Legislature(2017 - 2018)BELTZ 105 (TSBldg)

02/02/2017 01:30 PM Senate LABOR & COMMERCE

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01:30:08 PM Start
01:30:42 PM SB14
03:32:21 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
-- Public Testimony --
            SB  14-TRANSPORTATION NETWORK COMPANIES                                                                         
1:30:42 PM                                                                                                                    
CHAIR COSTELLO  announced the consideration  of SB 14.  She noted                                                               
that she and Senator MacKinnon are sponsors.                                                                                    
1:31:03 PM                                                                                                                    
SENATOR ANNA  MACKINNON, Alaska  State Legislature*  cosponsor of                                                               
SB 14, stated that she represents  one of the many communities in                                                               
the  state that  has been  disadvantaged by  unmet transportation                                                               
needs.   She  opined   that   including  transportation   network                                                               
companies    within   state    statute   will    provide   needed                                                               
transportation  and work  opportunities. She  said that  for more                                                               
than  25 years  the residents  of  Eagle River  and Chugiak  have                                                               
tried  to  access traditional  means  of  transportation, but  it                                                               
hasn't  worked  out.  The  bus route  from  the  Municipality  of                                                               
Anchorage to these communities is always  the first to be cut and                                                               
it  is  not  economically  advantageous for  taxicab  drivers  to                                                               
provide service to  and from this area. Efforts  by the Anchorage                                                               
Assembly to  institute a  chauffeur license  to provide  rides to                                                               
and  from the  communities  of Eagle  River,  Chugiak and  Peters                                                               
Creek and the  airport hasn't worked out either.  She opined that                                                               
many communities statewide are similarly underserved.                                                                           
She  stated that  SB  14 provides  job  opportunities for  single                                                               
parents  and people  in transition,  which offers  an opportunity                                                               
for  economic growth.  Allowing transportation  network companies                                                               
could also  reduce commuters on  the highway and  increase safety                                                               
and reliability for riders. She  shared that her experience using                                                               
rideshare companies has been positive.  "It was very nice, it was                                                               
on time  and there was  a feeling  of safety available  for those                                                               
who were accessing  the ride because you were in  control of that                                                               
opportunity."  She noted  the letter  of support  in the  packets                                                               
from the Chugiak-Eagle River Chamber of Commerce.                                                                               
1:36:05 PM                                                                                                                    
At ease                                                                                                                         
1:38:07 PM                                                                                                                    
CHAIR COSTELLO reconvened the meeting  and pointed out that SB 14                                                               
is in context  with the economic presentations  the committee has                                                               
heard this  session. This includes the  need for diversification,                                                               
the need  for more  jobs during  the recession,  and the  need to                                                               
expand opportunities  for people  to make a  living. She  cited a                                                               
recent  survey  by  the Department  of  Commerce,  Community  and                                                               
Economic  Development (DCCED)  that found  that Alaskans  believe                                                               
that economic  development is the  overwhelming factor  in making                                                               
Alaska a better place to live. She opined that allowing ride-                                                                   
share companies in Alaska will move the economy forward through                                                                 
She stated her intention to hear the bill, take members'                                                                        
questions, take public testimony, and hold the bill in committee                                                                
for further review.                                                                                                             
1:39:57 PM                                                                                                                    
WESTON EILER, Staff, Senator Mia Costello, provided introductory                                                                
comments on SB 14, paraphrasing the following sponsor statement:                                                                
     Senate  Bill 14,  the Let's  Ride Alaska  Act, improves                                                                    
     transportation   and   economic   opportunity   through                                                                    
     innovation. The  bill provides clarity in  state law to                                                                    
     allow for Rideshare companies to operate in Alaska.                                                                        
     Rideshare (sometimes  known as  "Transportation Network                                                                    
     Companies") is  a relatively new concept  with a simple                                                                    
     premise -  use technology to connect  Alaskans, helping                                                                    
     get  from  here  to  there.   During  the  past  decade                                                                    
     companies   like   Uber,   Lyft,   and   Sidecar   have                                                                    
     revolutionized how  people travel in  cities worldwide.                                                                    
     Using   a  simple   smart   phone  application,   these                                                                    
     companies  have   created  a  platform   that  connects                                                                    
     private  drivers with  people looking  for a  ride. The                                                                    
     result  is  quick, cashless  transportation  solutions.                                                                    
     Drivers and  riders self-select each other  through the                                                                    
     app,  make   their  trip,  and  digitally   rate  their                                                                    
     Senate  Bill  14  authorizes their  use  in  Alaska  by                                                                    
     providing  clarity to  Alaska's  insurance and  workers                                                                    
