EP 41: Shifting Thoughts on the Sharing Economy
Did you take an Uber or a Lyft home on New Year's Eve? Did you wonder on your way back what that ride meant for city policy? Probably not as such, sure, but you've likely heard the conversation about regulating the elements of the sharing economy, like ridesharing (Uber; Lyft) or homesharing (Airbnb; VRBO). That's just one corner of the conversation, though. The sharing economy is expansive and is moving or upending so many parts of the marketplace that it's impossible for cities and their governments not to consider the ramifications. On this episode, we talk with the National League of Cities to go over where city governments are with the sharing economy and actions they're taking to come to terms, and even leverage it. NLC report, "Cities and the Innovation Economy: Perceptions of Local Leaders" - http://www.nlc.org/resource/cities-and-innovation-economy-perceptions-of-local-leaders Earlier one, from 2015 - http://www.nlc.org/sites/default/files/2017-01/Brief%20-%20Shifting%20Perceptions%20of%20Collaborative%20Consumption2015.pdf One Earth report on the sharing economy and local government - http://www.localgovsharingecon.com/uploads/2/1/3/3/21333498/localgovsharingecon_report_full_oct2015.pdf CityMetric article, "How can cities use the sharing economy to solve urban problems?" - https://www.citymetric.com/business/how-can-cities-use-sharing-economy-solve-urban-problems-2560 The Skatepark Podcast from the Tony Hawk Foundation - http://thfskateboardpodcast.libsyn.com/website
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Transcript
On this episode of Municipal Equation.
We also saw that 22% of cities do not support the growth of the sharing economy, which actually dropped from 29%, in 2015. So certainly, I think that the level of acceptance is growing.
A look at what the sharing economy means for cities right now and one more quick spin through the public skate park. The first thing that feels real, which is this first city council meeting. Oh, boy. That was big. Wasn't it? That was big. My name is Ben Brown, and this is Municipal Equation, a podcast about cities and towns and changing times from the North Carolina League of Municipalities, episode 41. So Armo's popular episode of twenty seventeen was episode 27 about how local authorities or local governments are solving problems by developing public skate parks, Not developed out of sight, not built with crappy materials like plywood, but classy concrete skate parks put in with the regular park system and involving kids in their development, in the planning process, with local government and private partners, you'll recall that we talked with the police captain whose story about developing a public skate park went all the way to the White House. Because I was looking at him as a skateboarder
being a problem in our town and just by the way he dressed, the board that he carried. But at the same time, he was having a lot of conversations with police officers, and he was maybe judging police officers by the job that we do, the badge we carry. And, so it was a great opportunity for us to really understand each other, and that broke down walls. And that further led to more meetings, and we just started saying, well, what can we do to help each other?
That was police captain Jacques Gilbert of Apex, North Carolina on scene at Rogers Family Skate Park, which is right at the entrance to a community park that has tennis courts and soccer fields. And again, check out episode 27 for the full story on that. So I'm bringing this back up because the Tony Hawk Foundation, which was also a part of that episode, has launched its own podcast. It is a really, really, really well done detailed step by step guidebook for anyone who wants to see a public skate park built in his or her town. They talk about identifying the issue of kids getting in trouble for skating on private property, and the tension created when police come out, and how that can impact a kid's perspective on authority and government. Instead, the whole podcast, which is called the Skatepark Podcast, is about diffusing that tension, and giving kids and their parents, or adults who skate, the tools to work with their city council or parks department to do something better.
