open data Sharing Economy Transparency



In the absence of open data standards, companies like Airbnb can define their own terms for behaving in an “open and transparent” way.

  • In early December, Airbnb made headlines by releasing some data on how people are using the company’s platform in New York City.

    In doing so, the company has provided an object lesson in the critical role that data plays (and will continue to play) in government regulation of private companies in the 21st century, and highlighted how ill-equipped governments are to obtain and use this data.


    Over the past year, the use of Airbnb to rent properties in New York has received intense scrutiny from government regulators because of suspicion that a non-trivial amount of rentals listed on the site were in violation of state or city rules. In late 2014, New York State Attorney General Eric Schneiderman released a report examining Airbnb rentals in New York that concluded that “most short-term rentals booked [through Airbnb’s service] in New York violate the law.”

    The recent data release by Airbnb was meant to make good on a promise by the company in response to the Attorney General’s report to be “open and transparent,” and to underscore its contention that the vast majority of the users of its service do so in compliance with state and local laws.

    From the start, the release of this data was viewed with skepticism by some journalists, activists, and others that closely watch the “sharing economy.” In order to view it, interested parties needed to make an appointment to review the data in person at Civic Hall, where Airbnb is an organizational member. The data was highly redacted, was not published to company’s data website, and those viewing it were not allowed to copy it to review it more closely after their scheduled appointment.

    In the weeks that followed the release, outside reviews of the data seem to contradict Airbnb’s primary claim that most of its hosts are using the service lawfully. Others have cited the need for more detailed information to draw definitive conclusions. Though Airbnb has indicated that it would like to share similar data on usage for other cities, there is no indication that the company will release more detailed information for New York City.

    It seems clear that the ultimate question of whether Airbnb’s service is being used lawfully will be determined by examining data on how people use the service. State regulators and others know this and have used legal and other means to try and get this data. Airbnb also knows this, and it has carefully constructed its limited release of data (and its public outreach about this data release) to assert that they are in compliance with the law.

    But if data is at the heart of government’s ability to regulate Airbnb and other “sharing economy” companies, why are they so ill-equipped to obtain and use it?


    At its core, the sharing economy—whether defined by the example of UberAirbnb, or one of the other standard-bearers of this emerging class of business—represents a change in the way that people consume goods and services that is enabled by advances in technology. This change in consumption results in a challenge to an existing, entrenched market actor (for Uber, the taxi industry; for Airbnb, the hotel industry) that is subject to existing government taxes and regulations.

    The challenge for public officials and regulators is to avoid stifling new innovation that can result in better services but at the same time to ensure the fair and equitable application of rules that have been set up to regulate business operations and protect consumers. This is an issue that can have significant political implications. Striking the proper balance between competing needs can indeed be tricky.

    But this challenge is not a new one for governments—tension between regulators and private interests spans the history of collective governance.

    Supporters of the sharing economy commonly criticize existing government regulations as outdated and ill-suited to support innovation by 21st century technology companies. Reputation systems are often pointed to as a 21st century alternative to traditional government regulation, to ensure that sharing economy firms and similar types of companies act in the best interest of consumers.

    But there are a number of common examples where consumers engage in transactions for which they have an abundance of reputational information where the company providing the services is also highly regulated by government. Consider the example of dining out at a restaurant—never before have consumers had as much information as we do now about the quality and cleanliness of food service establishments. And yet, restaurants and food service establishments are highly regulated by multiple levels of government.

    In addition, recent research specifically examining reputation systems used by technology companies suggests that reputation systems and more traditional central regulation can work beneficially in tandem. A recent study from the Ohio State University examined the reputation system used by eBay in conjunction with a buyer protection program—a centrally managed program to provide protections to buyers and recourse if they are dissatisfied with purchases (an approach strikingly similar to the notion of centralized regulation). The study concluded that:

    “[W]e estimate that the total welfare rises by 2.9% after the introduction of the buyer protection program. This increased welfare demonstrates an efficiency gain by having the two mechanisms, the eBay Buyer Protection and eBay Top-Rated Sellers, in place.” [Emphasis added]

    Sharing economy supporters also claim the the growth of companies like Airbnb, Uber, Taskrabbit and others has led to a fundamental change in the economy, with more people opting to become freelancers who—to paraphrase the words of sharing economy companies—become masters of their own destiny. But another recent study from George Mason University suggests that the freelancer phenomenon began long before the advent of sharing economy companies like Airbnb and Uber:

    “Our data support the claim that there has been an increase in nontraditional employment, but the data refute the idea that this increase is caused by the sharing-economy firms that have arisen since 2008. Instead, we view the rise of sharing-economy firms as a response to a stagnant traditional labor sector and a product of the growing independent workforce.”

