lie"  because it                                                               
asserts that  the typical business  model calls for a  25 percent                                                               
fee  for the  internet provider,  and  "fully 75  percent of  the                                                               
profits will  go to the  driver."  He  pointed out that  there is                                                               
not a business in the world  that receives 100 percent profit, it                                                               
is  approximately  50 percent  of  its  profit  in the  taxi  cab                                                               
business.  Therefore, the internet  provider is trying to grab "a                                                               
full 50  percent of the profits"  and if a taxi  cab operator was                                                               
to work for  a [TNC] and pay  his driver, both he  and his driver                                                               
would  receive "a  quarter share."   Twenty-five  percent of  the                                                               
gross taxi  cab revenue  is money that  should be  "spread around                                                               
this community" such  as fuel, tires, and mechanics,  and he said                                                               
he  spends $20,000  per year  on vehicle  maintenance in  a local                                                               
shop.  He  related that taking 25 percent profit  out and leaving                                                               
the  business with  the bill  will affect  public safety  because                                                               
owners will skimp on the tires and equipment.                                                                                   
4:14:35 PM                                                                                                                    
PATTI  SLATER  advised  that  she  had  the  opportunity  to  use                                                               
ridesharing  services,  such as  Lyft  in  Portland, Oregon,  and                                                               
pointed  out that  the app  allows her  to see  a picture  of the                                                               
driver,  a  description  of  the  car,  license  plate,  and  GPS                                                               
location  which allows  her to  feel  comfortable and  safe.   It                                                               
would be "a wonderful thing" to  offer the citizens of Alaska and                                                               
visitors ridesharing  opportunities as  happens in  cities across                                                               
the  United  States.     Oftentimes,  she  offered,  "people  are                                                               
shocked" that  the services are  not available, and the  State of                                                               
Alaska desperately needs these services.                                                                                        
4:15:52 PM                                                                                                                    
JASON CUSTER,  Chairman, Government Affairs  Committee, Ketchikan                                                               
Chamber  of Commerce,  advised he  was calling  on behalf  of the                                                               
Ketchikan  Chamber  of  Commerce representing  over  200  members                                                               
including  private  businesses,  local  governments,  and  tribal                                                               
entities.  The  Ketchikan Chamber of Commerce  Board of Directors                                                               
voted  to  support  the  passage   of  the  HB  132  as  written,                                                               
specifying free market competition  regulated on the state level,                                                               
and he  commented that none  of the directors voted  against this                                                               
position.     The   Ketchikan   Chamber   of  Commerce   welcomes                                                               
ridesharing  services within  its  community  and believes  these                                                               
businesses   deserve   a   fair,  predictable,   and   consistent                                                               
investment  environment  in Alaska  to  compete  to do  business.                                                               
Ridesharing offers  transportation opportunities, and  it creates                                                               
more  diverse and  flexible employment  options because  Alaska's                                                               
visitors desire  and expect  ridesharing to  be available  in the                                                               
communities in  the same manner  they expect internet  access and                                                               
cell  phone coverage.    He related  that  ridesharing will  help                                                               
support the  economy by keeping Ketchikan  competitive with other                                                               
destinations,  and HB  132 will  help the  community attract  and                                                               
retain  ridesharing  opportunities.   The  Ketchikan  Chamber  of                                                               
Commerce asks that  the committee support the passage  of HB 132,                                                               
he said.                                                                                                                        
4:17:29 PM                                                                                                                    
BEN MULLIGAN,  Deputy Director, Alaska Chamber,  advised that the                                                               
Alaska  Chamber supports  HB 132  because  it provides  necessary                                                               
transportation  options in  areas where  [transportation services                                                               
may not be  available], and it provides competition.   The Alaska                                                               
Chamber  supports a  consistent  set of  rules  across the  state                                                               
because   the    Matanuska-Susitna   Borough    has   overlapping                                                               
jurisdictions, he said.                                                                                                         
4:18:45 PM                                                                                                                    
DAVE O'MALLEY advised that he  is a long-time driver and advocate                                                               
in  the taxi  cab industry,  and in  2015 he  was the  first Uber                                                               
driver during the  six months it was in Anchorage.   He mentioned                                                               
that  he heard  people  complain about  lousy  taxi cab  service,                                                               
dirty  cabs, and  such, yet  Uber customers  continuously praised                                                               
the service.   He said  he hoped for  Uber to stay  in Anchorage,                                                               
but it  did not.   He stated that  people refer to  the Anchorage                                                               
taxi cab system, as a monopoly  and cartel; he describes it as an                                                               
extortion  racket  that  has  stayed  in  business  through  paid                                                               
lobbyists,   (audio   difficulties)   public   relation,   (audio                                                               
difficulties) large  donations, and local politicians.   The taxi                                                               
(indisc.) paying huge  sums to keep competition  out and maintain                                                               
status quo,  which is purely the  increase of the value  of their                                                               
permits along with  the value of (audio difficulties).   He said,                                                               
"We   drivers   want  choice"   and   he   is  convinced   (audio                                                               
difficulties), and he  and most of the taxi cab  drivers he knows                                                               
do  support  HB  132,  and  asks  that  the  committee  pass  the                                                               
4:21:06 PM                                                                                                                    
JOELLE HALL,  Director of Operations,  AFL-CIO, advised  that the                                                               
