Massachusetts Passes Uber Bill; Noncompete & Airbnb Proposals Fail

In a frenetic end to the Massachusetts legislative session, state lawmakers worked throughout the weekend and past a midnight deadline Sunday to send several bills to Gov. Charlie Baker’s desk. But for three proposals with implications for the state’s tech sector, inaction mostly ruled.

House and Senate lawmakers couldn’t agree on a compromise to iron out the differences in their respective bills to curb noncompete agreements. A proposal to charge hotel taxes on Airbnb and other short-term home rental companies didn’t make it into a larger economic development bill.

Legislators did, however, pass a bill regulating ride-hailing app companies like Uber, Lyft, and Fasten.

Let’s take a closer look at each proposal, starting with the one that got passed.

—Ride-hailing apps: Massachusetts joined a growing number of states that have enacted regulations of popular apps that enable users to summon a private driver to transport them around town. The final version of the Massachusetts legislation requires drivers to undergo background checks conducted by the company and the state, but they would not have to be fingerprinted, which is something the taxi industry and Boston Police Commissioner Bill Evans had advocated.

The bill also implements a 20-cent per ride tax, with 10 cents going to local municipalities for transportation infrastructure investments, 5 cents going to the state’s transportation fund, and 5 cents going to the state MassDevelopment agency. MassDevelopment would use that money for grants for the taxi and livery sector to invest in workforce development and the adoption of new technologies.

The bill leaves open the possibility of ride-hailing app drivers being allowed to pick up passengers at Logan Airport and the Boston Convention and Exhibition Center. The House bill would have prohibited those pickups, while the Senate bill would have allowed them, MassLive reported. The final bill leaves the decision up to the respective groups that run the airport and the convention center.

Lyft released a statement in support of the compromise bill, which now heads to Baker’s desk. Here’s the full text of the bill.

—Noncompetes: The effort to limit employee noncompete agreements was probably the legislative session’s most divisive and talked-about measure that would impact the tech community. It’s an issue that has been debated in Massachusetts for many years, and it appeared changes might be enacted this time around. Earlier in July, the Senate and House both passed bills restricting noncompetes.

But the differences between the two bills were apparently too great to overcome, and so the reform effort has stalled. The Senate version would’ve capped noncompetes at three months and required employers to pay the departed worker’s full salary during the enforcement period. The House noncompete bill would’ve limited them to 12 months and required employers to pay half the person’s salary during that time, or to pay “other mutually-agreed upon consideration.”

Jody Rose, executive director of the New England Venture Capital Association, signaled on Twitter that her organization will continue fighting for noncompete reform.

—Short-term rentals: As part of a larger economic development bill, the Senate had proposed imposing a room occupancy tax on Airbnb, HomeAway, VRBO, and similar sites, a move aimed at raising up to $20 million per year for an expansion of the state’s earned income tax credit, the Boston Globe reported. But the proposal wasn’t included in the House’s version of the economic development bill, and Baker reportedly opposed the tax (after initially signaling he supported it). In the end, it was left out of the final economic development legislation passed over the weekend.

What’s interesting is that Airbnb ran an advertising campaign in support of the tax. The company has upped its lobbying efforts this year as it fights restrictions in cities such as New York and its hometown of San Francisco.

Jeff Engel is a senior editor at Xconomy. Email: jengel@xconomy.com Follow @JeffEngelXcon

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