Legislature(2017 - 2018)CAPITOL 106

03/18/2017 12:30 PM House LABOR & COMMERCE

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12:32:26 PM Start
12:32:35 PM HB132
02:38:06 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Continued from 3/17/17 --
Heard & Held
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
            HB 132-TRANSPORTATION NETWORK COMPANIES                                                                         
12:32:35 PM                                                                                                                   
CHAIR KITO  announced that  the only order  of business  would be                                                               
HOUSE BILL  NO. 132, "An  Act relating to  transportation network                                                               
companies and transportation network company drivers."                                                                          
12:34:47 PM                                                                                                                   
SAM MOORE  advised that he has  lived in Alaska for  a few years,                                                               
is representing  himself, and he  was born legally blind  and has                                                               
never  legally operated  a  motor vehicle.    Earlier this  week,                                                               
while walking to  an Anchorage Community Council  meeting along a                                                               
poorly maintained state  road, he said he came  to the conclusion                                                               
that  he needed  to attend  this meeting  in person  to speak  in                                                               
favor  of  this  piece  of  legislation.    He  related  that  he                                                               
considered  the  price  of  an   airplane  ticket  as  a  prudent                                                               
investment in  his potential safety  and overall quality  of life                                                               
because transportation network companies  (TNCs) help friction in                                                               
the marketplace  by making  it easier  to match  potential riders                                                               
with  potential   drivers.    The  TNCs   also  provide  economic                                                               
opportunities for  both parties  by making basic  human transport                                                               
easier  while freeing  up what  would otherwise  be idle  capital                                                               
assets, and yet  many of the concerns of  these companies revolve                                                               
around  the  "quote/unquote  fairness   of  competition."    Taxi                                                               
companies  around the  country have  enjoyed government-protected                                                               
monopolies for decades, thereby  shunning innovation and customer                                                               
service in  the process.   He stated that the  typical last-ditch                                                               
argument  of  unnecessary   government  protectionism  is  always                                                               
public safety,  and he  asked, in  the name  of public  safety to                                                               
"please  protect   me,  the  consumer"  from   these  unnecessary                                                               
barriers to competition.   He asked the committee  to protect him                                                               
from the Anchorage  taxi cartels, and the  assembly that protects                                                               
them, and  to protect the  Juneau residents from  an unreasonable                                                               
supply ceiling, and the City  and Borough of Juneau Assembly that                                                               
keeps it firmly in place.   Mr. Moore then asked the committee to                                                               
empower Alaskans  to find economic  safety and  the opportunities                                                               
TNCs create,  and to not  protect him  from the marketplace.   He                                                               
related that he has found himself  waiting an hour for a taxi cab                                                               
just trying to  get groceries to his home, and  that he lives his                                                               
life  constrained  by   a  bus  schedule  and  the   whims  of  a                                                               
dysfunctional   taxi  system   which   is  an   affront  to   his                                                               
independence  and freedom  as an  Alaskan  and human  being.   He                                                               
urged the  committee to  pass HB  132 out  of committee  with the                                                               
statewide  regulatory  framework  that   protects  him  from  the                                                               
meddling of taxi cartels and locally elected assemblies.                                                                        
12:37:44 PM                                                                                                                   
ERICA  SIMPSON  said she  is  a  life-long Alaskan,  resident  of                                                               
Juneau,  and  is testifying  on  her  own  behalf.   She  offered                                                               
support  for HB  132 as  she is  a proponent  of ridesharing  and                                                               
transportation  network  applications,  and uses  Uber  and  Lyft                                                               
almost   daily  whenever   traveling  out-of-town   due  to   its                                                               
convenience,  affordability, and  efficiency.   She related  that                                                               
the majority of  Uber and Lyft drivers are  normal people looking                                                               
for ways  to live comfortably  and fill a  need in a  place where                                                               
there is a  demand.  Alaska, and in particular  Juneau, is one of                                                               
the most  expensive places in the  country to live and  she asked                                                               
the  committee to  not withhold  an opportunity  from anyone  who                                                               
could  benefit  from a  supplemental  income.   Opportunities  in                                                               
Alaska have not been on the  rise nor has its population.  Alaska                                                               
is  behind  the  times  and  there has  not  been  a  "smidge  of                                                               
anything" that  drives people  to want  to move  here and  try to                                                               
make a  life here  in quite some  time.  As  an advocate  of this                                                               
bill, people  working seasonally  have advised  her that  if this                                                               
bill passes  at least they might  be able to pay  their rent next                                                               
winter rather  than leaving  town because they  want to  live and                                                               
spend   time  and   money  in   Juneau.     She  stressed   that,                                                               
specifically,  the  taxi  companies  in  Juneau  have  irrelevant                                                               
arguments because  economic impact statements  and transportation                                                               
studies  show that  taxis suffer  slightly from  the addition  of                                                               
rideshare applications in only the  "on-demand service," as their                                                               
scheduled  rides and  street hails  stay  the same  overall.   In                                                               
Juneau,  taxis make  a large  percentage of  their income  giving                                                               
tours in  the summer  so the  impact on Juneau  cabs would  be so                                                               
insignificant it  is not worth  consideration.   Approximately 50                                                               
percent more  people would utilize rideshare  applications on top                                                               
of those who already use taxis  would mean an increase of patrons                                                               
to local  businesses and restaurants because  ridership increases                                                               
overall.  Taxi companies will be  able to increase their level of                                                               
customer  service and  everyone can  have a  ride when  and where                                                               
they desire.  She described it  as a long overdue positive impact                                                               
on the business community and its citizens.                                                                                     
12:40:48 PM                                                                                                                   
ZAC BOLES, Owner, Southeast Alaska  Sourdough Cab, expressed that                                                               
his argument against  HB 132 is not that TNCs  cannot come in and                                                               
do business  because everyone wants  to promote  economic growth.                                                               
Except,  he  offered, Uber  was  caught  with a  software  system                                                               
called "Greyball"  which is built  into the app to  detect police                                                               
officers, regulators,  and city officials that  are against Uber,                                                               
its regulations, or  its business practices.  The  New York Times                                                             
"has  done many  articles  on  it and  other  companies --  other                                                               
municipalities  and states  have  started digging  into this  and                                                               
creating investigations  to find  out how  this program  has been                                                               
used."   He  explained  that Greyball  reviews  information on  a                                                               
person's phone and  if it believes the  person is "quote/unquote,                                                               
out to get  Uber" or is a regulator or  police officer, it stores                                                               
that information in Uber's system and  a portion of the app sends                                                               
them a fake  car or if there  are close cars in  a person's area,                                                               
it cancels  the ride.   Articles have stated that  "they geofence                                                               
certain   municipal  places"   like   police  stations,   capitol                                                               
buildings, and public offices where  it believes these people are                                                               
"messing with  them to catch them  in the act."   He related that                                                               
it  is  important  to  know   that  currently,  Portland  has  an                                                               
"investigation  going  30  days,"   the  San  Francisco  District                                                               
Attorney's Office  "is in this, looking  at it in their  own home                                                               
town."   Albany, New York is  investigating as Uber is  trying to                                                               
move out  of New York  City and move  into upper state  New York.                                                               
The State of  New York has similar legislation as  HB 132 and the                                                               
legislature has pulled  it off the table until the  end result of                                                               
this  investigation  in  order   to  determine  whether  Greyball                                                               
software had been  used in New York City and,  he offered, Boston                                                               
is fighting  this with  an ongoing  investigation.   He explained                                                               
that  Greyball has  also been  used  in other  places around  the                                                               
world, such as  Australia, China, and South  Korea, therefore, it                                                               
is important to have local regulations on this situation.                                                                       
12:44:33 PM                                                                                                                   
REPRESENTATIVE STUTES asked what the purpose of Greyball is.                                                                    
MR. BOLES  explained that  the software  detects regulators.   He                                                               
said, "When  they're picking up  flags, taking phone  calls, it's                                                               
so that  the governments or  municipalities or states  that don't                                                               
want them because they don't  believe in their business service."                                                               
Uber can blackball  those people to stop them  from catching Uber                                                               
doing anything illegal.  The  intent is to defraud regulators, he                                                               
12:45:13 PM                                                                                                                   
REPRESENTATIVE BIRCH  asked, as  a taxi cab  owner, what  sort of                                                               
discretion is permitted when deciding whether to pick up a fare.                                                                
MR. BOLES  responded that  he does reserved  the right  to decide                                                               
not to  pick up a fare,  but within the Ketchikan  Municipal Code                                                               
