Cities Power the Sharing Economy

by Feb 23, 2015Smart Cities

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So much of the news we read these days is peppered with the words Uber, Lyft, or Airbnb. With the swiftness of their rise in cities nationwide and globally, city leaders and policymakers are scrambling to find out how to best approach this new economic model—the sharing economy. At some point in the last five years the word ‘Uber’ transitioned from a catchy company name to a household verb, and the sharing economy became a game changer.

People think of a lot things when they hear the term “sharing economy.” The rapid diffusion and evolution of this new economic model has left people with a variety of feelings, most of which fall somewhere in the realm of ambiguity and utter confusion. And that’s reasonable, given the warp speed at which the sharing economy thrust itself into our everyday lives, becoming commonplace in cities large and small around the world.

Furthermore, the vast difference in types of sharing economy platforms can be mind-boggling and often times policymakers are solely aware of what is happening with ridesharing or ride-hailing and homesharing, not realizing the vast array of goods and services that can be shared from food to ones time to tools and even municipalities sharing heavy equipment.

The common theme within this space is that cities make the sharing economy work. With the unanticipated surge in sharing or collaborative consumption companies, there has been what is commonly referred to as ‘disruption’ of existing systems. Traditional industries are being upended with the growth of innovative sharing economy models that do not neatly fit into existing local regulatory environments.

Residents both expect on-demand services and crave collaborative opportunities. City leaders must walk a fine line, embracing change and innovation while simultaneously prioritizing safety and market fairness. As they grapple with this, they find that there is no best practice or one-size-fits-all solution, but rather an opportunity to experiment, to find a unique, context-sensitive answer that works for their community.

When it comes to cities and the sharing economy the legislative and regulatory system has been most affected by ridesharing and homesharing, and emerging models for how to incorporate these services are developing, but the newness of this issue still precludes long-term tested best practices. Additionally, there is no one-size-fits-all regulatory solution, because one of the true innovations in cities is always the ability to experiment and come up with solutions that work best for the local context.

At the National League of Cities, we conducted a study to measure the sentiment and direction of the sharing economy in the 30 largest cities in America.

Findings are based on a content analysis of media sources covering:

  • the subject of sharing-economy services
  • the introduction of sharing-economy services in cities
  • the overall sentiment pertaining to sharing-economy services
  • policies and regulation on sharing-economy services

Because of the sheer expansiveness of the sharing economy, NLC refined this study’s scope to focus only on ridesharing and homesharing services. Part of measuring the sentiment, also included an exploration of whether each city has or is undertaking legislative or regulatory action to address these new models.

Every city is different, have different needs, a different culture, and different existing economic conditions, and they all subsequently address the sharing economy in different ways. Even given the wide variety of responses to sharing, most of the cities in our sample are working toward accommodating or adjusting to the operation of ridesharing or homesharing companies.

Looking specifically to the 30 cities analyzed we found 9 cities that showed overall positive sentiment and 21 that had mixed sentiment to homesharing and ridesharing. Additionally, we found that 15 of the 30 cities experienced regulatory action or other intervention from state policymakers. Our analysis also found that states are playing a big role in this discussion. State level interventions ranged from legislation to regulatory rulings to state legal action.

Most mixed and negative sentiment for the sharing economy is based on 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.

Within the study we highlighted more in-depth what is happening with the sharing economy in a number of US cities, including Denver and Portland. Denver is an interesting city for further exploration, because it is one of the cities that have seen intervention from state lawmakers. Colorado was the first state in the union to pass legislation authorizing ridesharing statewide.

While this legislation received pushback from some traditional industries, Governor John Hickenlooper celebrated the state’s move toward embracing innovation. While the state legislature made a bold move in legalizing ridesharing outright, the policy still underscores the importance of safety with provisions that require insurance and background checks. In October of 2014, the Denver City Council convened a special task force to explore the city’s sharing economy, with an initial goal of understanding the social and economic effects of the city’s homesharing market.

