Andrew Leigh

An 'app-ier' future for our cities?

Speech to Urban Taskforce Australia

Sydney

You might not be familiar with the names Michael Nuciforo and Robert Crocitti, but they’re the kind of blokes you want to have around when you’re trying to solve a tricky problem. They’re the creators of ParkHound, an app that lets you find and hire private parking spaces in busy metropolitan areas. They decided to start the company after circling around East Melbourne on the hunt for parking near the MCG before an AFL game.

As they tell it: “We drove past parked car after parked car, after….empty space that required a parking permit. There were dozens of empty garages and driveways right near the ground. It then hit us. Wouldn't it be great if we could just knock on someone’s door and ask to park at their place for a small fee? The more we thought about it, the more it made sense. We don’t need more parking spaces, we just need to utilise the parking spaces we already have.”

ParkHound is just one of dozens of new app-based services that have sprung up recently in the so-called sharing economy. While the kinds of services offered differ, fundamentally they all link people who have surplus goods to those who can make use of them.

As the father of three young boys, the word “share!” comes out of my mouth pretty frequently. Unlike the kind of sharing I’m trying to teach them, money usually changes hands in the sharing economy. But the transaction happens directly between the provider and the consumer, with the companies themselves simply offering a platform for connecting people and collecting payments.

In thinking about the rise of services like ParkHound, AirBNB, and yes – the controversial Uber – it strikes me that the sharing economy has great potential to help us address some of the big challenges our cities face. As Australia’s cities continue to grow, issues like congestion and the use of space are becoming increasingly urgent. The mounting pressure on our built environment puts the people who live in it under pressure too – as all of you Sydneysiders would well know.

We need to lessen some of that strain, and we need to be smart about how we do it because many of the solutions we’ve tried in the past simply won’t cut it today. I firmly believe the rise of the sharing economy can help with that. But as a Labor politician and a committed egalitarian, I also believe we need to get the regulatory framework around these services right so that all Australians can share in the benefits.    

Getting cities moving again

Congestion is easily one of the biggest urban challenges we face today. Transport infrastructure has simply not kept up as more and more people have flocked to our cities. The continual demand for land has seen them sprawl ever outwards, dramatically increasing the distances people must travel day-to-day. 

In their book City Limits, Paul Donegan and Jane-Frances Kelly note that the proportion of Sydneysiders who commute for more than 10 hours a week has risen from a little over one in five to almost one in three over the past decade. Ten hours a week means over 500 hours a year. That means these workers are spending about three full weeks a year in the car just driving to and from work.

In Melbourne, research by VicRoads shows average speeds on freeways during the morning peak have dropped from 68 km/h to just 45km/h over the past decade. That has added around one minute to the time it takes a driver to travel each 10 kilometres. Not surprisingly, the length of the morning and afternoon traffic peaks has therefore blown out significantly. In 2001, the morning peak period lasted about an hour and three quarters; now it runs for nearly three. The afternoon peak has also increased by about an hour, and now runs from 3:15 pm to about 6:30pm.

It reminded me of that Doctor Who episode about a society where gridlock gets so bad that people are born, grow up, and die in their cars on the freeway. Whole generations evolve who cannot remember life before they were stuck in traffic.

In some cases, we haven’t made any progress on these problems in the past century. In others, unexpected solutions arise. I was in Tel Aviv last week, where many drivers use Waze. This app works out where the traffic is moving best, and dynamically directs people onto those routes. At the same time as the app is providing you with information, your smartphone is contributing to the system’s understanding of how quickly the traffic is moving. We’re fortunate in my hometown of Canberra that we don’t have a lot of traffic, but I understand Waze is also very popular here in Sydney to help locals beat the peak hour gridlock. 

To combat congestion we need to use our existing infrastructure better: both public roads and private cars. Singapore is leading the way on this by setting the target of doubling capacity on its roads without building an extra kilometre of asphalt. One of the ways they’re going to get there is by increased use of ride-sharing and pooled transportation. This is where the sharing economy comes in.