there  must be  a valid  and legitimate  reason.   The code  also                                                               
requires  that Ketchikan  operators  deal with  a telephone  call                                                               
customer first before picking up flags and cell phone calls.                                                                    
REPRESENTATIVE  BIRCH inquired  as to  whether the  discretion is                                                               
left up to the taxi cab driver or the dispatcher.                                                                               
MR. BOLES  replied that the  control is  left up to  the drivers,                                                               
and in  the event a  female driver  believes a male  customer has                                                               
been too aggressive  with her, she has the right  to pass off the                                                               
ride.   In those  situations, he said,  the dispatcher  sends the                                                               
next  available  car  in  line so  the  customer  still  receives                                                               
12:47:06 PM                                                                                                                   
REPRESENTATIVE BIRCH  asked whether  there is  a record  of those                                                               
MR. BOLES answered that his  company does not keep those records,                                                               
it is all based upon driver discretion.                                                                                         
12:47:19 PM                                                                                                                   
REPRESENTATIVE  JOSEPHSON  referred  to Greyballing,  and  opined                                                               
that this is not "some black  helicopter theory" in that Uber has                                                               
acknowledged it was using this software.                                                                                        
MR. BOLES  agreed, and he  said it was used  in Las Vegas  as far                                                               
back as 2014.                                                                                                                   
12:47:56 PM                                                                                                                   
REPRESENTATIVE  WOOL confirmed  that The  New York  Times article                                                             
read  that  Greyballing  did occur  in  cities  exercising  local                                                               
municipal  control.    He  explained that  HB  132  is  statewide                                                               
legislation and  it is for  all transportation  network companies                                                               
(TNCs).   He asked whether  Mr. Boles  pays the insurance  in his                                                               
taxi business, or the individual drivers.                                                                                       
MR.  BOLES answered  that  his drivers  are  subcontractors on  a                                                               
leased car  system, and part of  the lease money the  drivers pay                                                               
him on their flat rate, pays the insurance.                                                                                     
REPRESENTATIVE WOOL  surmised that the insurance  policy is under                                                               
the company's name and not the individual driver's name.                                                                        
MR.  BOLES agreed,  and  he  said the  drivers  submit a  driving                                                               
record and are then added to that policy.                                                                                       
REPRESENTATIVE WOOL  surmised that when  leasing a car on  a flat                                                               
rate, if  the driver does not  make enough money on  a particular                                                               
night to cover the lease, he still  has to pay it and would incur                                                               
a net loss for his shift.                                                                                                       
MR. BOLES said that Representative Wool was potentially correct.                                                                
REPRESENTATIVE  WOOL  asked  whether   his  company  provides  as                                                               
follows:     guaranteed  minimum  wage,   workers'  compensation,                                                               
overtime pay, sick time, or vacation time.                                                                                      
MR. BOLES responded, "No."                                                                                                      
12:49:29 PM                                                                                                                   
REPRESENTATIVE KNOPP asked whether  the reason for the complaints                                                               
about taxi cab  business is that when a person  needs a taxi cab,                                                               
that  Mr. Boles's  company is  not  large enough  to provide  the                                                               
services during the busy time of  year so people wait longer than                                                               
they would  like, and  are not able  to book a  taxi cab  ride on                                                               
their smart phones.                                                                                                             
MR. BOLES  responded that taxi  cabs offer valuable  services and                                                               
many  taxi cab  companies have  apps  to book  fares, and  people                                                               
could call  and have cars available  as needed, but he  could not                                                               
speak for other  companies.  He pointed out that  there are three                                                               
taxi cab companies in Ketchikan  with 22 taxi cab permits between                                                               
all three companies, and wait time  is no longer than ten minutes                                                               
except  in an  extreme circumstance  due  to weather.   He  began                                                               
keeping track  of rides  at the  beginning of  the middle  of the                                                               
second quarter  of last  year in Ketchikan,  and he  offered that                                                               
"we've operated  over 75,000  cab rides" in  a 38-mile  long town                                                               
from end to end.                                                                                                                
12:51:26 PM                                                                                                                   
REPRESENTATIVE KNOPP commented that  because his drivers contract                                                               
to pay him $100 per day per  car, for instance, and they may lose                                                               
money  at the  end of  the day  that he  would think  the drivers                                                               
would be eager to take a fare.                                                                                                  
MR.  BOLES  said  Representative Knopp  was  absolutely  correct,                                                               
drivers are aggressive in getting to  rides, but not in a harmful                                                               
manner.   The drivers work hard,  he described, and they  want to                                                               
work that car, make  a living, and it is in  the best interest of                                                               
the taxi  cab "game" to  get to the customer.   He said  they are                                                               
like  one  big  happy  family  between  taxi  cab  operators  and                                                               
12:52:09 PM                                                                                                                   
REPRESENTATIVE  KNOPP  commented  that  he  was  unfamiliar  with                                                               
Juneau's economy,  and asked  whether it  has a  public transport                                                               
system,  and  whether  his  company  is  compensated  for  public                                                               
MR. BOLES related that he was  unsure as to Juneau, but Ketchikan                                                               
does  have  public  transit,  and  taxi  cab  operators  are  not                                                               
subsidized in any manner by public transit.                                                                                     
12:52:45 PM                                                                                                                   
REPRESENTATIVE JOSEPHSON  asked what amount of  money a Ketchikan                                                               
driver  would personally  invest in  the business,  assuming they                                                               
operated a leased car.                                                                                                          
MR.  BOLES advised  that the  only investment  a taxi  cab driver                                                               
must make in order to jump into  a cab and lease a vehicle is the                                                               
cost of  their license, $80 as  a rule, and having  some money on                                                               
hand to make  change and a square credit card  reader.  Mr. Boles                                                               
advised that  according to  the lease  agreement, from  the money                                                               
the  driver pays  him, he  pays  insurance, vehicle  maintenance,                                                               
upkeep, stickers, and advertising.                                                                                              
REPRESENTATIVE JOSEPHSON  asked the  amount of  money one  of his                                                               
drivers might  gross in one year  because they have to  pay their                                                               
own taxes through a Form 1099.                                                                                                  
MR.  BOLES said  that it  was  difficult to  guess because  newer                                                               
drivers will  make a little  less until they are  established and                                                               
people start  to call  them and  build up  "personal calls."   He                                                               
related that  he has an 84-year  old female driver that  has been                                                               
driving for  40 years, is  extremely popular and does  very well.                                                               
This driver  can clear, after  lease, anywhere  between $150-$250                                                               
per shift seasonally,  and that the days driving  during the week                                                               
make a  difference.  A  driver can  make a comfortable  living in                                                               
Ketchikan  because they  receive  approximately  $3.30 per  mile,                                                               
which  stimulates  the  economy  to help  pay  the  lease,  rent,                                                               
personal vehicles, groceries, and so forth.                                                                                     
12:55:32 PM                                                                                                                   
REPRESENTATIVE  JOSEPHSON referred  to the  ostensible similarity                                                               
in status and asked how  he distinguishes between his independent                                                               
contractors and  the fact that  no workers' compensation  is paid                                                               
for  them  relative  to  these   Uber  drivers.    Representative                                                               
Josephson further  asked whether  there was  a separation  in his                                                               
MR. BOLES stated  there is a separation because  taxi cab drivers                                                               
sign  lease agreements  stating  they are  separate, wherein  the                                                               
drivers deal with  all of the money and then  pay their expenses,                                                               
and the  choice is fully  upon the  driver how they  handle their                                                               
expenses.   The difference in how  taxi cab drivers and  Uber and                                                               
Lyft  drivers  operate  is  that   the  money  goes  through  the                                                               
companies  first  and  then  comes  back to  the  driver.    When                                                               
discussing the issue  of who handles the money, he  noted that it                                                               
almost seems  like an employer/employee relationship  on for TNCs                                                               
because all of  the money is funneled through  the company before                                                               
coming back  to the  driver, almost  in the  sense of  a paycheck                                                               
with their commission being removed.                                                                                            
12:57:55 PM                                                                                                                   
ROSS BIELING said he represents  himself with no affiliation to a                                                               
third party.  He pointed out  that the IRS has a 20-question test                                                               
as  to  whether   or  not  [TNCs]  or  taxi   cab  companies  are                                                               
independent contractors  or employees,  and the state  should not                                                               
