Legislature(2017 - 2018)BARNES 124

03/31/2017 03:15 PM House LABOR & COMMERCE

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03:22:25 PM Start
03:23:09 PM Confirmation Hearing(s)
03:25:32 PM SB14
03:35:13 PM Confirmation Hearing(s)
03:40:02 PM SB14
04:46:12 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved HCS CSSB 14(L&C) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
+ Confirmation Hearings: TELECONFERENCED
- Board of Certified Direct-Entry Midwives
- Board of Pharmacy
- Board of Professional Counselors
             SB 14-TRANSPORTATION NETWORK COMPANIES                                                                         
3:25:32 PM                                                                                                                    
CHAIR KITO announced  that the next order of business  would be CS                                                              
FOR   SENATE   BILL  NO.   14(FIN)   am   "An  Act   relating   to                                                              
transportation  network   companies  and  transportation   network                                                              
company drivers; and providing for an effective date."                                                                          
3:26:15 PM                                                                                                                    
WESTON   EILER,  Staff,   Senator  Mia   Costello,  Alaska   State                                                              
Legislature,  presented CSSB  14  (FIN) am  on  behalf of  Senator                                                              
Costello, prime sponsor.   He stated that this is  the "Let's Ride                                                              
Alaska   Act."     It  would   authorize  transportation   network                                                              
companies  (TNCs),   more  commonly  known  as   "rideshares,"  to                                                              
operate in  the state of Alaska.   The proposed  legislation would                                                              
set the framework  and safeguards that would enable  TNCs, such as                                                              
Uber  and  Lyft,  to  provide  transportation   services.    These                                                              
rideshares  create  a platform  where  Alaskans  can  "self-select                                                              
each other  to get from  here to there."   These services  provide                                                              
economic  benefits  and  flexible   employment  for  Alaskans  and                                                              
benefit a  broad demographic in  underserviced areas.  [TNCs] give                                                              
a  connection when  it's  hard to  get a  cab,  improve access  to                                                              
services, and  lower the  number of  occurrences of driving  under                                                              
the influence (DUI).   He indicated that the  proposed legislation                                                              
would  offer a  statewide solution  while allowing  municipalities                                                              
to have a choice.                                                                                                               
3:30:09 PM                                                                                                                    
MR. EILER spoke  about the demand for services.   For example:  In                                                              
2014,  Uber Technologies  Inc. had  over 100  drivers; over  2,000                                                              
Alaskans  had the Uber  Technologies Inc.  application ("app")  on                                                              
their phone,  and 60,000  opened the  app just to  see if  the app                                                              
was available.   He  related that 49  other states have  rideshare                                                              
options;  Alaska is  the  last state  without  this  service.   He                                                              
stated that this  bill is necessary because it  clarifies Alaska's                                                              
workers' compensation  insurance statutes, which will  allow these                                                              
companies   to  operate   in  Alaska.      Previously  when   Uber                                                              
Technologies  Inc.  operated  in  Anchorage, it  was  involved  in                                                              
talks  with  the  Municipality  of  Anchorage  and  the  State  of                                                              
Alaska, which  resulted in  Uber Technologies  Inc.'s pausing  its                                                              
operations  and signing  a settlement.   Part  of that  settlement                                                              
was  that  [TNCs]  would  seek  legislation  that  would  add  TNC                                                              
drivers  to the  list  of job  classes  and occupations  in  state                                                              
statutes  that  are  exempt  from   workers'  compensation.    TNC                                                              
drivers are included  in the same job class as taxi  drivers.  Mr.                                                              
Eiler  stated, "That  was part of  the clarity  in the  resolution                                                              
that  the  company   Uber  Technologies  Inc.  reached   with  the                                                              
Department of  Labor in 2014 and  is one of the  essential reasons                                                              
why  there's  a need  for  state  legislation  to help  deal  with                                                              
MR. EILER  noted that  Washington State  exempts TNC drivers  from                                                              
workers' compensation.   No jurisdiction considers  TNC drivers as                                                              
employees.     TNC  drivers  would   fit  under   the  independent                                                              
contractor  concept.   Drivers can  work for  a TNC  on their  own                                                              
time and using their  own vehicles, phones, and skills.   A driver                                                              
can work by  turning an app on.   To qualify to work for  a TNC, a                                                              
driver needs to  meet the automobile and driving  record standards                                                              
for safety and accountability.                                                                                                  
             SB 14-TRANSPORTATION NETWORK COMPANIES                                                                         
3:40:02 PM                                                                                                                    
CHAIR  KITO announced  the  final  order of  business  would be  a                                                              
return to CS  FOR SENATE BILL NO.  14(FIN) am "An Act  relating to                                                              
transportation  network   companies  and  transportation   network                                                              
company drivers; and providing for an effective date."                                                                          
3:40:15 PM                                                                                                                    
REPRESENTATIVE  BIRCH stated  that  he is  "a  fan" [of  rideshare                                                              
services].   Regarding the  idea of a  limited passenger  base, he                                                              
asked  if   it  was  known   if  communities  [using   TNCs]  have                                                              
discovered an increase  in customers because of the  "ease of use"                                                              