So for example, the Skatepark podcast has a whole episode about how to approach your city council and have a positive discussion. Action item. But the first thing that feels real, which is this first city council meeting. Oh, boy. That was big. That was big. Yeah. Were your hands shaking? The whole time. Yeah. I'm still a little shaken up by it. I know. But it was cool. It was exciting. It was. Yeah. And it and it is empowering because you leave that thinking, alright. Well, we got their attention. They they said, you know, both consider doing a steering committee, but we kinda need you guys to come up with some community support. Alright. They want to see that They also have episodes about community outreach, messaging,
fundraising, site selection, design and construction, and they build up to an interview in episode 11 with Tony Hawk himself. By the way, they did it binge style, where they released a whole bunch of episodes at once. You can just kind of go through them one by one. So it's really worth listening to if this topic has come up in your community, or if you're someone who wants to pursue this, or if you're a city official who wants to hear more about this conversation from the skateboarding community's perspective. A related note, Pete Whitley, the host of the podcast, interviewed me a few days ago for an episode of the skate park podcast focusing on local policy and frustration between kids and government and how we're seeing more and more cities breaking that tension by doing the kind of thing that Apex, North Carolina did with captain Gilbert. And we also do an update on the recently opened skate park in Morganton, North Carolina, which was helped out by a grant from the Tony Hawk Foundation. And that's part of the work they do is to be a financial aid for these projects. So I'll put out an update when that episode comes out. I'll also have a link in the show notes to the Tony Hawk Foundation's podcast. Alright. So happy New Year. If you went out and partied and geared up for your midnight champagne and didn't feel like getting behind the wheel would be a good idea, then you might have called an Uber or a Lyft or some other ride sharing company to get home safely. You might have even gotten to the party that way, taken the anxiety out of your night knowing that you could just hail a ride from your smartphone. A lot of you are familiar with the category this fits in, the sharing economy, with Uber and Lyft serving as examples of ride sharing. Put it another way, if you're unfamiliar with what the sharing economy is, then ride sharing is one way to look at it. One example. The sharing economy is growing in cities and has been for quite some time. This market of on demand resources, a wide market of things that break from the tradition of reliance on traditional corporate structuring. Getting from place to place when you're out of town doesn't have to mean getting a rental car or hailing a cab. Staying overnight doesn't have to mean a hotel or a motel, for example. And these are the most upfront examples. When you widen that out to all the traditional pieces of the market that are feeling this sense of change in the sharing economy, It's obviously something cities and city governments are having to check out. Is it bad? Is it good? Opportunity? Disruption? It's got to mean something for policy. And policy groups are on it. A 2015 report from One Earth, that's a nonprofit based in Canada,
said this. Local governments are faced with a tsunami of sharing economy activities. Many are overwhelmed with little time or opportunity to develop an effective response. This has led to pushback over concerns such as business competitiveness, jobs, health, safety and other risks and, in some instances, environmental impacts. Many cities have adopted a piecemeal and reactive approach to sharing economy activities that absorb scarce resources rather than a more strategic one that efficiently advances urban sustainability.
Thank you, Robot Voice. Again, that was from 2015. Earlier that year, the National League of Cities came out with a report about the sharing economy and implications for cities. It was based on a survey of city officials and their questions, comments, concerns, and where they're at with the sharing economy. Is it forced adaptation happening on part of city governments? Or do these sharing economy entities need to conform to how we're used to doing business? What opportunities do we miss by putting the regulatory squeeze on companies like Lyft and Airbnb? Why might it also be a good idea? Brooks Rainwater, he works with NLC, pointed out a lot of mixed feelings. Well, NLC in late twenty seventeen released another report to catch up with how cities are dealing and what the remaining questions are. So I got up with Brooks to flesh that out. In a quick few stats that came up in this report, more than half of cities have not acted to regulate the sharing economy. I'm just gonna read straight from the NLC. They say 53% of local officials reported that their local government imposed no regulation on the sharing economy. At the same time, 30% of local elected officials indicated that their city had imposed light regulation or a partial ban on the sharing economy compared to 6% in 2015. 55% of cities describe the relationship with companies like Uber, Lyft, and Airbnb as good or very good, and 16% have entered into a formal partnership. Of those not in a formal partnership with these companies, 79% indicated that they were open to forming one. However, while a majority of cities indicate positive sentiments, a third of cities, a 33%, describe their relationships with sharing economy companies as very
poor. I'm Brooks Rainwater, and I'm the senior executive and director of the Center for City Solutions here at National League of Cities in Washington, DC. And so I oversee the Center for City Solutions where we do research, technical assistance, best practices, and leadership education. And we do that across a range of issues that very much mirror what cities are focused on. So infrastructure and transportation, economic development and finance, housing and community development, land use and climate issues. We even go so far as to do international engagement, so that we're able to bring those international best practices back to American cities. And one of the areas that I've sharing economy, open data, and just a range of how cities are changing rapidly because of technology, thinking about the future of work and automation. So within all of these areas, we look at research both on the national level as well as thinking about ways that we can lift up the promising practices happening in cities today.
Could you set a definition for what the sharing economy is and what we're talking about right now? And, I mean, I'm pretty sure most people listening are familiar enough, but, you know, what definitively are we talking about, and what's maybe a real life example of the sharing economy that most of us might be familiar with?
Absolutely. The sharing economy is really I would describe it as being on a continuum, all the way from, say, sharing library books. I mean, the library is a perfect example of kind of the the precursor to a broader sharing economy, to something like Uber and Lyft where people are sharing their individually owned vehicle on a technological platform. Mhmm. And so and everything in between. I mean, basically, it comes down to the idea that an individual is sharing something that they own, and receiving a fee for that service. And so it's broadly encompassing so many different areas, but what I think most people are most familiar with would be kind of the home sharing with Airbnb Mhmm. Or the ride hailing with Uber and Lyft. Right.