Most of the talk so far about transport and the sharing economy has focused on Uber. Their UberX service has been trailblazing in a lot of ways as an example of entrepreneurial innovation. But it has also caused a lot of consternation by operating outside of the existing rules and regulations that govern services like taxis. The current situation is obviously unsustainable, not least because it leads to unfair competition between emerging and established players. There’s tough questions to be resolved about how a service like UberX should fit into the regulatory landscape, and my party is currently working through those.

I don’t know whether UberX is sustainable in the long term. But I’m very interested in UberPool and the equivalent offerings from Lyft and Sidecar that have been launched in the US. UberPool allows customers to order a car and then share their trip with others who need a lift along the route. Importantly, the app splits up the total cost of the trip when you arrive at your destination. So the more riders you share with, the cheaper your own share gets.

This is really important because we know that the vast majority of car trips are taken with just one person on board – the driver. In my book Disconnected, I noted that in 1976, one in five drivers had someone sitting next to them on their commute. By 2006, only one in 10 did. We own more cars than ever before. But our cars are emptier than ever before. At risk of talking to you like I’d speak with my three boys: can’t we do a better job of sharing?

Modelling from Deloitte suggests that if just one in six solo drivers took a passenger, the US would cut nearly a billion commuter hours. Imagine the quality of life benefit to that nation from a billion more hours to spend at work, with family, or with friends. As the authors of that modelling somewhat wryly point out: “To achieve these savings through traditional means would require billions of dollars of infrastructure investment.”

There’s nothing to stop people sharing rides right now. But the limited uptake of informal ride-sharing suggests that the coordination problems involved do act as a barrier. App-based ride-sharing solves many of these.

For example, an app lets you find people who are going your way at the exact time you want to go there – instead of some pre-agreed time that might not end up suiting you on the day. It also helps you connect with people who are going in the same direction but not necessarily to the same place, which dramatically increases the range of possible ride-sharers. Most importantly, the app lets both parties develop an externally validated reputation, so you’re not just getting in the car with a stranger.

Again, there’s some hard questions to work through here about how we can protect public safety and maintain standards when private providers are offering a form of public transport. But these ride-sharing apps do seem to have a lot of potential to ease the current congestion pressure on our city roads.   

From parking to parks

Parking congestion is a related problem the sharing economy may help solve. First – and most obviously – if more people are sharing rides into the CBD or other hubs, then this cuts down the number of people actually looking for a park. But second, sharing economy services like ParkHound can ensure the existing supply of parking is used more efficiently to increase overall supply without needing to set aside more space. Every bit of bitumen and block of land reserved for parking cars is valuable inner city space we can’t use for something else. By unlocking the existing stock of private carparks and filling them at times when they’d otherwise be empty, we can free up more land for housing, shops or maybe even (*gasp*) parks, community gardens and outdoor plazas. 

While I think there’s good potential for the sharing economy to help with congestion problems, we’ve seen one service emerge recently which pushes the friendship too far. MonkeyParking is an app that lets drivers who’ve found a kerbside park auction it off to the highest bidder when they’re ready to leave. That’s right – the sellers are auctioning off something they don’t actually own.

Anyone can see that this app is likely to exacerbate parking shortages by creating an incentive for drivers to ‘squat’ on parks until a high-bidder comes along. It also creates a potential traffic hazard because people are driving around focused on the bidding war on their phones instead of the road in front of them. It won’t surprise you to hear that the app was banned in San Francisco and a number of other cities last year. It’s a good reminder that we have to draw the line somewhere – these apps should help us solve a problem, not create new ones.

Congestion is one of the biggest urban challenges of our time. It’s an area where sharing economy services have a lot of potential to bring about practical, positive change to get our cities moving better. There’s a couple of other areas where the sharing economy can make a particular difference for city dwellers too and I’d like to touch on them very briefly.   

Living a big life in a little home

As commuting has become more of a hassle and house prices have continued to rise, we’ve seen an explosion in the number of Australians choosing apartment living in our cities. In Sydney, approvals for apartment construction now make up 67 per cent of all building approvals, while in Melbourne the figure is 53 per cent.