[of  apps] and  if there  are any  other  jurisdictions that  have                                                              
documented results.                                                                                                             
3:41:11 PM                                                                                                                    
MR. EILER  clarified that TNCs do  grow a customer base  by making                                                              
it easier  for a passenger  to get to  his\her destination.   TNCs                                                              
make fares  more affordable  for passengers  than regulated  fairs                                                              
for the  public provided thru car  services or taxies.   Rideshare                                                              
services  are also  creating more  forms of  transportation.   TNC                                                              
services are  accessed thru  apps on a  smartphone using  a credit                                                              
card.  He  stated that using a  TNC app on a cell phone  can allow                                                              
a passenger  to self-select  the driver they  want to use  to take                                                              
them  to  their  destination.    He stated  that  there  had  been                                                              
studies that show  TNC companies have been in  operation for close                                                              
to a decade and  have not seen a significant demise  or decline in                                                              
the taxi  industry.  Mr.  Eiler related that  a study done  by the                                                              
Portland   Bureau  of   Transportation   showed   the  impact   of                                                              
initiating  the  operation of  rideshare  companies.   That  study                                                              
showed  there was  an initial,  short-term  dip in  the number  of                                                              
cabs  hailed;  however, over  the  past  six-month period  of  the                                                              
pilot, the study  showed that for-hire transportation  use grew by                                                              
up to 40 percent.                                                                                                               
3:44:04 PM                                                                                                                    
REPRESENTATIVE JOSEPHSON  requested Mr. Eiler please  describe how                                                              
the system complements what cities are doing.                                                                                   
MR. EILER responded  communities are in the process  of looking at                                                              
how they  regulate for-hire taxi  or car transportation  services.                                                              
The   intention   of  the   sponsor   is  to   improve   community                                                              
transportation.  The Anchorage  municipal assembly  is phasing  in                                                              
its   medallion  permits.   Other   communities  have   Commercial                                                              
Passenger  Vehicles (CPV).   The intent  is to  make it  easier to                                                              
get  a  ride and  increase  transportation  in  communities  where                                                              
there is clearly a demand.                                                                                                      
REPRESENTATIVE  JOSEPHSON asked  Mr. Eiler if  CSSB 14(FIN)  am is                                                              
sufficiently regulatory.                                                                                                        
MR. EILER  answered that 44 states  regulate rides on  a statewide                                                              
level.    The  concerns  mentioned  regarding  regulation,  public                                                              
safety insurance,  and recourse are handled in  the proposed bill:                                                              
Rideshares  would be  required to  follow all  traffic and  public                                                              
safety  laws; and  drivers  must hold  both  drivers and  business                                                              
licenses,  which provide  recourse if  there are  any issues  that                                                              
might arise.   These  rideshares have a  large amount  of feedback                                                              
and  self-correction  by  their  customers  and  drivers.    These                                                              
companies continually  evaluate and review the rankings  that both                                                              
drivers and riders  receive.  For example, if a bad  driver is not                                                              
meeting  the  standards,  being   unfriendly,  arriving  late,  or                                                              
acting  in  an  aggressive  manner,   then  driver  and  passenger                                                              
receive instantaneous  feedback by the  TNC companies.   Mr. Eiler                                                              
said the prime  sponsor is comfortable with the  structure and the                                                              
set-up  that's provided  and  believes that  it  provides for  the                                                              
necessary safeguards to have rideshares come to Alaska.                                                                         
3:47:11 PM                                                                                                                    
REPRESENTATIVE  JOSEPHSON  questioned if  independent  contractors                                                              
in  Seattle are  treating  these folks  as  employees and  weather                                                              
California is still debating this.                                                                                              
MR.  EILER stated  no statewide  jurisdictions consider  rideshare                                                              
drivers to  be employees.   The State of  Oregon, on  a regulatory                                                              
level, had  determined that  rideshare drivers  are not  employees                                                              
and were  thus exempt  from workers' compensation.   The  State of                                                              
Washington  removes rideshare  drivers from  the state's  workers'                                                              
compensation program.   As a result, rideshare  services fit under                                                              
the independent  contractor's model,  exempting them  from workers                                                              
compensation  along with  taxi cab  drivers  and other  comparable                                                              
REPRESENTATIVE JOSEPHSON  stated that many states  do not describe                                                              
these types of  drivers as independent contractors  but leave that                                                              
question open for a court of law to determine.                                                                                  
MR. EILER answered  he would provide comparative  information from                                                              
the rideshare  companies  and that the  information is  accessible                                                              
on-line.   He also  stated that  several states  are silent  about                                                              
how  they   define  or  frame   the  concept  of   an  independent                                                              
contractor  in their  statutes.   States like  Arkansas have  a 5-                                                              
