There is no one-size-fits-all regulatory solution for the sharing economy, and what works well for one city might not work for another.
he consensus is there is no consensus. City leaders across the country are working to understand and incorporate the sharing economy into their cities, and are being presented with a new set of challenges and opportunities. Community residents crave these new collaborative opportunities and commerce, and at the same time expect on-demand services at their beck and call. The sharing economy is thriving as a result, and it is upending traditional industries, disrupting local regulatory environments and serving as a bulwark for innovation and growth—all at the same time.
There is no one-size-fits-all regulatory solution that can be implemented across the board to accommodate these new business models, and what works well for one city might not work for another. And, these days, it’s hard to read the news without coming across the words Uber, Lyft, or Airbnb. The sharing economy, also commonly referred to as the collaborative economy or the peer-to-peer economy, is dominating every conversation. Seemingly overnight, services like homesharing and ridesharing became commonplace in cities large and small around the world.
The fact that the word ‘Uber’ has been readily adopted and transformed into a verb (i.e. ‘let’s just uber to the party’) reflects the rapid and impactful way that these types of disruptive technologies have entered and changed our lives. The term ‘sharing economy’ refers to businesses that provide consumers the ability and platform to share resources and services from housing to vehicles and more. Sharing economy exchanges typically take place with the use of an online and/or application-based business model, making them convenient for all who have internet or smartphone access.
The National League of Cities recently conducted a study to measure the sentiment and direction of the sharing economy in the thirty most populous cities in America. Findings are based on a content analysis of media sources covering: 1) the subject of sharing economy services, 2) the introduction of sharing economy services in cities, 3) the overall sentiment pertaining to sharing economy services, and 4) policies and regulation on sharing economy services. For the purposes of this study we limited the analysis to mention of ridesharing and homesharing services. In measuring the sentiment toward the sharing economy, we also determined whether each city has or is undertaking legislative or regulatory action toward sharing economy companies.
While all cities address the sharing economy in different ways, our analysis found that the majority of cities in our sample are working toward policies that accommodate or adjust to the operation of ridesharing or homesharing companies.
In summary, we found that:
- 9 cities (Austin, Charlotte, El Paso, Indianapolis, San Diego, San Francisco, Seattle, San Jose and Washington DC) show positive sentiment toward ridesharing and homesharing.
- 21 cities (Baltimore, Boston, Chicago, Columbus, Dallas, Denver, Detroit, Fort Worth, Houston, Jacksonville, Louisville, Las Vegas, Los Angeles, Memphis, Nashville, New York, Oklahoma City, Philadelphia, Phoenix, Portland and San Antonio) show mixed sentiment toward ridesharing and homesharing.
- 15 cities (Baltimore, Charlotte, Chicago, Denver, Detroit, Jacksonville, Las Vegas, Los Angeles, Louisville, New York, Philadelphia, Phoenix, San Diego, San Francisco and San Jose) have experienced regulatory action or other intervention from state policymakers.
In addition to the wide range of responses from cities, our analysis found that state actors are playing prominent role in this discussion. State level interventions ranged from legislation to regulatory rulings to state legal action. Most negative sentiment for the sharing economy is based in concerns over safety (provider and consumer), fair business practices (equal application of regulations or “leveling the playing field”), or lost tax revenue (uncollected hotel taxes). Overall, cities are finding that there is a way to strike a balance between promoting innovation, ensuring consumer safety and addressing existing industries.
City ordinances that governed traditional fields of commerce took decades to solidify, and while the opportunities of the new fields are great, the swiftness of their rise has been challenging. Cities are up to this challenge, though, and the National League of Cities is helping them navigate and prepare for this changed environment with resources and the development of a Sharing Economy Advisory Network. We must harness the power of great ideas, encourage innovation and develop robust regulatory structures that meet the needs of many. For more detail and to read the full report, click here.