The "Sharing" Economy: Issues Facing Platforms, Participants, and Regulators A Federal Trade Commission Workshop
In recent years -- primarily since the financial collapse of 2008 -- we've seen an intense shift of our economic sector, toward low-paying service-sector jobs and, increasingly, what is being referred to as the "gig" or "sharing" economy. Many of the technological advances that conceived this new economic sector have sprung from Silicon Valley and subsequently been backed by Wall St. and Hedge Fund money. The companies have grown into some of the most valuable in the world: Uber has been valued at $40 billion and Airbnb at more than $10 billion, making them not just valuable but incredibly powerful. Their formation and rapid growth, however, have allowed them to operate in an environment virtually free from any regulation at all, and using their money and power, they have aggressively fought every effort to ensure their customers and competitors are treated fairly. New York Communities for Change is a membership-based statewide organization of low- and moderate-income New Yorkers who are fighting for economic, social, and racial justice. Our members organize in their neighborhoods, churches, and workplaces around issues such as affordable housing, education justice, and workers' rights. In many ways, our members have been negatively affected by the rise of the sharing companies and the powerful companies that drive it. New Yorkers are experiencing a drastic affordable housing crisis; according to the Furman Center at NYU, half of all renters in New York are rent-burdened (paying more than 30 percent of their income in rent). This equates to more than 1 million households, and disproportionately affects low-income renters. Homelessness in New York is hovering near record numbers Unfortunately, Airbnb is exploiting this crisis, taking crucial housing units off the market, and allowing big real estate moguls to line their pockets with profit. Allowing Airbnb to continue to hoard housing units and turn them into hotels will only exacerbate the problem, while destroying residential neighborhoods for local residents. Another reason why Americans are having a harder time affording to pay their rent is stagnating wages. This also dates back to the financial collapse of 2008, and it's likely not a coincidence that a rise in the "sharing" economy coincided with a very weak labor market. According to Robert Reich, this has resulted in a "share the scraps" economy model, where "The big money goes to the corporations that own the software. The scraps go to the on-demand workers." Part-time work is replacing full-time work, benefits are disappearing, and hedge funds and other Wall St. titans are reaping huge profits. This race to the bottom is depressing wages for our members across sectors, and ensuring we continue with an economic system that keeps them earning poverty wages. There is no greater example of this phenomenon than Uber, which is replacing jobs full-time middle class jobs in the taxi industry while simultaneously ignoring every rule and regulation. Our disabled members can't use Uber cabs, because the company claims the Americans with Disabilities Act does not apply to it. In New York yellow cabs, 50 cents from every ride goes to the MTA to subsidize the cost of public transportation -- the best mode of transportation for our members and the environment. Until recently, Uber did not contribute one dime, and it remains to be seen what they will contribute moving forward. Currently, for the low- and moderate-income residents of NY Communities for Change, the negative consequences of the sharing economy and corporate giants like Uber and Airbnb are far outweighing any increased convenience for users. We need to figure out how to regulate these companies and this industry so that we are not depressing wages, exploiting workers, and gutting our affordable housing. Until that is done, we should be capping their growth as they continue to do more harm than good.