prong variety  of test they  put in statute.   No state  considers                                                              
TNC drivers to be employees.                                                                                                    
3:49:46 PM                                                                                                                    
REPRESENTATIVE  SULLIVAN-LEONARD  stated  that  she  supports  the                                                              
bill and thinks  of it more like  an economic overview.   She said                                                              
she  encourages  new  development   in  the  state  and  wants  to                                                              
continue  to  encourage  new  businesses  to come  to  Alaska  and                                                              
invest.   She asked  how many  jobs Lyft  and other TNC  companies                                                              
will  bring to  the state.   She  asked  Mr. Eiler  to start  with                                                              
numbers for the city of Anchorage, Alaska.                                                                                      
MR.  EILER said  he would  be happy  to provide  data showing  the                                                              
benefits that  these companies  and this  type of technology  have                                                              
offered  across the  country.   What's  seen is  that Lyft,  Inc.,                                                              
estimates that  it adds $750 million  to the economies  around the                                                              
country.    The  company  has seen  and  sighted  an  increase  in                                                              
spending of  49 percent.   Surveys have  shown that 60  percent of                                                              
respondents  either agree  or strongly  agree  that Lyft  provides                                                              
access to  more areas.   The bill sponsor's  staff have  spoken to                                                              
stakeholders that say  this type of job fits  their lifestyle very                                                              
well for the types  of citizens that are in Alaska.   For example,                                                              
being a  rideshare driver  is one  of the few  side jobs  that the                                                              
active duty military  can take, because it is  flexible.  Specific                                                              
figures  for Uber  Technologies  Inc. are  unavailable, since  the                                                              
company had  only been in  Alaska for just  a few months  in 2014.                                                              
At that time,  Uber Technologies Inc.  had over 100 drivers.   Mr.                                                              
Eiler  stated that  if these  new  technologies and  opportunities                                                              
are  allowed,  and  the  choice  and  competition  can  come  into                                                              
Alaska,  then the  prime sponsor  thinks that  this can  transform                                                              
and  catapult  Alaska's  economy   in  ways  that  can't  even  be                                                              
3:53:05 PM                                                                                                                    
REPRESENTATIVE  SULLIVAN-LEONARD  requested  to see  the  numbers.                                                              
Regarding  her  constituency  in  the  Matanuska-Susitna  (Mat-Su)                                                              
Valley, she  related there are a  lot of families that  work part-                                                              
time jobs  because that's  what is available  in that  area; being                                                              
able to work for a rideshare service would be highly desirable.                                                                 
3:53:32 PM                                                                                                                    
REPRESENTATIVE  KNOPP stated  that  while he  thinks  TNCs are  an                                                              
upcoming technology,  he does not  like the proposed  legislation.                                                              
He said he is  an advocate for local control.   He related that in                                                              
the Kenai Peninsula  Borough, people must register  as independent                                                              
contractors and have  business licenses to collect sales  tax.  He                                                              
said  he  is   not  certain  SB  14  would   regulate  independent                                                              
contractors;  it  would  regulate   TNC  companies  providing  the                                                              
applications.   He  warned  that  in its  eagerness  to "get  this                                                              
thing  coming,"   the  committee  is  "not  thinking   this  thing                                                              
through."   He said Alaska  is probably  the last state  trying to                                                              
adopt  [legislation  regulating  TNCs];  other  states  have  gone                                                              
through   changes   in   regulations   and   have   adopted   more                                                              
regulations.  He  questioned what the outcome of  such legislation                                                              
would be.                                                                                                                       
REPRESENTATIVE  KNOPP  noted that  there  is  a zero  fiscal  note                                                              
accompanying CSSB  14(FIN) am but  predicted that the  Division of                                                              
Licensing  would "get  bombarded  with applications  for  business                                                              
licenses."  He said  he would be more comfortable  if the proposed                                                              
legislation  were   to  offer   the  basics  regarding   insurance                                                              
requirements  and  driver  and vehicle  inspections,  while  local                                                              
jurisdictions   could  take   care  of  "the   issues  that   will                                                              
eventually arise."   He indicated that the committee  had received                                                              
numerous  letters of objection  from local  governing bodies  that                                                              
do  not  want  to  have  "that  option."    Regarding  independent                                                              
contractor licensing  and registration, he asked,  "Will this bill                                                              
really extend to those drivers?"                                                                                                
3:58:12 PM                                                                                                                    
MR. EILER expressed  that Senator Costello's intention  was not to                                                              
increase burdens.   Conversely, he  said she sees CSSB  14(FIN) am                                                              
as  a  "great positive"  that  will  "grow  the number  of  people                                                              
registering for  business licenses in  the state."  He  offered to                                                              
follow up with  Representative Knopp's staff to  clarify insurance                                                              
coverage  or  any  other  questions regarding  the  bill.    Other                                                              