     compensation    statutes.    Rideshare   drivers    are                                                                    
     classified as independent  contractors and are exempted                                                                    
     from  workers' compensation  similar  to taxi  drivers.                                                                    
     The bill  also requires safety background  checks, zero                                                                    
     tolerance  substance   policies,  and   numerous  other                                                                    
     Diversification is key to  growing our state's economy.                                                                    
     Enabling  Rideshare  through  Senate   Bill  14  is  an                                                                    
     innovative way to create jobs  for Alaskans and improve                                                                    
     transportation and public safety in our state.                                                                             
1:43:11 PM                                                                                                                    
He  highlighted  that  Uber  previously  operated  in  Anchorage,                                                               
providing a  flexible work  platform for  independent contractors                                                               
who average less than 10 hours  driving per week. He related that                                                               
transportation  network   companies  have  also  been   shown  to                                                               
increase public  safety through reduced DUI  and DWI convictions.                                                               
He  reviewed the  safety  standards  that transportation  network                                                               
companies  provide including  accreditation through  the National                                                               
Association of  Professional Background Screeners. He  noted that                                                               
an Uber  representative would demonstrate the  insurance coverage                                                               
for both the driver and passenger.                                                                                              
1:45:32 PM                                                                                                                    
MR. EILER reviewed the following sectional analysis for SB 14:                                                                  
     Section  1. Describes  the legislative  intent for  the                                                                    
     Section 2. Amends AS 21.96  by adding a new section, AS                                                                    
     21.96.018, relating  to transportation  network company                                                                    
     insurance provisions. This  section allows insurers who                                                                    
     write  automobile insurance  in  the  state to  exclude                                                                    
     coverage while  a driver  provides a  prearranged ride.                                                                    
     However, nothing  in the  section precludes  an insurer                                                                    
     from providing  coverage for the personal  vehicle of a                                                                    
     transportation network company driver.                                                                                     
     Section   3.   Amends   AS  23.30.230(a)   to   exclude                                                                    
     transportation network company  drivers from the Alaska                                                                    
     Worker's 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 chapter  23, titled                                                                    
     "Transportation Network Companies and Driver."                                                                             
          AS 28.23.010 - Provides that a transportation                                                                         
     network company  or driver 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   28.23.020.   Requires   that   transportation                                                                    
     network companies comply with  AS 43.70 and maintain an                                                                    
          AS 28.230.030. Relates to fares collected by                                                                          
     transportation network companies for services.                                                                             
          AS 28.23.040. Governs identification required for                                                                     
     by transportation network vehicles and drivers.                                                                            
          As 28.23.050. Requires electronic receipts.                                                                           
          AS 28.23.060. Sets insurance requirements for                                                                         
     transportation network companies and drivers.                                                                              
          AS 28.23.070. Requires transportation network                                                                         
     companies to  provide automobile  insurance disclosures                                                                    
     to drivers.                                                                                                                
          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 a 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                                                                    
          AS 28.23.120. Provides for maintenance of                                                                             
          AS 28.23.180. Provides for definitions for the                                                                        
          AS 28.23.190. States that the short title of the                                                                      
     chapter  may be  cited as  the "Transportation  Network                                                                    
     Companies Act."                                                                                                            
CHAIR COSTELLO noted who was on line to respond to questions.                                                                   
1:52:28 PM                                                                                                                    
SENATOR  STEVENS asked  for clarification  of the  statement that                                                               
rideshare  companies  will  create  more  jobs  and  improve  the                                                               
economy. "Does it  really create more jobs if  you're taking jobs                                                               
away  from somebody  and giving  them to  somebody else?  Does it                                                               
really improve  the economy  if you're taking  money away  from a                                                               
cab and giving it to Uber?"                                                                                                     
MR.  EILER  said  a  study  in  Portland  looked  at  the  effect                                                               
rideshare companies have  on the cab industry and  it showed that                                                               
they grew  the pie. He  offered to  provide that study  and other                                                               
information  that  looks  at  the  cause  and  effect  of  having                                                               
rideshare companies introduced into an economy.                                                                                 
SENATOR  STEVENS   said  he  looks   forward  to   receiving  the                                                               
CHAIR COSTELLO offered her understanding  that being a driver for                                                               
