Sharing Economy Regulation: Why it Matters
Over the past few years there have been significant developments in sharing economy regulation in Canada. Many of those regulations have embraced the safe and common sense use of these new technologies. But, others are aimed at the prohibition of this new innovation, which is actively stifling consumer choice and removing money from the wallets of Canadians.
By 2013, one study indicated that the sharing economy added over 3.5$ billion to people’s pockets. That figure is not broader economic activity, that’s only direct payments to sharing economy sellers.
Can you imagine what that number is today?
So it’s obvious why sharing economy regulations are a consequential debate. Over the next few weeks we will be discussing current regulatory efforts at the municipal, provincial, and federal levels.
I try to stay away from politics. Those who are regular readers at the Casual Capitalist know our mantra is that the sharing economy is here to stay, whether we like it or not, and that regulators and governments will have no choice by to address it.
When they do, we want a common sense approach that helps enable what people are already doing — making money from things they already own.
The Benefits of the Sharing Economy
Studies over and over have shown that the sharing economy can lift people out of poverty, and offers others supplemental income options. Indeed, a recent JP Morgan study of hundreds of thousands of bank accounts suggests that on average sharing economy workers earn an extra 15% a month. Not too shabby.
I’ve kept away from politics on purpose, trying instead to focus on sharing economy workers. But today I want to get political. Why? Because so much is happening, and it impacts our ability to earn money from things we already own.
Sharing Economy Regulation: We Need Them
Despite the innovative ability of self-regulation inherent in the sharing economy, there is a need for government involvement. At all levels.
For platforms like Uber and Airbnb, I nor my fellow enthusiasts have ever argued for an unregulated wild west business landscape. This is a mistake. But on the other side of the debate, overly restrictive regulations will stifle innovation and put Canada on the wrong side of history.
For all of the entrenched interests and lobby groups let me say it again: the sharing economy is here to stay.
I don’t know what the solution is. Good thing I am not a politician, saying this would be career suicide. But let’s have an honest discussion about the sharing economy and how it affects our lives. And more specifically, how can it be embraced safely and productively.
Municipalities all over the world have been banging their heads against the wall trying to figure this sharing economy business out.
I want to yell out: “Hey, [insert city name here]! Stop banging your head against the wall!”
“What else am I supposed to do?” [insert city name here] responds frantically.
“First, let’s stop the head banging, and then we can come up with a better solution” I retort sympathetically.
The only way we are going to figure this new business model out is if we first stop with knee-jerk reactionary measures that are currently plaguing regulatory efforts.
Sharing Economy Regulation: Not Just Uber!
Uber is currently on the front-line of the sharing economy regulation battle. And we have had some progress. Both Toronto and Ottawa have recently implemented common sense regulations for ride-sharers.
Unfortunately, I can’t say the same thing for my home province of Quebec. It is embarrassing the lack of foresight shown by the Quebec government in this regard. Some silver lining exists with a recent announcement that the Liberal government in Quebec is working with Uber to pilot ways that ride-sharing services can conform with Quebec’s taxi laws.
The problem is that when your taxi laws are draconian and developed by entrenched interests to begin with, we aren’t really getting anywhere. But I digress.
The point is that Uber is only one of literally hundreds of online platforms that enable people to turn otherwise unproductive assets into income-producing ones.
So, Uber is simply the opening salvo in what promises to be an extended existential debate over the sharing economy. We still haven’t even touched on employment insurance legislation, taxation issues, worker benefits, worker classification, the insurance gap…Need I continue?
What about short-term rental by-laws and Airbnb? Or the employee classification of someone who works 3 hours a week for TaskRabbit? Or the by-law issues associated with someone renting out an empty parking space on a platform like Rover? Uber is only the beginning.
There are hundreds of other sharing economy websites out there waiting for their turn in this discussion. And this is a good thing!
After all, progress is messy as Hegel eloquently stated.
These debates won’t go away, they are simmering below the surface, waiting for their turn to expose themselves. We will pretend like we were caught off-guard by these disruptions, but we have had adequate warning.
Sharing Economy Regulation: All levels of government, even the feds
So, if we don’t have a complete solution, what can we do? I strongly believe that governments at all levels need to foster innovation, research, and honest debate about the sharing economy.
Easy enough to say right? But how can we go about facilitating something when there are so many stakeholders and embedded interest groups?
That is our goal for the Anatomy of Common Sense Sharing Economy Regulations series, to address these issues one level of government at a time.
Next week we will begin our journey. I want to start with the federal government, because it is the most challenging. I hear time and time again that there is no role for the feds in this discussion. I completely disagree.
See you all soon!