states have  a variety of ways  to define and outline  the concept                                                              
of working  as an independent contractor  (IC).  When  the company                                                              
Uber Technologies  Inc. operated in  the state of Alaska  in 2014,                                                              
the first  page of  the settlement it  signed with the  Department                                                              
of Labor and  Workforce Development said that it  would not resume                                                              
operations  or  seek  to  continue  activities  unless  state  law                                                              
specifically  exempted  TNC drivers  from  workers'  compensation.                                                              
Insurance  is   the  purview  of   the  State  of  Alaska.     The                                                              
legislature  sets the  statutes  on  that, and  there  can be  the                                                              
additional   requirements  on   taxi  drivers   or  others.     He                                                              
emphasized  that under  CSSB 14(FIN)  am transportation  companies                                                              
would be  responsible for  "insurance that  exceeds ...  any local                                                              
jurisdiction  in  the state  of  Alaska."   He  mentioned  statute                                                              
related  to  independent  contractors  and  consideration  by  the                                                              
administration for the further definition in statute.                                                                           
4:02:40 PM                                                                                                                    
REPRESENTATIVE  KNOPP stated  that he  would like  to see  TNCs in                                                              
Alaska.   He reiterated  that independent  contractors are  exempt                                                              
from  workers' compensation  insurance  and must  have a  business                                                              
license.  He suggested removal of "local control language."                                                                     
4:04:11 PM                                                                                                                    
CHAIR  KITO interjected  that Representative  Knopp was  referring                                                              
to a committee substitute that had not yet been adopted.                                                                        
4:04:56 PM                                                                                                                    
REPRESENTATIVE WOOL  moved to adopt  the proposed  House committee                                                              
substitute  (HCS)  for  CSSB  14(FIN)   am,  labeled  30-LS0250\L,                                                              
Wallace, 3/31/17, as a working document.                                                                                        
4:05:09 PM                                                                                                                    
CHAIR KITO objected for discussion purposes.                                                                                    
4:05:30 PM                                                                                                                    
LAURA  STIDOLPH, Staff,  Representative  Adam  Wool, Alaska  State                                                              
Legislature,  stated  that  version L  would  incorporate  changes                                                              
that the  companion bill [HB  132] made in  the House, as  well as                                                              
incorporate  some amendments  that had  been made  by the  Senate.                                                              
It  would involve  a  more  prescriptive, seven-year  lookback  at                                                              
crimes that  would disqualify a person  from being a driver  for a                                                              
TNC.  There  would also be  a three-year lookback at  their moving                                                              
violations which may also disqualify a person.                                                                                  
MS.  STIDOLPH said  the  first  change was  on  page  8, line  24,                                                              
adding  AS  [23.10.699]  and  AS   23.30.395  to  clarify  a  more                                                              
independent contractor  language in statute.  Language  on page 9,                                                              
lines 27-31, through page 10, lines 1-21 were removed and the                                                                   
following language was added:                                                                                                   
     (b)  A transportation  network company  may not allow  a                                                                   
     driver  to  accept  trip requests  through  its  digital                                                                   
     network if the driver                                                                                                      
          (1) has, in the past three years,                                                                                     
               (A)  been convicted of  or forfeited  bail for                                                                   
     a third or subsequent moving traffic violation;                                                                            
               (B) been convicted of                                                                                            
                    (i)   driving  while  license   canceled,                                                                   
     suspended,  revoked,  or in  violation  of a  limitation                                                                   
     under AS 28.15.291;                                                                                                        
                    (ii)  failure  to stop  at the  direction                                                                   
     of a peace officer under AS 28.35.182;                                                                                     
                    (iii)   reckless  or  negligent   driving                                                                   
     under AS 28.35.400 or 28.35.410; or                                                                                        
                    (iv)  a  law   or  ordinance  of  another                                                                   
     jurisdiction  having  similar  elements  to  an  offense                                                                   
     listed in (i) - (iii) of this subparagraph;                                                                                
          (2) has,  in the past  seven years, been  convicted                                                                   
               (A)  any  offense  that  is  an  unclassified,                                                                   
     class  A,  or   class  B  felony  in  this   or  another                                                                   
     jurisdiction; or                                                                                                           
               (B) a misdemeanor involving                                                                                      
                    (i)  a  crime   under  AS  28.33.030,  AS                                                                   
     28.35.030, or 14 28.35.032;                                                                                                
                    (ii)  a  crime   under  AS  28.35.050  or                                                                   
                    (iii)  a crime against a person  under AS                                                                   
     11.41; or                                                                                                                  