insert  itself in  that decision-making  process.   He  suggested                                                               
looking into  standards requiring that the  vehicles are entirely                                                               
checked over  annually.  He described  that it should be  an open                                                               
free-market enterprise even though the  taxi cab companies do not                                                               
want competition, and the committee  should rely on his testimony                                                               
for clearer guidance.                                                                                                           
1:00:05 PM                                                                                                                    
BARBARA  HUFF TUCKNESS,  Executive Director/Legislative  Liaison,                                                               
Teamsters  Local 959,  said she  represents Teamsters  Local 959,                                                               
and wants  to make it  clear that  she is not  testifying against                                                               
TNCs  coming into  the  state  because her  concern  is with  the                                                               
drivers.    There  are  over  400,000  drivers  in  this  country                                                               
involved in lawsuits and she  suggested that the legislators take                                                               
a close look  at what is being contemplated  in this legislation.                                                               
Local 959 believes that HB  132 should provide a special carveout                                                               
for  existing   worker  classification  law   for  transportation                                                               
network  companies  (TNCs)  as  the  bill  would  instead  impose                                                               
minimum requirements in order for  TNCs to treat their drivers as                                                               
independent contractors.   If passed,  it would create  an unfair                                                               
double-standard  for classifying  transportation  workers.   This                                                               
union represents  transportation workers  in this state  who have                                                               
been  using technological  devices  for years,  for example,  UPS                                                               
drivers.   Under  this bill  TNCs drivers  will be  exempted from                                                               
existing state  law for worker  classification and  would instead                                                               
be classified as independent contractors.   In the event only the                                                               
minimal requirements are met, the  TNC would not set the driver's                                                               
hours, prohibit drivers from using  other TNC networks, limit the                                                               
driver's territory, or restrict  the drivers' activities, and the                                                               
company and driver  must agree to this in  writing.  Essentially,                                                               
she  said,  this  bill  establishes  a  new  bright  line  for  a                                                               
definition.     She  opined  that  an   Uber  driver's  testimony                                                               
yesterday,  disclosed that  drivers  all want  to be  independent                                                               
contractors because  their hours are their  only flexibility, and                                                               
the  companies   control  everything  else.     She  advised  the                                                               
committee that a  lawsuit was settled yesterday  with $24 million                                                               
going to thousands  of Lyft drivers.  She said  that the union is                                                               
asking  the committee  to take  the time  and make  an effort  to                                                               
protect  not only  these drivers,  but other  drivers who  aren't                                                               
represented.   Alaska  is  different and  does  not operate  like                                                               
everybody else in the Lower-48.                                                                                                 
1:03:40 PM                                                                                                                    
SUZIE SMITH  said she  is a  taxi cab  operator in  Anchorage and                                                               
opposes the  legislation because the  state should not   involved                                                               
with the regulation of transportation  needs, but rather leave it                                                               
with the municipalities, and that  TNCs should receive no special                                                               
treatment.   Cities have rules  and regulations to  ensure safety                                                               
and  consumer  protection,  yet  this  bill  will  create  unfair                                                               
competition  and subject  the state  to equal  protection claims.                                                               
Special laws  cannot be enacted  for businesses that do  the same                                                               
thing as a taxi cab company  even though TNCs will claim they are                                                               
nothing  more  than a  technology  network  company.   Technology                                                               
Network Companies (TNCs)  say they are different from  a taxi cab                                                               
company except when  it comes to their damage.   For example, she                                                               
said, they  are now seeking to  get their driver recognized  as a                                                               
self-employed operator,  now they  want to  say their  drivers do                                                               
the same thing as a taxi  driver so they can avoid basic business                                                               
laws, such  as workers'  compensation.  The  TNCs hold  the money                                                               
and  issue  payment  to  the  driver,  and  are  responsible  for                                                               
evaluating  drivers'  performance  and  firing  at  will  if  the                                                               
drivers do not  hold up to their standards, she  said, "it sounds                                                               
like  employer/employee  status."   This  bill  originally had  a                                                               
fiscal  note  of  $280,000  attached  to  it,  so  somewhere  the                                                               
lobbyists must have  been quite persuasive.   The original fiscal                                                               
note, she  opined, was underestimated -  Anchorage transportation                                                               
budget has a yearly budget  of nearly one-half million dollars to                                                               
regulate taxis, for  hire [vehicles], and limousines.   She asked                                                               
how the  state plans to  regulate TNC vehicles statewide  with no                                                               
fiscal  note  attached, "for  the  benefit  of  an out  of  state                                                               
company where 25  percent of every ride leaves the  state with no                                                               
financial benefit to our state?"   She offered concern that under                                                               
HB  132, "they  will be  just  running amuck"  with basically  no                                                               
1:06:39 PM                                                                                                                    
REPRESENTATIVE WOOL noted she was  a taxi cab driver in Anchorage                                                               
and  asked  whether  she was  covered  by  workers'  compensation                                                               
MS. SMITH responded that she is  a taxi cab operator in Anchorage                                                               
and said, "I  run a permit, I  do not drive," and  her drivers do                                                               
not have workers' compensation insurance.                                                                                       
CHAIR  KITO advised,  for the  record,  that all  members of  the                                                               
committee have been present since the beginning of the hearing.                                                                 
1:07:15 PM                                                                                                                    
RAFAEL  BARBOSA said  he has  been a  taxi cab  owner/operator in                                                               
Anchorage  for 33  years,  and encouraged  the  committee to  not                                                               
allow Uber  into the state  unless it  was willing to  follow the                                                               
rules.  He  expressed that TNCs come in with  nothing but a bunch                                                               
of lies and once  they are in, they do whatever  they want and it                                                               
needs to be  changed because it will put the  people in Anchorage                                                               
"in a bad situation."                                                                                                           
1:09:07 PM                                                                                                                    
GEORGE  RENDON said  he  is a  former owner  of  a taxi  dispatch                                                               
company for the  last 30 years and  he is in favor  of [taxi cab]                                                               
drivers and operators,  and almost 80 percent of  the drivers who                                                               
do not  want Uber to come  into this town.   He said that  he has                                                               
noticed crime growing in Anchorage and  he knows what is going on                                                               
to  increase crime  in  Anchorage.   He said,  "I  think here  to                                                               
represent   most  the   drivers   have   (coughing)  and   (audio                                                               
difficulties)  stop   who  is  coming   to  this   town."  (Audio                                                               
difficulties)  come to  town  and destroy  the  business so  that                                                               
[taxi  cab] drivers  do not  make enough  money to  support their                                                               
families and  turn to welfare  for help with  food and rent.   He                                                               
said it is  upsetting to see how that business  destroys over 500                                                               
families trying to make a living.                                                                                               
1:11:36 PM                                                                                                                    
PAT  FALON said  she represents  herself, and  commented that  if                                                               
Uber comes  back to Alaska, it  should be required to  follow the                                                               
same rules as  other like-businesses with employees.   Uber wants                                                               
its  own rules  and the  ability  to misclassify  its drivers  as                                                               
independent  contractors   and  not  pay   workers'  compensation                                                               
insurance or  overtime.  Uber  misrepresents itself,  she stated,                                                               
it is unfriendly  to its employees, it requires  drivers to drive                                                               
new  vehicles and  then cuts  their income  so the  driver cannot                                                               
afford  the  payments on  the  vehicle  and  they must  file  for                                                               
bankruptcy  in the  process.    Uber has  the  Koch Brothers  and                                                               
Americans for Prosperity  supporting this bill and  she asked the                                                               
committee to slow this issue down and take a good look at Uber.                                                                 
1:13:29 PM                                                                                                                    
AGNES KALLMAN  said she  represents herself  and is  an Anchorage                                                               
taxi cab driver.   She disagreed that there is  a monopoly and no                                                               
competition  because many  families, permit  owners, and  drivers                                                               
receive their  income from this  [industry].  She  described that                                                               
she is  an independent contractor  and pays tens of  thousands of                                                               
dollars  for  her  lease  each  year  to  a  local  owner,  which                                                               
stimulates the economy in Anchorage.                                                                                            
1:15:50 PM                                                                                                                    
JAMES HARRIS, Owner, Juneau Taxi,  James Harris, Owner, commented                                                               
that  this type  of legislation  is "being  pushed" all  over the                                                               
country  with Uber  and Lyft  currently allowed  in hundreds  and                                                               
hundreds of  cities with similar  state legislation  "which would                                                               
