 Aloha and welcome to Ehana Kako. We're here every week on the Think Tech Hawaii broadcast network. I'm Kili Ikeena, president of the Grassroot Institute. Well, there's a revolution taking place amongst us, and it's transforming our economy. But it's a quiet revolution, and frankly, it's been going on since the dawn of man. It's the sharing economy. Now, what exactly is a sharing economy? To some, it means Uber and Lyft, ride sharing. But it's a much broader concept than that. And today, we have an expert who's been studying the sharing economy and advocating for it for quite a while. He used to be with the Manhattan Institute, but now he's with the Foundation for Government Accountability. His name is Jared Meyer. Jared, welcome to the program. Thanks for joining us. Hey, thanks for that. In fact, we're broadcasting you all the way from what state? I'm in D.C. right now. There you are, Washington, D.C., and we had a good meeting together there. Quite recently, talking about the sharing economy. Jared, when we talk about the sharing economy, help us define exactly what we're talking about. Well, I think to understand the sharing economy, you need to look past the popular companies that a lot of people use, Uber and Airbnb. While those are definitely parts of the sharing economy, it extends to nearly everything that we touch today. And why I say this is the same trends that make it possible for you to call a car from your smartphone are allowing millions of people to work independently and work for themselves all across the economy. So when we have technological progress through the Internet where we can connect easier than ever before, we're seeing those trends extend to the whole economy, and I think that's why people are talking about the sharing economy. Now, there has been some debate. There's no denying that there's some controversy over the sharing economy and vested interests in some cases find it a very nervous thing that work is being democratized so much. But a recent study done by one of these vested interests showed that the sharing economy is actually shrinking. They tried to show by looking at the riderships as well as the actual workers for companies like Uber and Lyft that the sharing economy is going down in terms of its proportion in the economy. But from what you say, I would suspect otherwise. What do you find is the case? Yeah, so it's true that if you look at a select few companies, their growth has slowed down, especially on what's known as capital platforms like Airbnb or eBay where you're selling physical goods. But that's taking a very narrow view. The sharing economy, as I said, isn't just about a few companies, but rather a better way to measure it is the amount of people who are working as independent contractors, those 1099 incomes, where you can work for yourself. Why this has always existed, we've seen an explosion in independent contractor status since the 1990s, really when we've had connection over the internet. A story I like to use is my mom, she would make mittens out of old sweaters that she'd buy at garage sales. And she'd sell them at craft shows around Christmas because, you know, here in D.C., it gets pretty cold in the winter, unlike in Hawaii. But what we saw was it was difficult for her to build up her business and sell her mittens. You can only sell so many in a craft show. But now, today, she could hop online to one of the hundreds of services, Etsy, eBay, and sell her mittens to theoretically anyone in the world. This was simply not possible just a decade ago, and that's the kind of thing we're seeing with the growth and how the sharing economy, I would argue, is expanding at a faster and faster rate. So we started to talk about the sharing economy in the past several years, and then on ride-sharing companies like Uber and Lyft, as well as home-sharing companies that facilitated people to rent out a room and so forth, such as Airbnb. But you're saying independent contractors. You gave an example of your grandmother. What are some other examples of common sharing of work today? Well, I think an example I like to use is graphic designers. So let's say Grassroot Institute in the past wanted to make a new logo. They might have brought on a graphic designer full-time, even if they only had maybe 20 hours of work a week for them, because it'd simply be too expensive to go out and find a new person every time you wanted a new tweet to your logo or a new report was coming out and you needed it formatted. But now, rather than hiring that one graphic designer full-time, what companies can do is contract out a lot of this work to professionals who are able to work on that one skill full-time. And this is great for companies. It's more efficient, but it's really great for workers where they can focus on what they're great at, hone their skills, and really be their own boss. And that's what a lot of this is about. We're moving away from the structure where everyone has a boss, everyone punches a time card, and people view that you have to join a union to have any power to one where work is now flexible, individualized and mobile. It's really a way for people to follow through on all those entrepreneurial dreams that they have. Well, in many ways, the sharing economy, while it seems new to us in our way of talking about work today, is actually something very, very old. In fact, it's universal as well. I'm thinking of the