a rideshare  company is one of  the few jobs that  an active duty                                                               
military person can hold.                                                                                                       
1:55:29 PM                                                                                                                    
SENATOR MEYER asked  how this bill differs from the  one that was                                                               
introduced several years ago.                                                                                                   
MR. EILER  replied the current  bill contains model  language and                                                               
strikes the right  nexus for insurance companies  to define these                                                               
drivers  as  independent  contractors.  He described  this  as  a                                                               
growing model that is creating  more solutions. "You're seeing it                                                               
start to  compliment even some  of the reforms that  Anchorage is                                                               
doing with its own taxi market," he said.                                                                                       
SENATOR  MEYER  said  he  doesn't  recall  that  taxicab  drivers                                                               
complained that they  were losing business when  Uber conducted a                                                               
trial program in Anchorage, but  he did receive calls asking what                                                               
happened to  Uber when  it no  longer operated  in the  state. He                                                               
asked for an explanation.                                                                                                       
MR. EILER explained  that Uber arrived in  Anchorage in September                                                               
2014 and ultimately decided to  pause operations until state laws                                                               
were amended to  clarify the issues of  workers' compensation and                                                               
insurance.  SB 14  was  introduced to  provide  that clarity  for                                                               
state and local governments and the industry.                                                                                   
1:59:55 PM                                                                                                                    
SENATOR GARDNER referred to the  description of need that Senator                                                               
MacKinnon articulated and  asked if an Uber driver  can refuse to                                                               
pick up a  fare between the Mat-Su Valley  and downtown Anchorage                                                               
or the airport.                                                                                                                 
MR.  EILER  deferred  the question  to  an  Uber  representative.                                                               
Speaking to  the statement of  need, he explained that  a taxicab                                                               
driver  would  have  to  deadhead back  to  Anchorage  to  resume                                                               
commerce if he/she agreed to take  a fare to Chugiak, whereas the                                                               
rideshare model would  allow a passenger to  connect with someone                                                               
who  is commuting  to or  from  Anchorage and  Chugiak. That's  a                                                               
benefit of this model, he said.                                                                                                 
SENATOR GARDNER  said she'd like  to hear Uber discuss  whether a                                                               
driver can  decline a  fare or not.  She offered  her perspective                                                               
that   the  remaining   issue   is   workers'  compensation   and                                                               
unemployment insurance.  She asked  for some discussion  from the                                                               
Department of  Labor or the  sponsor about what  distinguishes an                                                               
independent contractor  from an  employee, absent defining  it in                                                               
2:03:08 PM                                                                                                                    
MR. EILER  said the concept  of SB  14 is that  rideshare drivers                                                               
are  independent  contractors  in  that they  operate  their  own                                                               
vehicles, work  on their own time,  and may work for  one or more                                                               
companies.  The  only  direction  they take  from  the  rideshare                                                               
company  is  to meet  their  standards  for safety  and  customer                                                               
service. He  explained that these  are technology  companies that                                                               
provided the  platform to connect  a driver  and a rider.  At the                                                               
end of the fare, 80 percent goes  to the driver and 20 percent to                                                               
the rideshare company as a technology fee.                                                                                      
SENATOR GARDNER pointed out that the  price of the ride is set by                                                               
the rideshare company and it  can fluctuate depending on need and                                                               
time of day.                                                                                                                    
MR. EILER deferred the discussion about pricing to Uber.                                                                        
2:05:01 PM                                                                                                                    
SENATOR  HUGHES shared  her personal  experience using  both Lift                                                               
and Uber  and opined that  SB 14 will  help people in  the Mat-Su                                                               
Valley get  to and from the  airport and will be  a cost savings.                                                               
She offered her  perspective that these drivers  won't be sitting                                                               
and waiting  for a  fare. Rather,  it will  be someone  headed to                                                               
Costco, to a job, or to  the Fifth Avenue mall. Her experience is                                                               
that drivers typically have another  job and they drive less than                                                               
ten  hours  a week.  She  pointed  out  that  the need  for  this                                                               
platform is growing and stated  agreement with the statement that                                                               
allowing rideshare companies will grow the pie.                                                                                 
She  asked  if  drivers  could carry  their  proof  of  insurance                                                               
coverage in electronic form. She noted she supports that option.                                                                
MR. EILER deferred the question to legislative legal services.                                                                  
SENATOR  GARDNER added  that  an electronic  form  would be  more                                                               
likely to be up to date.                                                                                                        
MR. EILER said the industry supports digitized information.                                                                     