undercut all of the rules they  already have."  Subsequent to the                                                               
voters  in Austin,  Texas voting  for stricter  background checks                                                               
for  Uber drivers,  Uber left  Austin, Texas.   He  related that,                                                               
"Now they  are putting this  same type of legislation  through to                                                               
try to  come back without those  rules."  He remarked  that these                                                               
transportation network companies (TNCs)  have spent millions upon                                                               
millions of dollars throughout the  country for lobbyists to push                                                               
this type  of legislation.   He said there  is not a  monopoly in                                                               
Anchorage  or Juneau,  this [legislation]  is TNCs  pushing their                                                               
agenda to  make taxi  cab companies look  bad, and  surmised that                                                               
this legislation could  "pass quite easily" except  the holdup of                                                               
local regulation.                                                                                                               
1:18:26 PM                                                                                                                    
KATHIE  WASSERMAN, Executive  Director, Alaska  Municipal League,                                                               
advised that the  Alaska Municipal League has no  issue with TNCs                                                               
because it  likes fair  competition, although  unfair competition                                                               
is  not cared  for  especially when  that  unfair competition  is                                                               
pushed by  government.   This issue is  not about  these specific                                                               
companies,  this is  about the  legislature  attempting to  erode                                                               
local control.  The Constitution  of the State of Alaska, Article                                                               
X,  provides  for  "maximum,  local,  self-government,"  and  the                                                               
Alaska  Municipal   League  is   opposed  to   this  legislation.                                                               
Currently, municipalities do regulate,  except they do not simply                                                               
regulate  the  individual  vehicles   for  taxi  cabs,  shuttles,                                                               
limousines, and  buses, they regulate  the system.   For example,                                                               
she pointed out,  when 10,000 people unload from  cruise ships in                                                               
Ketchikan  for one  day,  for instance,  tour  buses, taxi  cabs,                                                               
pedi-cabs,  limousines, and  shuttle  buses from  the hotels  are                                                               
available, and  "you have  to be able  to regulate  that system."                                                               
Except, she expressed, when 15-20  new cars suddenly show up from                                                               
some business  of which the  municipality is not allowed  to deal                                                               
with, "the  entire system goes  up;" this [system] is  for safety                                                               
and local municipalities  need the ability to  regulate.  Unclear                                                               
in the  bill, she related,  is what regulation means  and whether                                                               
it  includes taxes  because it  appears that  regulation includes                                                               
sales  tax, and  municipalities would  not  be able  to charge  a                                                               
sales tax to these companies.   Yet, she remarked, these cars are                                                               
using city roads  and streets and receive  police protection, and                                                               
if the  city cannot tax  them, they would receive  these services                                                               
for free and the cost "eventually goes onto other people."                                                                      
1:21:19 PM                                                                                                                    
TOR WALLAN advised he was raised  in Juneau, and is testifying as                                                               
a private citizen.  He said he  has spent a lot of time traveling                                                               
for  work   in  various  cruise   ports  with  high   demand  for                                                               
transportation  options  and  appreciates  Uber  and  Lyft  as  a                                                               
transportation  choice.     In  his  experience   in  the  cruise                                                               
industry,  the more  transportation  options  the better  because                                                               
free  enterprise  and  competition   encourages  all  parties  to                                                               
enhance their business  model.  He related that  Seattle taxi cab                                                               
services  offer  their own  app  for  services which  has  proven                                                               
beneficial to  them, and they  still flourish in  locations where                                                               
ridesharing is an option.  It  is important, he said, to consider                                                               
that  taxi  cab  services  will continue  to  cater  to  specific                                                               
demographics that do not embrace  new technology and find it more                                                               
comfortable to  call or hail a  taxi cab.  He  explained that his                                                               
support for  this bill  should not be  interpreted as  a position                                                               
against  taxi  cabs,  he simply  believes  that  new  independent                                                               
businesses should be  welcomed in this state  rather than holding                                                               
them back.   He advised that he has spoken  with taxi cab drivers                                                               
who  have transitioned  into Lyft  drivers and  they are  happier                                                               
because they can  better manage their own  schedule with flexible                                                               
hours, more  money, and eliminated the  money transaction factor,                                                               
which often caused issues for debate when they drove a taxi cab.                                                                
1:23:37 PM                                                                                                                    
DENNIS HARRIS, Owner,  Custom Juneau Tours, said that  he drove a                                                               
taxi cab  in Juneau for 10  years, is the process  of obtaining a                                                               
limousine license,  and favors local  regulation.   The insurance                                                               
levels in  HB 132 are  too low because  he carries $1  million of                                                               
commercial coverage at a cost of  $3,500 per year for a taxi cab,                                                               
and will cost $6,500 for a  limousine he intends to purchase.  He                                                               
advised  that commercial  insurance must  be required  for anyone                                                               
carrying passengers for  hire, and must be set at  a level higher                                                               
than stated in the legislation,  and local municipalities must be                                                               
able to  collect sales tax and  permit fees.  The  permit fees at                                                               
the  Juneau airport  finance the  operation of  the taxi  waiting                                                               
zone at the airport, paving,  striping, and maintenance, which is                                                               
the  same at  the  docks, wherein  a permit  fee  is charged  for                                                               
people picking up  passengers, and the city collects  a sales tax                                                               
from  the  drivers.    He said  that  he  averaged  approximately                                                               
$70,000 per  year on  the meter, which  meant the  city collected                                                               
$3,500 per  year off  of his taxi  cab when he  was driving.   In                                                               
Juneau, with approximately  60 taxi cabs on the  street, the city                                                               
needs that  money to  help finance the  operation of  Juneau with                                                               
five cruise ships a  day.  He pointed out that  with 60 taxi cabs                                                               
and all  of the buses, [the  system] will not work  without local                                                               
regulation.   Uber prices its  fares at  40 percent of  its costs                                                               
currently because it has $70  billion in venture capital and will                                                               
do  that until  it  ruins  the taxi  cab  business  all over  the                                                               
country.    He  remarked  that  after that,  because  it  is  not                                                               
regulated, Uber's fares  will "go up just like they  do when they                                                               
do the man pricing when it's busy."                                                                                             
1:27:17 PM                                                                                                                    
LINDA DURR  advised she has  been a  resident of Alaska  over 40-                                                               
years,  is a  retired "snowbird,"  and has  experienced Uber  and                                                               
Lyft ridesharing  services when outside  of Alaska.   She offered                                                               
that  from  a  consumer's  point   of  view,  previously  it  was                                                               
difficult  to  hire a  cab  in  the  residential areas  of  Clark                                                               
County,  Nevada, and  when  Lyft  entered the  market  it was  an                                                               
absolute  "Godsend"  for  disabled  people and  residents.    She                                                               
described  that it  is more  affordable for  people to  use on  a                                                               
regular basis than a taxi cab,  and expressed her support for the                                                               
1:30:29 PM                                                                                                                    
MITCHELL MATTHEWS, Representative,  Uber Technologies, advised he                                                               
represents   Uber   Technologies,   and  that   20,000   Alaskans                                                               
downloaded  the Uber  app in  2016, and  over 60,000  individuals                                                               
opened the app  looking to connect with a ride,  be it tourist or                                                               
resident.   The legislation  provides the  appropriate safeguards                                                               
for  consumers, it  creates a  predictable,  clear, and  concise,                                                               
framework  for TNC  drivers and  riders across  the state.     He                                                               
added that the  bill also contains an insurance  model adopted in                                                               
substantially the same  form in over 40 states, of  which has the                                                               
support of the largest property  and casualty insurance trader in                                                               
the  United   States.     This  bill   will  enhance   access  to                                                               
transportation around  rural communities when Uber  connects with                                                               
underserved  neighborhoods  and  residents, it  will  create  new                                                               
small  businesses  and  new  income   streams  for  families  and                                                               
individuals, and it supports maximizing  the network that drivers                                                               
can create in  their communities with the  statewide framework of                                                               
the bill.   He explained  that when evaluating drivers  for their                                                               
eligibility to drive on the  app, a thorough screening process on                                                               
each individual is completed by  a third party, which is approved                                                               
by  the National  Association  of  Professional Background  Check                                                               
Screeners, and  it screens  for convictions  based on  the social                                                               
security number,  DMV driving  records, and  Uber does  not allow                                                               
anyone on the National Sex Offender  public website to drive.  He                                                               
added that, if  necessary, a screener will travel in  person to a                                                               
courthouse in  each individual borough, county,  and municipality                                                               