Hong Kong experience. Hong Kong 100 years ago was just bustling with people who were bartering and who were sharing in terms of their labor and so forth, and with low levels of regulation, it just turned into a mecca for business. Do you think that there is a relationship between low levels of regulation and the flourishing of the sharing economy? Undoubtedly. If you're looking at the sharing economy, one of the reasons it was able to grow so fast is because the United States specifically put a very light regulatory environment on the Internet. And that's why we've seen the massive growth to where we have computers that are better than any computer that existed just two decades ago walking around in our pockets. This was the innovation we saw because of a light regulatory touch. But what you're seeing now is that when this innovation and the Internet starts to interact with the real world, like with ride sharing or home sharing or disrupting business models or labor regulations or labor relationships, you're seeing pushback from entrenched interests and from regulators because now the Internet's butting up against regulations that, let's say, were written in the 1930s like much of our labor law or a lot of the law's governing taxis, which Uber has been going up against for a few years now. So you're seeing that regulations starting to catch up to these entrepreneurs who before had just run out leaps and bounds ahead of where any regulator thought the economy was going to go. Well, let's take a look at one of these industries, in particular the ride-sharing industry. On a very simple pass, it's all about somebody who has extra space in their car and some extra time making some extra money. It's a transaction fundamentally between two people. But regulators and those who are protecting some of the taxi industries say that there needs to be greater regulation for the sake of safety. How do we determine what level of regulation is appropriate for a butting industry or for any industries whatsoever? I think before I answer that, I want to talk about what's not appropriate for regulation and that's taking these old antiquated systems that may be made sense in, again, the 1930s and applying it to new technology. That's what you see regulators doing time and time again. So what I would like to see is rather than, let's say, leveling the playing field by bringing up the regulations on new technologies, why don't we just bring down all the pointless antiquated regulations that hold back taxis from fully competing? So I would say when we're looking at regulation, we should think, who's really being protected? Is it the public that's going to be safer with this regulation? Or is it about protecting an old way of doing things? So the best way to look at this is innovators should be able to be free to change business models until they actually harm someone. We don't want to just listen to fear-mongering and all these other scare tactics that a lot of entrenched interest will use or else we're not going to progress as an economy at all. Now, you talk about harm being brought to people and you're talking about protecting people after some level of harm has occurred, presuming, of course, that we have laws that are applicable. But don't most regulators and don't most licenses of industries try to protect people before the occurrence of any harm from business activity? Well, if there was something where it would be a clear case of leading to harm, I could see an argument for regulators. But when we're talking about ride-sharing specifically, I think what we need to do is look at the existing option that was out there before, taxis. And taxis are much more dangerous than ride-sharing. Look at the data. Believe it or not, being a taxi driver means that you're twice as likely to be murdered while on the job as a police officer. Another very dangerous occupation. And if you think about it, this makes perfect sense. For one, taxi rides are completely anonymous. You have no idea who's getting into your car. And secondly, the drivers carry lots of cash. It's really the perfect place to commit a crime. On the other hand, we can look at ride-sharing where identities are verified before the trip. The companies track both parties throughout the trip and you can easily complain after the trip if something went wrong. I mean, seriously, if you commit a crime in an Uber, you must want to get caught because you are going to get caught. So this is one way to look at it where if something goes wrong in, let's say, an Uber or a Lyft car, it's great that now we can hold people accountable. But beforehand, with taxis, I know in New York City, the police commissioner actually advised women against taking taxis by themselves because taxi drivers are the number one cause of sexual assault by strangers in New York City. So whenever you hear a scare tactic or some fear-mongering stories about ride-sharing, regulators have to be part and look at the existing option. We're never going to be 100% safe. We've made a lot of improvements from technology in making it safer and giving us more options. Well, you mentioned scare tactics or fear-mongering. We do, from time to time, see in the news stories about people who take ride-share cars and something disastrous happens to them. They're taken advantage of by the driver. How does the person in the public sort this through and come to the correct analysis