2:09:33 PM                                                                                                                    
At ease                                                                                                                         
2:11:07 PM                                                                                                                    
CHAIR COSTELLO reconvened the meeting.                                                                                          
2:11:21 PM                                                                                                                    
NANCY ALLRED, Senior Regulatory  Counsel, Uber Technologies Inc.,                                                               
explained  that  Uber  is a  technology  company  that  digitally                                                               
connects drivers with riders.  The independent contractor drivers                                                               
value  the flexibility  the platform  provides;  some 80  percent                                                               
give that  as the  reason they  work for  Uber. She  reviewed the                                                               
history of  the company  that was founded  in 2009.  It currently                                                               
operates in 47 states and 541 cities worldwide.                                                                                 
She  said she  is  speaking  in support  of  SB  14. It  provides                                                               
appropriate safeguards for  consumers and provides predictability                                                               
to  launch  their  product  in   Alaska.  It  includes  insurance                                                               
language that  has been adopted  in over  40 states and  has been                                                               
approved  by the  National  Conference  of Insurance  Legislators                                                               
(NCOIL). Background  checks are performed  by a third  party that                                                               
has  been  approved by  the  National  Association of  Background                                                               
Screeners. This  involves a motor  vehicle check and a  review of                                                               
the national sex  offender website. She opined that  this will be                                                               
a benefit for  residents and tourists alike. She  noted that over                                                               
60,000 people  in Alaska  have opened  the Uber  app in  the last                                                               
year looking for a ride.                                                                                                        
2:14:07 PM                                                                                                                    
MITCHEL  MATTHEWS,   Senior  Operations  Manager,  Uber   in  the                                                               
Northwest, displayed a  video to demonstrate the  features of the                                                               
Uber app.  Riders see screens  that show the  product description                                                               
and  the  prices,  type  of vehicles,  driver  contact  and  trip                                                               
details,  including share  status  and  payment information.  The                                                               
rider also  receives information about  the driver and  where the                                                               
car is en route.                                                                                                                
2:17:44 PM                                                                                                                    
CHAIR COSTELLO  said a feature  she enjoyed  is that there  is no                                                               
fumbling  for   your  wallet  or   purse  once  you   reach  your                                                               
destination. A good  safety feature is that the  driver and rider                                                               
each give the other a star rating based on the experience.                                                                      
SENATOR MEYER asked if the rating is a five-star scale.                                                                         
MR. MATTHEWS answered  yes. Responding to a  further question, he                                                               
confirmed that the rider could reject  a driver based on the star                                                               
SENATOR HUGHES asked about wait  times, how rates are calculated,                                                               
and if  the technology  works equally well  in rural  areas where                                                               
there are fewer drivers and riders.                                                                                             
MR. MATTHEWS  explained that  the Uber product  is shaped  by the                                                               
community,  but it  works equally  well in  both urban  and rural                                                               
communities.  The wait  times  vary according  to  the number  of                                                               
drivers on  the app  and where  they are  relative to  the rider.                                                               
Addressing pricing,  he explained  that Uber drivers  receive per                                                               
minute per  mile base  fare information,  so they  understand the                                                               
compensation  they  will  receive  for  a trip  as  well  as  the                                                               
associated  commission  and  rate structure.  Riders  receive  an                                                               
estimated fare up front. Feedback  from riders is they appreciate                                                               
the fare  transparency and up-front  pricing, although  that does                                                               
change  during periods  of high  demand. That  is built  into the                                                               
CHAIR COSTELLO  asked him  to describe Uber  kids and  Uber women                                                               
and if he foresees them being in Alaska should the bill pass.                                                                   
MR.  MATTHEWS  explained   that  Uber  teen  is   a  pilot  where                                                               
individuals who  are 13-18 years  of age  can take trips  and the                                                               
parent can  see where  their child is  en route  and confirmation                                                               
that  they arrived  at  the destination.  The  one million  women                                                               
pledge  is to  provide  a business  opportunity  for one  million                                                               
women. He  noted that  a lot  of military use  the app  to bridge                                                               
income  gaps. Uber  also has  drivers  from the  hearing-impaired                                                               
community.  Enhanced features  in  the driver  app inform  riders                                                               
that  they  will be  picked  up  by  someone  who has  a  hearing                                                               
disability. He  emphasized that all  these drivers own  their own                                                               
business; they  set their  own schedules, receive  a 1099  at the                                                               
end of the year, and use their own vehicles and equipment.                                                                      
2:24:07 PM                                                                                                                    
SENATOR  GARDNER asked  how Uber  price  fluctuations compare  to                                                               