AFL-CIO  represents  50,000 workers  throughout  the  state in  a                                                               
variety of  industries.   The AFL-CIO opposes  HB 132  because it                                                               
opposes this  classification of workers,  the action in  the bill                                                               
would  exclude   TNC  drivers  from  workers'   compensation  and                                                               
unemployment  insurance  as  a  special class  of  worker.    She                                                               
described this  as a dangerous  precedent because TNC  drivers do                                                               
not meet the standard of  a true independent contractor, and taxi                                                               
cab drivers  are exempt under  the statute because they  took the                                                               
steps  to  set  up  a  business  model  that  complies  with  the                                                               
independent contractor status.   The TNC business  model does not                                                               
comply  with all  of  the standards  required  of an  independent                                                               
contractor because  in order  to meet  the standards,  the driver                                                               
would need to pay all of  the fees associated with insuring their                                                               
vehicles and pay the TNC app  because there are fees for services                                                               
required  for the  TNC drivers  to run  their business;  however,                                                               
that is not  the manner in which  this model works.   In the case                                                               
of TNCs,  TNCs pay  the insurance  when the rider  is in  the car                                                               
(audio difficulties)  up to  the driver so  they can  monitor the                                                               
driver's actions  and collect  payment.   Independent contractors                                                               
are usually responsible  for the cost of  doing business, collect                                                               
all  of  the revenues,  and  pay  their  venders directly.    TNC                                                               
drivers fail to  meet the standard of  an independent contractor,                                                               
she said, and it  is a slippery slope that will  open the door to                                                               
other  industries  looking  to  avoid  workers'  compensation  or                                                               
unemployment insurance.   Additionally,  the AFL-CIO  opposes the                                                               
preemption language in the bill  as each community regulates taxi                                                               
cabs differently,  and since  TNCs are  in direct  competition to                                                               
taxi cabs,  the AFL-CIO believes  that it  is only fair  that the                                                               
communities currently  regulating taxi  cabs deserve  to regulate                                                               
the TNCs.  She described that  it is an issue of fair competition                                                               
wherein  each jurisdiction  would deal  with it  as it  regulates                                                               
this industry.                                                                                                                  
4:23:10 PM                                                                                                                    
REPRESENTATIVE WOOL  related that the audio  difficulties made it                                                               
difficult to hear her testimony,  and asked whether she said taxi                                                               
cab drivers have workers compensation  exemptions and do not have                                                               
sick time, over time, or any type of work compensation.                                                                         
MS. HALL responded  yes, and she opined that this  bill is adding                                                               
TNC drivers  to a list  that also  includes taxi cab  drivers who                                                               
are   exempt   from   workers'  compensation   and   unemployment                                                               
insurance, as are babysitters and jobs of that nature.                                                                          
4:23:51 PM                                                                                                                    
REPRESENTATIVE WOOL surmised that  the AFL-CIO's problem with the                                                               
bill is not that TNC  drivers will not have workers' compensation                                                               
coverage  because   taxi  cab  drivers   do  not   have  workers'                                                               
compensation  coverage, the  problem is  who buys  the insurance.                                                               
With taxi  cabs, car insurance is  paid by the taxi  cab company,                                                               
but  with TNCs  the  individual  drivers pay.    He  said he  was                                                               
unclear about the insurance concern.                                                                                            
MS.  HALL   related  that   her  concern   is  the   opposite  of                                                               
Representative Wool's  statement; as  a taxi cab  business owner,                                                               
insurance  is commercial  insurance 24/7  when driving  for work.                                                               
When driving  for a TNC,  the driver's personal  insurance covers                                                               
the driver  while looking  for a  rider, except  once the  app is                                                               
pressed and  someone is in the  car, the TNC pays  the insurance.                                                               
She  explained that  that is  not how  an independent  contractor                                                               
model works,  that is not in  any other business model,  and that                                                               
would not be legal for an independent contractor.                                                                               
4:25:06 PM                                                                                                                    
REPRESENTATIVE WOOL  said he  slightly disagrees  as to  who pays                                                               
the insurance coverage in period 1  of the TNC, and asked who the                                                               
AFL-CIO  would like  to see  paying for  the insurance  to be  an                                                               
independent contractor.                                                                                                         
MS. HALL  responded that  if the driver  is truly  an independent                                                               
contractor, the driver  should be paying this insurance  as it is                                                               
their  responsibility to  pay the  fees  associated with  running                                                               
their business.                                                                                                                 
4:25:41 PM                                                                                                                    
REPRESENTATIVE  JOSEPHSON asked  whether Ms.  Hall had  commented                                                               
that what  would make  this unique  in an  independent contractor                                                               
situation, is that generally an  independent contractor would, in                                                               
the first instance, receive the fee  from the customer and not in                                                               
the second instance.                                                                                                            
MS. HALL replied  yes, and she said that  normally an independent                                                               
contractor  would receive  a fee  for their  service immediately,                                                               
and  from  that fee  they  would  pay  their vendors,  and  would                                                               
ideally pay for  insurance out of that as a  taxi cab driver pays                                                               