And is this mainly a big city thing or are we finding the sharing economy in small towns as well?
So the sharing economy definitely started in larger cities, you know, and it really kind of ramped up in the last five or six years, and a lot of this came about due to the economic downturn and the fact that simply people didn't have the dollars to go out and purchase new things and so they were kind of utilizing existing resources in new ways. And so we saw this happen in the San Francisco Bay Area and New York and some of our larger markets. And as the services have taken off, we've seen it really just explode and go to markets of all sizes. Certainly starting in those larger metro regions and kind of encompassing the smaller communities that surround them, but I've even seen it in communities as small as 50,000, 60,000. I grew up in a small beach town in Florida and when I go back there, I can take Uber now, from the small little airport nearby. And so it's definitely something that has infused into the broader culture of America.
So going back to when you first noticed, the sharing economy as a thing, what were your thoughts? I mean, and what do you think it might might mean for cities? Was this just gonna be a a quick passing thing or something that, you know, really had potential to grow into something?
So I first noticed the sharing economy as a thing a few years before I came to the National League of Cities. I was actually out in San Francisco, at a meeting out there called Meeting of the Minds and while I was there somebody offered me a token to kind of use a new ride sharing service, which actually actually no longer exists. But at the time San Francisco had real trouble with taxi cabs. I was supposed to meet somebody for dinner one night and walk for about twenty, thirty minutes, unable to find a cab. And so when somebody the next day offered me this $10 credit to try this service, I was like, sure, why not? And so that was the first time that I ever had any kind of familiarity with it. I've seen it somewhat in kind of the the building industry where you had started to see people starting to share space through co working spaces where they were really starting to build up at the time. But that was the first time the company was called Sidecar and I think they went under a few years ago. I'm not being able to really speak with Uber and Lyft, but it really opened my eyes to the fact that this was a new kind of viable alternative and it was social as well. So much of the sharing economy, particularly at the beginning of it was a social enterprise where you would get in the car, you'd have a conversation with someone new and kind of that dynamic of that was really powerful. And I think a lot of people utilizing social media so much of their lives being online kind of having that interaction with people was really valuable.
Yeah. I I I feel like it also kinda ties in with, another thing that NLC has been reporting on, which is the maker movement and kind of this feeling of kind of Mhmm. Taking it back and home growing and kinda having that personal kinda human connection with the services that you're using, which seems to be kind of a driver and why this thing ends up being so successful, because it's something that you can kind of help to shape yourself in a way. Absolutely. I think the maker movement intersects directly with the sharing economy. It does take it back to that personal aspect of it,
that you as an individual, by yourself or working with others can create something new and can create something that you own and you kind of have that ownership of and you're doing something and kind of new ways that are built on old ways, because it's kind of building back to the community And even if you're in a city of a couple million people, you start to build kind of that broader community around these things that you do, these things that you make. And it's really good from kind of the civic engagement aspects, you're getting people back more involved with their community. And I think it creates real opportunities for city leaders, mayors, council members and others to kind of instigate these types of movements, so you have more people involved and you're building whole new things and that leads to building new businesses. You can't lose sight of the fact that the entrepreneurial aspect of the sharing economy is very real.
Yeah. So from that kind of economic development and growth aspect, you know, that there's a a queue for city government there. But but also from the regulatory side, you know, one might ask why local government needs to be involved and who stays at my house overnight or who pays me for a ride to the airport. And I don't even know if I'm characterizing that the right way, but why is city government a role player, in the sharing economy?