taxicab price fluctuations.                                                                                                     
MR.  MATTHEWS explained  that pricing  generally  depends on  the                                                               
time of day and how the  community shapes the product. When there                                                               
is more  demand for the  drivers, the price  generally increases.                                                               
It's also  a component of  how Uber  grows the pie  to complement                                                               
other transportation networks within the community.                                                                             
SENATOR  GARDNER  asked  if  drivers   are  free  as  independent                                                               
contractors to refuse a fare.                                                                                                   
MR. MATTHEWS  answered yes,  drivers are free  to decline  a ride                                                               
any time  they choose to do  so, even after they  have arrived at                                                               
the pick-up point.                                                                                                              
SENATOR GARDNER asked if Uber drivers have a business license.                                                                  
MR. MATTHEWS replied they do in some jurisdictions.                                                                             
2:27:02 PM                                                                                                                    
SENATOR STEVENS questioned whether this  really grows the pie and                                                               
improves the  economy. "It makes sense  to me that if  you give a                                                               
job to one person and take  it away from someone else, you're not                                                               
creating more  jobs. If  you give  money to  someone and  take it                                                               
away from  somebody else,  you aren't putting  more money  in the                                                               
MR. MATTHEWS related that when  Uber enters a market, traditional                                                               
taxicab  drivers also  use the  for-hire app.  He explained  that                                                               
Uber grows  the pie  by enhancing  services and  opportunities by                                                               
bringing  in interesting  platforms and  products to  underserved                                                               
demographics or underserved areas of  the community via Uber teen                                                               
or working with restaurant or hotel partners or care facilities.                                                                
2:28:58 PM                                                                                                                    
At ease                                                                                                                         
2:30:42 PM                                                                                                                    
CHAIR  COSTELLO reconvened  the meeting  and welcomed  Marie Marx                                                               
who would answer questions related to workers' compensation.                                                                    
2:31:02 PM                                                                                                                    
SENATOR GARDNER  asked her to  talk about the  difference between                                                               
an employee and an independent contractor.                                                                                      
2:31:26 PM                                                                                                                    
MARIE   MARX,  Director,   Division  of   Workers'  Compensation,                                                               
Department of  Labor and Workforce Development  (DOLWD), said she                                                               
could only talk  about the definition in the  context of workers'                                                               
compensation. She explained  that every employer that  has one or                                                               
more  employees  is  obligated   to  cover  those  employees  for                                                               
workplace  injuries, and  every employee  injured on  the job  is                                                               
entitled  to   benefits.  Workers'  compensation   provides  that                                                               
framework, and  without it the  employer is open to  lawsuits and                                                               
the employee is potentially subject  to substantial medical bills                                                               
if they don't have personal coverage.                                                                                           
Whether or not an individual  should be considered an employee is                                                               
a case-by-case determination,  she said. Under current  law it is                                                               
a six-factor balancing  test and no one  factor is determinative.                                                               
If a  dispute arises  after a workplace  injury about  whether an                                                               
individual is  in fact  an employee, the  matter goes  before the                                                               
Alaska Workers'  Compensation Board.  The board looks  at factors                                                               
such as who  controlled the work, who provided  the primary tools                                                               
for the job, who set the  hours, and how the individual was paid.                                                               
Then they  make a determination  on whether the individual  is an                                                               
SENATOR GARDNER asked if the  manner of compensation is a factor.                                                               
She noted  the committee  had been told  that Uber  drivers never                                                               
touch the money, whereas taxi drivers collect the fare.                                                                         
MS.  MARX  said one  factor  that's  considered in  the  workers'                                                               
compensation context is  how the person is paid for  the work and                                                               
who controls  the payment. She  related that the Alaska  Board of                                                               
Workers'  Compensation  has never  made  a  determination on  the                                                               
issue  of   employee  status  for  Uber   or  similar  technology                                                               
companies. She offered  her understanding that drivers  pay a set                                                               
rate  to  access   the  dispatch  service  in   the  taxi  driver                                                               
structure, whereas  the Uber platform  doesn't have a set  fee to                                                               
access the  app. The  Uber driver  is paid  for each  ride he/she                                                               
SENATOR  GARDNER asked  if she  agrees that  the bill  identifies                                                               
Uber  and   other  technology  company  drivers   as  independent                                                               
contractors by virtue of definition.                                                                                            
MS.  MARX said  the division  is still  reviewing SB  14, but  as                                                               
currently  written  it  doesn't call  those  drivers  independent                                                               
