[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]
THE DISRUPTER SERIES: HOW THE SHARING ECONOMY CREATES JOBS, BENEFITS
CONSUMERS, AND RAISES POLICY QUESTIONS
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON COMMERCE, MANUFACTURING, AND TRADE
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
__________
SEPTEMBER 29, 2015
__________
Serial No. 114-80
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the Committee on Energy and Commerce
energycommerce.house.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
20-105 PDF WASHINGTON : 2016
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COMMITTEE ON ENERGY AND COMMERCE
FRED UPTON, Michigan
Chairman
JOE BARTON, Texas FRANK PALLONE, Jr., New Jersey
Chairman Emeritus Ranking Member
ED WHITFIELD, Kentucky BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois ANNA G. ESHOO, California
JOSEPH R. PITTS, Pennsylvania ELIOT L. ENGEL, New York
GREG WALDEN, Oregon GENE GREEN, Texas
TIM MURPHY, Pennsylvania DIANA DeGETTE, Colorado
MICHAEL C. BURGESS, Texas LOIS CAPPS, California
MARSHA BLACKBURN, Tennessee MICHAEL F. DOYLE, Pennsylvania
Vice Chairman JANICE D. SCHAKOWSKY, Illinois
STEVE SCALISE, Louisiana G.K. BUTTERFIELD, North Carolina
ROBERT E. LATTA, Ohio DORIS O. MATSUI, California
CATHY McMORRIS RODGERS, Washington KATHY CASTOR, Florida
GREGG HARPER, Mississippi JOHN P. SARBANES, Maryland
LEONARD LANCE, New Jersey JERRY McNERNEY, California
BRETT GUTHRIE, Kentucky PETER WELCH, Vermont
PETE OLSON, Texas BEN RAY LUJAN, New Mexico
DAVID B. McKINLEY, West Virginia PAUL TONKO, New York
MIKE POMPEO, Kansas JOHN A. YARMUTH, Kentucky
ADAM KINZINGER, Illinois YVETTE D. CLARKE, New York
H. MORGAN GRIFFITH, Virginia DAVID LOEBSACK, Iowa
GUS M. BILIRAKIS, Florida KURT SCHRADER, Oregon
BILL JOHNSON, Ohio JOSEPH P. KENNEDY, III,
BILLY LONG, Missouri Massachusetts
RENEE L. ELLMERS, North Carolina TONY CARDENAS, California
LARRY BUCSHON, Indiana
BILL FLORES, Texas
SUSAN W. BROOKS, Indiana
MARKWAYNE MULLIN, Oklahoma
RICHARD HUDSON, North Carolina
CHRIS COLLINS, New York
KEVIN CRAMER, North Dakota
_____
Subcommittee on Commerce, Manufacturing, and Trade
MICHAEL C. BURGESS, Texas
Chairman
JANICE D. SCHAKOWSKY, Illinois
LEONARD LANCE, New Jersey Ranking Member
Vice Chairman YVETTE D. CLARKE, New York
MARSHA BLACKBURN, Tennessee JOSEPH P. KENNEDY, III,
GREGG HARPER, Mississippi Massachusetts
BRETT GUTHRIE, Kentucky TONY CARDENAS, California
PETE OLSON, Texas BOBBY L. RUSH, Illinois
MIKE POMPEO, Kansas G.K. BUTTERFIELD, North Carolina
ADAM KINZINGER, Illinois PETER WELCH, Vermont
GUS M. BILIRAKIS, Florida FRANK PALLONE, Jr., New Jersey (ex
SUSAN W. BROOKS, Indiana officio)
MARKWAYNE MULLIN, Oklahoma
FRED UPTON, Michigan (ex officio)
(ii)
C O N T E N T S
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Page
Hon. Michael C. Burgess, a Representative in Congress from the
State of Texas, opening statement.............................. 1
Prepared statement........................................... 2
Hon. Janice D. Schakowsky, a Representative in Congress from the
State of Illinois, opening statement........................... 3
Prepared statement........................................... 4
Hon. Fred Upton, a Representative in Congress from the State of
Michigan, opening statement.................................... 5
Prepared statement........................................... 6
Hon. Frank Pallone, Jr., a Representative in Congress from the
State of New Jersey, opening statement......................... 71
Prepared statement........................................... 72
Witnesses
Luceele Smith, Driver/Partner, Uber Technologies, Inc............ 7
Prepared statement........................................... 9
Michael Beckerman, President and Chief Executive Officer,