to confirm that the information is  correct.  To drive with Uber,                                                               
he said  that individuals  must submit their  full name,  date of                                                               
birth,  social security  number, driver's  license, registration,                                                               
proof of  valid insurance, and proof  of a valid bank  account to                                                               
which  this  information  is  screened.    With  respect  to  the                                                               
classification  of   workers,  he  advised  that   seven  states,                                                               
including  Kansas, Nevada,  and Massachusetts,  made a  statewide                                                               
determination that  Uber drivers are independent  contractors for                                                               
the purposes  of unemployment compensation, and  the bill assigns                                                               
a similar  designation to  TNC drivers that  taxi cab  drivers in                                                               
Alaska already  have.  The  TNC driver controls their  own hours,                                                               
what  app they  can  use -  there are  no  restrictions on  using                                                               
competitors' apps and  can have both apps open at  the same time,                                                               
the type  of vehicle  they own  and drive,  the expenses  of that                                                               
vehicles,  maintain  a business  license,  pay  their taxes,  and                                                               
choose how often they  wish to be paid and where  they drive.  He                                                               
related  that Uber  looks forward  to coming  back to  Alaska and                                                               
operating under this statewide framework.                                                                                       
1:33:41 PM                                                                                                                    
STEVE WACKOWSKI  advised he is  a life-long Alaskan and  a combat                                                               
veteran fighting in Afghanistan.   He related that services, such                                                               
as Uber  and Lyft help  active duty service members  and veterans                                                               
in  that recently  Uber  and Lyft  announced  hiring over  50,000                                                               
veterans.   The  TNCs offer  incentives and  discounts to  active                                                               
military and veterans and make it  easy to work for the TNCs, and                                                               
receive rides.   Mr. Wackowski then offered a  couple of personal                                                               
anecdotes.   Uber and Lyft  are the only outside  employment many                                                               
active duty  commanders will allow  for their troops,  and Alaska                                                               
has more veterans  per capita than any other state  in the United                                                               
States.  He opined that not  one single taxi cab permit holder in                                                               
Anchorage  is a  combat veteran,  and he  urged the  committee to                                                               
allow for ridesharing in Alaska.                                                                                                
1:35:53 PM                                                                                                                    
REPRESENTATIVE STUTES  asked whether he  said that Uber  and Lyft                                                               
hire veterans.                                                                                                                  
MR.  WACKOWSKI responded  that this  summer Uber  had a  military                                                               
initiative and  in July  it announced  that it  had just  hit the                                                               
50,000-person mark for active duty military and veterans.                                                                       
1:36:25 PM                                                                                                                    
The committee took an at-ease from 1:36 p.m. to 1:40 p.m.                                                                       
1:41:01 PM                                                                                                                    
SHAVONNA  RIVERS  advised  she  represents  herself  and  offered                                                               
support  for the  legislation because  she  is an  Uber and  Lyft                                                               
driver in Seattle due to the  freedom and flexibility.  She said,                                                               
"With our  current regulations" without the  proper city licenses                                                               
it makes  it difficult and those  processes are not the  same for                                                               
each  city.   For  example,  she  must  have a  Seattle  business                                                               
license  to function  and operate  in Seattle  and if  she drives                                                               
outside  of Seattle,  she must  have another  city license.   The                                                               
goal of  HB 132 is to  simplify the process so  drivers can drive                                                               
in the local cities and  counties without jumping through various                                                               
hurdles by being under the umbrella of the state.                                                                               
1:43:14 PM                                                                                                                    
MARICE BROWN advised  that after 20 plus years of  working with a                                                               
non-profit  organization  he was  let  go  due to  organizational                                                               
restructuring.   He began searching for  work "and I faced  a lot                                                               
of race discrimination" in the  process which was frustrating and                                                               
discouraging but, he said, he is  grateful to the TNCs because he                                                               
is able to provide for the  needs of his family and keep working.                                                               
He said  that "when we  do the  patchwork" and cross  counties in                                                               
order to pick  up and deliver in a certain  county they must have                                                               
a license for that county.                                                                                                      
1:45:57 PM                                                                                                                    
ADELE TARIL advised  that she has owned assisted  living homes in                                                               
Anchorage  and  HB  132  would  be a  benefit  to  Alaska's  more                                                               
vulnerable  population with  the opportunity  to review  drivers'                                                               
histories.   She said she  has used Uber  in many cities  and "it                                                               
rocks," and  would be a  boost to  the tourism industry  and make                                                               
tourism safer in downtown Anchorage  with tourists not driving in                                                               
unfamiliar  territory,  intoxicated, or  stoned.    The taxi  cab                                                               
companies  have  had the  opportunity  to  add the  services  the                                                               
public  likes   about  Uber,  but   instead  they  do   not  want                                                               
competition.  Uber is a "win-win," she said.                                                                                    
1:50:12 PM                                                                                                                    
JEREMY PRICE,  Alaska State  Director, Americans  for Prosperity,                                                               
advised  that  dozens  of  young  Alaskans  asked  Americans  for                                                               
Prosperity  to  engage  in  this issue  because  after  the  last                                                               
legislative  session, the  previous chairman  of the  House Labor                                                               
and Commerce  Standing Committee "refused  to even hear  the bill                                                               
in  question" and  these young  people were  frustrated with  the                                                               
legislature.   Americans for  Prosperity decided  to weigh  in on                                                               
this  issue for  young folks  and  assist in  the possibility  of                                                               
allowing  these  ridesharing  services  into Alaska,  and  it  is                                                               
trying  to  help  Alaskan  have   a  better  future.    While  he                                                               
understands the  local municipalities' position, he  related that                                                               
in Alaska's  small market differing  local regulations  would not                                                               
work  because there  is  a limited  population  base and  limited                                                               
customer base.  When looking  at Austin, Texas, local regulations                                                               
drove  ridesharing businesses  out of  the  city.   In the  event                                                               
there is an attempt to pull Section  7 out of the bill, he opined                                                               
that there  is no purpose in  passing the bill, and  on behalf of                                                               
thousands of  young people,  he asked the  committee to  pass the                                                               
bill out as currently written.                                                                                                  
1:52:14 PM                                                                                                                    
LEILANI  INMAN  said she  has  traveled  across the  country  and                                                               
cannot believe Alaska  does not have ridesharing.   She described                                                               
that  taxi cab  services are  overpriced, not  safe, the  drivers                                                               
drive recklessly,  and it takes too  long to receive any  sort of                                                               
service to  get through on their  telephone line.  She  said that                                                               
many people have expressed the  need for Uber in Alaska, Alaska's                                                               
public transportation is  due for an improvement and  this is one                                                               
step closer to achieving that goal.                                                                                             
1:54:46 PM                                                                                                                    
CHAIR KITO, after  ascertaining no one wished  to testify, closed                                                               
public  testimony  on  HB  132,   with  the  caveat  that  public                                                               
testimony could be reopened if necessary.                                                                                       
1:55:23 PM                                                                                                                    
REPRESENTATIVE STUTES  asked whether  Uber or Lyft  transport the                                                               
mentally  disabled  or the  physically  handicapped,  and if  so,                                                               
whether they accept vouchers.                                                                                                   
1:55:52 PM                                                                                                                    
MR.  MATTHEWS responded  that some  jurisdictions  in the  United                                                               
States have partnership with Uber  where it can provide first and                                                               
last  mile  opportunities  for transit  agencies,  and  that  can                                                               
segway into  transporting individuals  who may require  some form                                                               
of  extra  assistance.   Uber  has  a relationship  in  Portland,                                                               
Oregon  where  it  has  Uber   Assist,  which  provides  enhanced                                                               
services for individuals.   The app is also tailored  in a manner                                                               
for  drivers  who are  hearing  impaired  or deaf  with  enhanced                                                               
capabilities to support  those individuals driving on  the app to                                                               
have an income.                                                                                                                 
1:56:42 PM                                                                                                                    
REPRESENTATIVE STUTES  asked whether when someone  calls for Uber                                                               
Assist, the driver's private vehicle has  a lift or whether it is                                                               
something Uber and the driver work together to create.                                                                          
MR.  MATTHEWS  responded that  within  the  metropolitan area  of                                                               
Seattle, and  the Seattle-Tacoma International Airport,  Uber has                                                               