contractors or  employees. Rather,  it exempts  rideshare drivers                                                               
from  the Alaska  Workers' Compensation  Act. She  explained that                                                               
the division  does not  exempt business  types, but  it currently                                                               
exempts ten categories  of individuals from the  Act. "It doesn't                                                               
mean  they're  employees.  It doesn't  mean  they're  independent                                                               
contractors. The  Act just does  not apply to them."  She related                                                               
that  commercial fishermen  are one  category of  individuals the                                                               
Act doesn't  apply to.  If an  injury were  to occur,  the fisher                                                               
would not be entitled to workers' compensation benefits.                                                                        
SENATOR GARDNER asked if an Uber  driver would be expected to pay                                                               
those benefits on his/her own.                                                                                                  
MS. MARX  replied the Alaska  Workers' Compensation  system isn't                                                               
involved  when  it's  an  exempt  category  of  individuals.  Her                                                               
understanding  is that  most  states  have liability  legislation                                                               
relating to rideshare technology  companies, but she doesn't know                                                               
how  many   have  addressed  the  tricky   issue  of  independent                                                               
contractor status.                                                                                                              
2:38:33 PM                                                                                                                    
SENATOR STEVENS asked if this really is workforce development.                                                                  
MS. MARX said the administration has  not taken a position on the                                                               
economic impact of this legislation.  The division has focused on                                                               
the labor  aspect looking at  whether these individuals  would be                                                               
completely exempt from the Alaska Workers' Compensation Act.                                                                    
CHAIR COSTELLO  noted that the Department  of Commerce, Community                                                               
and Economic  Development representative  would testify  next and                                                               
he could address the question.                                                                                                  
SENATOR STEVENS said he wouldn't ask it again.                                                                                  
2:40:33 PM                                                                                                                    
At ease                                                                                                                         
2:41:33 PM                                                                                                                    
CHAIR  COSTELLO  reconvened  the   meeting  and  welcomed  Deputy                                                               
Commissioner Parady.                                                                                                            
2:41:54 PM                                                                                                                    
FRED  PARADY,   Deputy  Commissioner,  Department   of  Commerce,                                                               
Community  and  Economic  Development (DCCED),  stated  that  the                                                               
department believes  that SB 14 provides  necessary provisions to                                                               
protect  consumers from  an insurance  perspective. It  clarifies                                                               
the commercial  insurance necessary for a  transportation network                                                               
company  and allows  insurers to  exclude coverage  offered under                                                               
personal vehicle  policies. He reported  that insurers  in Alaska                                                               
and  other states  have filed  endorsements  in their  automobile                                                               
lines that  specifically exclude  coverage for drivers  when they                                                               
are signed into a transportation network company platform.                                                                      
MR.  PARADY  said the  Division  of  Insurance has  not  received                                                               
filings  to  add  transportation   network  coverage  for  Alaska                                                               
drivers  under  either  personal  or  commercial  auto  insurance                                                               
because  TNCs   are  not  expressly  authorized.   Similarly,  no                                                               
insurers have filed  advising the division they  are adopting the                                                               
currently  approved authorized  insurance  service office  (ISO).                                                               
Should the  bill pass,  those steps likely  will occur,  he said.                                                               
Transportation network drivers will then  need to make sure their                                                               
auto  insurance coverage  complies with  Alaska requirements  and                                                               
that they understand their insurance exclusions.                                                                                
MR. PARADY  concluded that SB  14 will  have no fiscal  impact on                                                               
the  Division of  Insurance. The  only concern  with the  bill is                                                               
resolving the question of coverage  under personal and commercial                                                               
automobile insurance.                                                                                                           
2:45:22 PM                                                                                                                    
SENATOR  STEVENS  asked how  someone  would  know that  either  a                                                               
taxicab driver or an Uber driver has insurance.                                                                                 
MR. PARADY read  the portion of SB 14  that specifically requires                                                               
a TNC  driver or  the company  on behalf of  the driver  to carry                                                               
proof of insurance coverage.                                                                                                    
2:46:41 PM                                                                                                                    
CHAIR COSTELLO opened public testimony on SB 14.                                                                                
2:47:12 PM                                                                                                                    
NIKKI ROSE,  representing herself,  Sand Lake,  Alaska, testified                                                               
in support  of SB 14.  She related her personal  experience using                                                               
Uber when she lived in Seattle  and opined that she would be both                                                               
a driver and rider if this platform were available in Anchorage.                                                                
