Upton Wary of Regulating ‘Sharing Economy'

By Alexis Kramer
Sept. 29 — Congress should be wary of imposing stifling regulations on the emerging “sharing economy” sector, according to the chair of the House Energy & Commerce Committee.

Rep. Fred Upton (R-Mich.), in the first of a planned series of hearings on policy issues arising from the sharing economy, said Sept. 29 that Congress needs to recognize the risk of hindering innovation with reactionary regulatory measures.

“At a time when jobs are still hard to find, and balancing the budget is a challenge, we should not risk job creation with hasty calls to regulate,” Upton said.

The “sharing economy” consists of peer-to peer business platforms in various sectors of the economy, in which individuals can share their homes, cars and other private assets for a profit. The sharing economy generated approximately $15 billion in revenues in 2013, and is projected to generate $335 billion by 2025, according to a recent PriceWaterhouseCoopers study.

House representatives and industry representatives at the hearing expressed similar views and said that lawmakers must first consider the benefits of these platforms to both users and the economy — e.g., job flexibility, convenience, increased competition — before deciding to take regulatory action.

Regulation Would Stifle Benefits, Reps Say

Rep. Michael Burgess (R-Texas), chairman of the House Commerce, Manufacturing, and Trade Subcommittee, urged fellow legislators to be skeptical of adding new regulations that would impede innovation and consumer benefits from these technologies.

“The sharing economy is an excellent example of why I fight for smaller government,” Burgess said. “And I for one am more concerned about existing regulations hurting new jobs than I am about the need for new regulations.”
Upton agreed, adding that lawmakers should consider reducing the regulatory burden in industries where new technologies are responding to consumer needs in a safe manner.

Michael Beckerman, chief executive officer at the Internet Association, an association of Internet companies including Uber, AirBnb and Lyft, urged the committee to first weigh the clear benefits to consumers — including lower prices, higher quality services and consumer choice — against any perceived harms. Beckerman asked lawmakers to consider whether complaints lodged against these technologies are “not simply complaints against increased competition.”

“Congress does need to be a little careful not to put too heavy of a hand on this and regulate it too much,” Beckerman said. Sharing platforms are providing opportunities that didn't exist before, he added.

Beckerman said that many sharing economy platforms already self-regulate through customer rating systems, which allow users to provide feedback and rate sellers so that other users know whether they can be trusted before entering into a transaction.

According to Rep. Burgess, “sharing platforms are inherently good at providing reputation feedback loops.”
Rep. Jan Schakowsky (D - Ill.), however, said that the economic changes introduced as a result of these technologies are not always positive. Sharing economy firms seek to hold their users as independent contractors in order to avoid legal liability, and other legally mandated employer obligations such as overtime pay and healthcare.
Sharing economy companies need to meet all existing requirements if they intend to compete with other traditional companies, she said.

To contact the reporter on this story: Alexis Kramer in Washington at akramer@bna.com
To contact the editor responsible for this story: Thomas O'Toole at totoole@bna.com