You know, I think the the key reason why is that city government first and foremost needs to protect public safety. Mhmm. And, you know, we have regulations in place for a reason. When you think about, some of the challenges with home sharing, when you stay in a hotel or you stay in a bed and breakfast, there's sprinkler systems, there's fire suppression systems, there's a regular inspection series within commercial buildings that make sure that everything is safe and up to snuff. Unfortunately that's not really a viable alternative when you think about something like Airbnb and home sharing. That doesn't mean that we shouldn't do it, but it does mean from the government regulatory side we need to be cognizant of that and think about ways that we can approach those safety issues to make sure that people have these opportunities to share their homes. And I think it gets into kind of the nuances of somebody sharing a room in their home versus somebody sharing their entire home when they're not there, whether that's a secondary residence they might own. You know, there's just so many kind of pieces to that puzzle in particular that create different dynamics and challenges. And then there's also the question of neighborhood composition. A lot of people move into single family neighborhoods thinking that they're going to be with other owners of those homes or long term renters. All of a sudden you're introducing a dynamic where people are coming in renting homes overnight or for a week at a time and it just creates a different kind of level of challenges that people perhaps weren't expecting. And while there are negative externalities to zoning regulations, they're also positive ones. And so I think that's where the public needs to be involved in deciding how and what those zoning regulations look like. And in most instances, the existing zoning regulations wouldn't allow something like Airbnb. So rather than saying that it should be disallowed, what should happen is the community should participate and everyone should come to the conclusion of how in fact home sharing should be working within that city. And And then when we switch over and think about something like ride hailing and Uber and Lyft, the dynamic there kind of changes a bit, because there's still the safety aspect, but where that's a little bit different is depending on the city, because in many cities, taxicab drivers are contract employees as well. So similar kind of basis to how Uber and Lyft drivers are contract employees. So I think where the difference comes in is in many cities we have fingerprint requirements and other background check requirements that Uber and Lyft do on their own and they do in different ways. And so I think that's more just kind of lining up the factors that make riders frankly be comfortable with the fact that they know they're getting into a car with somebody that's safe, that doesn't have a spotty background or hasn't been in jail or other things that would kind of create a dynamic that would make the ride potentially unsafe. I think for the most part, those types of issues have been solved in cities throughout the country. You still see things popping up here and there. But again, I think it's back to kind of that public safety element. And frankly, in our survey, that's what we continuously see. We We saw it two years ago and we saw it again this time. That's where city leaders are most concerned.
So, you had safety, and and this is definitely not the first time you guys have surveyed cities on the sharing economy. So 2015, doing it again. What what are the big findings? Maybe what are some of the differences between 2015 and '17 2017 when it comes to perceptions and regulations and so on, with cities and the sharing economy?
Yeah. I'd say on the growth and acceptance side, we've seen some differences that more than three quarters of cities, 78% are broadly supportive of sharing economy growth, and this figure increased seven points from 71% in 2015. And of those that support sharing economy growth, 62% support growth in the sharing economy overall, 15% support ride sharing growth specifically and 1% support home sharing growth. And so I think that's something that we actually saw. We asked the question in a different way in 2015, but there was a real discrepancy in how people were viewing ride sharing versus home sharing with kind of a more positive outlook on the ride sharing side rather than the home sharing side. And I think some of those kind of zoning questions and other kind of neighborhood issues, certainly have a role to play there. We also saw that 22% of cities do not support the growth of the sharing economy, which actually dropped from 29% in 2015. So certainly, I think that the level of acceptance is growing. One of the more interesting factors was on the relationship with sharing economy companies that relationships with these companies have evolved. Earlier in the development, there was reluctance or consternation in many cities and this has now shifted in some instances the more amicable and even formal partnerships. And that formal partnerships piece is key and we've seen this particularly more on the transportation side, because what Uber and Lyft can do is fix some of those first mile, last mile challenges we have with public transportation. Mhmm. And so we've seen transit partnerships in a number of cities starting to grow, and I think that's something particularly as we move to autonomous vehicles that we're gonna see more and more, because it'll create those opportunities to fill some of the gaps that we have, throughout the country.
Yeah. So so that kind of brings up another question. Is there a big inclusion and equity piece of all this, you know, making sure that underserved communities are getting the service, and fairness in the sharing economy?
Yeah. There definitely is. And I think this is one of the areas with cities being so focused on equity that they've been pushing these companies to open up their data for many years to actually explain how it is that they are making sure that they're serving underserved communities that they are indeed thinking about from, like, the home sharing perspective that everyone is equally able to rent space, because there were some earlier indications that that indeed was not happening. And so it's been a constant challenge where the private companies will open up enough of their data to make the argument that they indeed they are indeed doing a better job than say taxi companies. But without kind of that broad scale data sharing, it's always hard to fully check that. Anecdotal evidence says that in fact they are doing a good job on this front compared to what you had seen over the years with taxicab companies. But again, you can only kind of take that so far without having the full data sharing. And so I think this is something where city leaders should continue to push these companies to prove it, to actually make it clear that not only is this something that they're saying they're doing, but they need to show that they are indeed doing it. And that's where kind of regulation and legislation can, in fact, kind of create that dynamic in different ways.
And so, you know, we you've so you you've mentioned some ways that the sharing economy can, be a benefit for cities and how it may pay off for cities. But just to kind of reencapsulate it, where are are we seeing the sharing economy paying off for cities and how are city governments getting in there and leveraging that? And is there anything surprising about how this has played out?
