by Monica Bernardi | Sep 29, 2015 | The Urban Media Lab
LOO
KING FOR A WAY TO REGULATE SHARING SERVICES. ONLINE VACATION RENTAL LEGISLATION SB 593
The regulation issue in the general sharing economy debate is gaining more and more momentum. New disrupting services are spreading, posing the question of their categorization between personal and professional provision and related forms of regulation. If the service is not clearly ascribable to a personal or professional level can be very challenging to apply the right rules. In addition, the new peer-to-peer business models have to face existing structures of regulation designed for old services. This misalignment can impede the economic growth and discourage the development of innovative and useful solutions, but at the same time it can favor situations of tax evasion, privacy violations, and unfair competition[1].
For this reason, make a reasoning at governmental level is becoming essential and that is exactly what has been done thanks to the proposal of Senator McGuire in USA. He presented an Online Vacation Rental Legislation, SB 593, that found great support among the Senate Governance and Finance Committee and the Senate Transportation and Housing Committee[2]. This legislation covers the hospitality sector, one of the most critical area, since entire cities are experiencing one-way sharing in which online vacation rental businesses (OVRB’s) share all the benefits of a local community’s services but not the responsibilities. The case is particularly strong in California where thousands of rental units are being converted from permanent housing for residents to hotels for tourist, often in violation of local zoning laws and avoiding taxes. Online hosting platforms that manage online vacation rental, like AirBnb, currently operate with little accountability and local governments has to afford costs and expenses related to this growing industry.
In this frame many conflicts are emerging, because the short-term rental (especially in case of management companies that rent hundreds of apartments in the same neighborhood) impacts on the local life in terms of congested street, lack of parking, loss of affordable units for citizens and loss of revenue that could be invested in local services. The bill “Thriving Communities and Sharing Economy Act” tries to stop property owners from using AirBnb and similar platforms to convert scarce permanent housing for residents into hotels for tourists while avoiding the traditional taxes that hotel have to pay. It aims to empower cities to enforce local policies, ensuring that their laws are followed. Another goal is to force short-term rental companies to make disclosures as required under local law (providing address of host rental, amount of nights stayed, and amount paid by the visitor). The Senator’s proposition simply try to reinforce local laws asking that OVRB’s follow them. The idea is very simple: where there are local ordinances that allow vacation rental the bill will assist local jurisdictions in regulating and collecting the Transient Occupancy Taxes (TOT) as for traditional hotels; where vacation rental is illegal the bill will reinforce the local ordinance prohibiting OVRB’s from making a rental. In addition, local jurisdictions may choose to have OVRBs collect the taxes and remit them, cities can opt out of their information disclosure process at their discretion and use the TOT to found critical services in the communities, such as road improvements, fire and police services, public school support, safe neighborhood.
In some cities like Portland, New York and San Francisco, Airbnb is already providing information that SB 593 required, and in the case of Portland there is an agreement to use the TOT for public utility services. The bill has been received with great enthusiasm as show by the words of Matt Cate, the Executive Director of the California State Association of Counties (CSAC): “CSAC greatly appreciates Senator McGuire’s leadership in making sure local communities have the ability to regulate on-line hosting platforms. In particular, we support the Senator’s legislation to ensure cities and counties can collect transient occupancy taxes that fund critical services in our communities.”
This bill marks an important step forward in terms of regulation of sharing economy services, at least in the field of hospitality, delegating more regulatory responsibility to the marketplaces and platforms while preserving some government oversight. It ensures that the innovations carried on by the sharing economy could really spread for the benefit of citizens, showing that government, local authorities and sharing economy platforms can truly work together to guarantee that all legal requirements are met.
