Uber eyes statewide launch as Alaska Legislature takes up ride-share legislation

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JUNEAU, Alaska (KTUU) – Alaskans can still buy VHS tapes at Blockbuster, but they cannot hail a ride on their smartphone through services like Lyft and Uber.

Now, there is a renewed effort in the Legislature to bring Alaska’s transportation industry into line with the rest of the world.

“It really gives a lot of flexibility to people in Alaska in times of a recession,” Sen. Mia Costello, R-Anchorage, said of her Senate Bill 14. “It comes at the exact time when we need something like this, where people can actually have a job, make some income, while they do other things.”

Critics from the taxicab industry, however, believe the large corporations that would benefit most from the changes advocated in S.B. 14 would profit simply by skirting local regulations that require traditional cab drivers to get a license, go through a background check process, get training, and be subject to local oversight.

Costello’s bill would allow the companies to operate statewide without having to follow local government regulations imposed on taxis.

That means any “transportation networking company” could open in Anchorage, Bethel, Juneau, or anywhere else in the state if the proposal eventually becomes law.

S.B. 14 would also establish that drivers of ride-sharing services are independent contractors rather than employees, a distinction that allows the companies to avoid paying workers’ compensation insurance and to avoid a variety of labor rules including a guaranteed minimum wage.

Uber is the lone company to announce plans to launch statewide if S.B. 14 passes. The company tried and failed to enter the market here a few years ago.

At that time, various local regulators nixed ride-sharing, and former Rep. Kurt Olson, R-Soldotna, would not move legislation to enable the companies from the House Labor and Commerce Committee he chaired.

"We really want to be back and want to be here for all Alaskans," Mitchel Matthews, who oversees Uber's Northwest operations, said in an interview. "We're looking forward to being in Anchorage and Bethel, maybe as far north as Prudhoe if we can."

As the company has before here and elsewhere, Uber argues its drivers are not employees in the traditional sense and sees the legal provisions as necessary to avoid labor disputes.

Rather than directly employing drivers, Uber requires a fee equal to 25 percent of each ride. Drivers keep the remaining profits. According to a presentation by the company to the Senate Finance Committee, the average driver works 10 hours per week or less.

Matthews contends that the approach enables people to get a side revenue stream or a livable full-time wage.

James Harris has owned Juneau Taxi for 20-plus years, a company that operates year-round with peak business happening when cruise ships and summer arrive.

Harris said he disagrees with the notion that Uber would be good for drivers and even consumers.

"Uber says, 'Get your side money on,'" he said in an interview from his office. "Why don't they just say, 'Get your minimum wage on.'

"Sure, they're going to show up in nicer vehicles. They will. But at what cost?"

Harris said one of the advantages of having a regulated cab industry, like the one that exists in Juneau, is that prices are held constant and not subject to rapid variations.

For example, Uber allows "price surging" at times of peak demand which means the price of a fare could multiply by several times on short notice.

"We're in Juneau. We get cruise ships. I would suspect that if they are here, during the summer, they're going to end up in their price surging mode pretty much the entire summer because every time a cruise ship lands, it's going to be peak time," he said.

Kathie Wasserman, director of the Alaska Municipal League, told members of the Senate Finance Committee that the local governments she represents oppose being written out of the process.

The bill already moved through the Senate Labor and Commerce Committee, chaired by Costello, and is now being considered by the Senate Finance Comittee. Sen. Anna MacKinnon, R-Eagle River, co-chairs the committee and is listed as a co-sponsor of S.B. 14.

Uber currently operates in every state except Alaska, South Dakota, West Virginia, and Wyoming.