Internet Association........................................... 10
Prepared statement........................................... 12
Robert Passmore, Assistant Vice President, Personal Lines,
Property Casualty Insurers Association of America.............. 24
Prepared statement........................................... 26
Dean Baker, Co-Director, Center for Economic and Policy Research. 29
Prepared statement........................................... 31
Alex Chriss, Vice President, QuickBooks Self-Employed Segment,
Intuit, Inc.................................................... 43
Prepared statement........................................... 45
Jonathan Lieber, Chief Ecoomist, Thumbtack, Inc.................. 55
Prepared statement........................................... 57
Submitted Material
Statement of Vaughn Armour of Brooklyn, New York, undated,
submitted by Ms. Schakowsky.................................... 92
Statement of New York Taxi Workers Alliance by Inder Parmar,
September 29, 2015, submitted by Ms. Schakowsky................ 93
Statement of Taxicab, Limousine & Paratransit Association by Mike
Fogarty, President, September 29, 2015, submitted by Ms.
Schakowsky..................................................... 95
Statement of Working Partnership USA of San Jose, California,
undated, submitted by Ms. Schakowsky........................... 103
Statement of American Hotel & Lodging Association, September 29,
2015, submitted by Mr. Burgess................................. 105
Letter of September 28, 2015, from Joseph E. Spinnato, President,
and Vijay Dandapani, Chairman of the Board, Hotel Association
of New York City, to Mr. Burgess and Ms. Schakowsky, submitted
by Mr. Burgess................................................. 108
Statement of Texas Hotel & Lodging Association, September 29,
2015, submitted by Mr. Burgess................................. 122
Statement of National Limousine Association by Gary Buffo,
President, September 29, 2015, submitted by Mr. Burgess........ 124
THE DISRUPTER SERIES: HOW THE SHARING ECONOMY CREATES JOBS, BENEFITS
CONSUMERS, AND RAISES POLICY QUESTIONS
----------
TUESDAY, SEPTEMBER 29, 2015
House of Representatives,
Subcommittee on Commerce, Manufacturing, and Trade,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 10:18 a.m., in
room 2322 of the Rayburn House Office Building, Hon. Michael C.
Burgess (chairman of the subcommittee) presiding.
Members present: Representatives Burgess, Lance, Blackburn,
Harper, Guthrie, Olson, Pompeo, Kinzinger, Bilirakis, Brooks,
Mullin, Upton (ex officio), Schakowsky, Clarke, Kennedy,
Butterfield, Welch, and Pallone (ex officio).
Staff present: James Decker, Policy Coordinator, Commerce,
Manufacturing, and Trade; Andy Duberstein, Deputy Press
Secretary; Graham Dufault, Counsel, Commerce, Manufacturing,
and Trade; Melissa Froelich, Counsel, Commerce, Manufacturing,
and Trade; Paul Nagle, Chief Counsel, Commerce, Manufacturing,
and Trade; Olivia Trusty, Professional Staff Member, Commerce,
Manufacturing, and Trade; Dylan Vorbach, Legislative Clerk;
Michelle Ash, Democratic Chief Counsel, Commerce,
Manufacturing, and Trade; Jeff Carroll, Democratic Staff
Director; Lisa Goldman, Democratic Counsel; Meredith Jones,
Democratic Director of Communications, Member Services, and
Outreach; and Adam Lowenstein, Democratic Policy Analyst.
Mr. Burgess. The Subcommittee on Commerce, Manufacturing,
and Trade will now come to order. The Chair recognizes himself
for 5 minutes for the purpose of an opening statement.
OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF TEXAS
Good morning, and I want to welcome everyone to our hearing
this morning on the sharing economy. We are lucky to be here
this morning to be able to talk about a sector of our economy
that is actually putting people to work.