or assessment of how safe ride-sharing is compared to taxis? Is it really a matter of data that's out there? I think it is. An additional benefit of ride-sharing in many cities, there simply aren't enough taxis to take care of demand that let's say are closed or on a holiday like New Year's Eve. So what we've seen and data has proven this is that after ride-sharing enters a city, drunk driving arrests and fatalities both drop very drastically. And this is common sense. When people have more options, they're going to make better choices. So taking away this option through excessive regulation or even limiting the availability of different ride-sharing services, that's going to lead to more people being harmed. I think policymakers, if they want to, they can make a very, very strong case that ride-sharing is not only as safe as taxis and the existing options, but it's safer. It helps public safety. Now there are a good number of online services that match people who want to provide labor or skilled work in exchange for people who want to buy it. And you can find someone online to fix your faucet. You can find someone to help you get a good hairdo, almost anything that you need whatsoever. And this has ruffled the feathers of those protecting certain industries with licensing. How do some of these concepts... Well, how do you respond to some of the criticisms that are raised? Well, I think when you hear criticisms of the new economy, where people can, let's say, go on Yelp or go on Google reviews to find out where they want to eat or get their hair cut, what they're saying is that consumers aren't being protected because in a lot of these new business models, regulation that was written decades ago doesn't apply. Well, I like to point out that government isn't the only one who can regulate. Now, because of the increased access to information that consumers have, they're more able than ever before to hold companies accountable. I'm by no way saying that businesses will regulate themselves, but what I am arguing is that consumers, empowered with all the information that today's technology gives us, they can hold companies accountable. And I always joke, you know, social media, it is like word of mouth on steroids. If you had a bad experience at, let's say, an airline or a hotel and you start tweeting about it or posting about it on Facebook, I guarantee you'll get a response from that service provider. Whereas a few decades ago, good luck trying to get their attention using a call-in line or something like that. So I think what we're seeing now is a fundamental shift in how consumers are able to hold businesses accountable and now we need regulators to update their minds and realize they don't have to be the ones always stepping in to provide consumers some level of protection. Well, Jared, we're going to take a short break now and after that I'd like to explore a little bit more with you because the free market helps to ensure what regulation really can't ensure in terms of quality assurance and safety and so forth. Thank you for being with us. Just hold on for a moment. I'll say to the audience, we're listening to Jared Meyer who is with the Foundation for Government Accountability in Washington, D.C. and we're talking about the sharing economy. I'm Keeley Akina with Grassroot Institute and we'll be right back on the Think Tech Hawaii Broadcast Network after this short message. Don't go away. Hi, I'm Chris Leitham with The Economy and You and I'd like to invite you each week to come watch my show each Wednesday at 3 p.m. I pity the fool who ain't watching this show at 12 o'clock on Friday afternoon. Stan, the Energyman, watch it. I'm Jay Fiedel and with Ray Starling, I host Hawaii, the State of Clean Energy, 4 o'clock every Wednesday, the Hawaii Energy Policy Forum, making discovery of what's going on in energy in this community. Ray, what do you think? We've got a great group of shows coming up, finishing out this year and starting next year. Dean Nishida has been with us today. He's the new consumer advocate and he has told us a lot, but he's got a lot more to tell. So we're going to have him back and others like him in future shows. And Dean, how much of that do you agree with? There's a lot to be said and I'm interested in seeing some of your other shows. Okay, we'll be back. 4 o'clock every Wednesday here on Think Tech Hawaii. Welcome back to the final segment of today's Ehana Kako broadcast on the Think Tech Hawaii broadcast network. Ehana Kako, that means let's work together. At the Grassroot Institute, we like to say it's time to work together for a better economy, government and society. And that's what people are doing in the sharing economy, which is such an important and vibrant force for us today. It's important to understand that the sharing economy not only expands the free market by putting together people who want to provide services and work with people who want them, but it also provides free market solutions to knowing what the quality of services is. And that's what we were talking about with Jared Meyer from the Foundation for Government Accountability. Jared, going back to that last topic we ended on today, you are absolutely right. It is far easier to find the kind of restaurant you want or if you're looking for a hotel to be able to tell what kind of experience you'll have because so many people are putting information out there