You know, I think where we are seeing those relationships build more strongly is, on the transportation side. You know, the we we are starting to see Lyft and Uber actually actively trying to work with cities a bit more. Their original business model was to go in and disrupt existing regulations and just operate however it was that they wanted to operate. Now that they've gone from startups to actual existing businesses, I think they've realized that that dynamic no longer makes a lot of sense. And so that's why I think we're starting to see those transportation partnerships grow. We're starting to see instances in the suburbs of Orlando, Florida, where they're actually subsidizing rides for lower income communities. And I think that's where from kind of the equity standpoint, we can start to see different opportunities arise. And so if you start to see subsidies like that as one potential pathway, if you start to see Uber and Lyft working with transit agencies to fix some of the first mile, last mile challenges that we have with transit systems, and then we start to see kind of dynamic shift even more as autonomous vehicles come online and you potentially have a cheaper ride to and from those transit stations, you could really start to see the dynamic of public private partnerships flourishing. And from our research, that's exactly what many of the cities said. We had a certain percentage that said that they've already started to kind of partner with these cities, but it was 84% of cities that don't have a formal partnership, but they'd like one. 16% of cities said they've already entered into those partnerships. And so I think there's a lot of potential there. And there's a lot of opportunity, because frankly, while we've continuously seen ride hailing, you know, being more supportive than, say, home sharing, is that it offers a whole new service that was not existing in so many communities. You know, it's only the largest cities in this country that had robust taxicab systems. I remember when we were doing some of our best practices work, Indianapolis really welcomed Uber in and they saw it as something that could upgrade their tourism industry, because all of a sudden, you know, when people got there at the airport or needed to get around the city, they had a new option. And so I think kind of thinking about what works best in your city and figuring out how you can integrate these services in different ways is really the way forward.
So, any other conclusions from your report? What do cities need to bear in mind about the sharing economy and why it matters as everything unfolds?
Sure. Now I always go back to the fact that cities make the sharing economy work. That from the very beginning of these companies forming, it was the urban environment that allowed them to build their companies, allowed them to kind of pilot new ideas. And frankly, through Mayors and Council members working with these companies, the companies were able to flourish and kind of build out where they are now being $60,000,000,000 $70,000,000,000 companies, because in general cities are incubators for new technology. The nation's cities official are embracing these new technologies and sharing economy platforms and leaders recognize the value that they bring to cities and their residents. And so I think that the success of these technology driven endeavors signals a new era in which on demand services and collaborative consumption has become mainstream. And ultimately what that means is that residents have new options, because that's what people want. They want choices and how they get around, where they stay, you know, where they can eat, you know, what they can share and how they can socialize Mhmm. With friends and new people that they would meet. And so that's where I think the sharing economy as a platform for the future really has room for growth.
So is there anything I haven't asked about that you think is important, anything that I might have missed along the way? Or
I think the one thing that I would close with is it's fascinating to see how fast the sharing economy has taken off within cities. And ultimately what's exciting is to see how quickly Mayors and City Council members and people throughout cities have been able to kind of incorporate these new services into their communities and create new opportunities for their residents on the job side as well as new opportunities for people to utilize these services. And so I think it really shows the dynamism of local government and it shows the dynamism of cities more broadly. And so, again, kind of closing out, cities make the sharing economy work and I think the future looks quite bright.
Are are there gonna be follow-up reports? So is this kinda like an every other year type thing that you're gonna be following or kinda as needed? Or Yeah. I mean, I think more broadly, the the innovation
economy writ large is something that we're very focused on. Mhmm. You know, thinking beyond just the sharing economy, smart cities, drones, autonomous vehicles. Yeah. You know, these these are kind of new things that are impacting cities now and going forward, and we're gonna keep on top of them because we wanna make sure that city leaders have the resources and tools to kind of approach the these emerging issues. So so definitely, we will have more research in this space.
The NLC report is called Cities and the Innovation Economy, Perceptions of Local Leaders, and you can find it at nlc.0rg. Also, I have a link to it in the show notes with this episode at soundcloud.com/municipalequation. We've got a lot of exciting stuff ahead for 2018. Thanks to groups like ELGL, who will be a part of it. We'll actually hear from them pretty soon. If you have any ideas for episodes or topics we should tackle, let us know. Any feedback or commentary, record it yourself in the voice memo app on your phone and email that to me, bbrown@nclm.org. I'll play it on the show. This podcast covers everything about cities and towns in the face of change. Tweet at me. The handle is at muni equation. That's at m u n I equation. And again, the email address bbrown@nclm.org. NCLM stands for North Carolina League of Municipalities online at nclm.org. Lots of new stuff coming up. Keep in touch. This is Ben Brown.
