In a late-night Sunday scramble to the finish line, the state legislature completed their work for the session. The push to the finish line saw the House and Senate pass four major pieces of legislation, and leave one priority — a law setting limits on noncompete clauses — behind.
The decisions Sunday had big implications for the area’s tech and startup scenes, as well as some major, national, consumer-facing tech companies.
Uber/Lyft: Massachusetts will join dozens of other states in establishing rules for the digital-age taxicab competitors. Drivers will now face a two-part background check, one from the company and one from the state, and will be required to receive a certification from the state before getting behind the wheel. They will also face an additional vehicle inspection each year and be required to display decals on their cars while driving for a transportation network company. Unlike a prior proposal, drivers will not be banned from picking up drivers at the Boston Convention and Exhibition Center, and the bill allows Logan Airport to consider whether to allow ride-hail drivers to pick up fares at its terminals. In addition, the companies will pay a 20-cent fee for each ride they give in Massachusetts, with the revenue going to city and state transportation needs — including a fund meant to help taxicabs and limo services adapt to changes in technology.
Airbnb: A Senate proposal to tax Airbnb and other online home rentals at hotel rates was not included in a broader economic development bill that passed late Sunday. The idea originally had the backing of Gov. Charlie Baker, who upon further review walked back his support. It also had the support of Airbnb itself, which pays taxes in other states and last week bought radio ads to push for one in Massachusetts. Alas, the company’s push was not successful: Airbnb couldn’t get itself taxed this session. The economic development bill also did not include a Senate provision that would have allowed the state lottery to expand into online gaming, according to State House News Service.
Noncompetes: Boston’s startup community has been fighting for years now to eliminate or limit the restrictions of these contractual agreements, which can bar employees from leaving a job to accept a new job in their field. It looked like this may have been the year when the House and Senate each pitched proposals to rein them in. However, no agreement was reached before the two-year legislative session came to a close around midnight. The House pitched a law that would have limited the maximum length of a noncompete agreement to one year and given those employees some compensation between jobs. The Senate proposal would have freed employees after three months and allowed for even greater payments to affected employees in the meantime. Some large companies support the use of noncompetes as a way to protect trade secrets, but others in the tech world, including startup leaders and venture capitalists, argue that they prevent innovation by holding employees in place. With the weekend’s discussion falling through, the battle will live to wage another year or two — at least.