All of us here on the dais endure the typical Government
skirmishes. We spend a lot of time quibbling over the proper
size and the proper role of the Federal Government, so today it
is refreshing to remind ourselves that the private sector is
often working to solve problems even in spite of us some days.
And we are doing that--and the private sector is doing so in a
way that fosters jobs through innovation.
The opportunities sharing platforms provide are often in
addition to, not necessarily instead of, the streams of income
available through traditional employment sources. The sharing
economy has captured the entrepreneurial spirit of many
Americans already. Those who engage in freelance jobs are
expected to skyrocket to 40 percent of the workforce in the
next 5 years, and almost 8 million will be participating in a
sharing economy.
The sharing economy is an excellent example of why the
fight exists for smaller Government. I want to hear today about
how technology has built in accountability and built in
consumer protections into their platforms, because eventually
we must confront the question of whether and how Congress
responds to these types of firms.
Many suggest no action is warranted, either by Congress or
local regulators, and others are seeking direct and immediate
intervention both at the Federal and the local level. There
should be some limited Government oversight, particularly where
safety is significant, and firms should be thinking about
privacy, firms should be thinking about cybersecurity from the
outset, lest they invite the very type of regulation that they
sought to avoid.
But generally speaking, the sharing economy companies do
face regulations, like most other firms, under the typical
patchwork of Federal and State laws, and I, for one, am more
concerned about existing regulations hurting new jobs than I am
about the need for new regulations. The CEI estimates that the
Federal Government already has stifled progress through
regulation to the tune of almost $2 trillion per year.
Meanwhile, the sharing economy has generated $15 billion in
global revenues in 2013, and is likely to generate $335 billion
annually by the year 2020. We should be highly skeptical of
interventions that take away new conveniences and measurable
benefits for consumers.
Sharing platforms are inherently good, providing reputation
feedback loops. As we look at any disrupter, we should ask
ourselves, is more regulation needed, or is someone just
concerned about change, and worried about change of the status
quo?
I want to thank the witnesses for participating. I look
forward to a lively and informative discussion. I will yield
back my time, and recognize the ranking member of the
subcommittee, Ms. Schakowsky, for 5 minutes for an opening
statement.
[The prepared statement of Mr. Burgess follows:]
Prepared statement of Hon. Michael C. Burgess
Good morning and welcome to our hearing on the sharing
economy. We are lucky to be here this morning to be able to
talk about a sector of the economy actually putting people to
work.
All of us here on the dais endure the typical Government
skirmishes--here in Washington we spend a lot of time quibbling
over the proper size and role of Government.
So it is uniquely refreshing for us to remind ourselves
that the private sector is often working to solve the same
problems we are and doing so in a way that fosters jobs through
innovation.
The opportunities sharing platforms provide are often in
addition to--not necessarily instead of--the streams of income
available through traditional sources.
The sharing economy has captured the entrepreneurial spirit
of many Americans already. Those who engage in freelance jobs
are expected to skyrocket to 40 percent of the workforce in the
next 5 years--about 7.8 million of which will be participating
in the sharing economy.
The sharing economy is an excellent example of why I fight
for smaller Government. And I want to hear about how technology
has built in accountability and consumer protections into the
platform.
Because eventually we must confront the question of whether
and how Congress responds to these types of firms.
Many suggest no action is warranted either by Congress or
local regulators, and others are seeking direct and immediate
intervention from Congress.
There should be some limited Government oversight,
particularly where safety is needed. And firms should be
thinking about privacy and cybersecurity from the outset, lest
they invite the very regulation they would rather avoid. But
generally speaking, the sharing economy companies do face
regulations, like most other firms, under the typical patchwork
of Federal and State laws.
And I for one am more concerned about existing regulations
hurting new jobs than I am about the need for new regulations.
CEI estimates that the Federal Government has already stifled
progress enough through regulation--to the tune of $1.8
trillion per year.
Meanwhile, the sharing economy generated $15 billion in
global revenues in 2013 and will generate $335 billion annually
by 2020.