LabGov is deep involved in the analysis of the sharing economy context. See: http://www.shareable.net/blog/interviewed-professor-christian-iaione-on-the-city-as-commons; http://commonstransition.org/the-city-as-commons-with-professor-christian-iaione/; http://www.labgov.it/xxi-century-cocentury/
[1] https://lawreview.uchicago.edu/page/self-regulation-and-innovation-peer-peer-sharing-economy
[2] http://sd02.senate.ca.gov/news/2015-04-08-senator-mcguire%E2%80%99s-online-vacation-rental-legislation-advances-senate-committee
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Con la diffusione sempre più massiccia dei servizi di sharing economy si pone la questione di trovare forme di regolamentazione adatte, che da un lato non soffochino e limitino il loro sviluppo, e dall’altro non li lascino completamente de-regolamentati. I settori della mobilità e dell’ospitalità sono al momento i più critici e nell’ottica di arginare contesti di illegalità o impatto eccessivo sulle comunità locali il Senatore McGuire (California) ha presentato una proposta di legge ad hoc. L’Online Vacation Rental Legislation, SB 593, mira a normare l’azione delle piattaforme di ospitalità online aiutando le giurisdizioni locali a gestirle laddove l’affitto a breve termine è consentito e rafforza le ordinanze di divieto laddove è invece proibito. La proposta di legge ha riscosso grande successo al Senato e segna un passo importante in termini di regolamentazione nell’integrazione dei nuovi servizi di sharing senza che danneggino il mercato e le comunità, ma a loro vantaggio.
by Edoardo De Stefani | Sep 28, 2015 | The Urban Media Lab
On the 29th September at the 5th meeting of the Commission for Economic Policy, the CoR will discuss its draft opinion on “The local and regional dimension of sharing economy”. As anticipated in July this opinion has been drafted by LabGov Director, Professor Christian Iaione, after a long consultation with many experts worldwide.
The document contains a series of policy recommendations pertaining the nature and the role of the Sharing Economy (SE) in the broader European framework. It builds on Professor Iaione theory of Poolism and pooling economy. In addtition, while defining the dynamic nature and the core features of SE, the document tries to design essential principles for an EU initiative on the SE.
SE is all about changing paradigm, it is a megatrend. One of its main highlights is about transforming the standard economic agent, in a way for which also consumers become able to monetize or exploit idle assets. What is novel is the capacity of people to participate in the SE as users, capitalizing their collective capability. In other words, people are not anymore economic actors and economy is not only a unilateral top-down process: people are users, co-workers, designers, makers, creators, artisan and much more. And the market place is a global network.
Thus, the realm of SE comprises and adopts a platform whereby the traditional economic model is not anymore functioning as the main driver. More likely, SE encompasses sharing, trading, or renting assets instead of buying them, and it comes with the right technology allowing demand and supply to interact.
Services like Car2Go, AirBnb, Bla Bla Car, Roomz, Stayz, Uber, and MamaBake, are just some of the most successful experiences of collaborative consumption. They have won a sizable market share not because they are offering a product, but because they offer a connection. However, the narrative of SE is far from being normalized in institutional behaviour. In fact, while there is much agreement on the question of paradigm change, what is less clear is about the direction that is taking this shift. In other words, is all the sharing economy about similar use or same access and functioning? Or otherwise there is not yet a commonly shared culture of SE?
Coming to think about it, Bertrand Russell famously once said: “Everything is vague to a degree you do not realize until you have tried to make it precise”. Exactly, this is what happens when trying to put the concept of sharing economy in the spotlight. SE seems to emerge in various configurations, all alternatives to capital-intensive forms of market economy, but yet with different social, legal and business patterns.Not surprisingly then, it is very difficult to think about regulating SE at EU level, at least at current development stage.
Someone said that “sharing economy uses technology to reshape the world through transforming the need to own. It’s a world in which our collective capability meets our collective needs, where we collaborate to enhance each other’s lives, protect our planet and create wealth from which everybody benefits”. (Benita Matofska, Chief Sharer, Compare and Share and global expert on the sharing economy)
But again, this is a good attempt to capture a new idea never expressed before and nothing more. On the opposite, the regulatory nature of EU requires clear standards and concepts if we want [or we need] to build a tailored policy framework for regulating sharing economy.
