Smoothing the way for the sharing economy

Following my op-ed in today's Daily Tele about the opportunities and benefits of the sharing economy, I joined Simon Marnie on ABC 702 Sydney to talk about how my colleagues and I in parliaments around Australia might tackle the regulatory issues raised by services like Uber and AirBnB. Here's the transcript:

E&OE TRANSCRIPT

RADIO INTERVIEW

ABC 702 SYDNEY

TUESDAY, 6 JANUARY 2015

SUBJECT/S: opportunities in the sharing economy; cost of living

SIMON MARNIE: It's called the sharing economy. Basically, it's making an extra buck from what you already have: renting out a spare room, giving a ride to someone heading in your direction. But not everyone is a fan, mainly because of the legislative and regulatory sides that come into it. Federal MP Andrew Leigh reckons that the sharing economy could not only ease the cost of living, but could even make things like home ownership easier for Australians. He joins me on the line, good morning to you.

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Good morning Simon, how are you?

MARNIE: I'm well. Now, I must say that I've been using UberX and I've been quite impressed with its ease and with its inexpensive nature. But it is, at its heart, still an illegal thing, isn't it?

LEIGH: That's right. Illegal for drivers, as I understand it, in most situations. The only exception that I know of in Australia right now is that the South Australian Government is allowing hire car drivers to pick up passengers using Uber Black. So that's once they've passed the regular hire car checks. 

MARNIE: So with your background in economics, why have you got such high hopes for services like this and the idea of the sharing economy?

LEIGH: Well Simon, if you think about the two big challenges for an extraordinary city like Sydney, high on your list would have to be housing affordability. The average house used to be three times median incomes, now it's seven times median incomes. And commuting times would be the other one, with the roads gridlocked as you've been speaking about this morning. The potential, I think, to make better use of our housing stock through services like AirBnB is really important. We've got nine million unused bedrooms in Australia at the moment, and yet we've got this housing affordability crisis going on. We've got gridlock choking the streets of our major cities, and yet potentially there's these ways of linking up people who need a ride with people who have a spare seat. 

MARNIE: It almost seems as though it's bringing back a sense of community, but you also get to top up your own personal piggy bank while you do it.

LEIGH: At its best, that's absolutely right. Of course, there's legislative challenges on this. But what I was trying to do with my opinion piece today was to say: let's step back and look at the big picture. Let's look at what the sharing economy could achieve for our society if we get the legislative settings right. I think sometimes in politics we're too quick to jump to the negatives. Politicians can be very good nay-sayers, particularly when we're talking about ideas coming from the other side. But we need to also be the ultimate optimists. We need to speak with the community about things that new technologies can achieve.

MARNIE: I like the fact that in your article you shift the focus from what it does for consumers to what it does to the people who actually provide the services. For example, I could assist my mortgage repayments with a couple of days a month AirBnB rental.

LEIGH: Absolutely. Many people are doing this around Australia and the world at the moment. We've known about the potential to supplement your income through eBay, for example, but these sharing economy services also offer the potential for people to turn a few quid. That's really important at a time when you go back 20 years and three-quarters of late 30-somethings owned a home, now it's only two-thirds of late 30-somethings. For those people who are trying to pay off a mortgage, something like AirBnB can make a difference. But you've got to get the regulatory settings right. If you've got a shared stairwell of an apartment block with just a few other apartments, then maybe that's not going to be so convenient for other people in that block to have strangers traipsing in and out. So regulators need to think about this the right way. 

MARNIE: But I guess it's about being proactive to anticipate what regulation is needed. For example, in an AirBnB situation, I know of somebody staying overseas and the AirBnB apartment was robbed so they would have needed insurance to cover what was taken.

LEIGH: That's right. And AirBnB itself holds insurance for situations like this. But they're really doing that because the legislative frameworks haven't caught up. I've had good experiences in staying in AirBnB properties in cities where they've got a bed shortage. So you look at a place like New York City, and there's far fewer hotels than they need given the demand for people to come and stay. You know, when you've got a family of five like ours, having your own little apartment in New York actually works out nicely. But as you say, the regulatory settings are just a couple of decades behind where people are going already.

MARNIE: Andrew, the counter-argument is that people should be able to use their own resources – their car, their home – as they wish, they're not harming anybody, and if anything goes amiss, then that's why the police exist. Is it one of those ones where perhaps the people making the money out of the existing services are feeling a little jealous and left out?

LEIGH: I do think we need to make sure the public is kept safe in these sorts of industries, Simon. I gave the example before about somebody allowing AirBnB rentals in a situation in which they're making their neighbours feel insecure. And we need to make sure too that drivers and passengers are appropriately protected with services like Uber. I don't want to pretend that any of this is easy, and I'm certainly not a technological utopian who thinks we should just let the technology run rampant and have regulators get out of the way. But I do think, on the big picture, we need to be looking at how we can better use our capital stock, at a time when estimates are that house construction is 200,000 units behind where it needs to be, and when we know that gridlock is choking our roads. We need to look at whether there are ways of getting the technology right in order to allow us to live more economically and happier.

MARNIE: I guess there's a danger though that if we embrace it, we'll then wrap it in red tape and make it just as cumbersome as some of the services they're competing against. Or not competing against, but really shining against.

LEIGH: You've hit the nail on the head. You want to come to an appropriate accommodation there. I'm certainly somebody who believes businesses should pay their fair share of tax, for example. So I was really pleased when Portland struck a deal with AirBnB where they will pay the appropriate hotel tax on the condition that the City of Portland agrees not to prosecute AirBnB renters. That seems like a clever agreement which recognises that services need to prosper because they're providing something useful and valuable to consumers, rather than simply because they're a brand-new tax dodge.

MARNIE: Do we know of other instances where, other than being threatened by these new sharing economy services, they've been embraced?

LEIGH: South Australia with Uber Black is an interesting example. But we're very much in the nascent stage of this. My call is for my parliamentary colleagues and others who are diving into the conversation in this space to think big picture. To think about the opportunities that we have for tackling Australia's big challenges like housing affordability and congestion, and ensure we don't get caught up with little turf battles instead. 

MARNIE: Andrew, thanks for joining us this morning. 

LEIGH: Thank you, Simon.         

ENDS

MEDIA CONTACT: JENNIFER RAYNER 0428 214 856


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