    The George Mason study helps to clarify the role that sharing economy companies can play in a changing economy—as opportunities for traditional employment become scarcer, the sharing economy may play an important role in providing employment for a changing workforce.

    But we should not allow these potential benefits to be offset by other negative consequences that may arise if sensible regulations are not applied sharing economy companies.


    The exercise of regulating private interests by government almost always involves an information asymmetry. Governments seek to discover the occurrence of specific activities that are subject to regulation and to apply relevant rules and taxes to those activities.

    Prior to the digital age, governments sought to (and still seek to) address this asymmetry by hiring groups of trained employees like auditors, inspectors and agents. The job of these individuals is to investigate certain kinds of activities and transactions to determine if the activity in question falls under the authority of a specific regulation or regulating entity, and then to enforce any applicable rules or taxes.

    With the rise of the internet and the dawn of the digital age, governments have employed a wide range of new tools to help ensure that the activities of private interests comply with rules that have been adopted by elected and appointed bodies. The steady march of technical advancement has also made compliance with government mandated taxes and rules easier and more efficient for businesses than ever before.

    The tension between how technology alters production and consumption patterns, and how these new patterns square with existing government rules is not new.

    In the 1960’s, the rise of mail order retailers began a protracted debate on the application of state and local sales taxes to remote sales—a debate that has raged through the time when internet retailers like Amazon developed and flourished, and that still rages today.

    In the early 2000’s, a new class of business—bolstered by the increasing availability of broadband internet access—began to offer consumers new options for telecommunication services that bypassed the Publicly Switched Telephone Network. In a scenario that is remarkably similar to the sharing economy, these new VoIP companies competed against large entrenched industry incumbents that were heavily regulated by government by offering customers improved service, a better customer experience, and lower prices.

    The tension between the new service being offered to consumers VoIP companies and existing government rules was ultimately resolved by an order from the FCC.

    So while the tension with existing tax and regulatory requirements created by technical advances is not new, and existing government institutions have shown they are capable of resolving these tension to the benefit of consumers, things are a little different when we consider the companies that make up the sharing economy.

    Sharing economy companies self identify as “technology companies”—not dispatch companies (in the case of Uber) or hoteliers (in the case of Airbnb) that happen to make heavy use of internet technologies. They position themselves not as providers of a service, but as enablers or connectors that bring together individuals that want to transact with each other.

    The issue with respect to government regulations as they relate to sharing economy companies is not so much that existing regulations are outdated as some have claimed. Instead, it is that the infrastructure for ensuring compliance with these regulations was not constructed for the 21st century—or, at best, the infrastructure has been minimally and very unevenly built.

    Government regulations need to speak the native language of these companies—in the 21st century, this language is almost always data in JSON or CSV format delivered over HTTP.


    Consider Airbnb’s recent data release—what if the State of New York, as part of its request to the company to share data, had offered Airbnb the ability to publish data to its open data portal?

    The state could have provided the company with a user account and requested that they publish their data using that account at regular intervals to allow for scrutiny by regulators and other interested parties. They could have provided Airbnb with existing guidelines for ensuring privacy as well as metadata guidelines to help ensure data quality.

    Even if Airbnb didn’t opt to publish data to the state’s open data portal, the request to do so would have helped to better qualify the deficiencies in the data the company actually did release. The state’s portal already contains scores of data sets with detailed information from dozens of agencies. Are technology companies like Airbnb less equipped to publish data on their core business operations than the State Liquor Authority? Really?

    With very few exceptions, government open data portals are one-way vehicles—transporting data unidirectionally from government agencies to external consumers. Governments largely don’t view their open data portals as platforms for comingling data from different data producers, much less as vital instruments for successful 21st century regulation.

    But what if they did?

    With complete enough data, the question of whether an Airbnb host is in compliance with the law is fairly easy to spot. The issue is that in the absence of a standard mechanism for sharing this data openly, companies like Airbnb can define their own terms for behaving in an “open and transparent” way.

    We need to expand the way we think about open data so that it’s not just about agencies publishing data to an open data portal, but instead is an integral way that we collectively help ensure the health and stability of our communities. We need to expand our notion of “government as a platform” to go beyond just building new civic apps to helping ensure efficient compliance with rules that are adopted collectively through democratic processes.

