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Encouraging Innovation, Opportunity, and Flexibility in the Sharing Economy

The Committee on Education and the Workforce, chaired by Rep. Virginia Foxx (R-NC), today held a hearing to examine the sharing economy and consider how it relates to our nation’s workforce policies.

“There is no question that this growing economic sector has improved the American quality of life,” Chairwoman Foxx said. “The sharing economy has also helped start-up businesses get off the ground, and it has created new job opportunities that didn’t exist before. Not everyone is looking for a 9-5 job. More and more people are increasingly drawn to flexible work arrangements, and that’s what attracts them to the sharing economy. They want to be their own boss, control their own schedule, or earn extra cash while pursuing an education.”

Among today’s witnesses was a Connecticut entrepreneur who shared his story of how the sharing economy helped his small business expand.

“For professionals like me, we receive real leads from real customers looking for services in our area,” said Jonathan Johnson, owner of the photography start-up SnapSeat. “We had a plan when we started SnapSeat of growing into a large outfit with multiple photo booths, operating in surrounding cities, and being capable of handling hundreds of clients a year. In just three years, we now have a total of five photo booths and five employees. We’ve served over 600 clients in the last 40 months in three states.”

Johnson testified that the sharing economy has provided flexibility and opportunity for his family, which should be encouraged by federal policies.

“Starting a gig-based business has given me the flexibility to grow my business based on my schedule and be home for my family,” he said. “In today’s rapidly changing world, and in a new American economy and job market, it seems that more people are looking to make ends meet in this ‘gig economy.’ I believe our public policy needs to reflect this with laws that help every person with an idea who is willing to risk their time, talent, and resources to succeed.”

The committee also heard from experts in the field who highlighted the many ways in which the sharing economy positively impacts communities.

“In some communities, policymakers and regulators have embraced new technology, the modern workforce and flexible income, and recognized the consumer benefit from increased competition,” said Michael Beckerman, president and CEO of the Internet Association. “In these communities, which span across all 50 states, local economies have seen massive increases in income opportunities directly as a result of sharing economy platforms.”

At times, this growth and innovation has been undermined by policies designed with traditional business models in mind. “Unfortunately in some other communities, policymakers and regulators have put up roadblocks to consumer choice and competition,” Beckerman said. “Opportunities are lost, competition is stamped out, and growth is stifled.”

“Responding to this ongoing shift requires a fundamental rethinking of how we regulate,” added Dr. Arun Sundararajan, professor of business at the NYU Stern School of Business. "It is important to imagine a regulatory system that works with, rather than against, the platforms of the sharing economy."

Dr. Sundararajan continued, "The ‘sharing economy’ represents the early stages of a very significant digitally-enabled transition that will dramatically reshape the American world of work in the coming decades. Timely and forward-looking workforce and education policy is central to the future competitiveness and stability of the country.”

Chairwoman Foxx echoed this sentiment.

“As the sharing economy continues to grow, we need to make sure outdated federal policies don’t stand in the way,” Chairwoman Foxx said. “Not every answer can or should come from Washington. Innovation outside of Washington is needed to help tackle these challenges. And I have no doubt that the same creative minds behind the sharing economy will rise to the occasion."

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