We should be highly skeptical of interventions that snatch
away new conveniences and measurable benefits for consumers.
Sharing platforms are inherently good at providing reputation
feedback loops.
As we look at any disrupter, we really need to ask is
regulation needed or is someone just scared of a change to the
status quo?
I thank the witnesses for participating and look forward to
a lively and informed discussion.
OPENING STATEMENT OF HON. JANICE D. SCHAKOWSKY, A
REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS
Ms. Schakowsky. Thank you, Mr. Chairman, for holding this
hearing on the sharing, some call gig, economy. This is a topic
absolutely deserving of our attention, discussion, scrutiny.
Over the past few years Americans have begun to interact in
ways we never imagined just a decade, or even less, ago. The
sharing economy is one of the byproducts of technological
change. Today people hail rides, book rooms, hire a contractor,
purchase groceries, at the push of a button. This is the
fastest growing sector in our economy, and while there is
undoubtedly a convenience factor for those engaged with the gig
economy, there are a number of adverse consequences as well.
For many millennials the gig economy model of employment
may be appealing for a time, providing scheduling flexibility
that many young people desire. But for many older workers, who
used to have full time employment, or younger workers, seeking
steady full time work, this transformational change is not
always positive. The model of this economy, where people--there
are people seeking economic predictability and stability,
also--often eliminates benefits, like health care and pensions,
and it means more questions about whether they can make ends
meet, much less save for their children's education, their
parents' elder care, or their own retirement.
The gig economy companies argue that the individuals who
generate earnings through the use of their technology are
independent contractors. They claim only to operate a neutral
technology--technological platform, enabling individuals to
connect. Making that claim may enable gig economy companies to
avoid legal liability for much of what happens as a result of
the use of their platforms, may enable them--enables them to
avoid Social Security contributions, and requirements to
provide overtime pay, Workers' Compensation, and Unemployment
benefits. The workers are atomized, and unable to collectively
bargain in their own interest. And this shift--many work
related risks for employers go to workers. However, these
entities are very often directly involved in almost every
aspect of the transactions that occur by way of their
technology. They maintain standards for users of their apps,
and they have the ability to remove users from their platforms
altogether, often without any mechanisms, by the way, to
challenge their removal.
In June the California Labor Commission found that Uber
drivers are employees, rather than contractors. That
determination, if upheld, would require Uber to provide
reimbursable expenses, Social Security, Workers' Compensation,
and Unemployment Insurance benefits. Many gig economy
businesses do not ensure that their employees met licensing,
tax, and zoning requirements that are in place for the
industries against which those businesses seek to compete. I
believe those companies, and their employees and contractors,
need to meet all existing requirements if they intend to
compete with other entities honoring those standards.
It is also important that liability questions are addressed
by the businesses operating in the gig economy space. Is
additional insurance coverage needed to protect employees or
customers of gig economy businesses? When additional protection
is required, how do gig economy businesses ensure that their
employees and customers are adequately covered?
These gig economy businesses are largely data driven, and
there are few restrictions on how that data is used or
protected. Highly sensitive information, including background
checks, home addresses, credit cards, and bank account
information and travel patterns are often collected by these
businesses. Uber recently changed its privacy policy to allow
the company to ask for location details when users aren't
actively engaging with the app. It also allows Uber access to a
user's contact list. Most Uber users probably have no idea
about these policy changes, which is why greater oversight,
transparency, and communication are needed in this emerging
sector of the economy. All of these issues must be addressed if
we are to ensure that the sharing economy is as much about
improving the lives of working Americans as it is about
increasing the market caps of gig economy companies.
So I thank the witnesses for being here today. This is a
truly important, seminal discussion that we have right now. I
look forward to their testimony, and I yield back the balance
of my time.
[The prepared statement of Ms. Schakowsky follows:]
Prepared statement of Hon. Janice D. Schakowsky
Thank you, Mr. Chairman, for holding today's hearing on the
sharing--or gig--economy. This is a topic deserving of our
attention and scrutiny.
