Just 10 years ago, the idea of leaving your home for a long trip meant you were paying for something you wouldn’t use. Your car would sit in the garage, your apartment or house would sit empty, and you’d still be responsible for utilities. On the off chance you had a friend or relative in town, they could crash at your place and at least use the space. Since then, technology has dramatically lowered the transaction costs for connecting with other people and exchanging information. Suddenly, you’re not only able to share your home with one friend but offer your space to any number of interested customers online.
However, as this sharing economy has grown, so too has the government’s interest in it. Now, onerous regulations threaten to derail it. For example, a new proposal before Washington, D.C.’s city council would severely limit short-term rentals – effectively banning traditional vacation rentals entirely. Regulators have also targeted ride sharing companies in places like Seattle and Austin with provisions that would force companies like Uber and Lyft to vacate those cities altogether.
We stand to lose quite a bit if these types of regulations go forward. My team at the U.S. Chamber Technology Engagement Center (C_TEC) commissioned a Morning Consult poll conducted last month that questioned 2,000 national registered voters. Sixty-two percent of respondents who said they worked in the sharing economy workers said they were motivated to work for companies like Lyft, Uber, HomeAway, Airbnb, or Task Rabbit because of the flexible work hours.
An analysis by Princeton economist Alan Krueger and Uber’s Jonathan Hall in early 2015 found that 51 percent of Uber drivers work 1-15 hours per week, and 30 percent work 16-34 hours per week. Harvard Business Review reported in November of last year that 78 percent of Lyft drivers work 1-15 hours per week, and 86 percent are either employed full-time elsewhere or seeking other full-time employment.
The sharing economy also provides a benefit to consumers; short-term rentals bring tourists and families into communities that were previously inaccessible due to geographic location or lacked lodging options. As a result, consumers bring additional investment activity to the surrounding restaurants, shops, and the local economy.
Those sharing economy workers polled in the C_TEC survey rated their overall experience as positive, and nearly all said that it provides them with the flexibility to work as much or as little as they would like. Sixty percent said their financial situation has improved or stayed the same since they started working in the sharing economy. From the success of companies such as Uber, Lyft, Airbnb, and HomeAway, it’s clear their work is valuable to consumers, too.
For these workers, the sharing economy offers the opportunity to optimize their personal resources, which has become particularly important in a low growth economy. At times when jobs weren’t being created and wages were stagnant, Americans found a way to get ahead. And it’s in our shared interest to support them. The sharing economy harnesses innovation, creates competition in industries that have gone unchallenged, and encourages growth throughout the economy.
Sharing economy regulations come at the expense of our shared economic interest. The C_TEC survey showed that 60 percent of the public believe if their cities and communities develop regulations to promote and advance the sharing economy, it will expand their access to goods and services. And data supports these beliefs; a 2015 Credit Suisse projection suggested that overall revenues from the sharing economy could reach $335 billion by 2025, but only if bureaucracy, regulation, and misinformation don’t get in the way.
We should welcome the opportunities created by the sharing economy. But instead, policymakers are quick to impose new regulations that cost the entire economy. We need to move forward by pushing back against regulations that restrict sharing economy growth. C_TEC is working to prevent a patchwork of regulations, like the D.C. short-term rental proposal that will harm both workers and consumers. By pushing back on restrictive regulations, we can support those Americans who participate in the sharing economy, maximize the use of our collective resources, and create economic growth for years to come.
You can view much more data from the C_TEC report by clicking on the “Sharing Economy” button at the report website.
Tim Day is senior vice president of the U.S. Chamber of Commerce’s C_TEC group.