a partnership  with Yellow  Cab and it  provides the  service for                                                               
individuals requiring  a wheelchair accessible vehicle,  and Uber                                                               
pays a fee on every trip.                                                                                                       
1:57:36 PM                                                                                                                    
ANNABEL CHANG, Director of Public  Policy, Lyft, responded to the                                                               
question regarding  non-emergency medical transit or  people with                                                               
potential mental handicaps,  and said that Lyft  provides tens of                                                               
thousands of  non-emergency transit rides every  single week, has                                                               
a partnership  with the National  Federation for the Blind.   The                                                               
Lyft app  also has voice  over capabilities so  visually impaired                                                               
individuals can actually  use their voice on the Lyft  app.  Lyft                                                               
also  partners with  hospitals and  senior living  centers which,                                                               
she   described,  is   one  of   Lyft's   greatest  and   largest                                                               
partnerships in  is with Brookdale  Senior Living  Centers across                                                               
the country.   The Lyft app is available for  senior citizens and                                                               
those who  do not have  access to a  smart phone can  order their                                                               
rides through a  desktop or laptop computer web  portal page, she                                                               
1:58:58 PM                                                                                                                    
REPRESENTATIVE  STUTES asked  whether  some of  the Lyft  drivers                                                               
have their own  vans equipped for a wheelchair,  or whether there                                                               
is a relationship  Lyft built with another company,  such as Uber                                                               
and Yellow Cab.                                                                                                                 
MS. CHANG answered that there  are multiple types of partnerships                                                               
in  place.    In  the   event  an  individual  notates  on  their                                                               
application that  they require special  needs beyond  the regular                                                               
lift,  Lyft  will  potentially  partner  up  with  transportation                                                               
providers within  the community,  and Lyft has  some partnerships                                                               
where a set ride fee is sent into a fund, she explained.                                                                        
REPRESENTATIVE  STUTES asked  whether any  of Lyft's  partnership                                                               
for any  of those types of  services are with the  local taxi cab                                                               
MS. CHANG  answered yes, and she  said that in some  markets that                                                               
is the case.                                                                                                                    
2:00:33 PM                                                                                                                    
REPRESENTATIVE BIRCH  referred to recent testimony  regarding the                                                               
collection of  sales tax  in Alaska,  wherein there  are multiple                                                               
jurisdictions and  there is local  sales tax in  some communities                                                               
and not in other communities.   He asked how Lyft deals with that                                                               
circumstance, whether it  is an issue, and how it  goes about the                                                               
sales tax collection.                                                                                                           
MS.  CHANG replied  that Lyft  is looking  at the  language being                                                               
crafted addressing that  issue at the municipal  level in Alaska.                                                               
At this time, she offered, there  is no precedent for a municipal                                                               
sales tax collection on the TNC  platform in the nation, but Lyft                                                               
is open to discussions.                                                                                                         
REPRESENTATIVE BIRCH asked  whether Lyft must pay a  sales tax on                                                               
a ride in Seattle or San Francisco.                                                                                             
MS. CHANG replied, "No, we do not."                                                                                             
2:02:03 PM                                                                                                                    
REPRESENTATIVE BIRCH asked her perspective  on the suitability of                                                               
the background checks including fingerprints.                                                                                   
MS. CHANG responded  that Lyft currently does not  operate in any                                                               
market  of peer-to-peer  ridesharing  models  with a  fingerprint                                                               
requirement.    Lyft's   current  third-party  background  checks                                                               
provider  is Sterling  Talent  Solutions,  a national  background                                                               
check   provider  for   several  companies   including  financial                                                               
services and health services.   As a former prosecutor, she said,                                                               
she is  aware that  the most accurate  information is  located at                                                               
the  country courthouse  level,  and Lyft  has  court runners  to                                                               
cross-check those records.                                                                                                      
2:03:52 PM                                                                                                                    
REPRESENTATIVE  KNOPP  referred  to  the  independent  contractor                                                               
status,  and  asked  what  defines  the  independent  contractor,                                                               
whether vehicles  must be registered  to the driver  and license,                                                               
and whether  insurance must  be in  the owner's  name.   He asked                                                               
whether drivers have the ability,  as independent contractors, to                                                               
hire drivers.                                                                                                                   
MS.  CHANG opined  that the  question was  regarding the  current                                                               
structuring  and  the  relationship  behind the  driver  and  the                                                               
vehicle.    She  explained  that  in all  states  the  driver  is                                                               
registered to  drive that vehicle, although,  there are instances                                                               
where the owner is not necessarily  the driver.  For example, she                                                               
explained, the title  of the car is under Joe  Smith and his wife                                                               
elects to  be a Lyft driver,  if she is listed  on the insurance,                                                               
and has the  capability of driving that vehicle, she  can also be                                                               
a driver  on Joe  Smith's car  as long as  she meets  the state's                                                               
background and driving record check.                                                                                            
2:05:20 PM                                                                                                                    
REPRESENTATIVE KNOPP surmised that  an Uber owner/operator driver                                                               
could  hire as  many drivers  as he  chose as  long as  they were                                                               
included on his insurance policy.                                                                                               
MS.  CHANG   opined  that  the   question  was  if   someone  was                                                               
potentially  operating a  mini-fleet  on the  Lyft platform,  and                                                               
answered  that  it  could  potentially  be  possible,  but  under                                                               
different  state regulations  there could  be limitations.   Lyft                                                               
does have  a partnership with  General Motors and  Hertz Holdings                                                               
where  people  could rent  a  vehicle  if  they  did not  have  a                                                               
qualifying vehicle  under state law.   She advised that  in order                                                               
to drive on this platform, they  are technically the owner of the                                                               
vehicle during that  rental period and are listed as  an owner of                                                               
that vehicle.                                                                                                                   
REPRESENTATIVE  KNOPP  said  that,   theoretically,  a  taxi  cab                                                               
company could  be using the  Lyft app  and be Lyft  drivers under                                                               
the mini-fleet as long as they are using the Lyft platform.                                                                     
MS. CHANG advised  that Lyft does not have taxi  cabs on the Lyft                                                               
platform  at this  time, and  opined that  that is  not available                                                               
anywhere in the United States.                                                                                                  
MR. MATTHEWS  interjected that the  Uber app in some  cities does                                                               
have taxi cabs  as an option on the Uber  platform, and there are                                                               
vehicles operated by the  owner/operator involved individuals who                                                               
may lease that vehicle from an owner.                                                                                           
2:07:17 PM                                                                                                                    
REPRESENTATIVE KNOPP  noted that the committee  has predominantly                                                               
heard from  Uber as  "the push that  is behind  the legislation,"                                                               
but  he surmised  there are  numerous TNC  out there.   He  asked                                                               
whether providing the exemptions  the companies are requesting is                                                               
necessary for  all TNC platforms  from doing business  in Alaska,                                                               
even if Uber chooses not to.                                                                                                    
MS.  CHANG responded  that HB  132 would  be critical  for Lyft's                                                               
ability to launch in Alaska.                                                                                                    
2:08:32 PM                                                                                                                    
REPRESENTATIVE  JOSEPHSON  referred   to  Seattle's  approach  to                                                               
regulation  which  began  in  earnest  in  December  2015,  which                                                               
resulted in litigation  and disputes about the  City of Seattle's                                                               
ability to regulate Uber.  He  asked whether Lyft had joined Uber                                                               
in any litigation in the City of Seattle.                                                                                       
MS.  CHANG  opined  that  the United  States  Chamber  has  filed                                                               
litigation, and Lyft is a member of the (indisc.) Chamber.                                                                      
2:09:24 PM                                                                                                                    
REPRESENTATIVE  STUTES asked  whether  Uber is  operating in  any                                                               
city whatsoever with any type of local controls.                                                                                
MR. MATTHEWS responded  that the City of  Seattle, Washington was                                                               
the  third  city Uber  launched  in  2001,  and its  service  has                                                               
continued to operate for the  most part uninterrupted.  Although,                                                               
he said, Uber is pursuing  statewide regulations in consultations                                                               
with  the City  of  Seattle  and other  cities  in Washington  to                                                               
enshrine   a   state   framework  recognizing   the   costs   and                                                               
complexities of regulations.                                                                                                    
