Cities Should Let the Sharing Economy Thrive

In too many cities across the country, sharing economy platforms face outdated rules that prevent competition in favor of incumbent industries. Ultimately, public policy that stifles competition, limits innovation, or hinders sharing economy platforms is bad for local economies.

(Getty Images)

It is estimated that more than one million people use ridesharing apps every day. There are specific steps cities can take to make ridesharing and other facets of the sharing economy integrate effectively into the municipal landscape. (Getty Images)

This is a guest post by Dusty Brighton.

“Be your own boss.” Traditionally, when people hear that phrase, they think of a tiny sliver of the population fortunate enough to enjoy the flexibility and independence of working for themselves. Yet, over the past few years, a surge in independent entrepreneurship has enabled millions of Americans in cities and towns across the country to define the hours and terms of their work.

Today, anyone with free time or spare space can offer their services on a platform such as Uber, Lyft, Airbnb, HomeAway, Handy, Task Rabbit, DoorDash or Upwork and earn a premium wage. Thanks to these platforms, free time, a free room, a second home or an idle car can now lead to additional income and new opportunities without the strict commitments required by traditional employment. This flexibility has become a hallmark benefit for participants in the sharing economy – and, increasingly, our cities’ economies.

Many city leaders, like their constituents, understand and champion the immense opportunities for economic empowerment and growth provided by the sharing economy. And for good reason.

The growth of the sharing economy has created a new kind of safety net for individuals who need it. Rather than being limited by lack of opportunity and strict schedules in traditional job markets, the sharing economy allows people to tap into their skills, effort, and assets to earn more money. The only limit is how much an individual is willing to put into it. This means that anyone, from the college student paying for school to the single parent trying to make ends meet, has the ability to boost and diversify their income to fit their needs and lifestyles.

Beyond flexibility, those participating in the sharing economy are able to better support themselves and their families, bringing more value back into their communities. A national survey by Burson-Marstellar found that on-demand workers average three different income streams, with the average gross income from on-demand work accounting for 22 percent of household income. A majority of the workers polled in the Burson-Marstellar survey stated that they are better off financially than a year ago, and expect to be even better off in the future.

In a similar vein, short-term rentals – through platforms like Airbnb and HomeAway – allow residents to stay in their homes while generating income. Better yet, the money coming into communities through short-term rentals typically stays there. This means that the benefits are distributed beyond the renter to local restaurants and stores that would otherwise not be exposed to traditional tourism.

Allowing the sharing economy to thrive in our cities also means more freedom for consumers. This freedom does not come just in the form of more services – it embodies a wider variety of choice. Consumers do not choose to use Uber or Lyft because they are just another taxi company; they use ride-sharing platforms because they offer an innovative option that provides higher quality and safer service at a lower cost.

Americans want to live in cities that allow new services to innovate and make their lives better, not protect the interests of politically connected incumbents. Rather than passing laws that limit the sharing economy, every community should take steps to support increased competition and allow these platforms to compete and thrive. Ultimately, public policy that stifles competition, limits innovation, or hinders sharing economy platforms is bad for local economies.

In too many cities across the country, sharing economy platforms face outdated rules that prevent competition in favor of incumbent industries. For communities to thrive and prosper, the sharing economy must be allowed to compete on a level playing field. Sharing economy platforms hold the potential to provide better, safer services at lower costs – a win-win by any measure. But only if we let them.

As part of our engagement, the Internet Association is working to expand its outreach to local governments across the U.S. We continue to work on the ground with city officials and staff to reach policy goals that satisfy regulatory concerns while allowing innovative internet-enabled competition to thrive. The Internet Association also offers educational outreach to cities looking to learn more about our member companies and foster collaborative partnerships on local issues like economic development.

About the author: Dusty Brighton is the Vice President of State Government Affairs for the Internet Association. The Internet Association’s mission is to foster innovation, promote economic growth, and empower people through the free and open internet.