More and more of us are living in smaller spaces – the standard size for a Sydney one-bedroom apartment is around 45 square metres, while a two-bedroom will offer around 60 square metres of space. That compares with about 200 square metres for the average freestanding house.

One of the great advantages of apartment living is that there isn’t a lawn to mow or gutters to mend. But what about hanging a painting? Doing some DIY renovations? Or even just shifting a fridge? There simply isn’t space to store all the things you might need once or twice a year when you’re living in an apartment instead of a big home.

By the same token, most people who do own a drill or furniture trolley will only use it now and then; the rest of the time it’ll probably just be taking up space in the garage like all my gardening gear. Apps like Open Shed solve both these problems by letting people who own tools and equipment rent these out for short periods.  

And what if you’re an occasional skier, mountain biker or surfer, but have nowhere to store your equipment? Sharing services like Spinlister let you rent your neighbour’s gear for a weekend of fun at a fraction of the price most hire shops would charge.

As with freeing up parking spaces, these apps unlock private goods for common use. They reduce the amount of stuff any one of us needs to own, and so cut down the volume of goods needed overall. That’s really convenient for city-dwellers living in small spaces, but it’s also better for the planet as a whole.    

Sharing is caring

Before I wrap up, I want to talk briefly about another, more intangible benefit of the sharing economy: connection. I’ve long been concerned about the fact that Australians seem to be growing apart from each other, and interested in ways we can rebuild social capital.

I’m convinced that the sharing element of these new services is just as important as the economy part. We know that living in big cities can be isolating, and that many people struggle to form connections within their community when they’re constantly working or commuting.

Sharing economy services create the chance for serendipitous meetings with like-minded people. After all, if you’re renting a surfboard from someone, the chances are they share your hobby.

They create opportunities for regular interaction that can grow into friendship – whether it’s sharing a car on the daily commute or meeting your neighbours when you hire their drill.

They also foster an increased sense of trust and connectedness because you’re transacting with people instead of big corporations. I defy you to use any of the sharing economy services I’ve talked about today and not come away feeling a little bit cheered about the capacity for humans to be good to each other.  

So while the sharing economy can help us solve a lot of practical problems, I really believe that it can also play a role in reviving something that often falls away in the hurly burly of big cities: social capital. Real world, flesh-and-blood links to the people who share our environment and can enrich our lives if we create a space for civic connections.    

The way ahead

Labor’s passion for cities policy has a long lineage, going back at least to Gough Whitlam, the man who – among other things – sewered Western Sydney. In recent times, Shadow Transport Minister Anthony Albanese has outlined a ten-point action plan for better cities. The chair of Labor’s Committee for Cities, Andrew Giles, has been an energetic contributor to the urban conversation. I mention this to make clear that my thoughts on the sharing economy are part of a bigger conversation that Bill Shorten and Labor are leading on the future of our cities.

It should be pretty clear by now that I’m an optimist about the sharing economy, but not an uncritical cheerleader. I’ve already flagged some of the public safety and competition issues these services pose; workers’ rights, accessibility and tax are other big challenges which governments are going to have to grapple with.

My party wants to ensure all Australians share the potential benefits of the sharing economy – not just a few. That’s why we’ve released a discussion paper exploring what rules we really need to govern these new services. It sets out the main regulatory challenges they pose and the strong principles that will guide Labor’s response. Submissions to Labor’s sharing economy discussion paper are open until the end of the month, and I hope you’ll take the time to share your ideas with us.  

As the paper outlines, our priorities are to promote public safety and consumer protections; improve accessibility and equity; protect workers’ rights and ensuring fair competition. We want the sharing economy to grow, but not at the expense of the standards and protections that Australians have rightly come to expect.

How we translate these principles into practice is now up for discussion between my party and the Australian community. There’s no doubt that getting the rules right will be a serious challenge. But as progressive policymakers, I believe we owe it to Australians to take that challenge seriously. More Australians live in our cities than ever before. Let’s make sure they’re as app-y as can be.

ENDS

MEDIA CONTACT: JENNIFER RAYNER 0428 214 856