for their insurance.   She explained that a taxi  cab driver pays                                                               
for their  dispatcher, and  essentially the  app the  TNC drivers                                                               
use is a form of dispatch.   In this particular model, the app is                                                               
given to the driver and the app  is then used to collect the fees                                                               
which  is a  different model  of an  independent contractor  than                                                               
currently  exists in  law, and  this  is a  "half thing"  wherein                                                               
these   are  not   full  employees   and   are  not   independent                                                               
contractors.   She pointed  out that this  creates a  middle step                                                               
and  the middle  step is  worrisome because  this business  model                                                               
does   not  comply   with  the   definition  of   an  independent                                                               
4:27:14 PM                                                                                                                    
REPRESENTATIVE JOSEPHSON  related that  he finds the  benefits of                                                               
the new technology intriguing and  where the world is moving, and                                                               
that people  need to be  in that  place in a  competitive market.                                                               
He  offered  that assuming  there  is  enough insurance  for  the                                                               
passenger, his  concern is with  the rights of the  drivers, what                                                               
their benefits  are, their  pay, their retirement  and such.   He                                                               
asked whether she shares that concern.                                                                                          
MS.  HALL  answered  absolutely,  and she  said  the  AFL-CIO  is                                                               
concerned that  this particular form  of worker is  exempted from                                                               
workers' compensation  directly; therefore, it fails  to meet the                                                               
standard of the true independent  contractor.  A true independent                                                               
contractor drive in our environment all  of the time and taxi cab                                                               
drivers and other  drivers meet this qualification.   She related                                                               
that this is  a vital and important part of  the state's economy,                                                               
and the  concern is that a  worker being treated partially  as an                                                               
employee  by  the  industry  they work  for,  and  are  partially                                                               
exempt,  do  not have  complete  control  and  do not  have  true                                                               
dominion.    There are  rules  in  the  test for  an  independent                                                               
contractor  that  this  particular job  classification  does  not                                                               
meet, and the  bill exempts them from the  protections that would                                                               
normally  be required  over  any  other type  of  employee.   She                                                               
advised  that the  middle step  of not  being a  full independent                                                               
contractor and not  an employee is a dangerous  precedent for all                                                               
workers that could come from behind  and try to walk right behind                                                               
TNC drivers and  enter into this particular crack  and lose their                                                               
protections as well.                                                                                                            
4:29:41 PM                                                                                                                    
REPRESENTATIVE BIRCH asked  whether Ms. Hall has used  an Uber or                                                               
MS. HALL responded yes, and she said it was in Chicago.                                                                         
REPRESENTATIVE BIRCH  commented that previous  testimony revealed                                                               
that drivers  want a choice  and that the public  generally finds                                                               
the  service easy  to use  with positive  experiences.   He asked                                                               
whether Ms. Hall had had a positive experience.                                                                                 
MS. HALL  answered absolutely,  and she said  the AFL-CIO  is not                                                               
disputing that people like the  service because there is no doubt                                                               
people enjoy  this service.   The concern  of the AFL-CIO  is the                                                               
creation of a  third class of worker that is  not protected as an                                                               
employee, and  is not  fully an independent  contractor.   In the                                                               
event  TNCs want  to come  to  town, they  should be  one or  the                                                               
other, and they  could probably easily comply with  either one of                                                               
the  scenarios  of  either  employing   their  workers  or  truly                                                               
treating them as independent contractors, she remarked.                                                                         
4:31:19 PM                                                                                                                    
KENNETH  SWAZER, advised  he is  a  member of  the Facebook  page                                                               
"Alaska's  Worst  Drivers"  with  over 31,000  members  who  post                                                               
pictures  of individuals  parking  or driving  unsafely.   It  is                                                               
clear  that   drunk  drivers  are   repeat  offenders,   and  the                                                               
membership believes  in transportation  options wherein  a recent                                                               
survey  of over  one  hundred members  regarding  Uber coming  in                                                               
showed that over 80 percent favored supporting HB 132, he said.                                                                 
4:32:25 PM                                                                                                                    
BRYANT  HAMMOND,  City Clerk,  City  of  Nome, advised  that  his                                                               
office handles  licensing and taxation  for the City of  Nome and                                                               
offered concern regarding the language  in CSHB 132, Sec. 7, page                                                               
11, lines 17-19, which read as follows:                                                                                         
        *Sec. 7. AS 29.10.200 is amended by adding a new                                                                      
     paragraph to read:                                                                                                         
        (66) AS 29.35.148 (regulation of transportation                                                                         
     network companies or drivers.)                                                                                             
MR. HAMMOND  offered concern that  Sec. 7 reserves  regulation to                                                               
the State of Alaska in that  municipalities should be able to set                                                               
standards and address issues on a  local level, as with taxi cabs                                                               
and motor  buses currently.   In response  to Mr.  Farren's three                                                               
points, he  said the first point  does not apply to  the isolated                                                               
City  of Nome  as  it is  a 13-mile  square  municipality in  the                                                               
unorganized borough.   As to Mr. Farren's second  point, Nome has                                                               