2:52:07 PM                                                                                                                    
RYAN KENNEDY, representing  himself, Anchorage, Alaska, testified                                                               
in support  of SB 14.  He said he  follows issues in  the transit                                                               
market in Anchorage closely and  believes that TNCs would be very                                                               
beneficial to the area.                                                                                                         
2:55:37 PM                                                                                                                    
WILLIAM  WEATHERBY, representing  himself,  King Salmon,  Alaska,                                                               
testified in support of SB  14. He related several instances when                                                               
taxicabs were not available in  his rather rural area and offered                                                               
his opinion that TNCs could fill the gaps nicely.                                                                               
2:58:27 PM                                                                                                                    
STAN ECKMAN,  representing Yellow Cab in  Anchorage, testified in                                                               
opposition  to SB  14. He  described the  history of  the taxicab                                                               
market  since Anchorage  became  a municipality  and refuted  the                                                               
idea that TNCs  will grow the pie. He maintained  they would turn                                                               
his  30-year career  into a  hobby.  If the  taxicab industry  is                                                               
decimated, he asked what will happen  if Uber fails or decides to                                                               
leave. He  questioned the insurance  scheme for Uber  drivers and                                                               
the assertion that they are independent contractors.                                                                            
3:01:30 PM                                                                                                                    
KEVIN RUSTON, representing  himself, Anchorage, Alaska, testified                                                               
in opposition  to SB  14. He said  he is a  Yellow Cab  driver in                                                               
Anchorage and he  does not believe that Uber and  other TNCs have                                                               
been  good corporate  citizens.  They hold  themselves above  the                                                               
law. He said  they have decimated the  existing taxicab industry,                                                               
they underserve certain  populations, and they do  not create new                                                               
3:04:26 PM                                                                                                                    
RYAN MCKEE,  representing himself, Wasilla, Alaska,  testified in                                                               
support of SB 14. His experience is  that Uber does a good job of                                                               
ensuring that  their drivers are  well identified. He said  a lot                                                               
of people do  not use taxicabs because they are  too expensive or                                                               
there aren't  enough to meet  the demand. Sometimes  this results                                                               
in  people  driving home  drunk,  he  said. He  highlighted  that                                                               
Mothers  Against  Drunk Drivers  has  said  that DUI  rates  have                                                               
dropped dramatically  in cities that  allow TNCs. Having  Uber in                                                               
Alaska will be a benefit to the state, he said.                                                                                 
3:06:42 PM                                                                                                                    
DAVE   O'MALLEY,   representing   himself,   Anchorage,   Alaska,                                                               
testified  in support  of  SB 14.  He related  that  he has  been                                                               
openly critical  of the  dysfunction in  the taxicab  industry in                                                               
Anchorage. He  shared that he was  also the first Uber  driver in                                                               
Anchorage in 2015.  He maintained that keeping the  status quo in                                                               
the taxicab  industry is at odds  with the best interests  of the                                                               
state, the municipality, the public  and the industry in general.                                                               
TNCs will  force competition  which is what  the people  want. He                                                               
emphasized that  being an Uber  driver is  a better deal  for the                                                               
driver than working for a taxicab company.                                                                                      
3:09:28 PM                                                                                                                    
BRONSON FRYE  representing himself, Anchorage,  Alaska, testified                                                               
in opposition  to SB 14. He  said the concept of  Uber has value,                                                               
but  he  has  concerns  about   the  business  model  because  it                                                               
classifies the drivers as  independent contractors. He maintained                                                               
it violates  tax and  employment laws  as well  as the  rights of                                                               
employees. He said worker misclassification  has been the subject                                                               
of widespread  litigation nationwide and he  doesn't believe Uber                                                               
drivers  are actually  independent  contractors.  They don't  set                                                               
fares,  they can't  accept  tips, they  must  accept riders  when                                                               
they're logged  into the app,  and they must  buy or lease  a car                                                               
that  meets Uber  specifications.  He  said misclassification  is                                                               
such a  problem in  the construction  industry that  the governor                                                               
introduced a bill  to address the problem. It  doesn't make sense                                                               
to pass  a bill that  would potentially create that  same problem                                                               
in another industry, he said.                                                                                                   
3:15:26 PM                                                                                                                    
ERIC GRANT  representing himself, Seattle,  Washington, testified                                                               
in support of  SB 14. He has been an  independent contractor with                                                               
Rideshare for two and one-half years  and it has been an economic                                                               
benefit for his  family. He suggested the committee  look at both                                                               
the  economic  boost  TNCs  will  give to  a  community  and  the                                                               
opportunity they will provide for  people to earn more income. He                                                               