Over the past few years, Americans have begun to interact
in ways never imagined just a decade ago. The sharing economy
is one of the byproducts of technological change. Today, people
hail rides, book rooms, hire a contractor, and purchase
groceries at the push of a button. This is the fastest growing
sector in our economy. While there is undoubtedly a convenience
factor for those who engage with the gig economy, there are a
number of adverse consequences as well.
For millennials, the gig economy model may be appealing for
a time, providing scheduling flexibility that many young people
desire. However, for many older workers who used to have full-
time employment or younger workers seeking steady full-time
work, this transformational change is not a positive. The
model--which eliminates benefits like health care and
pensions--means more questions about whether they can make ends
meet, much less save for their children's education, their
parents' elder care, or their own retirement.
Gig economy companies argue that the individuals who
generate earnings through the use of their technology are
independent contractors. They claim only to operate a neutral
technological platform, enabling individuals to connect. Making
that claim may enable gig economy companies to avoid legal
liability for much of what happens as a result of the use of
their platforms, and enables them to avoid Social Security
contributions and requirements to provide overtime pay, and
workers' compensation and unemployment benefits. This shifts
many work-related risks from employers to workers.
However, these entities are very often directly involved in
almost every aspect of the transactions that occur by way of
their technology. They maintain standards for users of their
apps and they have the ability to remove users from their
platforms altogether.
In June, the California Labor Commission found that Uber
drivers are employees rather than contractors. That
determination--if upheld--would require Uber to provide
reimbursable expenses, Social Security, workers' compensation
and unemployment insurance benefits.
Many gig economy businesses do not ensure that their
employees meet licensing, tax, and zoning requirements that are
in place for the industries against which those businesses seek
to compete. I believe those companies and their employees and
contractors must meet all existing requirements if they intend
to compete with other entities honoring those standards.
It is also important that liability questions are addressed
by the businesses operating in the gig economy space. Is
additional insurance coverage needed to protect employees or
customers of gig economy businesses? When additional protection
is required, how do gig economy businesses ensure that their
employees and customers are adequately covered?
These gig economy businesses are largely data-driven, and
there are few restrictions on how that data is used or
protected. Highly sensitive information--including background
checks, home addresses, credit card and bank account
information, and travel patterns--is collected by these
businesses.
Uber recently changed its privacy policy to allow the
company to ask for location details when users aren't actively
engaging with the app. It also allows Uber to access to a
user's contact list. Most Uber users probably have no idea
about these policy changes, which is why greater oversight,
transparency, and communication are needed in this emerging
sector of the economy.
All of these issues must be addressed if we are to ensure
that the sharing economy is as much about improving the lives
of working Americans as it is about increasing the market caps
of gig economy companies.
I thank our witnesses for being here today, and I look
forward to their testimony. I yield back the balance of my
time.
Mr. Burgess. The Chair thanks the gentlelady. The Chair
recognizes the chair of the full committee, Mr. Upton, 5
minutes for an opening statement.
OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MICHIGAN
Mr. Upton. Well, thank you, Mr. Chairman. You know, today
we are here to discuss one of the most promising aspects of our
recovering economy, the sharing economy. Significant innovation
and advances have enabled new platforms to connect self-
employed individuals or small businesses with the consumers who
demand those goods and services.
The sharing economy is growing in leaps and bounds. Believe
it or not, in a decade, it is expected to generate $335 billion
annually. That sort of growth cannot be ignored. So this series
of hearings about disrupters, and I would include the Internet
of things, and the vehicle to vehicle communications under that
umbrella as well, is so important as we work to better
understand how these innovative companies impact consumers, job
creation, and yes, our economy. I am always encouraged by the
creativity and ingenuity that we see in America, and this
hearing is a great forum to learn how real people are taking
advantage of new opportunities to make a better life for
themselves and their families. I know it is true in Michigan,
as it is in the rest of the country, as families are glad to
have new ways to make ends meet.