two  local  taxi  cab  companies  and a  total  of  13  taxi  cab                                                               
licenses, and  he commented that  while Mr. Farren's  third point                                                               
was somewhat appealing  in that the local level  could wash their                                                               
hands  of  it,   he  was  unsure  that  moving   control  of  the                                                               
regulations would  be in  the best  interest of  Nome's citizens.                                                               
He  asked that  the committee  amend  the language  to allow  for                                                               
local control regulation  and taxation and that  he would support                                                               
of that amendment.                                                                                                              
4:34:01 PM                                                                                                                    
STEPHANIE SPRING, advised she is  a registered voter and resident                                                               
of  Anchorage and  offered support  for  HB 132  because it  will                                                               
increase  the  quantity  of  drivers  and  passengers  throughout                                                               
Alaska,  create job  opportunities,  provide better  flexibility,                                                               
provide support  for taxi cabs  in different  locations, increase                                                               
competition in  the area of  ridesharing, and  increase standards                                                               
within Alaska.                                                                                                                  
4:35:07 PM                                                                                                                    
GENESIS ALLEN-LOCKHART  described that her  first-time experience                                                               
in ridesharing  was with Lyft  in Las  Vegas, Nevada, and  it was                                                               
exceptional because she  was able to locate and  call her driver,                                                               
see  the ratings,  and the  car's  GPS on  a map  which was  nice                                                               
because she  was a tourist.   The tour season is  approaching and                                                               
it  would  benefit   the  citizens  and  tourists   to  have  the                                                               
flexibility of  using another means of  transportation, she said.                                                               
Ms. Allen-Lockhart  commented that she  has used yellow  cabs and                                                               
Lyft was much  cheaper than a cab, plus Lyft  offers a $50 credit                                                               
to try  out the program rather  than using a person's  own money.                                                               
The legislation would allow people to  work when they are able to                                                               
and the legislation has many good benefits, she said.                                                                           
4:38:02 PM                                                                                                                    
DAVID  PRUHS, Council  Member,  Fairbanks  City Council,  advised                                                               
that the City of Fairbanks is  in favor of Uber, but requests the                                                               
striking CSHB 132, Sec. 8, [pages  11-12 lines 20-31, and line 1,                                                               
respectively], and  he thanked Mr. Farren  for equating Fairbanks                                                               
as basically the standard for taxi  cab operations in Alaska.  He                                                               
said he  would read the  Fairbanks standard [as described  in the                                                               
Code of Ordinances,  Section 86-77] based upon  the protection of                                                               
riders and  those who are  able to give them  a ride, he  read as                                                               
     An   application  for   issuance   or   removal  of   a                                                                    
     chauffeur's license  must be  made upon  forms provided                                                                    
     by the city  clerk and submitted by the  city clerk for                                                                    
     review.   The  applicant must  be  21 years  of age  or                                                                    
     older, must be able to  read, write, and speak English,                                                                    
     must have  a current State of  Alaska driver's license,                                                                    
     must not  have any delinquent city  criminal or traffic                                                                    
     fines  or  fees,  must  not  have  had  their  driver's                                                                    
     license suspended  or revoked  within two years  of the                                                                    
     date of application, must not  have a conviction within                                                                    
     24 months  of reckless or negligent  driving or driving                                                                    
     with  a license  cancelled, suspended,  revoked, or  in                                                                    
     violation of limitation.   Except as otherwise provided                                                                    
     in this subsection,  the applicant must not  have had a                                                                    
     felony  conviction within  eight  years or  misdemeanor                                                                    
     conviction  within  four   years  of:  prostitution  or                                                                    
     promotion  of  prostitution;  any offense  involving  a                                                                    
     controlled  substance; felony  or misdemeanor  assault;                                                                    
     burglary,  felony  theft  fraud  or  embezzlement;  any                                                                    
     sexual  offense;  any  homicide  or  assault  involving                                                                    
     operation  of  a  motor vehicle;  two  separate  felony                                                                    
     convictions  of  any  type; driving  while  intoxicated                                                                    
     within five  years or  within eight  years of  a felony                                                                    
     conviction;  and  finally,  refusal   to  submit  to  a                                                                    
     chemical test.                                                                                                             
MR. PRUHS  explained that Sec.  8 removes the standard  of safety                                                               
the City  of Fairbanks  imposed, and  95 percent  of the  time an                                                               
applicant is  approved the  same day of  application.   He opined                                                               
that a few applicants have come to the city council for review.                                                                 
4:40:39 PM                                                                                                                    
JUNE  ROGERS, Council  Member,  Fairbanks  City Council,  advised                                                               
that  the  Fairbanks  City  Council   is  in  opposition  to  the                                                               
legislation as  written, but is  supportive of the work  thus far                                                               
in regard to  the state looking at the  responsibilities for this                                                               
type of  activity in  communities.   She referred  to government-                                                               
granted privilege, and opined  that government has responsibility                                                               
for community safety,  and the Fairbanks code  makes certain that                                                               
it is  approaching the  best possible  environment for  those who                                                               
are working and  using the services.  She said  that recently the                                                               
Fairbanks City  Council reviewed  an appeal that  was "definitely                                                               
