The Path to Let Rideshare Companies into Alaska Not So Smooth

February 22, 2017

The drive to allow rideshare companies like Uber and Lyft to operate in Alaska has hit speed bumps.

The bill, from Sen. Mia Costello, R-Anchorage, faces opposition from taxi companies worried the entrance of rideshare groups will drive down wages for their drivers and from municipalities that don’t want to cede regulation to the state.

Costello said she sees the bill as a way to create jobs amid the state’s recession and provide transportation options for Alaskans.

The bill excludes ride-share company drivers from state workers’ compensation laws, referring to them as independent contractors. Uber, in information provided to senators, said drivers have flexible schedules that can vary widely from week to week.

In 2015, the state labor department accused Uber of misclassifying employees as independent contractors, thereby avoiding paying things like taxes and unemployment insurance. A settlement called for the company to pay about $78,000 and not operate in Alaska until it complied with state law or changed its operating plan.

For purposes of workers’ compensation liability, Uber would be allowed to operate in the state if the law was changed, as Costello’s bill proposes, said Rhonda Gerharz, who works in the state’s workers’ compensation division.

Costello’s bill also sets insurance requirements and calls for background checks and driving histories on those applying to be drivers.

It has support from a group representing Anchorage’s hospitality industry and the chamber of commerce for two Anchorage suburbs, Chugiak and Eagle River.

A similar version of the bill is scheduled for hearing by a House committee Thursday.

Forty-three states have ride-share laws that are generally welcoming to the industry, said Doug Shinkle, transportation program director with the National Conference of State Legislatures. But he said states also are revisiting their laws and making tweaks based on experiences so far.

Uber previously attempted to operate in Anchorage, but it suspended its service in 2015 after failing to come to an agreement with municipal officials.

The Senate Finance Committee has sought justification for a state commerce department estimate that it would cost more than $200,000 annually to regulate the rideshare industry.

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