                    (iv)  a  law   or  ordinance  of  another                                                                   
     jurisdiction  having  similar  elements  to  an  offense                                                                   
     listed in (i) - (iii) of this subparagraph;                                                                                
          (3) is  listed on the  United States Department  of                                                                   
     Justice National Sex Offender Public Website; or                                                                           
          (4) is under 21 years of age.                                                                                         
     (c)  A transportation  network  company  driver may  not                                                                   
          (1)   provide  a   prearranged   ride  unless   the                                                                   
     transportation  network company  rider has been  matched                                                                   
     to  the  driver  through  the  digital  network  of  the                                                                   
     transportation network company;                                                                                            
          (2)  solicit  a  ride   or  accept  a  street  hail                                                                   
     request for a ride; or                                                                                                     
          (3)  solicit or  accept  cash payments  for a  fare                                                                   
     from a rider.                                                                                                              
4:12:01 PM                                                                                                                    
REPRESENTATIVE  JOSEPHSON  asked, "What  are  the changes  between                                                              
'E' and 'L'?"                                                                                                                   
MS. STIDOLPH  answered,  "'E' and  'L' were the  two ...  statutes                                                              
that  clarified   'independent  contractor'  language   in  Alaska                                                              
4:12:26 PM                                                                                                                    
REPRESENTATIVE BIRCH  asked for confirmation that  [Version L] had                                                              
been reviewed with TNCs.                                                                                                        
MS. STIDOLPH answered, "Yes, it has been reviewed by the TNC."                                                                  
4:12:51 PM                                                                                                                    
REPRESENTATIVE  KNOPP cited  language on  page 8,  line 23,  which                                                              
states that  a TNC "is not  an employer of Transportation  Network                                                              
Company drivers",  and noted language beginning on  line 24 states                                                              
that  a  TNC   driver  "is  an  independent  contractor   for  all                                                              
purposes".   He said he doesn't  believe the proposed  legislation                                                              
applies to  TNC drivers as  independent contractors; he  thinks it                                                              
refers to the company and not the driver.                                                                                       
4:14:42 PM                                                                                                                    
The committee took an at-ease from 04:14 p.m.  to 04:19 p.m.                                                                    
4:19:54 PM                                                                                                                    
CHAIR  KITO removed  his  objection  to the  motion  to adopt  the                                                              
proposed HCS  for CSSB 14(FIN)  am, labeled 30-LS0250\L,  Wallace,                                                              
3/31/17,  as  a   working  document.    There   being  no  further                                                              
objection,  Version  L  was  before the  committee  as  a  working                                                              
4:20:37 PM                                                                                                                    
REPRESENTATIVE JOSEPHSON  moved to adopt Amendment  1, labeled 30-                                                              
LS0250\I.A.1, Wallace, 3/28/17, which read as follows:                                                                          
     Page 10, line 30, following "Records.":                                                                                  
          Insert "(a)"                                                                                                          
     Page 11, following line 6:                                                                                                 
          Insert new material to read:                                                                                          
          "(b)  Except for specific information about a                                                                         
     transportation  network  company  rider,  including  the                                                                   
     rider's   name,  address,   and   telephone  number,   a                                                                   
     transportation   network   company   shall   provide   a                                                                   
     transportation  network  driver   information  for  each                                                                   
     ride    the   driver    completes,   including    global                                                                   
     positioning data,  the fare and  tip paid by  the rider,                                                                   
     and the rate charged.                                                                                                      
          Sec. 28.23.130. Prohibitions. A transportation                                                                      
     network company may not                                                                                                    
               (1)  take adverse action against a                                                                               
     transportation   network   company   driver,   including                                                                   
     restricting   the  driver's   tips   or  suspending   or                                                                   
     terminating   the   driver's    participation   in   the                                                                   
     company's digital network, as a result of the driver                                                                       
               (A)  organizing or joining a driver                                                                              
     association  or labor organization  or participating  in                                                                   
     a  driver  association  or  labor  organization  or  the                                                                   
     activities   of   the  driver   association   or   labor                                                                   
               (B)  decreasing the driver's participation                                                                       
     in the company's digital network; or                                                                                       
               (C)  generating less fare or tip income;                                                                         
               (2)  change a compensation rate or other                                                                         
     material term  of a contract  with a driver  without the                                                                   