Portland, Oregon has definitely displayed mixed sentiment toward the sharing economy. Homesharing has been legalized, and the city partnered with Airbnb to launch its Shared City Initiative. Part of this will include efforts to assist Airbnb hosts collect hotel taxes on the city’s behalf. Ridesharing has posed a different challenge for the city, as existing city codes prohibit the practice. Portland Mayor Charlie Hales initiated a new task force to explore the possibilities of a regulatory framework that might accommodate everyone.

In the meantime, Uber has agreed to temporarily halt operations in the Rose City, and is working with city officials to reach an agreement. An official statement from the city in December expressed optimism, and willingness to work “with Portland’s lawmakers, working to create a regulatory framework that works for everyone, not just us. Not just the taxi cabs. Not just the city officials. Everyone.”

City ordinances that govern more traditional fields of commerce took decades to develop, and while the sharing economy is wildly popular and nimble, we cannot expect things to change overnight. Cities are meeting these changes with open arms, though, and committing to addressing them responsibly, with the best interests of residents in mind. The National League of Cities (NLC) is helping them navigate and prepare for this new environment with resources and the development of a Sharing Economy Advisory Network.

Because this is a rapidly changing environment our findings represent a snapshot in time. In addition to reflecting what we could see at the time of our data collection and analysis, however, our findings indicate the presence of some trends in the sharing economy. Overall, city policymakers are trying to strike a balance between promoting innovation, ensuring consumer safety, and respecting existing industries.

This is only the beginning of the sharing economy, and we will undoubtedly continue to see more new companies, more disruption, and more social and political interplay between existing and new actors. Cities will continue to serve as the laboratories for these ever-changing technologies and business models. The best thing that city policymakers can do is keep an open mind about how the new economy might be fruitful with the right regulatory framework in place. Sharing is here to stay.

Las ciudades alimentan el sharing economy*

*también conocido como “economía del compartir”

Tanto de las noticias que leemos en estos días se acribillan de las palabras Uber, Lyft, o Airbnb. Con la rapidez de su subida en las ciudades nacionalmente y globalmente, los líderes de las ciudades y los legisladores salen en desbandada para enterarse de la mejor manera de abordar este modelo económico nuevo—el sharing economy. En algún momento durante los últimos cinco años, la palabra ‘Uber’ transformó desde un nombre de compañía pegajoso a un verbo familiar, y el sharing economy se convirtió en algo revolucionario.

La gente piensa en muchas cosas cuando oye el término “sharing economy”. La difusión y evolución rápida de este modelo económico nuevo ha dejado a la gente con una variedad de opiniones, la mayoría de ellos o siendo ambigua o un especie de confusión completa. Y es razonable, dado la rapidez con la que el sharing economy llegó a ser parte de nuestras vidas diarias, convirtiéndose en algo común y corriente en ciudades grandes y pequeñas por todo el mundo.

Sin embargo, la diferencia vasta entre los tipos de plataformas del sharing economy puede ser confusa y muchas veces los legisladores solo están conscientes de lo que está pasando con ridesharing (coche compartido/ carpooling) y homesharing (casa compartida), sin darse cuenta de la variedad de bienes y servicios que se pueden compartir desde la comida hasta el tiempo de una persona hasta herramientas e incluso equipo pesado compartido entre barrios.

El tema común en este espacio es que las ciudades hacen que el sharing economy funcione. Con el arranque inesperado de compartir o compañías de consumo colaborativo, ha habido lo que se suele llamar “interrupción” de sistemas existentes. Industrias tradicionales están cambiando drásticamente con el crecimiento de modelos innovadores del sharing economy que no caben muy bien en ambientes regulatorios locales que ya existen.

Los residentes esperan servicios por encargo y además tienen antojo de oportunidades colaborativas. Los líderes de las ciudades tienen que andar una línea fina, abrazando cambio e innovación mientras priorizando simultáneamente la seguridad y la justicia en el mercado. A medida de balancear esto, encuentran que no hay practicas idóneas o una solución que sirve para todos, sino una oportunidad de experimentar para encontrar una respuesta única y relevante al contexto que funcione para su comunidad.

