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CITIES, the SHARING ECONOMY and WHAT's NEXT About the National League of Cities

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CITIES, the SHARING ECONOMY and WHAT's NEXT About the National League of Cities CITIES, THE SHARING ECONOMY and WHAT'S NEXT About the National League of Cities The National League of Cities (NLC) is the nation’s leading advocacy organization devoted to strengthening and promoting cities as centers of opportunity, leadership and governance. Through its membership and partnerships with state municipal leagues, NLC serves as a resource and advocate for more than 19,000 cities and towns and more than 218 million Americans. NLC’s Center for City Solutions and Applied Research provides research and analysis on key topics and trends important to cities, creative solutions to improve the quality of life in communities, inspiration and ideas for local officials to use in tackling tough issues and opportunities for city leaders to connect with peers, share experiences and learn about innovative approaches in cities. About the Authors Lauren Hirshon, Director of Consulting; Morgan Jones, Associate Consultant; Dana Levin, Associate Consultant; Kathryn McCarthy, Associate Consultant; Benjamin Morano, Associate Consultant; Sarah Simon, Consulting Intern with the Fels Institute of Government at the University of Pennsylvania. Brooks Rainwater, Center Director of the Center for City Solutions and Applied Research at the National League of Cities. Acknowledgments The authors would like to acknowledge Nicole DuPuis for her help developing the research plan and reviewing the report. We would like to extend special thanks to Soren Messner-Zidell, who created the data visualizations, cover illustration and designed the report, and Paul Konz for editing the report. We are grateful for all of the city officials that took the time to speak to us about the sharing economy in their cities. Photo credits: All photos courtesy of Getty Images, 2015, unless otherwise noted. Vector maps courtesy of Free Vector Maps, 2015. © 2015 National League of Cities. All Rights Reserved. CITIES, THE SHARING ECONOMY and WHAT’S NEXT TABLE OF CONTENTS 2 Section I: Introduction 4 Section II: Methodology 6 Section III: Innovation 11 Section IV: Economic Development 15 Section V: Equity and Access 21 Section VI: Safety 27 Section VII: Process and Implementaiton 36 Section VIII: Conclusion Section I INTRODUCTION We are on the cusp of a monumental shift taking place developing, the relative novelty of this issue precludes in cities around the world. From innovative technologies long-term, tested best practices. Additionally, there is no and business models to redefined concepts of equity “one-size-fits-all” regulatory framework that every locality and safety, the sharing economy is impacting cities. At can or should apply to the influx of new economic the same time, cities make the sharing economy work activity. One of the truly innovative aspects of cities is and power its ability to grow worldwide. And this is their ability to experiment and develop unique, locally- only the beginning. With more than half of the world’s driven solutions to new challenges. population living in cities - a figure projected to rise precipitously in coming years - all eyes are on cities for NLC recently published a research report analyzing the global leadership. current sentiment towards homesharing and ridesharing, and we concluded that the general sentiment of cities This National League of Cities report seeks to provide an towards the sharing economy is shifting in certain analysis of what is currently happening in American cities municipalities, while others remain more resistant to so that city leaders may better understand, encourage change. Unlike other emerging city issues, the patterns and regulate the growing sharing economy. Interviews of diffusion across the country do not necessarily present were conducted with city officials on the impact of the themselves along the traditional lines of city size or sharing economy and related topics, and the report region. States are also playing a significant role in the centers around five key themes: innovation, economic emergence of the sharing economy, often intervening in development, equity, safety and implementation. a manner that includes legislation, regulatory rulings and even legal action. The sharing economy is also commonly referred to as collaborative consumption, the collaborative economy, The common theme within this conceptual space is or the peer-to-peer economy. This term refers to business that cities make the sharing economy work. Cities models that enable providers and consumers to share play a central role in deciding which sharing economy resources and services, from housing to vehicles and practices are adopted and which are rejected. Further, the more. These business models typically take the form unanticipated surge in sharing economy business models of an online and/or application-based platform for and the proliferation of companies that serve as catalysts business transactions. The vast differences in the types for collaborative consumption has created a disruption of of sharing economy platforms can be mind-boggling, existing systems. Traditional industries are being upended from pure sharing services with no money changing with the growth of innovative sharing economy models hands to commercial services and everything in between. that do not fit neatly into existing local regulatory Policymakers often assume that the concept of the environments. Much of this shift has been a direct result sharing economy applies only to ridesharing (or ride- of the fact that community members both expect on- hailing1) and homesharing, and are typically unaware of demand services and crave collaborative opportunities. the wide array of goods and services that can be shared, City leaders must walk a fine line, working to embrace which range from food and other consumables to an change and innovation while simultaneously prioritizing individual’s time and tools. Municipalities, for example, safety and developing context-sensitive city solutions that can even share heavy equipment, reducing overall work for their community. expenditures and providing needed tools that might 1 otherwise have been unavailable. The terminology for what has been popularly termed ridesharing is in flux, with the Associate Press shifting to It is safe to say that the sharing economy is thriving - ride-hailing with a January 2015 decision whereas others it is upending traditional industries, disrupting local continue to use the term ridesharing. For purposes of this regulatory environments, and serving as a benchmark report, because interviews were conducted prior to the for innovation and growth. This is all happening at once, AP’s shift, and most city leaders know the terminology as and there is no status quo; while emerging models are ridesharing, we have used ridesharing throughout. 1 Why Sharing? 1 2 3 Cities experience an increase in Changing conditions in Generational changes in Urbanization Economics User Preference/ Lifestyle Many cities are welcoming these new business models, despite regulatory barriers and the swift and sometimes aggressive nature of their immersion. Section II METHODOLOGY This research emerged from conversations with four officials held positions as a city councilmember, city leaders around the country who were looking four held positions in offices focused on economic for guidance on how to modify or develop new development or special projects, two held positions regulations for the sharing economy. The National in offices focused on transit or sustainability, and the League of Cities partnered with researchers from remaining two served as advisors to councilmembers Fels Consulting at the University of Pennsylvania’s or to the city. These officials represented the following Master’s in Public Administration program to design cities: Austin, Texas (two interviews conducted); a research approach, develop interview questions, Dallas; Denver; Indianapolis; Madison, Wis.; and identify interview candidates who could share Petaluma, Calif.; Philadelphia; Portland, Ore.; San insights on their strategies, tactics and lessons learned Luis Obispo, Calif.; Seattle; and Washington, D.C. while regulating this new space. To supplement this research, we also reviewed dozens Over a four month period, from November 2014 of current articles on cities’ responses to the sharing through February 2015, Fels Consulting conducted economy and studied ordinances, bills and various 12 hour-long interviews with a diverse array of pieces of legislation. current and former city officials. In our selection process, we sought to maximize geographic diversity The sections outlined in this report represent the and maintain a balanced mix of representatives major themes that emerged across our research, and from both small and large cities. We also aimed to are organized around the types of questions city interview officials who served in a variety of positions officials may want to ask themselves as they embark in city government. Of the 12 interviews conducted, on this regulatory process. Sharing and the City Interviews conducted with city officials from a diverse selection of cites across the United States. 10 8 5 7 6 4 11 3 Cities 1. Austin 9 2. Dallas 3. Denver 4. Indianapolis 5. Madison, WI 2 6. Petaluma, CA 7. Philadelphia 1 8. Portland, OR 9. San Luis Obispo, CA 10. Seattle 11. Washington DC 4 Section III INNOVATION How can cities meet their governing obligations while positioning themselves as innovative places to live, work and visit? Innovation is one of the terms most often associated Where do politics and innovation intersect
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