     driver's  voluntary prior  consent, if  the contract  is                                                                   
     based   on   the   driver   providing  a   ride   to   a                                                                   
     transportation network company rider."                                                                                     
4:20:42 PM                                                                                                                    
REPRESENTATIVE WOOL objected.                                                                                                   
4:20:46 PM                                                                                                                    
REPRESENTATIVE  JOSEPHSON  spoke  to Amendment  1.   He  said  the                                                              
proposed  amendment would  show drivers  how a  rate was  derived.                                                              
He said  he's heard  that TNCs routinely  change rates,  which, to                                                              
him, means  the drivers are  not independent contractors,  because                                                              
"generally  you wouldn't  impose such  a thing  on an  independent                                                              
contractor  and  get away  with  it."   He  indicated  that a  TNC                                                              
company  cannot  do  anything  to  prohibit  the  efforts  of  TNC                                                              
drivers to "organize."                                                                                                          
4:21:44 PM                                                                                                                    
REPRESENTATIVE  WOOL said,  "Some  of this  is just  the terms  of                                                              
service  between  a business  and  independent contractor;  so,  I                                                              
don't feel the need to ... legislate it."                                                                                       
4:22:58 PM                                                                                                                    
The committee took an at-ease from 4:22 p.m. to 4:23 p.m.                                                                       
4:23:21 PM                                                                                                                    
CHAIR  KITO clarified  that Amendment  1  was written  to a  prior                                                              
committee  substitute  and,  if  adopted, would  be  conformed  to                                                              
Amendment 1 by Legislative Legal and Research Services.                                                                         
4:23:57 PM                                                                                                                    
REPRESENTATIVE  WOOL surmised that  the place  for Amendment  1 in                                                              
Version L would  be in "the records  section" on page  11, line 8.                                                              
He  noted that  a previous  testifier had  said [TNCs]  frequently                                                              
were  changing  the  rates  and   changing  what  the  driver  was                                                              
earning.   He recollected  he had  spoken with someone  associated                                                              
with Uber  Technologies Inc.,  who said  rates are decreased,  but                                                              
infrequently.     He   mentioned   surge   pricing,  which   gives                                                              
incentives  to drivers not  currently on  the network  during rush                                                              
hour or  times when  there is a  high demand and  low supply.   He                                                              
offered his  understanding that this is  a regular practice.    He                                                              
said  that  other  than  surge   pricing,  he  didn't  think  fare                                                              
changing was common.                                                                                                            
4:26:46 PM                                                                                                                    
MITCHELL  MATTHEWS,  Uber  Technologies  Inc.,  stated  that  Uber                                                              
Technologies  Inc. has  dynamic  pricing at  times  when there  is                                                              
high  demand  and  limited  supply.   In  terms  of  more  general                                                              
changes to fare  structures, he said Uber Technologies  Inc. would                                                              
issue an  agreement to the driver  to which the driver  would have                                                              
to agree.   He said  rates in Seattle,  Washington, have  not been                                                              
cut since  he joined the organization  and rates have  been raised                                                              
in other  markets.  He  said rates can go  both ways, up  or down.                                                              
Regarding   Amendment  1,  Mr.   Matthews  mentioned   information                                                              
related  to global  positioning  data  and anonymity  for  privacy                                                              
purposes,   and  he  opined   that  the   proposed  amendment   is                                                              
4:28:25 PM                                                                                                                    
REPRESENTATIVE  JOSEPHSON  offered   his  understanding  that  Mr.                                                              
Matthews had  stated that the TNC  would make the driver  aware of                                                              
changing  fares and  that the driver  must agree  to the  changes.                                                              
Based on  that, he said he  doesn't understand how a  driver could                                                              
be considered an independent contractor.                                                                                        
MR. MATTHEWS  explained  that in  Seattle it's  not just the  TNCs                                                              
that can  set fares by  the minute, mile,  or base  fare; for-hire                                                              
companies  within Seattle  are  able  to set  their  fares by  the                                                              
minute, the mile, and associated time value.  He continued:                                                                     
     So,  that information  is what  would be  adjusted.   We                                                                   
     wouldn't change  the fare that a driver would  be given;                                                                   
     the  far is  based off  that base  calculation of  time,                                                                   
     space, and  distance.  ... That  would be a change  to a                                                                   
     market,  based  off of  pricing.    And so,  the  driver                                                                   
     doesn't  have  to  necessarily   agree  with  that,  but                                                                   
     that's the pricing  in the market, and we  would issue a                                                                   
     service fee  addendum on there,  and they would  be able                                                                   
     to  drive  on  another  TNC   that  may  have  different                                                                   
     pricing within  the market.  So, if Lyft  or another TNC                                                                   