said TNCs  naturally grow the pie.  Someone sitting at home  in a                                                               
remote area could  turn on the app and learn  that someone nearby                                                               
was looking for a ride. That person  may not want to wait more an                                                               
hour for  a taxi to  show up.  He regularly drives  drunk people,                                                               
elderly people,  and school age  children. All rides  are tracked                                                               
so there  is no safety  issue. He drives full  time, but it  is a                                                               
part-time model  that is designed  to allow people to  make extra                                                               
3:19:36 PM                                                                                                                    
MAURICE   BROWN,  representing   herself,  Seattle,   Washington,                                                               
testified in  support of SB  14. He has  been an Uber  driver for                                                               
over two  years and it has  given him an opportunity  to be self-                                                               
employed  and  provide for  his  family.  He relayed  a  personal                                                               
experience  that  demonstrates ride  safety  and  benefit to  the                                                               
community. He believes that TNCs  will diversify the economy of a                                                               
3:24:17 PM                                                                                                                    
KELSEY  PULZZINSKI,  representing   herself,  Anchorage,  Alaska,                                                               
testified  in support  of SB  14. She  believes authorizing  TNCs                                                               
will be  good for  Alaska and  will level  the playing  field. It                                                               
will  make  it  easier  for  veterans,  low-income  workers,  and                                                               
students  to earn  some extra  cash  at a  transitional stage  of                                                               
their lives.                                                                                                                    
3:25:29 PM                                                                                                                    
JIM  BRENNAN,  Attorney,  Anchorage,  Alaska, said  he  has  been                                                               
representing elements in the taxicab  industry for over 30 years.                                                               
He described  the current committee  process as a  travesty. Uber                                                               
was  allowed to  monopolize the  testimony leaving  little to  no                                                               
time for  people like himself  and other Alaskans to  testify. He                                                               
emphasized  that the  State of  Alaska should  not engage  in the                                                               
regulation of  an industry that has  traditionally been regulated                                                               
by individual municipalities.  He said that how to  allow TNCs to                                                               
come  in  and  play  by  the  same  rules  as  regulated  taxicab                                                               
companies  is  a  very  involved  question.  Municipalities  like                                                               
Anchorage have wrangled  with this issue and it  varies from city                                                               
to  city. "You  should  not do  this on  a  statewide basis,"  he                                                               
3:27:11 PM                                                                                                                    
ROSS BIELING, representing  himself, Anchorage, Alaska, testified                                                               
in support of  SB 14. He said his first  experience with Uber was                                                               
wonderful. He  believes that the crux  of the matter is  that "we                                                               
don't  like  competition  in Anchorage."  Uber  provides  a  very                                                               
unique  service and  the taxicab  industry needs  to wake  up and                                                               
realize that things are changing, he said.                                                                                      
3:28:19 PM                                                                                                                    
JEREMY   PRICE,  State   Director,   Americans  for   Prosperity,                                                               
Anchorage, Alaska,  testified in support  of SB 14. He  said that                                                               
TNCs  will  benefit Alaska  in  any  number  of ways.  They  will                                                               
provide   competition  and   improve  the   service  of   taxicab                                                               
companies. He  said there  should be no  fear about  changing and                                                               
increasing innovation.                                                                                                          
CHAIR COSTELLO noted that Senator  MacKinnon, cosponsor of SB 14,                                                               
had rejoined the committee.                                                                                                     
3:29:55 PM                                                                                                                    
BETH GOLDMAN, representing  herself, Anchorage, Alaska, testified                                                               
in  support  of  SB 14.  She  said  she  was  an Uber  driver  in                                                               
Anchorage at  the same time  as Mr.  O'Malley. It allowed  her to                                                               
earn   much  needed   income,  so   she  could   live  near   her                                                               
grandchildren. The platform is needed statewide.                                                                                
3:30:57 PM                                                                                                                    
MARISA   FREEMAN,   representing  herself,   Anchorage,   Alaska,                                                               
testified  in  support  of  SB  14.  She  knows  from  first-hand                                                               
experience that competition is healthy.                                                                                         
CHAIR COSTELLO said she welcomed written testimony.                                                                             
[CHAIR COSTELLO held SB 14 in committee.]                                                                                       

Document Name Date/Time Subjects
SB 14.PDF SL&C 2/2/2017 1:30:00 PM
SB 14
SB 14 - Sectional Analysis.pdf SL&C 2/2/2017 1:30:00 PM
SB 14
SB 14 - Fiscal Note - DMV.pdf SL&C 2/2/2017 1:30:00 PM
SB 14
SB 14 - Fiscal Note - DOL&WD WCD.pdf SL&C 2/2/2017 1:30:00 PM
SB 14
SB 14 - Fiscal Note - DCCED.pdf SL&C 2/2/2017 1:30:00 PM
SB 14
SB 14 - Fiscal Note - DOL&WD.pdf SL&C 2/2/2017 1:30:00 PM
SB 14
SB 14 - Support Letter - Chugiak Eagle River Chamber of Commerce.pdf SL&C 2/2/2017 1:30:00 PM
SB 14
SB 14 - Background - Uber 101.pdf SL&C 2/2/2017 1:30:00 PM
SB 14
SB 14 - Backgroudn - Uber Safety.pdf SL&C 2/2/2017 1:30:00 PM
SB 14
SB 14 - Background - Safety with Uber.pdf SL&C 2/2/2017 1:30:00 PM
SB 14
SB 14 - Background - Uber Small Businesses.pdf SL&C 2/2/2017 1:30:00 PM
SB 14
SB 14 - Background - Insurance White Paper.pdf SL&C 2/2/2017 1:30:00 PM
SB 14
SB 14 - Background - Working with Uber.pdf SL&C 2/2/2017 1:30:00 PM
SB 14
SB 14 - Sponsor Statement.pdf SL&C 2/2/2017 1:30:00 PM
SB 14