something that  -- that was  a decline, unanimous decline."   She                                                               
pointed out  that circumstances can sometimes  appear differently                                                               
when actually working through an  appeal and speaking to a person                                                               
directly in order  to receive total information  about the person                                                               
transporting   children  and   grandchildren.      Many  of   the                                                               
individuals testified  in the meeting  that their children  go to                                                               
school in taxi cabs and  precious transportation takes place when                                                               
someone is transporting  children to school.  She  said she hopes                                                               
some of  the information given by  Joelle Hall of the  AFL-CIO is                                                               
given  scrutiny because  that is  in direct  conflict with  state                                                               
4:43:09 PMs                                                                                                                   
REPRESENTATIVE SULLIVAN-LEONARD  asked whether she serves  on the                                                               
Fairbanks City Council as does Mr.  Pruhs, and if so, whether she                                                               
has  the  full  Fairbanks  City   Council  consensus  as  to  her                                                               
testimony position.                                                                                                             
MS. ROGERS answered  yes, and she said a letter  was submitted on                                                               
behalf  of  the City  of  Fairbanks  through the  Fairbanks  City                                                               
4:43:41 PM                                                                                                                    
REPRESENTATIVE  WOOL  asked  whether  she  was  aware  background                                                               
checks and  other sort of checks  are required for a  TNC driver,                                                               
and that  all of  the requirements Mr.  Pruhs listed  are equally                                                               
required of TNC drivers.                                                                                                        
MS. ROGERS  replied yes, however,  she said that the  example she                                                               
brought  up is  a different  circumstance when  speaking directly                                                               
with the person and reviewing more extensive records.                                                                           
4:44:29 PM                                                                                                                    
MR. PRUHS advised that "What we do  is, I would say the six cases                                                               
that  we've reviewed  were granted  five of  them where  normally                                                               
they would be denied," and the  Fairbanks City Council is more on                                                               
the  side  of  helping  a  person  get  through  something.    He                                                               
acknowledged that he does not know  the standards of the TNC, but                                                               
would  hope  the TNCs  would  meet  their  standard if  the  bill                                                               
passed.   He related that  the council is  in favor of  Uber, but                                                               
wants a "tried and true a standard of safety" for the riders.                                                                   
4:45:14 PM                                                                                                                    
REPRESENTATIVE BIRCH  asked whether  Mr. Pruhs  would be  able to                                                               
make the  opportunity to compare  the City of  Fairbanks standard                                                               
with the TNC standard.                                                                                                          
MR. PRUHS answered, "Of course we would."                                                                                       
4:46:44 PM                                                                                                                    
RYAN McKEE advised  that often Alaska is behind  the Lower-48 and                                                               
when it  comes to  rideshare, Alaska  is once  again late  to the                                                               
game.    [The audio  was  disconnected  at the  Matanuska-Susitna                                                               
4:47:53 PM                                                                                                                    
JARED  CURE, Owner,  Narrows Bar,  advised he  recently purchased                                                               
the Narrows Bar,  and would speak firsthand as to  the effects of                                                               
ridesharing on  the community of  Juneau.  After high  school, he                                                               
lived in  San Francisco for  over ten  years in the  growing tech                                                               
sector  and  saw Uber  and  Lyft  grow out  of  a  need for  more                                                               
efficient  transportation  solutions.  In the  mid-2000s,  before                                                               
ridesharing,  underground  and   unlicensed  taxi  cab  companies                                                               
sprouted  up  in   "The  Sunset"  area  to  fill   the  needs  of                                                               
neighborhood  residents.   This was  not a  perfect solution,  he                                                               
described, but at least they would  show up and because they were                                                               
unmarked no one would wave them  down before they arrived at your                                                               
location.   When Uber launched  in 2010,  he switched all  of his                                                               
business to Uber acknowledging that  it solved a problem for both                                                               
customers and drivers because a  person could see their driver in                                                               
real time  on a map, know  who they were, their  car, and exactly                                                               
when they would  arrive.  He pointed out that  taxi cab companies                                                               
have had  ample time to  adapt to  new technology and  respond to                                                               
the needs  of their  riders, and rather  than investing  in their                                                               
businesses  and  adding  value  for  customers,  they  lobby  for                                                               
continued  monopolies.   A  little competition  would  be a  good                                                               
thing, he  noted.  As  a bar owner,  he said, this  issue affects                                                               
him more than most because  efficient access to transportation is                                                               
more often than not the  difference between his customers driving                                                               
drunk or having a safe ride home.   He related that 88 percent of                                                               
Lyft users  say they  avoid driving  under the  influence because                                                               
they have  Lyft as an option,  and 66 percent of  Lyft rides take                                                               
place during  times of  high alcohol  consumption.   Studies have                                                               
shown that  ridership increases 40-60  percent when  rideshare is                                                               
an option, and he pointed out  that under the laws of Alaska, his                                                               
business,  his  employees, and  himself  personally  can be  held                                                               
liable for a  customer's actions even if he serves  them just one                                                               
drink.   He asked that  the committee allow his  customers access                                                               
to safe and reliable transportation options.                                                                                    