En cuanto a las ciudades y el sharing economy, el sistema legislador y regulatorio ha sido afectado sobre todo por ridesharing y homesharing, y modelos emergentes de incorporar estos servicios se están desarrollando, pero lo nuevo de este asunto todavía excluye las prácticas mejores a largo plazo que fueron probadas. También, no hay una solución regulatorio que sirve para todos, porque una de las innovaciones autenticas en las ciudades siempre es la capacidad de experimentar y crear soluciones que funcionen en el contexto local.

En el National League of Cities, llevamos a cabo un estudio para medir las opiniones y la dirección del sharing economy en las 30 ciudades más grandes en los estados unidos.

Los hallazgos se basan en un análisis de contenido de fuentes de los medios que se tratan de:

  • El tema de servicios del sharing economy
  • La introducción de servicios del sharing economy a ciudades
  • La actitud general relacionado a los servicios del sharing economy
  • Las políticas y la regulación de los servicios del sharing economy

Debido al tamaño puro del sharing economy, el NLC refinó el alcance de este estudio para centrarse solamente en servicios de ridesharing y homesharing. Una parte de medir las opiniones también incluyó una exploración de si cada ciudad tiene o está iniciando acción legisladora o regulatoria para abordar estos modelos nuevos.

Cada ciudad es distinta en cuanto a sus necesidades, su cultura, y sus condiciones económicas existentes, y por consecuencia todas manejan el sharing economy en maneras distintas. Aún dado la variedad vasta de respuestas en cuanto a compartir, la mayoría de las ciudades en nuestra muestra están trabajando para acomodar o ajustar a la operación de las compañías de ridesharing o homesharing.

En cuanto a las 30 ciudades analizadas, encontramos 9 ciudades que mostraron una actitud positiva generalmente y 21 que tuvieron opiniones complicadas acerca de homesharing y ridesharing. También, encontramos que 15 de las 30 ciudades experimentaron acción regulatoria u otra intervención de los legisladores del estado. Nuestro análisis también encontró que los estados tienen un papel importante en este discurso. Las intervenciones al nivel del estado variaron desde legislación hasta resoluciones regulatorias hasta la acción legal del estado.

La mayoría de las opiniones complicadas o negativas en cuanto al sharing economy se basa en nuestras preocupaciones sobre la seguridad (del proveedor y consumidor), prácticas justas de los negocios (el uso igual de regulaciones o “competir en igualdad de condiciones”), o ingresos fiscales perdidos (impuestos de hoteles no recopilados). En general, las ciudades están descubriendo que sí hay una manera de mantener un balance entre promocionar la innovación, asegurar la seguridad del consumidor, y reconocer industrias existentes.

Dentro del estudio, destacamos lo que está pasando en el sharing economy en varias ciudades estadounidenses, incluso Denver y Portland. Denver es una ciudad interesante para una exploración más a fondo, porque es una de las ciudades que ha experimentado intervención de los legisladores del estado. Colorado era el primer estado de la unión que aprobó la legislación que autorizó ridesharing por todo el estado.

Si bien esta legislación provocó mucho enfrentamiento por parte de industrias tradicionales, Gobernador John Hickenlooper celebró que el estado abrazara la innovación. Aunque la legislatura del estado tomó una decisión atrevida en legalizar ridesharing, la política todavía destaca la importancia de seguridad con provisiones que requieren seguro y revisiones de antecedentes. En Octubre de 2014, el Denver City Council inició un cuerpo especial para explorar el sharing economy de la ciudad, con una meta inicial de entender los efectos sociales y económicos del mercado de homesharing de la ciudad.

Portland, Oregón ha demostrado seguramente un punto de vista complicado hacia el sharing economy. Homesharing ha sido legalizado, y la ciudad colaboró con Airbnb para lanzar su Iniciativa de Shared City. Parte de esto incluirá los esfuerzos de ayudar los anfitriones de Airbnb a coleccionar los impuestos de hoteles de parte de la ciudad. El ridesharing ha sido otro tipo de reto para la ciudad, ya que los códigos de ciudades existentes prohíben la práctica. El alcalde de Portland, Charle Hales, inició un cuerpo especial nuevo para explorar las posibilidades de un sistema regulatorio que tal vez pueda acomodar a todos.