in social media with their experiences and so forth. It kind of reminds me of something my daughter said around the dinner table once when we were watching television about restaurant inspectors and the shortage of restaurant inspectors and the bureaucracy in getting a restaurant certified and so forth. And she said, Daddy, why do we need restaurant inspectors? If the food kills people, people will just stop going there and to some extent the spreading of that kind of knowledge is intuitive to a child, but that's what happens every time we use a service like Yelp or Expedia and so forth. What are some of the broader considerations here in terms of what's happening in the digital world? What's happening in terms of democracy as the free market expands through the sharing market? Well, I think one of the coolest things we're seeing is that services that were truly a luxury for the 1% just a few years ago are now democratized and people of all income levels can enjoy them. Uber's an easy example. I mean, hiring a black car that'll take you wherever you want to go and come pick you up at your house, that was not a service most people could have. And I lived in New York for a few years before this and I can tell you before Uber started when I was out in Queens in the outer borough, I never saw a taxi just cruising around on the street. But what I did, I was able to get ahold of Uber's ride data for an entire year and as Uber grew, its fastest growth was in those low income outer borough neighborhoods that I was living in. And what this shows is that when people didn't have options before and now have access to affordable, convenient, transportation in this case, they're going to take advantage of it. But yet when you have policymakers like in New York City, the mayor, Bill de Blasio, he tried to limit Uber's growth and Lyft's growth. But he was saying that it was because of congestion in downtown and Midtown Manhattan, which was proven to not be the case. But anyways, even if it was putting the needs of, let's say, pretty wealthy New Yorkers who had jobs in the financial district or Midtown, he was putting their needs above those low income families out in the outer boroughs who truly needed another way to get around. That's fascinating. Yes, you know, Jared, that is fascinating, but I want to give a note to our viewers that we're having a few broadcast difficulties and you'll fade in and out. And that's simply because of the internet connection. We're communicating with you through Skype all the way to Washington, D.C. Now, Jared, when you talked about New York City, you talked about the very wealthy and the very poor. And in some ways, some have conceived of the sharing economy as something that yuppies and millennials can take advantage of using new technologies. But in a very real way, the sharing economy provides new possibilities and opportunities for the poor. And you've done a little bit of research on that. Yeah, I think obviously millennials benefit from this. They love the services. You can't find one who doesn't use it. But also, I would say people who are retired, they benefit from the sharing economy immensely. Not only do they benefit as consumers who can go and now get these services delivered to them or have more mobility and freedom because of being able to get around in other ways, but they can also work when they're retired. It's something about working when you want on your own terms. You're truly your own boss in the sharing economy. And we see this in certain platforms like Uber and Lyft, for example. Half of Uber drivers work with the company for under 10 hours a week, and 80% of Lyft drivers work under 15 hours a week. This is because they either have other jobs or maybe they only want a part-time gig to go on. But the best part of the sharing economy is people can use this technology for whatever means they need. They can make it fit into their life, not having to try to make their life fit around work. Tell us a little bit more about your research you did in one of our major urban centers, New York City, with respect to some of the ride-sharing going on there. Yeah, the main thing is that as ride-sharing expanded, it expanded the fastest in those low-income communities that are away from downtown and midtown Manhattan. So it's something that policymakers need to keep in mind when they're trying to push out the sharing economy. They're taking away an option to not only get around when it comes to Uber, but also earn money for these workers. A lot of the workers are doing it so that they can make their rent or pay the bills they need to. And speaking of another sharing economy company with rent, Airbnb is a way for people to stay and afford those sky-high rents that are going on in cities all over the country. So when you can turn your unused room and turn that into money, that's something that should be welcome. This is what economists love. It's about being more efficient, putting what's known as debt capital to productive use, and it really empowers you to turn your assets into industry. In your work in the public policy think tank world, you've helped individuals fight against the growing encroachment of regulation upon the shared economy or the sharing economy. Do you have any war stories there to tell us? Quite a few. It's amazing what almost every state has tried at some point to limit Uber in one way or another. Right outside