Uber gets a lift from Senate authorization

March 29--Alaska is one step closer to putting a framework in place for transportation network, or ridesharing, companies such as Uber and Lyft, but local government officials across the state aren't happy about it.

The state Senate passed Senate Bill 14 on March 23 to establish requirements for driver insurance coverage, background checks and a "zero tolerance" drug and alcohol policy, among other provisions.

The bill also classifies transportation network company drivers as independent contractors, thus exempting the companies from providing workers' compensation protections.

However, municipal managers and administrators from many communities oppose a key section that prohibits local governments from regulating the companies' operations.

In testimony when SB 14 was heard in the Senate Finance Committee, Kathie Wasserman, executive director of the influential Alaska Municipal League, wrote that the organization opposes the bill primarily because it removes all elements of local governance over the business.

Very popular Outside, transportation network companies let customers "hail" a ride through a phone app, which alerts a nearby network driver to the customer's location. Riders are usually given the option to choose vehicle type depending on needs for accompanying passengers or cargo and other preferences as well.

Sen. Mia Costello, R-Anchorage, the bill's primary sponsor, said on the Senate floor prior to the vote on SB 14 that Alaska will be the last state to set up a structure for the smart phone app-based transportation services, which are regulated at the state level in 44 other states.

She said the fact that it has taken Anchorage several years to set up regulations allowing the companies to operate in the city -- the Anchorage Assembly passed them March 21 -- exemplifies the need for clarity in the law.

San Francisco-based Uber, one of the first and largest app-based transportation companies, operated in Anchorage for a few months in late 2014 and early 2015 for free to customers while paying drivers when the city first tried to establish ride sharing parameters.

"Keeping the rules simple and straightforward is important with this legislation," Costello said.

The fact that rides could cross municipal boundaries necessitates state control, according to Costello.

Opposition to SB 14 within the Senate came from minority Democrats, who mostly said they want the companies to come to Alaska but contend the bill gives special treatment to the businesses that directly compete with established taxicab services that are regulated on the local level.

Senate minority members proposed two dozen amendments to the bill aimed at narrowing its broad scope that were mostly rejected along caucus lines.

Sitka Sen. Bert Stedman quietly voted against SB 14, and was the lone Republican to do so.

Anchorage Democrat Sen. Bill Wielechowski said that while other states have decided to directly manage ridesharing, Article 10 of the Alaska Constitution calls for "maximum local self-government," which could be at odds with SB 14.

"This is state overreach," Wielechowski argued.

An amendment prohibiting companies from sharing riders' personal information drew support from Mat-Su area Republicans, as did one requiring Alaska laws be adhered to in company-driver or company-rider disputes, but both failed to pass.

Contracts with some transportation network companies call for the laws of certain states to be adhered to in dispute resolution.

Democrats also noted the bill gives the state regulatory authority but does not specify or fund a state agency to handle oversight.

A similar bill in the House, HB 132 sponsored by Fairbanks Democrat Rep. Adam Wool, also prohibits local rideshare regulation but allows for local sales tax collection on rides; the Senate bill does not.

Anchorage Democrat Sen. Tom Begich said the municipal restrictions will prevent local governments from generating tax and fee revenue during a recession and while the state is cutting local government assistance.

Costello countered that the bill encourages economic diversification with new companies to come to the state operating on a new platform.

Wielechowski also pushed back on the workers' compensation exemption, which Alaska taxi drivers currently have, according to Costello.

Transportation network drivers set their own hours and drive their own vehicles, thus making them independent contractors, proponents argued.

Wielechowski described the exemption as a "slow degradation of workers' rights."

"We don't have to pass this bill in order to let transportation network companies to come in and operate," he said. "They want a workers' compensation exemption. They want to get what the law does not currently allow them to get."

The specifics behind who in Alaska qualifies as an independent contractor and who is an employee -- a longstanding issue -- are also being hashed out in different bills sponsored by Gov. Bill Walker.

The guts of SB 14 and HB 132 require liability and uninsured motorist insurance coverage that kicks in as soon as the driver logs into the app and then can accept rides.

Additional liability and uninsured motorist insurance covering at least $1 million in damages that takes effect when the ride begins is also required.

SB 14 allows either by the driver or the parent company to provide the requisite insurance, but the companies often have blanket policies that cover these circumstances.

The bills also require local and federal level background and driver record checks, which are generally transportation network company policy.

Drivers do not need to have a commercial driver's license.

SB 14 is now before the House Labor and Commerce Committee.

Elwood Brehmer can be reached at [email protected].

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