One of the most intriguing aspects of this model is that it
is not tied to any particular industry. The press regularly
highlights the disruption in the lodging and transportation
sectors, but there is innovation in every facet of the U.S.
economy. And as with any developing marketplace, we must
recognize the risk of stifling the innovation with reactionary
regulatory measures. At a time when jobs are still hard to
find, and balancing the budget is a challenge, we should not
risk job creation with hasty calls to regulate. Where new
technologies and competition are responding to consumer needs,
and doing so safely, we should be asking ourselves if reducing
the regulatory burden makes sense. This may be true for both
the new entrepreneurs and incumbents. The sharing economy has
also given folks across the country a chance to make decisions
about how and when they work in a way that was not feasible
even a few years ago.
So we are familiar with high-profile leaders in the sharing
economy, but there are many other platforms that are using
technology to connect niche markets that have not been able to
connect before, and I have seen that firsthand, and I am
interested to hear more about those areas of the sharing
economy. Our witnesses today represent a broad and diverse
spectrum of the sharing economy. I would like to welcome in
particular Michael Beckerman back to the committee, albeit on
the other side of the dais this time around. I look forward to
hearing all your stories and experiences with the sharing
economy, and how we can foster an environment for community job
growth and community development, and I yield back.
[The prepared statement of Mr. Upton follows:]
Prepared statement of Hon. Fred Upton
Today we are here to discuss one of the most promising
aspects of our recovering economy: the sharing economy.
Significant innovation and advances have enabled new platforms
to connect self-employed individuals or small businesses with
the consumers who demand their goods and services.
The sharing economy is growing in leaps and bounds. In a
decade, it is expected to generate $335 billion annually. That
sort of growth cannot be ignored.
This series of hearings about disrupters--and I would
include the Internet of Things and vehicle-to-vehicle
communications under that umbrella as well--is important as we
work to better understand how these innovative companies impact
consumers, job creation, and our economy.
I am always encouraged by the creativity and ingenuity we
see in America and this hearing is a great forum to learn how
real people are taking advantage of new opportunities to make a
better life for themselves and their families. I know that this
is as true in Michigan as it is in the rest of the country, as
families are glad to have new ways to make ends meet.
One of the most intriguing aspects of this model is that it
is not tied to any particular industry. The press regularly
highlights the disruption in the lodging and transportation
sectors but there is innovation in every facet of the U.S.
economy.
As with any developing marketplace, we must recognize the
risk of stifling innovation with reactionary regulatory
measures. At a time when jobs are still hard to find, and
balancing the budget is a challenge, we should not risk job
creation with hasty calls to regulate. Where new technologies
and competition are responding to consumer needs, and doing so
safely, we should be asking ourselves if reducing the
regulatory burden makes sense. This may be true for both the
new entrepreneurs and incumbents.
The sharing economy has also given folks across the country
a chance to make decisions about how and when they work in a
way that was not feasible even a few years ago.
We are familiar with high-profile leaders in the sharing
economy, but there are many other platforms that are using
technology to connect niche markets that have not been able to
connect before. I am interested to hear more about those areas
of the sharing economy. Our witnesses today represent a broad
and diverse spectrum of the sharing economy--and I'd like to
welcome Michael Beckerman back to the committee, albeit on the
other side of the dais this time around. I look forward to
hearing all your stories and experiences with the sharing
economy and how we can foster an environment for continued job
growth and community development.
Mr. Burgess. The Chair thanks the gentleman. The gentleman
yields back. We are expecting the ranking member of the full
committee, Mr. Pallone, to be here at any moment. But pending
that, let me just go ahead and introduce our witnesses, and
then, when Mr. Pallone arrives, we will yield back to him for
his opening statement. So we do want to thank all of our
witnesses for being here today, thank our witnesses for taking
time to testify before the subcommittee.
Our witness panel for today's hearing will include Ms.
Luceele Smith, a driver-partner with Uber Technologies,
Incorporated, Mr. Michael Beckerman, President and CEO of the
Internet Association--and, you know, Michael, after you left
the committee, so many people asked, ``What happened to
Michael?'' And people said, ``He went to a better place,'' so I
guess the Internet Association is defined as a better place.