     came to  Alaska, there [are]  other apps out  there that                                                                   
     they  would be  able to use  if they  didn't agree  with                                                                   
     the  fares  that were  set  that  make up  that  minute,                                                                   
     mile, and base fare on the Uber platform specifically.                                                                     
4:30:01 PM                                                                                                                    
REPRESENTATIVE BIRCH  states that he doesn't see  [Amendment 1] as                                                              
helpful; therefore, he does not support it.                                                                                     
4:30:34 PM                                                                                                                    
A roll  call vote was  taken.   Representative Josephson  voted in                                                              
favor  of Amendment  1.   Representatives Sullivan-Leonard,  Wool,                                                              
Birch, Knopp, and  Kito voted against it.  Therefore,  Amendment 1                                                              
failed by a vote of 1-5.                                                                                                        
4:31:12 PM                                                                                                                    
REPRESENTATIVE  JOSEPHSON stated that  he's disappointed  that the                                                              
legislature couldn't  craft a TNC bill where "everyone  wins."  He                                                              
said  that  he  is  frustrated   because  he  thinks  that  "local                                                              
governments  deserve to regulate  this as  they are each  unique."                                                              
He  noted that  TNCs  don't pass  the Internal  Revenue  Service's                                                              
(IRS')  test  regarding  who does  the  hiring,  supervision,  and                                                              
paying.   He pointed out that  there is a continuing  relationship                                                              
between  workers  and employers.    He  mentioned the  "number  12                                                              
test" of  the IRS  - payment  by the  hour, week,  or month  - and                                                              
said,   "This  points   to  an   employer/employee   relationship,                                                              
provided  that this  method of payment  is not  just a  convenient                                                              
way of paying  a lump sum agreed on  as the cost of the  job."  He                                                              
said independent  contractors are paid  by the job or  on straight                                                              
commission,  but what  makes this  a quasi-independent  contractor                                                              
situation   is  that  the   TNC  is   buying  insurance   from  an                                                              
independent contractor,  which he opined  is "nice but "odd."   He                                                              
said  there is  also a  situation  in which  there is  fluctuating                                                              
pay.   He remarked that if  he, as a  lawyer, agrees to take  on a                                                              
job for  $50 an  hour and  halfway thru  the job  the client  says                                                              
he/she will pay  $35 an hour, then he, the lawyer,  could sue that                                                              
client and  win.  He said,  "And I don't  get that.  I  mean, that                                                              
suggests  they're employees.   They  also don't  get the money  in                                                              
the first  instance; they  get it  in the  second instance.   That                                                              
doesn't suggest that they're independent contractors."                                                                          
REPRESENTATIVE  JOSEPHSON  said   his  concern  is  not  with  the                                                              
passengers  but with  the app not  being on  despite [the  driver]                                                              
still  being in  "an employment  stage, because  they're about  to                                                              
shift it on  and they're driving  across town to get to  where the                                                              
action  is for  future  rides."   He said  everything  in the  law                                                              
tells him  that "these  are common carriers  or at least  contract                                                              
carriers;  they're not  just individuals  driving around;  they're                                                              
taking people's lives  in their hands."  He said  he think most of                                                              
the time things will work out, but sometimes it will not.                                                                       
4:34:56 PM                                                                                                                    
REPRESENTATIVE  JOSEPHSON  referenced  a Washington  Post  article                                                            
from June 27,  2016, and other online publications.   He expressed                                                              
concern  that after  paying their  expenses  Detroit drivers  will                                                              
make $8.10 an hour,  Houston drivers will make $9.93  an hour, and                                                              
Denver drivers  will make $12.17;  the Detroit drivers  won't even                                                              
make  minimum  wage.   He  questioned  whether  this is  the  best                                                              
lifestyle  for  TNC drivers.    He said  he  is worried  that  the                                                              
drivers may  forgo other work and  make this their primary  way to                                                              
earn income.   He reiterated  that he  is disappointed  that there                                                              
hasn't been something  better developed with the  drivers in mind.                                                              
He  said  TNC companies  violated  the  law  by coming  to  Alaska                                                              
before they were  regulated.  He expressed concern  that in Paris,                                                              
TNC drivers  were asking passengers  to help  pay for the  cost of                                                              
damages done by rioters.                                                                                                        
REPRESENTATIVE   JOSEPHSON   noted   that  the   Municipality   of                                                              
Anchorage  supported   Uber  Technologies  Inc.  and   Lyft.    He                                                              
     So,  it's ultimately  coming  down on  the  side of  the                                                                   
     TNCs,  but  not  without real  regulation.    And  we're                                                                   
     saying, "All  of that work  goes away; we don't  need to                                                                   
     know about that work."                                                                                                     
REPRESENTATIVE  JOSEPHSON  said  although  it may  sound  like  he                                                              
knows how  he will vote, he  has not yet made  that determination.                                                              
by a vote of  8-3; therefore, it's coming down on  the side of the                                                              