4:50:11 PM                                                                                                                    
MR.  McKEE  advised   that  the  only  people   opposed  to  this                                                               
legislation are the  taxi cab drivers, the  medallion holders, or                                                               
the lobbyists  hired to keep  this industry  out of Alaska.   The                                                               
users of  taxi cabs and  rideshares all support  this legislation                                                               
and paying customers  are asking the committee to  give them this                                                               
chance.  He said the Mothers  Against Drunk Driving has shown how                                                               
ridesharing lowers  DUI rates and  offers employment  and income.                                                               
He said he could not see why  the committee would not pass HB 132                                                               
from committee.                                                                                                                 
REPRESENTATIVE  JOSEPHSON commented  that a  legislator could  be                                                               
concerned with  drivers working for a  TNC and to be  watchful of                                                               
that concern.   He asked  whether Mr.  McKee was speaking  on his                                                               
own behalf or for a national organization, for example.                                                                         
MR. MCKEE  advised he was  speaking on his  own behalf as  he has                                                               
followed this  issue for a  long time,  and was excited  for Uber                                                               
when it  operated in  Anchorage only  to have  it leave  when the                                                               
Municipality  of   Anchorage  basically  required  it   to  cover                                                               
workers' compensation.   He related  that he visits  the Lower-48                                                               
often and  is able  to enjoy  the benefits  of rideshare,  and he                                                               
would like to see Alaska join modern society.                                                                                   
4:53:03 PM                                                                                                                    
REPRESENTATIVE   BIRCH  said   he  understands   that  it   is  a                                                               
symmetrical relationship  and from  his understanding of  the way                                                               
rideshare  works,  the  driver  also receives  a  rating  on  the                                                               
perspective customer.                                                                                                           
MR. MCKEE  stated that the rating  system goes both ways  and the                                                               
rating system matters to both  the riders and the drivers because                                                               
neither party  wants to be  obnoxious or  rude and receive  a bad                                                               
rating.   On either side, he  said, once a person  receives a bad                                                               
rating they are not allowed to use the service.                                                                                 
REPRESENTATIVE BIRCH surmised that  the rating aspects appeals to                                                               
him because it is a two-way street.                                                                                             
MR.  MCKEE agreed,  and he  said  it is  a  good way  to be  held                                                               
accountable  and  many people  can  attest  to  the fact  that  a                                                               
problem  is  immediately addressed,  as  opposed  to a  taxi  cab                                                               
4:56:31 PM                                                                                                                    
DON CREARY,  Member, Leadership Council of  the App-Based Drivers                                                               
Association,  Teamsters Local  117,  advised that  he has  driven                                                               
over three years  for Uber with 11,000 rides.   He described that                                                               
similar to  many drivers in  the Seattle  area, he has  gone from                                                               
great enthusiasm  about this  company to a  fair amount  of anger                                                               
and frustration due  to the constant cutting of  "our pay," which                                                               
has been experienced in every other  city in the country and will                                                               
be  experienced  in  Alaska.   He  offered  that  the  Washington                                                               
drivers have been  struggling with preemption for  the last three                                                               
years,  and Uber  keeps trying  to get  preemption to  eventually                                                               
whittle  away at  all regulations.   He  explained that  the App-                                                               
Based  Drivers  Association  has  a good  relationship  with  the                                                               
Seattle  City Council  and  the  association can  go  to it  with                                                               
issues that  these companies consistently  ignore.   For example,                                                               
he said,  drivers must  explain to  parents that  if they  do not                                                               
have car  seats for  their toddlers, they  cannot receive  a ride                                                               
due  to  safety and  it  is  against  the  law.   The  company's'                                                               
response is to  thank the driver for their concern,  to not break                                                               
the law,  other Uber drivers do  it, and "you are  an independent                                                               
contractor, it's  up to you."   He cancels the ride  and the next                                                               
Uber driver gives  the children a ride.   He expressed confidence                                                               
that in  working with  the Seattle City  Council that  this issue                                                               
will be  resolved, but  he has  no faith  in going  through these                                                               
companies that the issue would  ever be resolved.  Preemption, he                                                               
explained,  would stop  the drivers  from addressing  their local                                                               
city councils with issues these  companies will ignore based upon                                                               
his  three years  of experience,  he assured  the committee.   He                                                               
stressed that  he wished  he was  an independent  contractor even                                                               
though he  was referred to  as an independent  contractor because                                                               
the only way  he is an independent contractor is  that he has the                                                               
freedom to work whenever he desires,  other than that he works to                                                               
the dictates of the company in every regard.                                                                                    
4:59:39 PM                                                                                                                    
REPRESENTATIVE  WOOL  asked whether  he  is  affiliated with  the                                                               
Teamsters Union or if he is is an Uber driver.                                                                                  
MR. CREARY clarified  that he is an Uber driver,  and a member of                                                               
the App-Based  Drivers Association under the  Teamsters Local 117                                                               
REPRESENTATIVE WOOL  opined that  the City  of Seattle  passed an                                                               
ordinance  allowing the  drivers to  organize, and  asked whether                                                               
his capacity is as a teamster  as an Uber driver, or something he                                                               
