Notifications

'Sharing Economy' Companies Like Uber And AirBnB Need To Start Getting Political


US-ECONOMY-TRANSPORT-UBER
Andrew Caballero-Reynolds/Getty Images
 IJR Opinion is an opinion platform and any opinions or information put forth by contributors are exclusive to them and do not represent the views of IJR.

Last November, the people of San Francisco voiced their support for the sharing economy — or at least their distaste for a particular type of regulation — by voting down Proposition F.

This proposition was ostensibly designed to address San Francisco’s well-documented rent crisis. However, it would have hobbled short-term rental companies such as Airbnb by limiting vacation rental days to 75 per year and strengthening the city’s enforcement power and penalty fees.

Proponents argued that these new measures would improve the sorry state of San Francisco’s housing stock, while those against claimed it would do nothing to fix the underlying problem of the city’s housing crisis — namely, San Francisco’s snail-like progress in building new housing.

Proposition F courted its fair share of controversy, both on its own merits and because of Airbnb’s aggressive tactics in campaigning against it. While it wasn't the only company that would have been affected by the regulations, Airbnb was by far the most prominent, spending millions to defeat it. And despite some of the tactics, it’s difficult to argue with the results.

When faced with regulations that could potentially cripple its business in San Francisco, Airbnb did what it believed it needed to do: It went political. Governmental bodies are finally catching up with the sharing economy, and incumbent competitors are using their clout to make the law work in their favors.

As a result, this approach will only become more common. Airbnb isn’t the first sharing company to be in conflict with lawmakers, and it won’t be the last.

The question then becomes, is political lobbying the next inevitable step for the sharing economy? Or is there a way that companies like Airbnb can avoid political conflict from the start? To answer that question, we have to determine what exactly the sharing economy is fighting against.

Companies like Lyft, TaskRabbit, and Airbnb operate on the idea that most people have idle resources that can be used to turn a profit: an apartment that is currently vacant, a car with nowhere to be, free time that could be spent helping someone else. In many ways, the sharing economy is a platform that enables the free market to work at full efficiency, giving the average person an opportunity to make money where there wasn’t one previously.

The problem is that no one in the industry or government was prepared for the rise of such a platform. The result is a mix of traditional businesses influencing the government with money and power and politicians scrambling to tax and regulate a brand new industry that no one saw coming.

Rather than encourage a free market approach, the powers that be are trying to level the playing field by restricting how these new categories can operate. For sharing startups, this means either fighting these laws before they're enacted or changing the way they do business afterward.

Airbnb was targeted not because it's the cause of San Francisco’s housing crisis but because it's an easy target. The very fact that Airbnb was willing and able to stand up against the incumbents of the housing industry will give other sharing platforms the confidence to stand up for their niches.

This doesn’t mean these startups should start throwing their political weight around, but they’re going to eventually need political support to ensure the continuity of the sharing economy’s growth. It’s not about self-interest (not exclusively, anyway); it’s about protecting a platform that delivers true value to the consumer. The free market is already voicing its opinion, and it’s supporting the sharing economy in droves.

In the immediate future, we will likely see more fights like these — certainly Uber has seen plenty of similar scraps already. But while these fights will help shape the future model for regulation, the sharing economy will need the backup of politicians in order to take its next step forward.

Politicians need to understand what people want and what platforms are truly beneficial to society. If they support the best platform and don't serve as barriers to innovation, then they're doing their jobs. In turn, it’s the job of the tech industry and those who support it to convince politicians what that best platform is.

This won’t come about through strong-arming or aggressive marketing tactics from tech companies — it will come from the consumers and the suppliers. The sharing companies of the world must persuade consumers and on-the-ground employees to voice their opinions on the local level in any way they can.

This voicing of opinion can be literal, of course — through voting and even through social media (an increasingly powerful tool for citizens to be heard) — but also through their spending and income. If tech companies can show leaders specific numbers for jobs created or revenue streams, then they can begin to get these politicians on their side when it comes to regulatory practices.

The sharing economy is far from perfect. But its potential is clear to anyone who has used or benefited from it. Now it’s the job of these startups to make sure local citizens remember this truth. Consumers can, in turn, garner the needed support to sway politicians. The future of the sharing economy may be determined by political lobbying, but the majority of that push should hopefully come from the people.