The explosive growth of the Sharing Economy has enabled thousands of people all over the world to share their car, home, workspace, skills, and more everyday. This behavior represents a shift in the way that people work and live. It has also started to change the way people think about ownership.

With the Sharing Economy, city living is more accessible to all. Services flourish in a city like New York because there is a high density of people in a given area who are interested in and have things to share. The high cost of living in NYC makes access a more attractive option than ownership. The Sharing Economy give residents flexible opportunities to make or save money by getting more efficient use out of their assets. Cities are the epicenter of the movement and key to the success of the Sharing Economy, so we want to keep you informed on the outlook, news, and regulations in various major metropolitan areas.

The Sharing Scene in New York City

In October 2015, the Coral team spent a few weeks living an on-demand lifestyle in New York City. New York is the tourism capital of the US and has a developing technology scene. However, city officials have aimed to squash the Sharing Economy and services that are disrupting transportation and lodging.

As you might imagine, New York City is one of the biggest markets for peer-to-peer platforms. For example, despite the arcane city and state laws restricting short term rentals, thousands of listings are still available for rent on home-sharing platforms like Airbnb, HomeAway and Flipkey.

grubhub

During our NYC stint, you could walk into an apartment complex and pretty much guarantee that there were other tourists renting out someone’s space or getting picked up by Uber to get around town. On-demand services like GrubHub and Seamless had creative advertisements all over the inside of subway cars, and Lyft had ads all over Times Square.

Photo Credit: http://www.fuhleeshuh.com/blog/?currentPage=4

Ride-sharing

The iconic New York taxi industry is not happy with the impact ride-sharing has had on their business. “The taxis collected $981 million through June of this year, a 7% drop compared with the $1.06 billion raked in over the same period last year. In real numbers, each cab brought in 9% less on average due to an increased number of taxi medallions and stiffer competition.” [1]

Also, the value of taxi medallions has dropped significantly, from $1.3m to between $600,000 and $900,000.1 The diminishing value of the taxi medallion has caused companies like the largest single owner of medallions, Gene Friedman of Taxi Club Limited, to file for bankruptcy. [2]

One major concern city officials have is traffic congestion. For this reason, Mayor Bill de Blasio carefully controls the number of taxi cabs on the road and wanted to do the same for Uber. However, the fear that ride-sharing will gridlock the city is not very well researched or understood. An analysis performed by FiveThirtyEight on the number of pickups by Uber in Manhattan showed that Uber has not caused a net increase in the number of pickups, and is replacing cabs in the center of the city and supplementing them in the outer boroughs. [2] Moreover, the taxicab industry holds some of Mayor de Blasio’s most prolific campaign contributors leading people to “think this is less about traffic congestion than it is about political contributions.” Luckily, the legislation to cap Uber’s growth in NYC was not passed, rather the city announced the commencement of a study on ride-sharing and its effects on traffic patterns and more.

deblasio

Uber put a “de Blasio” tab to show riders what it would be like is the new regulations went through. Photo credit: http://money.cnn.com/2015/07/20/news/companies/uber-new-york-city-de-blasio/

It is a complicated issue, but it doesn’t look like Uber, Lyft, or any of the other ride-sharing apps are going anywhere. It may be best to classify ride-sharing regulation in NYC as pending, but we can expect to see some progress towards the closing of the study in September 2016. Otherwise, you won’t see much of a difference in your ride-sharing experience.

Homesharing

saveairbn

Photo Credit: https://www.facebook.com/airbnbnyc

The Big Apple is no stranger to tourism and Airbnb with thousands of listings available all over the city. To date there are over 30,484 short-term rental listings in New York City. Opponents of short-term rentals, like affordable housing advocates, the hotel industry, and labor unions, argue that commercial hosts on Airbnb (greedy landlords) are turning homes they do not live in into illegal hotels. Also, they believe home-sharing is to blame for higher rent prices and less affordable housing.

Currently, New York has banned renting an entire apartments for less than 30 days to combat abusers of the Airbnb platform and ensure more housing options.

Last year, the New York state Attorney General reported that 75% of all listings in NYC over a four year period were illegal and have been evading millions of dollars in hotel taxes. [4] The hotel industry argues that Airbnb dupes local housing laws and hotel restrictions, and takes a bite into their profit.

However, earlier in December, Airbnb released more data on its NYC community showing that over 75% are hosting legally and is expected to increase to 93% in 2016, and is responsible for an influx of economic activity in many neighborhoods. [4]

With hefty new fines and more home inspectors, city officials hope to tame home-sharing and protect affordable housing.

For more information on NYC Airbnb Regulation click here and here.

What to Expect

In both ride-sharing and home-sharing, it seems like NYC recognizes that it is in their best interest to partner with and welcome the Sharing Economy and its pioneers. At Coral, we are optimistic about the Sharing Economy in NYC and believe that as the city gains insight into the effects of peer-to-peer platforms they will more effectively regulate rather than ban entirely.

As Airbnb begins to play nice by sharing more data (more here) and the ride-sharing study comes to a close, you can expect that the decisions made by NYC officials will have a huge impact on regulation in other US cities. Stay tuned!


  • Credit for first image: http://www.npr.org/sections/alltechconsidered/2013/11/11/244538728/this-week-exploring-the-sharing-economy
  1. http://www.businessinsider.com/taxi-trips-down-10-percent-new-york-uber-2015-8
  2. http://fivethirtyeight.com/features/uber-is-taking-millions-of-manhattan-rides-away-from-taxis/
  3. http://www.nytimes.com/2015/07/17/nyregion/city-hall-and-uber-clash-in-struggle-over-new-york-streets.html?_r=0
  4. http://www.nytimes.com/2015/12/02/technology/airbnb-releases-trove-of-new-york-city-home-sharing-data.html
  5. http://www.nydailynews.com/opinion/editorial-show-time-airbnb-article-1.2409408

The Coral Team