does on the side.                                                                                                               
MR. CREARY  reiterated that he  is a driver, with  an association                                                               
under the  Teamsters Local 117 umbrella,  it is not yet  a union,                                                               
and the teamsters advise the association.                                                                                       
REPRESENTATIVE WOOL  surmised that  Mr. Creary is  not officially                                                               
in the Teamsters Union.                                                                                                         
MR.  CREARY  answered,   "Not  as  of  yet."     In  response  to                                                               
Representative  Wool, he  acknowledged that  the Teamsters  Union                                                               
flew Mr. Cleary to the hearing today.                                                                                           
REPRESENTATIVE WOOL surmised that Mr.  Creary was testifying as a                                                               
Teamster, but he  was not really a Teamster and  has been an Uber                                                               
driver  for three  years in  Seattle.   He asked  whether he  had                                                               
driven for Lyft.                                                                                                                
MR. CREARY advised that he drives for both companies.                                                                           
5:01:12 PM                                                                                                                    
REPRESENTATIVE WOOL asked  whether he had ever driven  for a taxi                                                               
cab company.                                                                                                                    
MR. CREARY  said that he had  worked for a taxi  cab company many                                                               
years ago, and  confirmed that he is still a  driver for Uber and                                                               
5:01:29 PM                                                                                                                    
MR. CREARY,  in response to  Representative Josephson,  said that                                                               
he is a known critic of Uber.                                                                                                   
REPRESENTATIVE  JOSEPHSON  noted  that  notwithstanding  being  a                                                               
known critic of Uber, asked whether Uber had canceled his app.                                                                  
MR. CREARY answered, "Not yet."                                                                                                 
REPRESENTATIVE  JOSEPHSON surmised  that Mr.  Creary had  advised                                                               
Uber that  people asked him  to carry young children  without car                                                               
seats, with  Uber's response  being that  it was  up to  him, and                                                               
asked what else Uber had to say.                                                                                                
MR. CREARY  answered that he  emailed Uber, and the  response was                                                               
that  it  appreciated his  concerns  but  he was  an  independent                                                               
REPRESENTATIVE JOSEPHSON  said he was interested  in Mr. Creary's                                                               
working conditions and  how much money he  earns, commenting that                                                               
he recently read about the City of Seattle's concerns with TNCs.                                                                
MR. CREARY answered  that the money will  vary from approximately                                                               
$600-$800 for 45-55  hours of work, and three years  ago he would                                                               
have received $1,000-$1,100 for the same amount of time.                                                                        
MR.  CREARY, in  response to  Representative Josephson,  answered                                                               
that the above-mentioned  money estimates are from  the same TNC.                                                               
He  attributed  the  reduced  income  to  rate  cuts  because  he                                                               
received $1.70  per mile three  years ago and  currently receives                                                               
$1.35 per mile.                                                                                                                 
5:03:27 PM                                                                                                                    
MR. CREARY, in response to  Representative Stutes, clarified that                                                               
he drove a taxi cab in 1982-1983.                                                                                               
REPRESENTATIVE  STUTES  related  that  she was  intrigued  as  to                                                               
whether or not  he was an independent contractor  or an employee,                                                               
and  asked  how he  was  paid  when he  drove  for  the taxi  cab                                                               
MR.  CREARY responded  that he  would take  his money  home every                                                               
night, pay the dispatch, and keep the remaining money.                                                                          
MR. CREARY,  in response to  Representative Stutes,  advised that                                                               
he is  paid by Uber  or Lyft via a  weekly direct deposit  to his                                                               
bank account.   In further response to  Representative Stutes, he                                                               
answered that he does not handle any money.                                                                                     
5:04:46 PM                                                                                                                    
REPRESENTATIVE BIRCH  commented that 11,000 rides  in three years                                                               
is approximately 10 rides per day.                                                                                              
MR. CREARY  interjected that he  is on  the low side  compared to                                                               
other  drivers because  many  drivers, due  to  these rate  cuts,                                                               
drive 70-80 hours per week, between 150-200 rides per week.                                                                     
REPRESENTATIVE  BIRCH asked  the amount  of money  for a  typical                                                               
fare  from  the airport  to  downtown  for  one person,  and  the                                                               
comparison of a taxi cab with an Uber fare.                                                                                     
MR.  CREARY responded  that as  an Uber  driver, he  will receive                                                               
approximately $23  minus gas, and  the charge to the  customer is                                                               
approximately $28.                                                                                                              
REPRESENTATIVE BIRCH surmised that he  would pay a $28 charge and                                                               
asked whether that includes the tip.                                                                                            
MR.  CREARY said  that  is a  whole other  issue,  no tipping  is                                                               
REPRESENTATIE BIRCH surmised  that it is a $28  fare, he receives                                                               
$23,  and pays  for  the gas,  he asked  whether  that ratio  has                                                               
changed over time.                                                                                                              
MR. CREARY answered  that when he first started  driving he would                                                               
receive $30 for that same ride.                                                                                                 
REPRESENTATIVE  BIRCH said  he was  trying to  understand whether                                                               
they are  just trying to  price the ride  to meet the  market and                                                               
bringing the  driver's cut down  proportionally or whether  it is                                                               
the share that goes to the driver that is changing.                                                                             