Mr. Bob Passmore, Assistant Vice President for Personal Lines
Policy with the Property and Casualty Insurance Association of
America, Mr. Dean Baker, Co-Director of the Center for Economic
and Policy Research, Mr. Alex Chriss, Vice President and
General Manager at Intuit, and Jon Lieber, Chief Economist at
Thumbtack. We do appreciate all of you being here today.
We will go ahead and proceed with the witness testimony,
and we may allow Mr. Pallone to give his opening statement when
he arrives. So we appreciate all of you being here. We will
begin with you, Ms. Smith. You are recognized. Each of you will
have 5 minutes to provide a summary of your testimony and given
an opening statement. Ms. Smith, you are recognized.
STATEMENTS OF LUCEELE SMITH, DRIVER/PARTNER, UBER TECHNOLOGIES,
INC.; MICHAEL BECKERMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER,
INTERNET ASSOCIATION; ROBERT PASSMORE, ASSISTANT VICE
PRESIDENT, PERSONAL LINES, PROPERTY CASUALTY INSURERS
ASSOCIATION OF AMERICA; DEAN BAKER, CO-DIRECTOR, CENTER FOR
ECONOMIC AND POLICY RESEARCH; ALEX CHRISS, VICE PRESIDENT,
QUICKBOOKS SELF-EMPLOYED SEGMENT, INTUIT, INC.; AND JONATHAN
LIEBER, CHIEF ECONOMIST, THUMBTACK, INC.
STATEMENT OF LUCEELE SMITH
Ms. Smith. Good morning, Chairman Burgess, Ranking Member
Schakowsky, and committee members. My name is Luceele Smith,
and I appreciate this opportunity to address you today and
speak about my experience working with Uber. I began driving
with Uber in June 2014, and prior to that I worked in the legal
field, and served 8 years in the Air Force. My son is also in
the Air Force, and will soon be deployed to the United Arab
Emirates.
Uber has been a great opportunity for me and many others.
What I like most about Uber is the flexibility. It allows
drivers to make money on their own time. I don't have a boss to
report to. I don't have to be on call. I work when I want to,
for as long as I want to, or as little as I want to. I use Uber
as supplementary income to finance my travel. I am from the
British Virgin Islands, and I use my extra income to visit my
family. And when I want to travel, I don't need to ask
permission. I just go.
Driving with Uber has also helped me to discover the city
in new ways, which has been very rewarding. In fact, I have
encouraged friends, and even riders, to become drivers because
I think it is a great opportunity not only to see new parts of
the city, but to connect with people in the community. And
these are people that I would never otherwise have met.
Every rider that I have met is grateful for the choice, and
the convenience, that Uber has brought to their lives. I
particularly enjoy the people component of being an Uber
driver. Having traveled all over the world, I can strike up
conversation with anyone, and point out new restaurants or new
shows in town. And when it comes to my riders, I have had so
many good experiences. I remember I picked up a couple once
from the airport and took them to a Redskins game, and when we
arrived, it started to rain, and the young lady was very
concerned about her hair, so I gave her my umbrella. I
understood what it would be like to sit in the rain and ruin
your hair. So it was just a great opportunity to help people in
large and small ways.
I have worked in traditional jobs before, but there is
nothing else out there where you can set your own schedule and
your own goals. Sometimes drivers ask me, how much money do you
make in a week? And the answer is, you can make as much as you
want to. If I want to make $500 to fly to St. Thomas for
Christmas, I can do that. With other jobs, the only way to earn
more money is to take another job, or to get a promotion, and
that can take years. So that freedom--it removes a lot of
stress from your life, and that freedom is priceless, knowing
you can log in anytime and make money. That is incredible. It
is unmatched. So it is an opportunity that I enjoy, and I know
many people feel the same way. Thank you so much.
[The prepared statement of Ms. Smith follows:]
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Mr. Burgess. The Chair thanks the gentlelady. The Chair
recognizes Mr. Beckerman. Five minutes for an opening
statement, please.
STATEMENT OF MICHAEL BECKERMAN
Mr. Beckerman. Thank you. Chairman Burgess, Ranking Member
Schakowsky, Chairman Upton, and Ranking Member Pallone, and
members of the committee, thank you for inviting me to testify.
