Cities’ Shifting Perceptions of Collaborative Consumption

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This post was co-authored with Nicole DuPuis.

Revisit CitiesSpeak monthly to follow our new Sharing Economy blog series. These upcoming blog entries will further explore the ways in which the sharing economy works in different places with guest posts from city and industry leaders.

 

When people want something, they want it now – and more often than not, this trait is shared by millions of other city dwellers across the globe. We are all in luck, because with the tap of a smartphone there is a car on its way or a room is rented halfway around the world. Data is the key ingredient making this happen and cities make the sharing economy work.

With this ever-changing environment, what will the future hold for the sharing economy and how are cities responding to the current shifts taking place?

The on-demand economy feeds our wants and needs, and is reflective of 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 that the challenges have disappeared – there are still some significant issues to address. But our work has shown that city sentiment on the sharing economy is shifting.

Shifting Perceptions of Collaborative Consumption is our newest report on the sharing economy. This is the first national level analysis of local elected officials’ views on this topic, and this data can help further the larger ongoing conversation on how this new economy is affecting cities. We have identified a range of benefits and concerns that cities are experiencing as a result of the shift towards these collaborative models. Additionally, the survey research examines the growth of the sharing economy businesses in cities, whether local governments are supporting this industry, and the regulatory response that has taken place.

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The three key benefits and concerns that are at the top of the list for cities are improved services, increased economic activity, and increased entrepreneurial activity. Cities view improved services as the primary benefit, with 22 percent identifying this as important. The next most vital area is increased economic activity at 20 percent. Entrepreneurial activity rounds out the top three benefits at 16 percent. 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 percent identifying this as the top priority. The numbers two and three concerns are protection of traditional service providers and industry participants at 10 percent and non-compliance with current standards at 9 percent.

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 percent, of cities in our sample reported some growth in the sharing economy, and 16% are 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 percent of cities reported growth in ridesharing and 46 percent saw growth in homesharing.Sharing Economy Micro Content-02

Cities are more open to ridesharing than homesharing. Sixty-six percent of respondents indicated that their local government is supportive of ridesharing, while only 44 percent indicated support of homesharing. However, when asked whether local governments are supportive of rapid growth in the sharing economy more broadly, nearly 71 percent of city leaders responded that 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 is ever accelerating as we enter the sharing city of the future together.

About the Authors:

Brooks Rainwater bio photoBrooks Rainwater is the Director of the Center for City Solutions and Applied Research at the National League of Cities. Follow Brooks on Twitter at @BrooksRainwater.

 

Nicole DuPuis bio photoNicole DuPuis is the Senior Associate for Infrastructure in NLC’s Center for City Solutions and Applied Research. Follow Nicole on Twitter at @nicolemdupuis.

1 comments on “Cities’ Shifting Perceptions of Collaborative Consumption”

  1. Excited to see NLC’s work on cities in the sharing economy. I am conducting research on informal work-related learning that develops around 11 new economies that are shaking up the world of work (sharing being one). Cities can play an important role by encouraging libraries and rec centers to become adult learning hubs. http://www.huffingtonpost.com/blair-forlaw/11-economies-shaking-up-t_b_7483886.html Interested in pursuing this topic? Please contact me. Thanks.

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