The Sharing Economy and the City of the Future: Pathways Forward in Government

An Insight from the 2015 Public Sector for the Future Summit

Part of a Series

This Insight is a part of the 2015 Public Sector for the Future Summit Report.

To see the complete report, click here.

The sharing economy is flourishing. Lyft, Uber, SideCar, and other Transportation Network Companies have altered travel. Airbnb, HomeAway, VRBO, and other home-sharing platforms are disrupting how people use apartments, homes, and spare bedrooms. Platforms like TaskRabbit (a mobile marketplace for short-term hires), SnapGoods (a site for lending/borrowing high-end household items), and Feastly (a marketplace for dining experiences) are taking off.

The growth of the sharing economy – also described as collaborative consumption, the collaborative economy, or the peer-to-peer economy – is creating challenges and opportunities for government. On the one hand, these platforms are upending traditional industries, challenging regulatory frameworks, altering how we understand and share assets, and shifting peoples’ expectations. On the other, the sharing economy has produced valuable data, facilitated public-private partnerships, and illustrated how all organizations—private and public—can operate more effectively.

At the 2015 Public Sector for the Future Summit, experts discussed how government officials can leverage the sharing economy. Brooks Rainwater, the Director of the Center for City Solutions and Applied Research at the National League of Cities (NLC), explained how U.S. officials are responding to the sharing economy curiously and cautiously. Attendees then heard from Emily Castor, the Director of Transportation Policy at Lyft, and Anita Roth, the Head of Policy Research at Airbnb. They described their companies’ public sector partnerships and how government can replicate elements of their operating models. Finally, attendees identified strategies to imbue the sharing ethos in the public sector.

We think a lot about cities. We think a lot about regulation. We think a lot about how we impact cities and what the opportunities are to bring all of that together.
Anita Roth
Head of Policy Research, Airbnb

The Public Sector Landscape

After leading three NLC studies on the sharing economy, Rainwater is convinced that this sector will be among the most important forces shaping U.S. cities over the next 10 to 25 years. Nonetheless, the research suggests that government officials are proceeding cautiously.

The first study found that U.S. cities have welcomed some sharing economy firms. An analysis of how 30 U.S. cities approach home- and ride-sharing revealed that nine municipalities have welcomed both, and 21 are open to at least one. The implication, Rainwater explained, is that most leaders are “excited about” the sharing economy but not embracing it wholeheartedly.

The other studies—which included interviews with and surveys of U.S. municipal officials—crystallized why leaders are proceeding cautiously and what it would take for them to become more open. In particular, the analyses found that many leaders are attempting to minimize potential harms (e.g., safety concerns and damage to traditional providers) while maximizing the benefits (e.g., improved services, economic development, and increased entrepreneurship). Consequently, municipal officials are seeking more data to inform their approach. ,

The Private Sector’s Perspective

The attendees then heard from Castor of Lyft and Roth of Airbnb. They discussed how they have partnered with (or are exploring collaborations with) local governments on issues like transportation policy and disaster management. Additionally, they focused on how government leaders can replicate elements of their work—principally resource efficiency, technology and data, and citizen-centricity—to increase value.

Castor and Roth highlighted how their firms have succeeded by using resources efficiently. Lyft recognized that many roads are congested, even though most cars have empty seats; they then created a carpooling app to transport people at a lower cost to them and the environment. Airbnb has helped people to monetize unused spaces while providing travelers unique accommodations. Operating in a resource-scarce environment, government leaders must be similarly creative.

Lyft and Airbnb have exploited these inefficiencies by harnessing technology and data. Lyft leveraged mobile communications technology to connect commuters and has employed data analysis to identify opportunities. For example, an examination of Lyft use in San Francisco and San Jose revealed that more than 22 percent of Lyft rides in those regions originate or terminate at commuter rail stations. Based on this data, Lyft is now discussing partnerships with public transit authorities to promote ridesharing as a last-mile option aimed at expanding access to rail stations and reducing parking congestion. Similarly, Airbnb has developed a digital platform and used data to highlight how it boosts household income, the local economy, and the environment. Municipal governments must also employ data and technology to identify opportunities and promote services.

Finally, Lyft and Airbnb have created customer-centric models. Lyft is thriving because it is flexible and reliable (people can get a ride when they need it); accountable (drivers have ratings, GPS tracking, and insurance); and incentivized (it is chic, and drivers are paid well). Similarly, Airbnb has catered to guests’ desire for authentic experiences and hosts’ hope for income. People have gravitated to both services because they simplify their lives; if governments do the same, the perception of the public sector would improve.

The New Enablers

The presentations reinforced that even though many factors have facilitated the growth of the sharing economy, the most important enablers have been technology, connectivity, and data. Thanks to the spread of mobile and sensor technologies, Global Positioning Systems (GPS), and data-mining and -matching, an organization can track an asset in real-time – enabling more extensive 24/7 sharing without paper-based tracking, phone calls, pleading, and cajoling. Data also makes it possible to identify trends in resource use and availability as well as patterns in behaviors and preferences. Finally, organizations can capitalize on mobile technologies to synchronize an asset with people who want to use it, and technology-enabled reviews and ratings foster transparency and accountability. These same factors can help governments maximize the use of resources.

Videos from This Session

Pathways Forward

Following the panel, participants identified steps public officials can take to adopt and adapt lessons from the sharing economy. These actions are encapsulated below under the Summit’s four strategic transformation areas.

Optimized Enterprise

Optimized enterprises adopt more fluid, responsive business models that maximize public value and enable the sharing and shifting of resources, systems, and processes to meet new policy and programmatic goals.

The Evidence-Based Organization

Evidence-Based Organizations track performance, benchmark against peers, measure outcomes, and use system data and data from programs and operating units to redesign operations and enable new levels of public value.

The Agile Workforce

As societal challenges become more complex, government must develop a workforce with the agility and skillset to meet future demands.

The citizen-centric government develops business models that engage citizens and partners in designing service offerings, providing feedback, and tracking service progress to improve customer satisfaction and leverage capabilities across boundaries.

I don’t say this lightly, but I do say it with a smile, that we actually have to make sharing something people want to do. We’ve got to make it something that they want to do because it’s actually faster and more fun and cheaper and delightful in a way that maybe driving isn’t.
Emily Castor
Director of Transportation Policy, Lyft

Conclusion

While leading these transformations will be challenging, participants were energized by the potential to make an impact. They realized that a sector that many public officials have greeted tepidly holds valuable lessons about how they can address pressing problems and help citizens. In short, they saw that they need to learn not just to regulate the sharing economy but also to harness its potential to sharpen their work for decades to come.

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