Legislature(2017 - 2018)BARNES 124

02/28/2017 01:30 PM House TRANSPORTATION

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

Document Name Date/Time Subjects
HB 132 Supporting Documents - Uber and Independent Businesses.pdf HTRA 2/28/2017 1:30:00 PM
HB 132
HB132 Fiscal Note DOA DMV 2.19.17.pdf HTRA 2/28/2017 1:30:00 PM
HB 132
HB132 Fiscal Note DOLWD WC 2.17.17.pdf HTRA 2/28/2017 1:30:00 PM
HB 132
HB132 Fiscal Note-DCCED DOI-2.19.17.pdf HTRA 2/28/2017 1:30:00 PM
HB 132
HB132 Opposing Documents - Teamsters 2.21.17.pdf HTRA 2/28/2017 1:30:00 PM
HB 132
HB132 Sectional Analysis.pdf HTRA 2/28/2017 1:30:00 PM
HB 132
HB132 Sponsor Statement.pdf HTRA 2/28/2017 1:30:00 PM
HB 132
HB132 Supporting Documents - Insurance White Paper for Rideshare Drivers....pdf HTRA 2/28/2017 1:30:00 PM
HB 132
HB132 Supporting Documents - Lyft Information.pdf HTRA 2/28/2017 1:30:00 PM
HB 132
HB132 Supporting Documents - Lyft Letter 2.21.17.pdf HTRA 2/28/2017 1:30:00 PM
HB 132
HB132 Supporting Documents - NAMIC Letter 2.27.17.pdf HTRA 2/28/2017 1:30:00 PM
HB 132
HB132 Supporting Documents - Portland Bureau of Transportation Report.pdf HTRA 2/28/2017 1:30:00 PM
HB 132
HB132 Supporting Documents - Ridesharing Key Benefits.png HTRA 2/28/2017 1:30:00 PM
HB 132
HB132 Supporting Documents - Safety with Uber.pdf HTRA 2/28/2017 1:30:00 PM
HB 132
HB132 Supporting Documents - Uber 101.pdf HTRA 2/28/2017 1:30:00 PM
HB 132
SB3 - AK Council on the Arts.pdf HTRA 2/28/2017 1:30:00 PM
SB 3
HB132 ver D.PDF HTRA 2/28/2017 1:30:00 PM
HB 132
SB3 - Environmental Compliance Info Sheet.pdf HTRA 2/28/2017 1:30:00 PM
SB 3
SB3 - FINAL Small Ship 2016 Sampling Report 1-3-17.pdf HTRA 2/28/2017 1:30:00 PM
SB 3
SB3 - Fiscal Note DEC.PDF HTRA 2/28/2017 1:30:00 PM
SB 3
SB3 - Fiscal Note DOT.PDF HTRA 2/28/2017 1:30:00 PM
SB 3
SB3 - Sectional Analysis.pdf HTRA 2/28/2017 1:30:00 PM
SB 3
SB3 - Small Vessel Discharge Bill FAQs 1.3.2017.pdf HTRA 2/28/2017 1:30:00 PM
SB 3
SB3 - Sponsor Statement.pdf HTRA 2/28/2017 1:30:00 PM
SB 3
SB3 - Version J.PDF HTRA 2/28/2017 1:30:00 PM
SB 3
SB3 - vessel vs. muni discharge.pdf HTRA 2/28/2017 1:30:00 PM
SB 3
HB132 Supporting Documents - Lyft Drives Economy.pdf HTRA 2/28/2017 1:30:00 PM
HB 132
HCS SB3(TRA) WORK DRAFT-2.27.17.pdf HTRA 2/28/2017 1:30:00 PM
SB 3