    We’ve started to assemble some of the building blocks for this new infrastructure, but we now need to put the pieces in place.

    For example, some governments publish data on zoning rules as open data. But we need to go beyond simply publishing this data and expose these rules through an interface that allow them to be encapsulated in a transaction. This work has only just begun and is,for now,largely driven by actors outside of government.

    Imagine an infrastructure that would allow companies like Airbnb to instantly determine if a potential short-term rental was authorized under local zoning and rental regulations, and to determine if a rental tax was due on the transaction and the amount.

    We are woefully short of this goal.

    In fact, in jurisdictions that specifically require short-term renters to register with the local government, there is no interface that supports an automated check to determine if a specific property has a permit and is authorized to conduct such a rental. The absence of this essential infrastructure to enforce local regulations may go a long way toward explaining the dismal rate of compliance.

    It seems clear that governments will not be able to successfully regulate these new companies without the infrastructure necessary to do so.

    Building the infrastructure for 21st century regulation will require us to expand our ideas of open data and government as a platform. Checking for compliance with tax and regulatory requirements—by either party in a sharing economy transaction—should be as simple as making an API call.

    Constructing this infrastructure won’t be done overnight, and it probably won’t be inexpensive. But the stakes for state and local governments have never been higher.

future of work laber Sharing Economy

Crowdfunding a Basic Income, First in Germany, Now in US

Crowdfunding a Basic Income, First in Germany, Now in US

What would you do if you had a guaranteed income of $1,250 a month?

A social-enterprise-marketer-slash-Lyft-driver recently started something called the My Basic Income project, a crowdfunding campaign to financially support one person (or more) for one year. Inspired by an existing project in Germany with the same premise, if the crowdfunding campaign is successful, the My Basic Income project will hold a raffle to determine who will receive $1,250 a month for twelve months. As part of the project, people signing up for the raffle would be asked to say what the income would allow them to do.

The project was started at the Basic Income Create-a-thon, which ran from November 13 – 15 in San Francisco. The Create-a-thon was put on by the Universal Income Project, a new nonprofit sponsored by the Roosevelt Institute. Interest in basic income has been rising worldwide, but the recent Create-a-thon and the resulting projects indicate that at least a small number of Americans are ready to stop talking and start taking things into their own hands.

This video was produced over the course of the Create-a-thon.

Cameron Ottens, the Lyft driver and small business owner who helped start My Basic Income, is fairly new to the idea of a basic income. He tells Civicist he first started reading about it six months ago. Once he was sold on the idea, however, he realized he realized we shouldn’t “hold our breath” waiting for our government to get to it.

“I thought the crowdfunding they were doing in Germany was a great idea—to just start, instead of waiting for a gatekeeper or politician to do it,” Ottens says. (The founders from the project in Germany actually attended the event.)

“The ultimate goal is to spread the idea of this from a personal angle,” Ottens says, which is why he is asking people to share what they would do if provided with a basic income. Ottens thinks that it will help dispel the belief that a guaranteed basic income would make everyone (else) lazy.

In the introduction to the crowdfunding campaign, Ottens writes:

Imagine if you could give someone $1,250 per month with no obligations, no limitations, and no strings attached for one full year. How would that change their life?

We want to find out! What would happen if everyone had an amount of money that covers their basic needs? Would people be lazy or would they use it to take on new risks? Would they waste it in one night or invest with intention in their futures? We don’t know, but what if we funded a full year of basic income for a complete stranger, to find out?

I asked if there would be some kind of report at the end, to prove the success of projects like My Basic Income. He acknowledge the inherent contradiction in requiring someone to do something in exchange for no-strings-attached cash—his hope is that recipients (if not all than some) would be moved to help spread the word.

The Basic Income Create-a-thon was attended by more than 60 people actively working on various projects, and more than a hundred came Sunday to see the final presentations (with another 350 watching a livestream). Jim Pugh, one of the organizers of the Create-a-thon, tells Civicist that organizers in Los Angeles and Minneapolis, Minnesota, have already reached out about conducting Create-a-thons in their respective cities.

Jim Pugh, the CEO of Share Progress, says that he connected with other advocates for universal basic income earlier this year, and the Create-a-thon is the result of their conversations. They originally came up with the idea of hosting a hackathon but as a group decided they didn’t feel comfortable having it be exclusively tech-focused. A Create-a-thon allows for input from artists, writers, filmmakers, and other non-techies.

