New Report Finds Majority of Cities Open to Partnerships with Sharing Economy Companies

Staff Report

Friday, November 3rd, 2017

New National League of Cities research on the innovation economy finds that many cities across the country are embracing sharing economy companies and new technologies like drones and smart city applications. The national survey, "Cities and the Innovation Economy: Perceptions of Local Leaders," shows that 78 percent of cities are broadly supportive of sharing economy growth, 42 percent of cities are using or considering using drones in municipal operations and 66 percent of cities have invested in some type of smart city technology.

"City leaders are eager to embrace new technologies and services to improve the lives of their residents," said Clarence E. Anthony, CEO and executive director of the National League of Cities. "Cities are where good ideas turn into action. There are no better examples of this than with the growth of the sharing economy in cities and the increased use of smart city technology. But with any new innovation, cities must ensure they are deployed equitably and safely."

The survey finds that 55 percent of cities describe their relationship with companies like Uber, Lyft and Airbnb as good or very good, and 16 percent have entered into a formal partnership. Of those not in a formal partnership with these companies, 79 percent indicated that they were open to forming one. However, while a majority of cities indicate positive sentiments, a third of cities (33 percent) described their relationships with sharing economy companies as "very poor."

"Relationships between cities and sharing economy companies have evolved rapidly in just a few years," said Brooks Rainwater, senior executive and director of the Center for City Solutions at the National League of Cities. "Through formal partnerships, cities are starting to collect tax revenue, share some data and solidify coordination with local transit services. However, opportunities abound to improve and expand these relationships. Cities make the sharing economy work, and city leaders have a vested interest in ensuring these relationships ultimately meet the needs of their communities."

Other key findings from the report include:

  • More than half of cities have not acted to regulate the sharing economy. Fifty-three percent of local officials reported that their local government imposed no regulation on the sharing economy. At the same time, 30 percent of local elected officials indicated that their city had imposed light regulation or a partial ban on the sharing economy, compared to 6 percent in 2015.

  • Public safety remains a top concern surrounding ridesharing and homesharing. Sixty percent of local officials identified public safety as a top concern with ridesharing, while 57 percent of local officials indicated it was a top concern with homesharing. This is consistent with 2015 survey results.

  • The majority of city residents have mixed or favorable feelings toward the sharing economy. Thirty-nine percent of local officials indicated that sharing economy companies are viewed favorably by residents, while 51 percent reported their residents' sentiments are mixed.