TRIPLE J HACK
TUESDAY, 24 MARCH 2015
SUBJECT/S: rise of the sharing economy
TOM TILLEY: Labor MP Andrew Leigh stood up at the National Press Club today and said Labor supports the sharing economy. Let's find out if he really means it: Andrew Leigh, thanks for joining us.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: It's a pleasure, Tom.
TILLEY: What are your favourite sharing economy apps that you use regularly?
LEIGH: Overseas I've used AirBNB and Uber and found them both to be good services. I also use hotels and taxis – it's quite a mix. So I guess you could say I'm a combined user of traditional services and a bit of sharing economy as well.
TILLEY: Ok, well these markets seem like they're going to exist with or without government intervention. We heard about the battle for Uber but there's plenty of people still catching Ubers even though governments in the states are trying to crack down on them. Do governments really have a choice whether you support these markets or not? Isn't it more of a question of going with the tide?
LEIGH: Tom, I think you're certainly right that these applications are having a huge impact on traditional markets. You look at the market capitalisation of Uber at $40 billion, it's now bigger than Hertz or Marriot Hotels. One-tenth of Sydneysiders have used a ride-sharing service and it's less than a year since Uber launched. One in 300 Australian homes are now on AirBNB. But that doesn't mean that government doesn't have an obligation to make sure that we encourage innovation while also protecting public safety.
TILLEY: That's a really difficult balance. You say that you're pro-sharing economy, but it's hard to imagine how governments will play a role in this. Especially when it comes to protecting consumers of Uber, for example. It relies on a ratings and trust system, whereas old-school taxi systems rely on charging people $40,000 for a licence to check that they're going to be reasonable operators. Do you think there'll ever be a time where governments will just let people rely on that trust-based system?
LEIGH: Tom, I think the trust-based system does have much to recommend it. I think there's virtues in having a ratings system. But the bigger something grows, the more that people – not unreasonably – would like some sort of appeal rights if they're being beaten up on a ratings system. I don't have all the answers, which is why Labor has launched this Discussion Paper and why we're reaching out to people in the broader community for their answers and their suggestions on how we deal with the sharing economy. I've been worried that the Government has had its head in the sand a bit, and that's why Labor has stepped into the breach. We think the conversation is too important for the future of our nation not to be engaged in it.
TILLEY: Thinking about old money and established interests, the big question here, Andrew Leigh, is taxes and particularly GST. So many of these trades don't end up giving their fair share of tax to the government coffers – how will you get around that one?
LEIGH: You're certainly right that it's a challenge there, Tom. I mentioned in the speech a comment from the CEO of Youth Hostels Australia, where he said: "what you call the sharing economy, we call the black economy." But when I talk to people in the sharing economy, they don't want to compete by avoiding taxes. They want a regulatory system that sees them pay their fair share. They think they have a better product and it is able to compete on a level playing field. So we need to have that level playing field in place. But we also need to start a conversation because all of these rules were written before the rise of smartphones, the rise of super-fast broadband and the rise of these brilliant technological entrepreneurs who've brought not only things like Uber and AirBNB, but also PawShake for someone to look after your pet; ParkHound to find off-street parking; and Spinlister for equipment rental. So there's all kinds of different new apps out there which can potentially improve our lives as long as we get the settings right.
TILLEY: The other area where governments might need to step in to offer some protection is the labour market. There are sites and applications that essentially get around the normal labour market and hook up people who are looking for work with different tasks that they have. But I imagine for you, as an MP in the Labor party – part of the movement that fought for so many awards and workers’ rights – how are you possibly going to embrace the sharing economy when it comes to labour?
LEIGH: Tom, I'm in favour of apps that create new and interesting jobs for people who might not have otherwise been able to have a slice of the labour market. So whether that's students, or people with young children who are able to find a niche in the sharing economy. There's potential upside for them. A woman contacted my electorate office after I'd once spoken about the sharing economy, and told me the story of how she'd used AirBNB after a difficult divorce to help her pay the mortgage. She said that without the sharing economy, she might well have lost her home. That's an opportunity where the sharing economy has not just been good for consumers, but it has also been good for the person providing the service. But at the same time, it does worry me if we devolve into a society where there's one group of people who have good, solid and secure jobs and who are paying this other class of people to run around after them, cooking for them, putting together their Ikea furniture, driving them from place to place. I'd be very concerned if that second class of people can't get a mortgage, can't take a holiday, don't have the security that a good job ought to provide. So that's a really important part of the conversation.
TILLEY: Andrew, interesting to hear your point of view. Thanks for joining us. It's an interesting speech which I think will start a much bigger conversation about how we manage the sharing economy.
LEIGH: Thanks very much, Tom.
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