Articles

Cities Begin to Take Advantage of App-Based Economy

While many places try to regulate or ban sharing-economy companies like Uber and Airbnb, a few are instead working with them to improve their emergency preparedness and transportation options.

by / October 14, 2015
Airbnb advocates rallying outside City Hall in New York City. AP/Bebeto Matthews

State and local governments have had a tumultuous relationship with Uber, Airbnb and other online companies that let people book rides, rooms, and goods and services from people rather than big businesses. Observers have focused a lot of attention on government attempts to control peer-to-peer services, yet some state and local governments are trying to use the sharing economy to their own benefit.

So far, the efforts have been limited. Most recently, Uber announced a partnership with the National Center for Missing and Exploited Children in 180 cities to send Amber Alerts to their drivers. But interesting models have emerged in a couple of other areas.

Emergency Preparedness

Several companies use technology to let people book stays at other people’s houses instead of hotels. The biggest is Airbnb, which is expected to generate more than $850 million in revenue this year and by some estimates is worth more than the Marriott hotel chain. In 2012, when Hurricane Sandy hit the Northeast, some 1,400 Airbnb hosts -- people who rent their rooms to others --  listed their lodgings at no cost for people displaced by the storm. Since then, Airbnb hosts in other cities around the world -- including Toronto, San Diego and Atlanta -- have offered free rentals to displaced people during local emergencies.

In 2014, Portland, Ore., struck up an agreement with Airbnb to help streamline disaster response in an emergency (the city passed legislation allowing short-term rentals). Airbnb now identifies hosts who are willing to help and shares that information with the city. In return, Airbnb waives its service fee to hosts who offer free lodging. The company also trains hosts to prepare for emergencies and uses its app to notify users about possible crises. San Francisco’s Department of Emergency Management has a similar partnership with Airbnb.

Typically during an emergency, the Red Cross provides food and shelter to displaced people and families, and “people will also find shelter on their own, usually at local hotels and motels,” said Dan Douthit, the public information officer for Portland's Bureau of Emergency Management. But available rooms can fill up quickly. “This agreement adds capacity; it isn’t meant to replace what the hospitality business provides,” he said. The hotel industry also lacks Airbnb’s database of hosts, which gives the city a real-time list of the number of lodgings available and where they're located. 

No emergency has happened in the Portland area that's called for Airbnb hosts to help out so far. Douthit believes an earthquake would be a likely scenario, but a flood or major fire could put the agreement into action. 

Transportation

Uber, the ride-booking service, has become popular in most major cities, and at least one local government sees an opportunity to work directly with the company.

Macomb County, Mich., located north of Detroit, has turned to Uber to provide door-to-door transportation for people who receive a summons for jury duty. The pilot project, launched in July, gives each juror an Uber code that covers a $20 ride to the courthouse (which Uber offers the county for free) on the morning of jury duty. County Clerk Carmella Sabaugh said the service gives jurors a safe ride to the courthouse and helps them avoid the hassles of limited parking in the area. 


The Uber app lets people track the location of their driver. (AP)

Local taxicab companies expressed concern about competition from Uber, but none were willing to offer free rides. Uber, which already offers a free ride to first-time customers, agreed to extend the offer to jurors for a trial period when approached by the county. Since 2004, the county has offered jurors free bus rides to the courthouse, but public transportation is limited, making Uber a convenient way for jurors to travel.

Macomb County's pilot is believed to be the first of its kind in the country. Depending on its success, the program could be continued beyond the trial period in Macomb County and expand into other counties in Michigan, Michael White, the general manager for Uber Michigan, told the Detroit Free Press.

Ride-booking services are also helping local governments transport disabled travelers.

In July, Uber launched UberACCESS, a pilot program that adds wheelchair-accessible vehicles to its services in Austin, Texas. Similar programs already operate in Chicago, New York, Philadelphia, Portland and San Diego.

Meanwhile, Seattle passed an ordinance creating a 10-cent surcharge on every ride originating in the city with the several ride booking firms that operate there. The money will be used to help drivers defray the cost of owning and operating a wheelchair-accessible taxi, according to the Shared Use Mobility Center.

It’s too early to tell how successful these arrangements will be for governments. But technology has allowed a market for a need -- in these cases, rooms and rides -- to emerge by using information in an efficient and user-friendly way. And the sharing economy isn’t limited to lodgings and rides. It makes what is surplus available to those who need it more efficiently than do many markets that government regulates.

This article was originally published on Governing.

Tod Newcombe Senior Editor

With more than 20 years of experience covering state and local government, Tod previously was the editor of Public CIO, e.Republic’s award-winning publication for information technology executives in the public sector. He is now a senior editor for Government Technology and a columnist at Governing magazine.