REPRESENTATIVE STUTES  surmised that from this  point forward any                                                               
area Uber chooses to operate would not be under local control.                                                                  
MR. MATTHEWS responded yes, and  he said that in Washington, Uber                                                               
has been  removing operations from  cities with local  control as                                                               
it works toward state regulations.                                                                                              
2:10:59 PM                                                                                                                    
REPRESENTATIVE  JOSEPHSON surmised  that  in Uber's  perspective,                                                               
there is no conceivable way, in  the long term, to tolerate local                                                               
regulation of the TNC industry within that community.                                                                           
MR.  MATTHEWS  answered that  he  would  "err on  answering  that                                                               
absolute manner."  He stated  that as Uber works toward statewide                                                               
regulations  with municipalities  under his  operational area  in                                                               
Washington,  Uber  has  erred on  launching  new  locations  that                                                               
request carveouts  or nuanced regulations  to support a  facet of                                                               
city operation or city structure.                                                                                               
2:12:16 PM                                                                                                                    
REPRESENTATIVE JOSEPHSON  asked whether  Mr. Matthews  was closer                                                               
to a "yes or no" to his question.                                                                                               
MR. MATTHEWS replied  that it is all situational.   He added that                                                               
in order  for Uber to  contemplate launching in Alaska,  it would                                                               
require a statewide bill with a clear and concise framework.                                                                    
2:12:59 PM                                                                                                                    
REPRESENTATIVE   WOOL   asked   whether  the   money   a   person                                                               
"relinquishes"  through their  phone app  then goes  to Uber  and                                                               
Uber then disperses it back to the driver.                                                                                      
MR.  MATTHEWS explained  that it  is  a cashless  service in  the                                                               
sense that  a person  puts a  credit card or  gift card  on their                                                               
app,  the  payment  is  then reconciled  through  a  credit  card                                                               
company or another payment service, and  the driver is paid.  The                                                               
driver  can request  to be  paid within  that day,  within a  few                                                               
hours, weekly, or at a time the driver sees fit.                                                                                
2:14:27 PM                                                                                                                    
MR.  MATTHEWS, in  response  to  Representative Wool's  question,                                                               
confirmed that  Uber makes the  payment back  to the driver  at a                                                               
time period agreeable  to both parties, or at  the default seven-                                                               
REPRESENTATIVE WOOL asked Ms. Chang the same question.                                                                          
MS.  CHANG   responded  that  Lyft  has   a  third-party  payment                                                               
processor because it  is all a cashless  credit card transaction.                                                               
Essentially,  she  explained, once  the  ride  has finished,  the                                                               
passenger makes  a determination on how  much to tip on  the app,                                                               
and  the  payment  is  completed.   At  that  time,  the  payment                                                               
processor splits the  fare, the driver retains 75  percent of the                                                               
fare  and   100  percent  of   the  tips.    Similar   to  Lyft's                                                               
competitors, the  driver selects the  time period for  payment to                                                               
their account, she said.                                                                                                        
REPRESENTATIVE  WOOL asked  whether Lyft  is primarily  operating                                                               
only in  states with statewide  regulations, and whether  the new                                                               
states Lyft picks up only have statewide regulations.                                                                           
MS.  CHANG responded  that  Lyft hopes  to  launch operations  in                                                               
Alaska,  and  in   order  to  launch  it   would  need  statewide                                                               
regulations.    She offered  that  39  states have  comprehensive                                                               
statewide   legislation  and   in  the   states  with   statewide                                                               
legislation, Lyft was able to launch in much smaller cities.                                                                    
2:17:12 PM                                                                                                                    
CHAIR KITO reopened public testimony on HB 132.                                                                                 
2:17:26 PM                                                                                                                    
JIM   BRENAN,  Attorney,   Anchorage  Taxi   Cab  Permit   Owners                                                               
Association (ATCPOA), advised he  is an attorney representing the                                                               
Anchorage Taxi  Cab Permit Owners Association  (ATCPOA), and said                                                               
he has  represented elements of  the Anchorage taxi  cab industry                                                               
for decades  and is well experienced  in governmental regulations                                                               
of passenger  transportation.  In  Alaska, he offered,  that type                                                               
of regulation  has always been under  local municipalities, never                                                               
under the  state.  He  opined that  the question has  become "how                                                               
can  we  fit this  into  Uber's  overall game  plan  nationwide,"                                                               
except there are a number of  reasons why this industry should be                                                               
locally  regulated.   Alaska's  cites  are  all different,  their                                                               
transportation  situations  are   different,  and  therefore  the                                                               
regulations are  different for  taxi cabs as  they should  be for                                                               
TNCs.   There is no  reason TNCs should  not be subject  to local                                                               
regulations thereby allowing  the regulator to make  an effort to                                                               
be  even-handed between  the regulation  of taxi  cabs and  other                                                               
forms of transportation.   Originally, he pointed  out, there was                                                               
a fiscal note, and now there  is no fiscal note, which means this                                                               
amounts to  no regulation  because there  is no  way this  can be                                                               
regulated  on a  statewide basis  without additional  expenses in                                                               
the way of  state governmental employees.  The  City of Anchorage                                                               
alone  has four  full-time employees  to regulate  taxi cabs  and                                                               
limousines, and he  urged the committee to at  least jettison the                                                               
section that  preempts municipal  regulation and leave  this type                                                               
of regulation  to Alaska's municipalities.   He advised  that the                                                               
Municipality  of Anchorage  Assembly  has been  wrangling with  a                                                               
detailed and  well thought out  ordinance for regulation  of TNCs                                                               
in Anchorage.   This  assembly, he  commented, has  experience in                                                               
dealing with  the transportation  of passengers  for hire  and it                                                               
should  not  be superseded  by  a  blanket bare-bones  regulatory                                                               
process  with   no  enforcement  mechanism.     He  reminded  the                                                               
committee that there  is no provision in this bill  for a penalty                                                               
if the TNCs  or its drivers do not comply.   The discussion here,                                                               
he  explained, is  an enactment  that would  have no  enforcement                                                               
capability   to   replace   municipal  regulations,   which   has                                                               
enforcement capability.                                                                                                         
2:21:04 PM                                                                                                                    
CHAIR KITO, after  ascertaining no one wished  to testify, closed                                                               
public testimony on HB 132.                                                                                                     
2:21:29 PM                                                                                                                    
REPRESENTATIVE JOSEPHSON  asked whether Lyft, at  its discretion,                                                               
changes the  rate it  charges passengers  and therefore  also the                                                               
rate it pays drivers, similar to Uber.                                                                                          
MS.  CHANG responded  that Lyft  does engage  in "prime  time," a                                                               
dynamic pricing  tool.   For example, when  a large  concert ends                                                               
and the  people leave  the facility,  in order  for Lyft  to have                                                               
enough supply  to meet  the demand, Lyft  arranges its  prices to                                                               
reflect that  greater demand  and incentivizes  drivers to  go to                                                               
that  location and  pick  up rides.   She  described  this as  an                                                               
effective   tool  in   making   sure  people   arrive  at   their                                                               
destinations, and they  are notified through the app  if there is                                                               
a price  change, and a person  cannot request a ride  or accept a                                                               
ride until  they acknowledge there was  a price change.   The app                                                               
has a price estimator so it is  always clear as to what the price                                                               
would likely be when the person is charged.                                                                                     
2:23:02 PM                                                                                                                    
REPRESENTATIVE  WOOL asked  whether  other municipalities,  other                                                               
than the City of Seattle, that  Uber operates in that do not have                                                               
municipal regulations.                                                                                                          
MR. MATTHEWS  advised that Uber  has different  arrangements with                                                               
different   cities,  for   example,  the   City  of   Tacoma  has                                                               
regulations differing  from the  City of Seattle  and Bellingham.                                                               
He  then  listed  the  cities  in  Washington  with  and  without                                                               
2:24:09 PM                                                                                                                    
REPRESENTATIVE WOOL  surmised that the  City of Spokane  does not                                                               
have  regulations   and  Uber   operates  there;   however,  when                                                               
statewide legislation  is passed,  all cities  and municipalities                                                               
in the State of Washington would be under the same statute.                                                                     
MR. MATTHEWS  advised that the  City of Spokane is  waiting until                                                               
statewide regulations are in place,  and Uber has a Memorandum of                                                               
Understanding with the  City of Spokane to  clarify any questions                                                               