Certainly the complexity of the task is evident, but at the same time economic trends are just incumbent and running wild. Sometimes they disrupt established business models and companies offering traditional services are threatened. At the same time, governments cannot hold back the tide of market forces and consumers’ preferences, failing to respond with timely and appropriate regulations. So, how can EU correctly think about sharing economy?
First of all, it is necessary to understand the many types and steps of sharing economy, as eventually they would require different regulatory approaches. Secondly, what have to be pointed out are the effects of the SE on the economic, environmental and social landscapes. In fact, SE practices are not necessarily optimal in terms of sound environmental protection, social cohesion, or even equality and social justice; for instance, many business initiatives might create significant imbalances in economic power and can be unsustainable as related to environmental impacts.
Also, to prevent inappropriate policy contexts and unfair treatments, it is necessary to develop a comprehensive approach to SE in a way for which citizens, companies and institutions would feel comfortable with with the regulatory framework. Discrepancy in power should not result.
Lastly, EU is called to address SE as a political and social phenomenon, in a way to make it mainstream in the everyday life and to make the institutional framework compliant to a bottom-up, adaptive, experimental and collaborative approach.
If all the previous conditions are met, SE might really function as a paradigm changer, in the sense of giving rise to a new positive economic identity. All things considered, LabGov has a vivid interest in sharing economy. For this reason, the reccomendations and the results that are due to be published after the debating, will turn to be extremely fruitful for the forthcoming conference on “The City as a Commons: Reconceiving Urban Space, Commons Goods And City Governance”, organized in collaboration with the Fordham University of New York and the ICEDD of the LUISS University of Rome.
The novel future is about institutions and regulations that make people live together; we need to create a culture of collaboration and to associate initiatives, efforts and assets in a way that is sustainable for the needs and interests of the whole population.
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Abstract
Il dibattito sull’economia collaborativa assume una connotazione ancora più importante alla luce dei recenti sviluppi industriali e commerciali che la sharing economy (SE) comporta. Esempi come Uber, AirBnb o Bla Bla car, hanno mostrato come il paradigma di sviluppo economico sia sostanzialmente mutato.
Tuttavia, il nuovo profilo che è venuto a delinearsi racchiude in sé un cambiamento ancora più profondo, relativo al ruolo ed alla funzione che ogni cittadino assume. Secondo il paradigma della SE, la figura standard del consumatore ha lasciato rapidamente spazio a quella di utilizzatore, artista, creatore e molto altro. Non si parla più dunque di economia di consumo, ma semmai della condivisione.
Evidentemente però, una definizione univoca e condivisa circa le caratteristiche, i valori e gli obiettivi che l’economia collaborativa deve perseguire non esiste. Di conseguenza, aprire un dibattito istituzionale per chiarire le dinamiche e i punti chiave della SE a livello nazionale ed europeo appare quanto mai necessario.
Per questo motivo, il prossimo 29 Settembre, il CoR discuterà in sede istituzionale la sua “draft opinion sulla dimensione locale e regionale della sharing economy”.
L’occasione è importante per discutere tutta una serie di raccomandazioni riguardo la natura e il ruolo dell’economia collaborativa. L’idea principale è quella di chiarire la necessità di avere un modello economico che non crei macro-squilibri e che sia invece sostenibile per gli interessi e le esigenze di ogni singolo cittadino.
by Giulia Spinaci | Sep 12, 2015 | The Urban Media Lab
Photo Credit: Shutterstock.com/ Ivelin Radkov
Welcome back to the reflections on the New York City experience! Episode 1 showed the other side of the sharing economy, which is more linked to the economic struggles of the society than usually thought. Now let us have a deeper look into this reality.
The NYC directory of sharing economy organizations tells an interesting story about the needs of the New Yorkers. The directory is divided into 15 thematic sections and strikingly, the three longest lists are “Space” (25 organizations), “On-demand services” (18 organizations), and “Transport” (13 organizations), which together amount for almost 50% of the total. This does not come as a surprise if we think about Manhattan: a crowded and congested place, where people are always in a rush. It is the standard stereotype of the biggest American cities, but New York certainly epitomizes this characteristic.