“I haven’t worked specifically in the arts space before but recognize the value of those people involved if you want to make an emotional appeal for a new idea,” Pugh says. He tells Civicist that, as a Bay Area resident, he realizes that a more automated future is almost guaranteed, and the basic income is a feasible solution for when “full employment isn’t feasible or necessarily desirable.”

As for Ottens, he says that with a basic income he would spend a little less time driving, and a little more time growing his business.

Civic Hall Election 2016 future of work Sharing Economy



Marco Rubio weighs in on the on-demand economy, innovation and disruption, money in politics, and platform cooperativism.

This morning Republican presidential candidate Marco Rubio dropped by Civic Hall to deliver a prepared speech on the on-demand economy, followed by a Q&A with Civic Hall founder Andrew Rasiej. In his speech, Rubio touted the advantages of the on-demand economy, including upward mobility, flexibility, and independence. He argued that all of the “best innovation is happening in the unregulated space” and said his proposed tax reform plan would make the tax code more welcoming to the on-demand economy. Many of Rubio’s prepared comments tracked with other speeches he has given on the subject, although this one was without any explicit jabs at fellow candidates.

Rubio highlighted New York-based Handy as an innovative startup facing overregulation, and said another entrepreneur he met recently asked him not to name his company publicly to avoid drawing the attention of legislators.

Rubio called for a new category of worker, pointing out that those with W2 status have more protections but fewer of the freedoms that characterize the on-demand economy, but if employees are categorized as independent contractors, employers are prevented from training them or otherwise dictating how something is done. Rubio argued that a middle ground is needed, pointing out Germany already has a third category for “dependent contractors.” He added, “Whether or not this model is the best for America is something we have to figure out.”

To cut down on innovation-stifling regulation, Rubio proposed a cap on the amount that regulations can cost the economy, saying current compliance costs approach $70 billion. Rubio singled out regulation lobbied for by incumbent interests like the taxi and hotel industries for hindering competition.

When Andrew Rasiej pushed him on the root issue that makes it possible for established interests to have their way—money in politics—Rubio first said that small government is the answer: If unlimited regulation is an option, he argued, incumbent interests will “find a public safety argument and use that to put up a roadblock.” In response to Rasiej’s follow up question, again about the influence of money in politics, Rubio said that the American people should “stop electing” people susceptible to that. But he didn’t offer any ideas for how to achieve that.FullSizeRender

Citing the impact of Airbnb on the housing market, Rasiej asked how the government could minimize the collateral effects of the on-demand economy without regulation. Rubio responded that he’s not against all regulation—he’s glad that his drinking water isn’t poisoned and that someone is checking on the planes he flies on—but added that “structural change in the economy has always been very disruptive” and pointed out that the industrial revolution brought about a number of new issues, including child labor, that had to be resolved.

Rubio repeated himself somewhat when a member of the audience—an independent taxi driver—asked whether new companies and drivers should have the same access to the market that he has, but without paying the same fees. Rubio first replied that he doesn’t think it’s the same model, but reiterated that innovation is always disruptive, citing the impact of the car on the horse cab driver. Rubio said that it is the role of government not to prevent innovation, but to help people affected get access to the new innovative economy, whether through education or other means.

Rubio was dismissive of the potential for worker-owned cooperative platforms to compete with other startups, saying, “I don’t think you’re going to get innovation that way…people aren’t driven to do it if they don’t see the opportunity to make money.”

Finally, when asked by Rasiej whether he would continue to support the U.S. Digital Service if he were elected president, Rubio said, “If it proves that it’s something that is effective and that it can attract the brightest minds to improve how government works, then that’s something we should definitely continue.”

future of work Sharing Economy



Of the witnesses, only one pointed out that lumping these companies and issues together as the “sharing economy” was a mischaracterization and a problem.

Yesterday, as part of the ongoing “Disrupter Series,” the House Commerce, Manufacturing, and Trade Subcommittee held a hearing on the “sharing economy” entitled “How Sharing is Faring: Growth and Adjustment in the Sharing Economy,” although it was evidently later retitled “How the Sharing Economy Creates Jobs, Benefits Consumers, and Raises Policy Questions.”

Witnesses included a vice president of Intuit, a personal finance software company, an assistant vice president of Property Casualty Insurers, a driver-partner with Uber, the chief economist at Thumbtack, an online marketplace for specialized services, the president of the Internet Association, a trade association representing Airbnb, Intuit, Lyft, Uber, and others, and the co-director of the Center for Economic and Policy Research.