TNC,   but  not   without   regulation."     He   reiterated   his                                                              
disappointment  that  a better  plan  could not  be  made, and  he                                                              
expressed  concern  about  the chaos  that  could  result  without                                                              
local control.                                                                                                                  
4:38:22 PM                                                                                                                    
REPRESENTATIVE  BIRCH spoke in  support of Version  L and  the TNC                                                              
initiative, in general.   He said overregulation  stifles economic                                                              
development  and opportunity.  and he  opined that  the action  of                                                              
Anchorage  to open  up  the community  to  ridesharing  is a  good                                                              
indication of  "the success this has  had."  He said  the proposed                                                              
legislation is "a  good effort" and he looks forward  to moving it                                                              
out of committee.                                                                                                               
4:39:21 PM                                                                                                                    
CHAIR  KITO  commented  that a  lot  of  work  has gone  into  the                                                              
proposed  legislation and,  while perfection  may not be  achieved                                                              
the  first time  around,  the committee  needs  to start  thinking                                                              
about how it will  help a new industry come to  Alaska, because it                                                              
is "a new paradigm in our state" whose "time has come."                                                                         
4:40:13 PM                                                                                                                    
REPRESENTATIVE  WOOL said  he understands  the concerns that  have                                                              
been expressed  related to labor issues, independent  contractors,                                                              
workers'  compensation, and  local municipalities.   He said  many                                                              
of the  concerns were  addressed in Version  L, including  the age                                                              
of the driver.   He said he  understands concerns about  safety of                                                              
drivers  and of  people on  the road,  in general.   He  indicated                                                              
that people may  go out more and  be safer [when using  TNCs].  He                                                              
emphasized  that  he  is  not  "taking  a  slam  at  cabs  by  any                                                              
stretch."  He  said he doesn't think local governments  "have been                                                              
all  that great  to  cabs either."    He mentioned  the  decisions                                                              
being made about  "medallions" and ventured that  the municipality                                                              
probably  would rather  not  deal with  that  issue.   He said  he                                                              
knows  that Alaska  is not a  densely populated  state, but  there                                                              
are  some communities  that border  each  other, and  he does  not                                                              
think TNCs  are going to come  to each municipality  separately to                                                              
negotiate a  deal about insurance,  for example.   He said  in Las                                                              
Vegas, Nevada,  there is a  taxi line outside establishments,  and                                                              
now there  is also an  Uber/Lyft line,  which means that  the idea                                                              
is being  embraced.   He said he  thinks any  bugs will  be worked                                                              
out, and he said he thinks Alaska needs [TNCs].                                                                                 
REPRESENTATIVE  WOOL, regarding  concerns  about  minimum wage  or                                                              
how much  a driver  makes, said  a cab driver  leases a  cab, buys                                                              
gas, and drives,  but has no guarantee  of making money.   He said                                                              
that is  the reality  of certain types  of businesses.   Regarding                                                              
Representative Josephson's  scenario in which the  payer drops the                                                              
rate, Representative  Wool said, "Well,  in the middle of  a ride,                                                              
I don't  think your  rate's going  to go down  either."   He noted                                                              
that  Mr. Mitchell  had said  the rates  in Seattle  had not  gone                                                              
down  in years.    He talked  about  businesses  adapting, and  he                                                              
said, "We can make changes and adaptations, as needed."                                                                         
4:44:15 PM                                                                                                                    
REPRESENTATIVE  WOOL gave  the example  of Netflix  which used  to                                                              
mail digital  video  disk [DVDs]  to clients   homes, but  now the                                                              
majority of  its business  is streaming video.   He  opined, "Cabs                                                              
have apps;  it's the future,  and we can  sit around and  watch it                                                              
go  by, or  we  can  get onboard,  and  we  can make  changes  and                                                              
4:44:48 PM                                                                                                                    
CHAIR KITO  recognized former  House Labor  and Commerce  Standing                                                              
Committee Chair,  Representative Kurt Olson, was  in the committee                                                              
4:45:15 PM                                                                                                                    
REPRESENTATIVE WOOL  moved to report HCS CSSB  14(FIN) am, Version                                                              
30-LS0250\L,  out  of committee  with  individual  recommendations                                                              
and  the   accompanying  zero  fiscal   note.    There   being  no                                                              
objection, HCS  CSSB 14(L&C) was  reported out of the  House Labor                                                              
and Commerce Standing Committee.                                                                                                

Document Name Date/Time Subjects
SB014 Amendment 1 3.30.17.pdf HL&C 3/31/2017 3:15:00 PM
SB 14
SB014 HCS Version E 3.31.17.pdf HL&C 3/31/2017 3:15:00 PM
SB 14
HCS CS SB014 version L.pdf HL&C 3/31/2017 3:15:00 PM
SB 14
HCS CS SB014 Sectional Analysis version L.pdf HL&C 3/31/2017 3:15:00 PM
SB 14
SB014-HB132 Supporting Documents - Letters of Support 4.3.17.pdf HL&C 3/31/2017 3:15:00 PM
HB 132
SB 14
SB014-HB132 Supporting Documents Index 4.3.17.pdf HL&C 3/31/2017 3:15:00 PM
HB 132
SB 14
SB014-HB132 Supporting Documents - Letters of Opposition 4.3.17.pdf HL&C 3/31/2017 3:15:00 PM
HB 132
SB 14
HCS CS SB14 Explanation of Changes ver Y.pdf HL&C 3/31/2017 3:15:00 PM
SB 14