Many of the organizations of the above-mentioned directory are actually solving most of the daily problems that living in New York City provokes. That is the reason why they are so famous and widespread. In fact, the operational model they are implementing in New York is replicable elsewhere, and sharing economy organizations like Airbnb and Uber are known – and used – worldwide.
The capacity of finding unexplored market niches is outstanding. If some of these sharing economy organizations are classical in terms of the service provided, others are quite bizarre! Do you need to hire someone to stand in line for restaurants or special events for you? Taskrabbit is the solution. Do you want to show off each month different luxury watches and ties? Eleven James and Freshneck will fulfil your wishes.
As previously noted, these sharing models are based on the match between a tiny/non-existent supply and a large potential demand, and on the assumption that trust is the “fuel” that ensures the correct functioning of the machine. Nevertheless, these models are not infallible and the first signs of dissatisfaction by users (but not only) have appeared. Quality has been often questioned and complaints rarely result in a disciplinary action or in a constructive solution. The problem primarily lies in the lack of a regulatory framework for these “sharing” experiments. Self-regulation has been invoked several times, but, as of now, it has not brought a definitive solution.
There are two main dilemmas and the case study of Uber will explain both of them. First, it is unclear (and not regulated properly) the relationship between users and providers of the service/good. Formally, drivers are not agents of the company and “Uber and its fellow service providers do not assign passengers to drivers nor control the conduct of the drivers. Rather, ride-sharing companies purport only to provide an “interactive computer service” through which a driver and a passenger may engage in a direct deal” (St Aubin Keith, 2014). From there, a question of civil liability arises and as of now, it is unlikely that Uber will be held accountable to victims of accidents.
Secondly, Uber undermines regular taxi drivers, who respect tougher regulation and earn much less. Since 2011, 12.000 cars have invaded New York apparently to enlarge the service to neighbourhoods usually outside the yellow cabs’ zone, but numbers speak clear. “In April, according to city data requisitioned from the company, of the roughly 76,000 New York City pickups Uber made on the average day, about 63,000 were in central Manhattan” (New York Times, 26/07/15). Substantially, they invaded the yellow cabs’ zone. This comes at the expense of regular taxi drivers who earn less and less money, and who thus accuse Uber of “economic terrorism”.
However, maybe the solution to these dilemmas is near. Gov. Andrew Cuomo proposed a State-wide regulatory framework for Uber (Observer, 23/07/15). On the one hand, it will not restrict job growth, while on the other it will provide the necessary norms for the service to operate rightly and safely.
If you are interested in this topic and to urban commons then SAVE THE DATE! LabGov is proud to announce that “The City as a Commons: Reconceiving Urban Space, Common Goods and City Governance” will be the theme of the first IASC Conference to be held on 6-7 November 2015 in Bologna, Italy. The conference will be co-chaired by Prof. Christian Iaione (LUISS Guido Carli and UniMarconi University) and by Prof. Sheila Foster (Fordham University), and it will develop along 6 different tracks. These thematic areas will be examined in two full days of plenary panels, keynote presentations, and parallel sessions with selected papers from a call for papers. The conference will conclude with a roundtable discussion intended to reflect on the methods and future directions for urban commons research. The second track will be “Mapping the Urban Commons”. What institutions with private-public partnerships might be considered an urban commons institution? What are the key research questions and methodologies to analyse these case-studies? If you wish to hear the answer to these questions by international experts, then come attending the conference!
by | Sep 11, 2015 | The Urban Media Lab
On the 12 of September Prof. Christian Iaione, LabGov’s Coordinator, will participate to the XXIX annual conference of the Società Italiana di Scienza Politica, the leading Italian association of the political scientists of which the famous Giovanni Sartori and Norberto Bobbio were presidents.
The conference will take place in the University of Calabria and it is divided into panels for shared interested. Prof. Iaione will participate in the panel devoted to sharing economy in the local public policies. In the same panel will partecipate also Monica Bernardi and David Diamantini who will speak about the sharing economy models and also Silvio Bolognini and Daniela Bosetto who will analyze a cause study in Lombardia.