MR.  CREARY responded  that the  percentage is  the same  and the                                                               
amount he receives  is less.  He  said it is not  in keeping with                                                               
the market,  it is designed  to undercut and drive  everyone else                                                               
out of business.                                                                                                                
5:07:36 PM                                                                                                                    
CHAIR KITO  commented that Mr. Creary  said the goal is  to drive                                                               
other companies  out of  business, and  asked whether  Mr. Creary                                                               
knows of companies that have been driven out of business.                                                                       
MR. CREARY  responded a taxi  cab company in San  Francisco filed                                                               
for bankruptcy, except he forgot the name of the company.                                                                       
CHAIR  KITO  cautioned that  if  he  was making  statements,  the                                                               
committee should be able to find out ...                                                                                        
5:08:05 PM                                                                                                                    
MR.   CREARY  interrupted   Chair  Kito,   and  in   response  to                                                               
Representative Stutes, answered  that the app tells  him the cost                                                               
of the fare for  each ride, and he knows per  trip how much money                                                               
he is earning.                                                                                                                  
REPRESENTATIVE STUTES surmised  that when he is paid  he knows he                                                               
is receiving the appropriate amount for the number of trips.                                                                    
MR. CREARY said  that he assumes he is  receiving the appropriate                                                               
REPRESENTATIVE STUTES said that if he  has the amount on his app,                                                               
could he not just deduct 25 percent.                                                                                            
MR. CREARY  commented that he  does not  have an issue  with that                                                               
and is confident he is paid properly.                                                                                           
5:09:14 PM                                                                                                                    
REPRESENTATIVE BIRCH calculated that on  the $28 fare, $5 goes to                                                               
Uber, approximately  17.8 percent,  and the driver  actually gets                                                               
80 percent.                                                                                                                     
MR. CREARY answered that he receives 80 percent.                                                                                
REPRESENTATIVE BIRCH  said that the  issue is primarily  the fact                                                               
that the $28 is coming down, not that his share has changed.                                                                    
MR. CREARY interjected  that his share is the same,  the issue is                                                               
that the rate  the passenger is paying keeps going  down and that                                                               
is a direct cut in a driver's pay.                                                                                              
REPRESENTATIVE BIRCH  commented that it is  a competitive market.                                                               
Mr. Creary  does not have a  contract and he can  go find another                                                               
job,  go to  a  different employer,  and he  offered  that he  is                                                               
trying to find out what keeps Mr. Creary driving for Uber.                                                                      
MR. CREARY  answered that  he drove  for this  company at  a time                                                               
when it was a good job  that many people enjoyed, and he believes                                                               
it can  be that again  if the drivers  organize.  He  states that                                                               
possibly he is naïve.                                                                                                           
REPRESENTATIVE BIRCH  confirmed that Mr.  Creary does not  have a                                                               
contractual obligation to  stay at Uber.  It sounds  like "the 80                                                               
percent is  hanging in  there all  right."   He offered  that the                                                               
market  can be  competitive, and  it is  probably competing  with                                                               
whoever owns the train because is it about a $2 ride.                                                                           
MR. CREARY  disagreed, and he  said that if Uber  charged another                                                               
$0.50 per mile those people would  still be going to the airport.                                                               
These prices  are low  specifically to keep  other people  out of                                                               
the market.                                                                                                                     
5:11:08 PM                                                                                                                    
REPRESENTATIVE JOSEPHSON  asked Mr.  Creary to describe  a system                                                               
where everyone wins or comes close to winning.                                                                                  
REPRESENTATIVE BIRCH answered that  when he first started driving                                                               
for Uber and  Lyft, the consensus amongst all of  the drivers was                                                               
that  this was  a "win,  win, win"  situation for  investors, the                                                               
company, the  riders, and  the drivers.   During that  time, they                                                               
were receiving $0.50 more a  mile, riders would express that they                                                               
really loved  the service and  that the drivers were  making good                                                               
money, so it was "really great."   There was never a concern that                                                               
the service was great, but the  riders sure wished it was cheaper                                                               
or that  the ride was too  expensive; oftentimes he was  told the                                                               
opposite, in  that riders did not  mind paying more.   The prices                                                               
being  charged are  not market  prices, he  opined, and  believes                                                               
they could charge higher prices  and the business would continue.                                                               
When he  started, he  described that it  as an  ascending vibrant                                                               
market at that  time wherein he offered less rides  and made more                                                               
money.  Mr. Creary related that  in January 2014, the company was                                                               
valued at $10  billion with the rates at that  much higher level,                                                               
and by August  the rates were still 25-30 percent  higher and the                                                               
company was valued at $50 billion.                                                                                              
[HB 132 was held over.]                                                                                                         

Document Name Date/Time Subjects
CSHB132 (TRA) Fiscal Note-DOA-DMV 3.10.17.pdf HL&C 3/17/2017 3:15:00 PM
HB 132
HB132 Supporting Documents - Letters of Support 3.17.17.pdf HL&C 3/17/2017 3:15:00 PM
HB 132
HB132 Supporting Documents - Mercatus Farren TNC Preemption Testimony 3.17.17.pdf HL&C 3/17/2017 3:15:00 PM
HB 132
HB132 Supporting Documents - Letters of Opposition 3.17.17.pdf HL&C 3/17/2017 3:15:00 PM
HB 132
HB132 Supporting Documents Index 3.17.17.pdf HL&C 3/17/2017 3:15:00 PM
HB 132