Laws? What laws? Sharing startups shrug off backlash and forge full-steam ahead
The sharing economy is full of startups competing against each other to connect you with rides, places to stay, and people to perform your tasks, but in some cities, they’re fighting for the right to exist at all.
Even California, the most tech-friendly state in the country, has spent years debating how to regulate homegrown companies like Airbnb and Lyft. State officials only last year developed rules for ride-sharing, and many Airbnb hosts in San Francisco are violating the city’s law against short-term rentals.
But rather than taking a wait-and-see approach, sharing startups and their users are barreling ahead, breaking old rules and lobbying for new ones—and making some enemies in the process. Politicians, protesters, and sharing proponents gathered this week in San Francisco to hammer out some of those legal issues at the first Share: Catalyzing the Sharing Economy conference. Nothing was resolved, but everyone involved is gearing up for a national fight.
“Calling for war”
Airbnb was born in San Francisco six years ago, but has been brazenly violating the city’s ban on short-term rentals for its entire existence. City Supervisor David Chiu recently introduced legislation to legalize Airbnb, but added a few restrictions: rentals would be limited to 90 days per year and hosts would be required to register with the city.
The legislation has a few opponents, like David Campos, Chiu’s opponent in a race for State Assembly.
Chiu told the crowd of Share attendees that Campos and his supporters “are calling for war on you” and that he just wants to “make sure that everyone is playing on a level playing field.” Campos has said that Chiu allowed Airbnb to participate too much in creating the legislation that would regulate it.
Other sharing companies are closely following Airbnb’s issues in San Francisco, not to mention the company’s fight for its life in New York, but so are hosts who use the platform to rent out their spaces. Many of them face fines and eviction for violating city laws.
“This legislation that David Chiu has proposed that in the next few months will go to the Board of Supervisors is crucial legislation that the whole country will watch,” well-known angel investor Ron Conway said during a Wednesday Share panel. “This would not pass if it went to a vote today.”
Chiu’s proposal gets Airbnb a little closer to legalization. In New York, the company is still battling the state attorney general’s subpoena for user data.
Lyft's feel-good focus
Like Airbnb, Lyft has faced pushback from city officials. The fist-bumping ride-sharing service rolled out in 24 new cities simultaneously last month, and a few of those cities were surprised to see pink mustaches pop up on their streets. Kansas City, Missouri, greeted the company with a legal smackdown.
Lyft doesn’t always set up shop without permission, said Emily Castor, the company’s director of community engagement. She handles outreach in cities where Lyft is planning to expand.
“We wait until we see there’s a strong demand for Lyft in new areas before we make a decision about where to expand next,” Castor told me at the Share conference. “Sometimes we’ll launch quickly in a new place and have the opportunity to go in and have conversations with the city. Especially launching 24 cities in one day, we have to try to get to as many people as quickly as we can, but sometimes we can’t begin those conversations until we’re there.”
The company, along with other ride-sharing services like Uber and Sidecar, has lobbied for legislation in California, where the rules for ride-sharing are pretty favorable, but watched as other cities issue tough restrictions on how its drivers can operate. In Seattle, ride-sharing companies are forced to limit the number of drivers they have on the road to 150 each after taxi drivers complained that Lyft and the like are flooding streets with cars.
Sharing startups haven’t been warmly welcomed in any market, but have still racked up users aplenty. The question is: How do they convince cities to change the laws to accommodate them and protect the people who use their platforms? The answer seems to be the users themselves, who happen to be constituents that politicians need to appease. Lyft’s Castor sets up community outreach sessions in neighborhoods that lack public transportation or are ignored by cabs to entice new drivers—and new potential passengers.
“We see Lyft as a platform that people can use, by neighbors for neighbors, to improve mobility in areas of cities that have been very underserved by traditional forms of transportation,” Castor said.
If people can turn their cars, which are cash sinkholes, into money-makers, and also help other people get to where they need to go, Castor considers Lyft’s job done.
Other peer-to-peer startups have similarly high-minded mission statements, but it’s clear that good intentions don’t mean much to regulators.