Prof. Iaione abstract title is Pooling law: from sharing to pooling economy Designing laws, institutions and regulations that make people live together. Has he said the aim of his speech is “to introduce an innovative, bottom-up, adaptive, experimental approach to create legal and institutional frameworks based on urban polycentric governance fostering collaborative and sharing economy.”
Speaking about sharing economy Prof. Iaione has been interviewed by Shareable lately. In the interview he explained “All levels of local governments must find ways to collaborate with engaged citizens and associations to carry out initiatives, activities and even a local economy respect that sustain interest and needs of the general population. These collaborative governance efforts are also crucial tools to properly address and help in solving a widespread crisis engulfing urban areas and citizens across the globe.” He doesn’t explicit address the sharing economy topic but speaking about commons and collaborative effort is quite intuitive the link with the sharing economy because the aim at the end is to find a new and better way to solve problems. Additionally sharing economy need trust, if you want a thriving sharing economy we need to create a culture of collaboration. Giving this trend can create an alternatives market of goods and service across society.
LabGov has a vivid interest in sharing economy. The forthcoming conference “The City as a Commons: Reconceiving Urban Space, Commons Goods And City Governance” that we are organizing in collaboration with the Fordham University of New York and the ICEDD of the LUISS University of Rome will analyze as well the topic of sharing economy.
The Conference will take place in Bologna on 6-7 November. It will be divided into six tracks. Those tracks elaborate the phenomenon of urban commons, one of this in particular is dedicated on “the Collaborative Sharing Economy as the Basis for a Commons-Based Urban Economy” . During the conference we will go through all the aspect of the emerging collaborative economy.
by Giulia Spinaci | Aug 24, 2015 | The Urban Media Lab
I arrived in New York from Rome at the end of May, just before summer showed itself in all its beauty (and heat, sic!). The city is vibrant and rumours are true: it is the city that never sleeps. Lights, colours, noises, scents (and odours), everything contributes to the conflicting impressions that you are both part of and alienated from a community that is three times bigger than Rome.
This is not my first time in New York, but it seems as if it were. Living the Big Apple in all its forms and expressions and among its people is different from visiting it in one week or two. After the first month, you do not “see” anymore. You observe. You do not look the buildings, but the multitude of people that populate them.
Then, from the window of my office, high above the street, I began seeing hundreds, if not thousands of people, who everyday go to work, go to lunch, chat with friends and colleagues, and come back home (maybe after a good beer: after work Friday events are famous for a reason!). At this point, I seriously asked myself if it might ever be possible for such a big and densely populated city like this to develop effective and sincere forms of social and economic collaborations, like those we are experiencing in far smaller cities in Europe.
This is not supposed to be a naïve question but it is rather based on historical, economic and sociological factors. The United States are the motherland of the modern capitalist economy, whose basic tenets are private property, self-interest, competition, economic freedom, consumer sovereignty and laissez-faire. Can thus a form of socio-economic collaboration among citizens be feasible and rise in such a context – a collaboration that goes beyond the basic principles of capitalism?
The answer is 100 times yes[1]. This is the number of sharing economy organizations that currently make New York City a true hub in this field. As Collaborative Consumption put it, “with 8.5 million people crammed into such a small space, it really makes sense to share!” Personally, I came in contact with this brand new reality and I had the impression of entering a world that casts both light and shadow. Sharing economy organizations have the potentiality of simplifying everyday gestures by giving you access to otherwise out-of-reach services, but at the same time they often spark debate as they are perceived as outsiders and free-riders of the economic system system (see for example the debate about Uber on The New York Times).
Generalizations about the sharing economy are easy and tricky at the same time. We might be tempted to infer from these few data that, at least in New York City, the very idea of capitalism has been superseded in favour of a collective form of management of depletable resources in the name of a superior (and maybe utopic) goal, namely sustainable development for all. It might be true in part, and certainly it is for a number of people, but we should go deeper into the reasons why sharing goods and services has become so successful since the mid-2000s.