it had, but there are no adopted regulations.                                                                                   
2:24:51 PM                                                                                                                    
REPRESENTATIVE  SULLIVAN-LEONARD commented  that she  understands                                                               
the Alaska  Railroad and other  tour industries do not  pay sales                                                               
tax  or attain  business licenses  in each  individual city  when                                                               
transporting people in  and out of that specific area.   She said                                                               
she  wondered whether  Alaska needs  to have  regulations on  the                                                               
Uber  and Lyft  TNC  market  when they  are  providing a  service                                                               
similar to  the railroad and  tour bus  services.  She  asked Mr.                                                               
Matthew to compare that description to the taxi cab industry.                                                                   
MR.  MATTHEWS  answered that  he  was  unsure he  understood  the                                                               
REPRESENTATIVE SULLIVAN-LEONARD noted that  the challenge for her                                                               
is  that if  taxi cab  drivers are  required to  have a  business                                                               
license  in  all  of  the  small  different  communities  in  the                                                               
Matanuska-Susitna Valley and  Anchorage, it limits transportation                                                               
in  a manner  that possibly  Uber and  Lyft could  provide.   She                                                               
asked  whether   that  was  Mr.  Matthews   perception  in  other                                                               
MR. MATTHEWS  replied that in  rural states, such as  Montana and                                                               
Idaho,  Uber has  been able  to enter  and provide  services into                                                               
smaller  cities  and towns  and  smaller  markets that  have  not                                                               
traditionally  had a  taxi cab  type service.   Yes,  he related,                                                               
smaller   communities   are   served   better   under   statewide                                                               
regulations  and   are  served  more  conveniently   through  TNC                                                               
2:27:58 PM                                                                                                                    
REPRESENTATIVE  STUTES asked  whether  the reason  Uber does  not                                                               
operate  in  Port  Townsend  is  because  the  city  wants  local                                                               
MR. MATTHEWS  answered that certain jurisdictions  ask for carve-                                                               
outs  or nuances  in their  regulations and  Uber chooses  not to                                                               
operate in those jurisdictions.                                                                                                 
REPRESENTATIVE  STUTES asked  whether Mr.  Matthews was  aware of                                                               
the regulations Anchorage  had required that caused  Uber to turn                                                               
to the legislature for regulations.                                                                                             
2:29:30 PM                                                                                                                    
MR. MATTHEWS said he has  an understanding of the regulation that                                                               
the  City  of  Anchorage  is  considering  at  this  time  as  to                                                               
transportation network companies (TNCs).                                                                                        
REPRESENTATIVE  STUTES  asked  what  the  regulations  were  that                                                               
created  some  consternation  for  the TNCs  that  prompted  Uber                                                               
coming to the legislature.                                                                                                      
MR.  MATTHEWS   asked  whether  she   was  discussing   the  2015                                                               
regulations or the current City of Anchorage conversations.                                                                     
REPRESENTATIVE  STUTES  opined  it   would  have  been  the  2015                                                               
regulations because that is when Uber  chose to come to the state                                                               
looking for legislation.                                                                                                        
MR.  MATTHEWS  answered  that   the  2015  regulations  included:                                                               
cameras  in vehicles,  fingerprint background  checks, individual                                                               
licensing, and  any number of  issues that  Uber did not  seek to                                                               
include because it was somewhat  against the manner in which Uber                                                               
looks  at  its  background  check   model  and  its  verification                                                               
systems.   Uber believes that  fingerprint background  checks are                                                               
somewhat discriminatory  in nature  and can  leave no  chance for                                                               
rehabilitation  for  individuals,  and also,  Uber  believes  its                                                               
third-party background checks are more  suited for the team model                                                               
versus what  was being requested  by the  City of Anchorage.   He                                                               
offered that  Uber does have  digital records of  rides including                                                               
GPS roads, and  the City of Anchorage requested  video cameras as                                                               
well, Uber  does not believe  that is necessary for  the public's                                                               
2:31:55 PM                                                                                                                    
REPRESENTATIVE STUTES said  she was confused by  the comment that                                                               
Uber believes fingerprint checks were discriminatory in nature.                                                                 
MR. MATTHEWS answered that fingerprint  background checks use FBI                                                               
records  and the  FBI  has  indicated that  the  records lack  of                                                               
information about  the final  outcome of cases.   He  pointed out                                                               
that FBI records  are somewhat inconsistent because  it relies on                                                               
each  individual  police department  or  agency  to upload  their                                                               
records into the  FBI file.  The  federal government acknowledged                                                               
that  the  database  was  not  fully complete  and  there  was  a                                                               
somewhat large  margin of error  due to human  technicians and/or                                                               
the fact that there are  missing records.  Fingerprint background                                                               
checks can be  discriminatory in the sense that  when records are                                                               
incomplete and  inaccurate, individuals  are more likely  to make                                                               
faulty  decisions based  off of  those records.   He  pointed out                                                               
that communities of color  are disproportionally impacted because                                                               
they are  arrested at  a higher  rate in  the United  States, and                                                               
fingerprint  background  checks   show  arrest  and  convictions,                                                               
whereas   the  third-party   background  checks   only  look   at                                                               
convictions.    There  are  certain  concerns  about  privacy  in                                                               
government overreach  in that the  FBI is requested  to (indisc.)                                                               
system from the Privacy Act, and  that the retention of civil and                                                               
criminal fingerprints have been merged.                                                                                         
2:33:41 PM                                                                                                                    
MS. CHANG reiterated that she is  a former prosecutor and a major                                                               
concern about  the FBI database,  which is fingerprint  based, is                                                               
exactly  what  Mr.  Matthews testified.    In  certain  counties,                                                               
uploads  are often  paper based  and voluntary,  so depending  on                                                               
whether  certain  counties  are  short staffed,  et  cetera,  the                                                               
counties actually  do not upload information  to state's database                                                               
system and; therefore,  the state does not then  have the ability                                                               
to update, and send that update  to the FBI database system.  The                                                               
difference  here,  she  said,  with  the TNC  model  is  that  it                                                               
actually  goes  directly  to the  primary  source,  the  criminal                                                               
courthouse,  for the  most accurate  information  possible to  be                                                               
certain  individuals  are not  caught  up  in a  false  positive,                                                               
thereby, being fairer to the applicants.                                                                                        
2:35:00 PM                                                                                                                    
REPRESENTATIVE JOSEPHSON  commented that Ms. Kathie  Wasserman, a                                                               
representative  of the  Alaska Municipal  League, testified  that                                                               
one of the  frustrations for cities was the  inability to collect                                                               
a sales tax  through the TNC system and Ms.  Chang's response was                                                               
that  "nowhere  in the  United  States  does  that happen."    He                                                               
referred to  an article and  said that "Airbnb agrees  to collect                                                               
hotel  taxes in  another huge  U.S. city,  and that  city is  Los                                                               
Angles.    And it  says  there  are  200 other  cities  worldwide                                                               
including  San Francisco."   He  referred  to the  burden put  on                                                               
firemen, law enforcement, and roads,  and said that it all sounds                                                               
pretty reasonable,  and asked "Why  should you get  exempted from                                                               
that, and  why could not  there be a system  to say you  can't be                                                               
exempted from that?"                                                                                                            
2:36:05 PM                                                                                                                    
MS. CHANG  offered that to be  clear, Airbnb is not  regulated at                                                               
the  state level  in any  region and  are municipally  regulated,                                                               
which is  part of the reason  they have entered into  this model.                                                               
Essentially, she said, the current  bill language read that there                                                               
is no permit fee,  that this is part of the  discussion here in a                                                               
way that "we  can make sure that cities are  made whole" and Lyft                                                               
looks forward to having that discussion.                                                                                        
2:36:48 PM                                                                                                                    
MR.    MATTHEWS   responded    that   in    some   jurisdictions,                                                               
transportation  is  a service  exempt  from  municipal sales  tax                                                               
(indisc.) designation  on those municipalities.   He related that                                                               
he  heard  from Representative  Wool  that  they are  working  on                                                               
language  for  this particular  situation  and  Uber is  open  to                                                               
conversations about sales taxes.                                                                                                
2:37:15 PM                                                                                                                    
REPRESENTATIVE  WOOL  responded  that he  is  currently  pursuing                                                               
language  to  accommodate  local  municipal  sales  tax  in  this                                                               
[HB 132 was held over.]                                                                                                         

Document Name Date/Time Subjects