the Beltway in Maryland, now Uber and Lyft might be leaving because the state is going to require fingerprint background checks, which I think policymakers have been watching a little too much CSI because they think fingerprint checks are just this catch-all, perfect way to ensure compliance. But what it turns out is this is a way that really discriminates against a lot of people. Because while police departments are great at fingerprinting people who get arrested, they don't keep these records up to date. So we get a lot of false positives when running these background checks. And also, surprisingly, in Maryland's case, the fingerprint system they're using doesn't even catch DUIs or aggressive driving convictions if they happen out of state. So this is something that it could lead to people being less safe. But what you have is taxis who have been fingerprinted for decades. They want, again, that same regulation applied to the new technology, where I just wish policymakers would look at how fingerprint background checks really don't work and are just a hindrance and allow taxis to then use the name-based, more thorough and faster and accurate background checks that the ride-sharing companies use. So it's all about pretty much everywhere you go, at some point or another, there were entrenched interests fighting back against the sharing economy. On a very practical level for our viewers today, how does one dive into the sharing economy? Suppose somebody goes to a typical eight-hour-a-day job, isn't making the level of income that they'd like to make, which is really virtually everybody here in Hawaii who's watching this and perhaps across the world. How do you get involved? What are some first steps? How would you advise somebody going about it? Well, I would say do your research. Figure out the skill or the asset you have, and maybe your asset's just time. You can do something that's maybe a lower-skilled job that you can get right into just if you have the extra time. But also you can use services. Thumbtack is one of them for highly skilled professionals where you can go and make a good amount of money working at your craft, whether that's, let's say, a personal trainer, a personal chef, an interior designer, like we mentioned. But also there's other things like Mechanical Turk or TaskRabbit or Postmates. All these other services that connect service or good providers with end users. And the easiest example to use is just Craigslist and eBay. Craigslist, especially, is an early example of the same technological trends that made today's sharing economy possible. It was about connecting two people through a middle platform. And so if people want to get into this, I would say look at what skills or resources you have and think about how much time you want to devote to it. Then check out how a platform works best for your lifestyle. But the great thing is you can work one hour a week or 50 hours a week. It's completely up to you when you're an independent contractor It sounds as if we're talking about a totally new way of looking at works and jobs. And I can't help but wince a bit when I think of the way our government typically approaches employment. Government programs set about to create jobs and then to fit people into those jobs. But we're actually looking at a different direction. If jobs don't create work, it seems that in the sharing economy work creates jobs. So what do you... Yes, go ahead. Oh, I'm going to say you lay out absolutely perfectly. Yet our government tends to think especially when you're looking at let's say our welfare systems, it's that you need to rely on an employer in order to be able to start. This is about overlooking much more than just our employment law but also our government programs when it comes to government assistance. I mean, when people can go out now and start earning money on their own, we should switch these programs and rely on just government independence to really government assistance to help you figure out how to use these services, how to advantage the new economy and maybe subsidize the wages you're earning when you're not making that much. But it's a complete big thinking of the New Deal style of welfare which is what we continue to be stuck with. That's right. In a final minute now, Jared, tell me the vision of the future. Where is work going in light of the sharing economy? Well, it's going towards work. It's much more individualized. It's going to be very mobile and the key is flexible. And why I'm excited is this is something that especially young workers want. Two-thirds want to work for themselves. Yet surprisingly, less than 4% of businesses are even partially owned by someone under the age of 30. So millennials have these entrepreneurial dreams that they're not following through on and the trends that make it possible for you to call it Uber from your smartphone are going to allow them to fill the gap. Well, it sounds very promising both for the economy and for democracy. Jared, thank you very much for being with us today. Hey, thank you for having me. My guest today from Washington, D.C. is Jared Meyer with the Foundation for Government Accountability. He's part of a network of think tanks doing good work across the nation of which the Grassroot Institute is part. And we'll be back again next week on Ehonokakko Let's Work Together talking more about issues that matter to you. Thank you very much.