Let us have a look into the data. In New York City, people do share almost everything, in a range that goes from food (e.g. EatWith) and transport (e.g. Uber and Citibike) to accommodations (e.g. Airbnb), education (e.g. Brooklyn Brainery) and even expertise (e.g. Contently). What all these organizations have in common is the people – people who decide to trust each other to the point that mutually beneficial relationships can be established.
But is trust the real push-factor behind the rise of the sharing economy? What continues to be forgotten in almost all discussions is the socio-economic environment in which this phenomenon has developed. The term first appeared in the mid-2000s, along with reflections on the tragedy of the commons, and in particular on depletable resources. One of the first theorists of the sharing economy is Yochai Benkler, who in 2002, coined the term “commons-based peer production”[2] to describe collaborative efforts based on sharing information and in 2004, explored in depth the possibility of a sharing economy[3]. We should however recognize that, in the practice, sharing economy organizations experienced a boom only in latest years.
Probably the New York Magazine got it right when it finally highlighted that “the sharing economy has succeeded in large part because the real economy has been struggling. A huge precondition for the sharing economy has been a depressed labour market, in which lots of people are trying to fill holes in their income by monetizing their stuff and their labour in creative ways. In many cases, people join the sharing economy because they’ve recently lost a full-time job and are piecing together income from several part-time gigs to replace it. In a few cases, it’s because the pricing structure of the sharing economy made their old jobs less profitable. (Like full-time taxi drivers who have switched to Lyft or Uber.) In almost every case, what compels people to open up their homes and cars to complete strangers is money, not trust”[4].
Of course this is not saying that the sharing economy in itself reneges or betrays the theoretical foundations on which it is based. At a secondary stage trust becomes indispensable and it is certainly true that it helps in better managing the dilemma of depletable resources. The case of New York City and its 100 sharing economy organizations is just the exemplification of a society that is currently struggling to find a way across an infinite series of obstacles, from reduced liveable space and limited non-renewable energy sources to economic stagnation and recession. By chance this exemplification serves not only the cause of the individual, but (luckily) also the cause of the community. Still, even if the end is clear, a deeper reflection on the means to achieve the latter is desperately needed to dispel all doubts.
Coming soon: “Sharing NYC – Episode II” to explore sharing experiences in New York City, between success stories and contradictions. STAY TUNED!
[1] List retrieved from http://letscollaboratenyc.com/
[2] “Coase’s Penguin, or, Linux and The Nature of the Firm”, 112 Yale Law Journal (2002)
[3] “Sharing Nicely”: On Shareable Goods and the Emergence of Sharing as a Modality of Economic Production, 114 Yale Law Journal (2004)
[4] http://nymag.com/daily/intelligencer/2014/04/sharing-economy-is-about-desperation.html
In this frame many conflicts are emerging, because the short-term rental (especially in case of management companies that rent hundreds of apartments in the same neighborhood) impacts on the local life in terms of congested street, lack of parking, loss of affordable units for citizens and loss of revenue that could be invested in local services. The bill “Thriving Communities and Sharing Economy Act” tries to stop property owners from using AirBnb and similar platforms to convert scarce permanent housing for residents into hotels for tourists while avoiding the traditional taxes that hotel have to pay. It aims to empower cities to enforce local policies, ensuring that their laws are followed. Another goal is to force short-term rental companies to make disclosures as required under local law (providing address of host rental, amount of nights stayed, and amount paid by the visitor). The Senator’s proposition simply try to reinforce local laws asking that OVRB’s follow them. The idea is very simple: where there are local ordinances that allow vacation rental the bill will assist local jurisdictions in regulating and collecting the Transient Occupancy Taxes (TOT) as for traditional hotels; where vacation rental is illegal the bill will reinforce the local ordinance prohibiting OVRB’s from making a rental. In addition, local jurisdictions may choose to have OVRBs collect the taxes and remit them, cities can opt out of their information disclosure process at their discretion and use the TOT to found critical services in the communities, such as road improvements, fire and police services, public school support, safe neighborhood.
