On May 7. Austin voters sided with an Austin City Council ordinance that implements requirements and regulations that ride-hailing services Uber and Lyft strongly opposed and now have to follow. This resulted in Uber and Lyft suspending operations in Austin.
Immediately after the vote, the American-Statesman reported that Mayor Steve Adler said he hoped the companies would sit down and negotiate with the city.
Austin and most U.S. cities are working through how best to regulate and facilitate “shared economy” services – new ways of delivering services via online platforms, driven by technological advances and business model innovation.
Though the sharing economy can benefit local communities, these innovative models are clearly disruptive.
"Shared use" or "crowdsourcing" models have the potential to advance significant improvements in areas like citizen engagement, government innovation and cost efficiencies. In the ongoing debates in city halls and state houses around the country, we are seeing government agencies (including here in Texas) beginning to see real value by tapping into the power of the shared economy. Recent Accenture research found that two-thirds of citizens and public sector leaders agree that greater government engagement in sharing economy activities would improve their ‘view of government’ and ‘overall satisfaction with government’.
For governments, the path to participation in the sharing economy is not necessarily long or complicated, nor are the barriers high. There are some very good reasons to keep an open mind about the potential for government to engage with and reap benefits for citizens from the disruptive new services.
First, access to hard and soft assets is not contingent on ownership. Accessing existing third-party sharing platforms can provide governments with opportunities to borrow assets and services quickly, easily and affordably.
Engaging with ride-sharing or rental platforms is already improving the efficiency of government fleets, even in cities still grappling with the growth of ride-hailing services. The city of Chicago, for instance, has saved 25 cents per mile by using Zipcar for some of its fleet needs. And, by the end of 2020, New York plans to eliminate 10 percent of its light-duty vehicles in favor of car sharing, with expected savings of up to $5,000 per year, per reduced vehicle.
Car-sharing platforms can also help close gaps in public transportation services without massive government investment, an idea that – according to Accenture’s research – three-quarters of citizens strongly support. Dallas Area Rapid Transit, for example, has developed fruitful partnerships with Uber, Lyft and ZipCar, whereby customers can purchase a DART ticket to and from the station alongside these other services through DART’s mobile GoPass app.
Second, while ownership might not be obsolete, it’s often not the best option for the budget-constrained public sector. Forward-thinking agencies are tapping into sharing platforms to maximize resource use and improve bang for the taxpayers’ buck.
Through MuniRent, dozens of state agencies and local governments are sharing heavy equipment, which is expensive and often underutilized. MuniRent provides these organizations with needed equipment at a lower cost than purchasing or renting, an idea that, according to Accenture’s research, 87 percent of citizens approve.
Similarly, a number of municipalities have listed their unused real estate – including areas in public libraries and other municipal buildings – for rent on an online platform called LiquidSpace, which offers workspaces by the day or hour.
Third, through third-party mobile apps, citizens are providing valuable information that can be used to shape and deliver public services, creating opportunities for innovation and citizen engagement, without government bearing the full burden of data storage and management.
Detroit and other city governments including Houston and New Haven are leveraging the mobile app SeeClickFix for citizens to report non-emergency issues such as road repairs. Review apps such as Yelp can help governments identify possible health and safety violations in the hospitality industry.
The sharing economy is far from being mainstream for governments. According to Accenture’s research, two-fifths of public sector leaders report no engagement with sharing economy services, and fewer than half have indicated an interest in implementation within the next decade.
Austin and other cities are in the early days of understanding and facilitating the disruptive business models at the heart of the sharing economy. But with substantial potential for cost savings and support from many citizens in major cities, the sharing economy is increasingly a fact of life and it makes sense for public policy and regulatory frameworks to evolve with it.
Daniel T. London is group chief executive, Accenture Health & Public Service. Thomas Pettit runs Accenture’s public sector practice in Texas.
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