Of the witnesses, only one, Jon Lieber, the chief economist at Thumbtack, pointed out that lumping these companies and issues together as the “sharing economy” was a mischaracterization and a problem.

Lieber said:

A quick note on terminology – because these services are essentially connecting people to other people, they have attracted a variety of ever-changing terms to describe them. One popular term – the “sharing economy” – is particularly inapt due to the fact that the one feature each of these services has in common is that money is being exchanged for a service. There is no actual “sharing” in the sense of which we learned about in preschool. The gig-economy, 1099-economy, collaborative consumption, peer-to-peer, on-demand… these terms confuse the issue of what is actually happening with the changes we are seeing in how people are turning their time and effort into money.

He went on to explain why this has policy implications:

Being precise in how we talk about these issues is important because the differences in the business models raise different sets of policy considerations. To take two prominent examples, Uber and Airbnb have both figured out how to take underutilized resources, private cars and private dwellings, and create productive assets out of them by enabling people to “share” them with others for a fee. But saying they are both part of the same sector totally obscures the radically different policy issues raised by both. Airbnb doesn’t have the labor issues that Uber does, and Uber doesn’t have the zoning and other issues that Airbnb does.

In spite of these points, it seems likely that the tyranny of the phrase “sharing economy” will continue, since statements by other witnesses and from the Energy and Commerce Committee use the phrase without question or air quotes.


Michael Beckerman answers some follow up questions.

Michael Beckerman answers some follow up questions.

“These companies have an extraordinary story to tell,” said Michael Beckerman, the president of The Internet Association. “Their story is about job creation, economic growth, opportunity, and life changing flexibility.” His breathless testimony invoked the metaphor of the “tale of two cities” to describe the difference between states and cities that have tried to regulate new companies (“growth is stifled, and opportunities are lost”), and those that have not (“consumers and the local economy have seen job creation and growth”).

Beckerman also made an interesting clarification about the nature of the “sharing economy” platforms he represents:

But first, I’d like to put the sharing economy in the proper macroeconomic context. Sidecar, Uber, and Lyft are neither taxi companies nor transportation companies. They are technology platforms connecting supply and demand. Likewise, Airbnb is not a hotel or lodging company. It is a technology platform that connects supply and demand. In 1980, for example, if you wanted a ride to the airport, you might pick up the Yellow Pages and look up a phone number for a car service, then call to arrange a pickup. In that pre-Internet age, the Yellow Pages served a similar function that Lyft and Uber do today connecting supply (the driver) with demand (the rider).

Whatever Uber and Airbnb are, they are not merely the Yellow Pages.

Job growth and creation were front and center, and for the most part the “sharing economy” was presented as being unquestionably good in this area. In the background memo sent to the subcommittee members before the hearing, a section on “Observed Benefits” cited the “new income opportunities.”

“The reasons for seeking freelance work or renters vary widely,” the memo reads, “and individual success stories come in myriad forms, but it is clear that a significant number of Americans are taking advantage: one survey finds that about 34 percent are freelancing, and another report projects 40 percent will be “contingent” workers by 2020.”

Note the positive-sounding phrase “taking advantage,” when some cases must also be “falling back on” or “resorting to.”

Representing Uber driver-partners, Luceele Smith testified to the benefits of working for the company, praising the flexibility: “I have worked in traditional jobs before, but there’s nothing else out there where you can set your own schedule and set your own goals. Sometimes drivers ask me, ‘how much do you make?’ I tell them, ‘you can make as much as you want.’”

Reading through the testimony—of all the witnesses, not just Luceele Smith—it’s interesting to see how easily the benefits of self-employment and the “sharing economy” are conflated as one and the same.

David McCabe reported for The Hill that the questions that followed split along partisan lines, with Republicans expressing concern that regulation would hurt job creation and stifle innovation and Democrats raising questions about worker protections and rights, as well as the safety of consumer data.

McCabe writes that the “hearing represents the first move by Republican lawmakers to exert their authority over the issues associated with the on-demand economy,” and points out that Republicans in Congress are playing catch-up with the GOP contestants in the presidential primary in this regard.

The voice of caution in the proceedings was Dean Baker, the co-director of the Center for Economic and Policy Research, who Politico identified as the “Democratic witness.”

He outlined a litany of risks and issues that arise from the so-called sharing economy, and his testimony should be required reading on the subject. The four categories of regulatory issues Baker identifies are: labor regulation; consumer protection regulation; property rights; and rules prohibiting discrimination in the provision of services—an issue which had received little to no attention from others.