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Saturday 1 October 2016

Cities worry about stranger dangers as they aim to cash in on service apps

Jennifer Peltz

Published 08/06/2015 | 02:30

A customer uses an Uber vehicle in Washington, DC
A customer uses an Uber vehicle in Washington, DC

American cities are enticed by the economic growth and services that “sharing economy” companies such as Airbnb, Uber and Lyft can offer, but officials are anxious about safety in a largely unregulated realm, a city advocacy group found in a new study.

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Nearly three-quarters of city leaders said they wanted to see the “sharing” sector grow, according to National League of Cities survey responses from 245 leaders of municipalities.

Yet nearly two-thirds said they were concerned about the safety of using apps and websites that let everyday people rent out rooms, arrange car rides and provide other services to strangers.

More than half the cities said they imposed no rules on “sharing” players, although their traditional counterparts — like hotels and taxi companies — are often regulated.

“Cities are welcoming” the rise of the sharing economy, said Brooks Rainwater, one of the study’s co-authors.

“But at the same time, because it’s upending traditional service providers and regulatory environments, it’s causing some level of consternation.”

Still, “cities are learning how to work with these companies”, and vice versa, he said. Companies say they’re safety-conscious contributors’ to cities’ economies. The Washington-based cities league included some sharing-economy questions in a broader economic survey sent this year to top elected officials in 986 cities; 245 responded.

The “sharing” or “peer-to-peer” economy can refer to services as varied as co-working spaces and short-term bike-rental programmes. The report, like the regulatory debate so far, focuses on “home-sharing” players such as Airbnb and “ride-sharing” companies such as Uber and Lyft.

Many cities are grappling with whether or how to regulate and tax the “sharing” sector.

New York taxi regulators, for example, are weighing whether to make ride-hailing services submit data on their trips. Portland, Oregon, is experimenting with allowing ride-hailing companies while deregulating its existing cab industry.

San Francisco agreed last year to permit some home-as-hotel rentals but is now contemplating further limits. Meanwhile, some lawmakers want to expand a squad that investigates complaints about such rentals in New York, where it’s largely illegal to rent out an entire apartment short-term.

While 71pc of cities said they supported sharing-economy growth, leaders embrace ride-hailing apps more readily than short-term home rentals, by 66pc to 44pc.

In general, cities see the biggest benefits as improved services (rated No 1 by 22pc) and economic expansion (20pc). Smaller numbers cited entrepreneurship, efficiency, tourism and constituents’ enthusiasm.

Almost two-thirds of cities said safety was their top concern about peer-to-peer services. Just 10pc or less named any other potential problem, including effects on established industries, lost tax revenue and staff issues.

Sharing-sphere firms say they fuel local economies by giving consumers new options and are committed to making them safe. San Francisco-based Lyft says it conducts criminal background checks of drivers, staffs, a round-the-clock safety hotline and has worked on regulations with about 30 cities and states.

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