Mientras tanto, Uber accedió a parar temporalmente las operaciones en la Ciudad Rosa, y está trabajando con los oficiales de la ciudad para hacer un acuerdo. En diciembre, una declaración oficial de la ciudad expresó optimismo y la voluntad de trabajar “con los legisladores de Portland para crear una infraestructura regulatoria que funcione para todos, no solo para nosotros. No solo para los taxis. No solo para los oficiales de la ciudad. Sino todos.”

Las ordenanzas de la ciudad que gobiernan los campos de comercio más tradicionales tardaron décadas en desarrollar, y aunque el sharing economy es muy popular y ligero, no podemos anticipar que las cosas cambien durante la noche. Sin embargo, las ciudades abrazan estos cambios y se comprometen a abordarlos responsablemente, teniendo en cuenta los intereses de los residentes. El National League of Cities (NLC) les ayuda navegar y preparar para este ambiente nuevo con los recursos y el desarrollo de un Sharing Economy Advisory Network.

Ya que este ambiente está cambiando rápidamente, nuestros hallazgos representan un solo momento en tiempo. Además de reflejar lo que podíamos ver durante el tiempo de nuestra colección y análisis, nuestros hallazgos indican la presencia de algunas tendencias en el sharing economy. Generalmente, los legisladores de la ciudad pretenden tener un balance entre promocionar innovación, asegurar la seguridad del consumidor, y respetar industrias existentes.

Esto es solo el principio del sharing economy, y continuaremos indudablemente a ver más compañías, más interrupción, y más interacción social y política entre participantes existentes y nuevos. Las ciudades continuarán a servir como los laboratorios para estas tecnologías y modelos de negocios que están cambiando constantemente. Lo mejor que los legisladores pueden hacer es mantener una mente abierta a cerca de cómo esta nueva economía puede ser productiva con la infraestructura regulatoria correcta. El compartir está aquí para quedarse.


About the Authors :

DuPuisNicole DuPuis is the Senior Associate for Infrastructure in the City Solutions and Applied Research Center at the National League of Cities. Her areas of expertise include transportation, telecommunications, public works, and urban innovation. Throughout her career in urban policy she has published several articles and contributed to numerous research reports on these topics. She is also a regular contributor to NLC’s blog, CitiesSpeak, on a variety of infrastructure issues. Follow Nicole on Twitter @nicolemdupuis.

brooks-rainwaterBrooks Rainwater is the Director of the City Solutions and Applied Research Center at the National League of Cities. The Center strengthens the capacity of municipal leaders to create strong local economies, safe and vibrant neighborhoods, world-class infrastructure, and a sustainable environment. As a strong advocate for vibrant and successful cities, Brooks frequently speaks and writes on the subject, and has published numerous research reports and articles on the creation of innovative, sustainable, and livable communities.Follow Brooks on Twitter @BrooksRainwater.


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  1. The use of the term “sharing-economy” to refer to monetized transactions is very unfortunate. A true sharing economy has nothing to do with exchange, and this use of the term not only serves to obscure the vast array of valuable and beautiful human relational activity that occurs outside of financialized markets, but it normalizes the belief that the market is all pervasive. “Sharing” something by asking for financial compensation is not sharing – it is selling.

    • Brandon – what word would you prefer? Protecting the use of words in order to prevent a cultural shift is like trying to put out a fire by collecting all the smoke. I think it is sharing — I share my house with you, and you share your money with me.

  2. “I share my house with you, and you share your money with me.”

    By this definition, all apartment rentals and car rentals are examples of sharing economies. Enterprise Rent-a-Car is ‘sharing’ their car with me, and i am ‘sharing’ my money with them. And if I were to “share” my money, that would mean that I could always ask for it back. This is not sharing, it is payment of rent.

    I’m not suggesting protecting the use of the term. I’m talking about using the word “share” accurately, and not applying it to market transactions.

    If you sleep on my couch, or borrow my lawnmower, or care for my children, and no exchange takes place, that is sharing. I have shared my couch, my lawnmower, and my time.

    “Peer-to-Peer Economies” is far more accurate, and doesn’t obscure the many valuable human economies that are not mediated by monetized exchange, and which have facilitated the development of human community over the past several millennia.


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