Collaborative Consumption and Shifting Perceptions in Cities
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What will the future hold for the sharing economy and how are cities responding to the current shifts taking place?
When I want something I don’t want to wait. I want it now and more often than not I share this thought with millions of other city dwellers. We are in luck, because with the tap of my smartphone a car is on its way or a room is rented halfway around the globe. Data is a key ingredient making this happen and cities make the sharing economy work.
The on-demand economy feeds our wants and needs and reacts to and has helped drive a fundamental shift in our culture. Early on, the disruptive and abrupt approach many rapidly growing sharing economy companies took as they entered cities created consternation and concern. Over time, the desires of people and the goals of cities have coalesced and become clearer and confrontation has moved more toward collaboration.
City leaders want to capitalize on the new opportunities and innovation the sharing economy can bring to cities. This isn’t to say for a minute that the challenges have disappeared, and in fact there are still some significant issues to address. However, we are observing in our work that the sentiment of cities on the sharing economy is shifting.
We identified three key benefits and concerns that are at the top of the list for cities in our new research survey. This is the first national level analysis of local elected officials’ views on the sharing economy, and this data can help us all further the larger ongoing conversation on how this new economy is affecting cities.
Cities view improved services as the primary benefit, with 22% identifying this as important. The next most vital area is increased economic activity at 20%. Rounding out the top three benefits is increased entrepreneurial activity at 16%. These numbers are a reflection of the economic activity afoot in cities as a result of collaborative consumption.
When we examined the concerns that cities had with the sharing economy, the primary issue that rose to the fore is public safety, and specifically the lack of comparable insurance and general safety concerns, with 61% identifying this as the top priority. The numbers two and three concerns are protection of traditional service providers and industry participants at 10% and non-compliance with current standards at 9%.
These numbers reflect many conversations we have had with city officials. We have held in-depth interviews with city leaders in a dozen cities and performed a sentiment analysis on large cities throughout America. This research identified and reinforced the notion that there is no one way for cities to approach the sharing economy. One of the beautiful things about urban areas everywhere is the inventiveness and uniqueness of place.
That earlier research identified a clear need for quantitative data. This Survey on the Sharing Economy approaches the data question and allows for a clearer, macro-level understanding of what cities are experiencing and what they hope to see from the sharing economy.
There is no doubt that collaborative consumption thrives in cities and brings value to residents. And, of course no city leader wants to stand against the steady drumbeat of progress and innovation. But just as cities make the sharing economy work the sharing economy needs to work with cities.
The growth of the sharing economy has been enormous and quick. The current valuation of just Uber and AirBnB reaches over $50 billion. All of this has taken place startlingly fast. And, over half, or 55%, of cities in our sample reported some growth in the sharing economy with 16% reported experiencing rapid growth.
The sharing economy is expanding far beyond transportation and short-term rentals, with myriad companies taking on peer-to-peer business models. While ridesharing and homesharing represent just a segment of the sharing economy, these two types of services are top of mind in cities. This is reflected in our numbers, which show that 53% of cities reported growth in ridesharing and 46% saw growth in homesharing.
Cities are more open to ridesharing than homesharing. 66% of respondents indicated that their local government is supportive of ridesharing, while only 44% indicated that their local government is supportive of homesharing. However, when asked whether these local governments are supportive of rapid sharing economy growth more broadly, nearly 71% of city leaders responded that indeed they were.
At the end of the day sharing economy businesses are flourishing and sentiment is shifting for the simple fact that sharing represents value on the ground now. While challenges persist, the benefits are very real, and the pace of change continues to accelerate as we enter the sharing city of the future together.
Nicole 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 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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