California congressmen Darrell Issa (R) and Eric Swalwell (D) this week launched the bipartisan Sharing Economy Caucus in the U.S. House. For the inaugural event Issa and Swalwell hosted a panel and Q & A with sharing economy experts and industry players moderated by New York University professor and digital economy scholar Arun Sundararajan.
Americans increasingly rely on the sorts of innovative services the internet has made possible – services that bring Americans together while providing a new measure of convenience by providing opportunities to conduct business in more efficient ways,” said Issa in a statement. “The Sharing Economy Caucus will focus on these pioneering industries and ensure Congress is taking all of the necessary steps to facilitate, rather than hinder, the next great idea.
Defining the Sharing Economy
To kick things off, Sundararjan outlined three characteristics of the sharing economy. "One is a shift away from an institutional provision of stuff and towards peer-to-peer, mediated by a platform. The second is better and sometimes more efficient access, deployment, and use of capital, of labor and of assets.”
Sundararajan shared an anecdote about how he tapped into the sharing economy to solve a transportation problem he faced that very morning when he learned his New York-to-DC Amtrak train was cancelled due to the tragic derailment in Philadelphia. He opened up a few rideshare apps and quickly found a driver to take him to DC and back. It worked out well for everyone. During the time Sundararajan was chairing the panel, the driver was out sightseeing around DC.
This example dovetailed with Sundararajan's third point: “The sharing economy is a blurring of lines between personal and professional in the provision of personal services."
Panelist David Hantman, head of Global Public Policy for sharing economy pioneer Airbnb said, “I think of it more as an empowerment economy. Because it takes people and empowers them to use things they already have better and more efficiently and safer, and helps them do other things.”
Other things, such as pay their rent. Hantman told the famous story about Airbnb’s founders not being able to pay their rent way back in 2008, so when they heard a tech conference was in town and hotel rooms were scarce, they bought a few air mattresses, put up an ad, and made their rent.
Inclusive Growth
As part of his academic research Sundararajan has analyzed reams of industry data and found that “the majority of the gains from the sharing economy are likely to be captured by people below median income rather than above median income.” He described this condition as “inclusive growth."
Panelist David Estrada, Vice President of Government Relations at Lyft, asked “Who are the people who benefit from this? These are real people, every day. It’s not just the people who use the services, its the people who provide the services.” Estrada described how a flexible schedule allows Lyft drivers access to "their own ladder of opportunity.”
Panelist Padden Guy Murphy, Head of Business Development & Public Policy for carsharing platform Getaround, pointed to the wave of “micro-entrepreneurship” facilitated by the sharing economy. "The average owner on Getaround right now is earning $521 a month, net."
Airbnb’s Hantman said that of the 35 million people who have stayed with Airbnb in the last seven years, more than 25 million have come onboard within the last year. "A majority of people who use Airbnb say they do it to help pay their rent. They rely on it to pay bills. And I think it is not a coincidence that this kind of activity has really taken off in bad economic times. People are just struggling to figure out — maybe they have two jobs already and what can they do — they can drive someone to the airport, they can rent out their apartment on the weekend, they can deliver goods to somebody.”
What Can Congress Do?
Moderator Sundararajan asked what Congress can do to help and opened a discussion on the appropriate level of regulation as the sharing economy continues to grow.
Lyft’s Estrada suggested equalizing the tax treatment for those who choose ridesharing for their work commutes. "What we’d really like to do is work on modernizing the tax code so that [Lyft credits for employers] become a tax-free commuter benefit. There exists a tax free commuter benefit for use on buses and trains, even parking. And I know it is already an issue that there should be parity between those two."
Getaround’s Murphy also mentioned taxes. "Currently we issue 1099s at end of the year and you have to pay taxes as a contractor.” This is the norm throughout the sharing economy, and many participants feel the sting of the taxman when filing season comes around.
Hantman recommended “shining a light” on the real world personal stories of sharing economy participants as a way to raise the overall level of understanding and awareness among lawmakers, and warned against jumping in too early with excessive regulation: "The real story is each individual person who is empowering themselves by these services can then have an opportunity to fulfill their dream and to come up with their idea — and we have no idea what that is going to be like — and so the real shame would be if we coil back early and we won’t even see how it plays out."
Estrada said, “We are entering an area where there is a lot of regulation. And if the goal is to make it easy for you in five minutes standing in the Starbucks line to become a Lyft driver, it’s not going to be possible if it becomes over regulated. We agree there should be smart regulation. The ride should be safe. But we would like to work with policymakers to make sure that we don’t go too far and crush the ability to achieve the goal."
Sundararajan described the self-regulating trend of sharing economy companies. An advocate of self regulation, he’s clear to note he is not opposed to government regulation, though it should be applied carefully. "I believe in regulation very strongly because I believe in markets very strongly. And the purpose of regulation is to step in and help markets function better, to fill the gaps, correct them when things are going off the wrong way. So you can’t be anti-regulation if you are pro-market, it’s just a question of being surgical about it."
Expanding the Caucus
Following the panel discussion, Congressman Swalwell said he would work to “make sure our commuter tax plans and benefits are updated and reflect all the ways in which people commute today. So we will be taking a look at that. We are going to continue the conversation.”
Issa and Swalwell will work to expand membership in the bipartisan caucus with a novel idea. "One way we are going to do this is we are going to go through members’ expense account and campaign accounts and if they have a Lyft expense, an Airbnb expense, a Getaround expense et cetera, we are going to invite them and gently nudge them. We will get them into the group that way and many other ways.”
Swalwell then laid out the big picture: "Starting to engage now, and educate people now, before you start to hit regulatory barriers in Washington is really important."