My name is Michael Beckerman. I am the President and CEO of the
Internet Association, which represents the world's most
innovative Internet companies. The Internet Association is the
unified voice of the Internet economy and its global community
of users. We are dedicated to advancing public policy solutions
to strengthen and protect Internet freedom, to foster
innovation and growth, and to empower the global community of
Internet users.
Included in our membership are more than 35 of the world's
most innovative companies, including the sharing economy
platforms, such as Airbnb, FlipKey, Lyft, Sidecar, and Uber.
And as an advocate for these companies on the local, State,
Federal, and international level, the Internet Association has
witnessed firsthand the often heavy handed and misguided
regulatory approach in markets throughout the country for these
platforms. These companies have an extraordinary story to tell,
a story about job creation, about economic growth, opportunity,
and life changing flexibility.
Ride sharing and home sharing do get most of the attention,
but these business models are really just the tip of the
iceberg. Companies like Instacart, Washio, TaskRabbit,
GetAround, Handy, and Thumbtack, who is here with us today, are
changing the way we shop, do our laundry, rent cars, improve
our homes, and so much more. The incredible consumer benefits
of these platforms pales in comparison to the benefits of
flexible earning opportunities for those that opt-in to meet
consumer demand.
What we are seeing across the country is a tale of two
cities. In some communities, regulators embrace new technology
and competition. In these communities, consumers in the local
economy have seen job creation and growth. Unfortunately, there
are other communities where policymakers and regulators have
put up roadblocks that block consumer choice and competition.
In these areas, the community is worse off when arbitrary
barriers are placed on new entrants to the market. Competition
is stamped out, growth is stifled, and opportunities are lost.
In my testimony this morning, I would like to outline a few
important principles the Internet Association thinks is helpful
in this policy debate. But first I would like to help put the
on demand, or sharing, economy into the proper macroeconomic
context. Sidecar, or Uber, or Lyft, they are neither taxi
companies nor transportation companies. They are technology
platforms that connect supply and demand. Likewise, Airbnb is
not a hotel or lodging company. It is a technology platform
that connects supply and demand.
To just give one example, back in 1980, let us say, if you
wanted a ride to the airport, you might pick up the Yellow
Pages and look up a number for a car service. Then you would
pick up the phone, dial the number, talk to the dispatcher, and
arrange for a ride. In that pre-Internet age, the Yellow Pages
served a similar function to what Uber or Lyft does today. It
connects supply, the driver, with demand, the rider. But today,
thanks to the Internet, and advances in mobile payments and
other technology, this connection of supply and demand happens
in real time, and in a seamless way for consumers, and the same
is true for the other sharing platforms.
Based on our advocacy for the Internet industry, and for
the sharing economy specifically, the Internet Association
suggests the following principles guide the committee as you
wade into this debate. First, evidence demonstrating the clear
benefits to consumers must be taken into account. These
benefits include lower prices, higher quality of services, and
overall increase in consumer choice. Second, in weighing these
benefits against perceived harms, lawmakers should consider
whether sharing economy services may, in fact, be safer than
incumbent counterparts. Third, in listening to complaints
against sharing economy companies in local markets, assess
whether these complaints capture a genuine consumer protection
concern, and are not merely complaints against increased
competition that will benefit consumers. And finally, recognize
the sharing economy platforms already self-regulate through
various mechanisms that are hardwired into the technology, such
as consumer ratings, payment systems, and GPS tracking, not to
mention the intense competition between all of these platforms.
And I do elaborate on each of these points in my written
testimony, which I ask to be submitted for the record.
In closing, the sharing economy is an exciting innovation
that collapses the distance between those offering services and
those consuming services. The end result of this arrangement is
increasing quality, and lower costs. The sharing economy
provides clear benefits to both consumers and those who wish to
earn extra money, and evidence of this fact must be considered
before taking legislative or regulatory action. Thank you for
allowing me to testify, and I look forward to any questions the
committee may have.
[The prepared statement of Mr. Beckerman follows:]
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Mr. Burgess. The Chair thanks the gentleman. The Chair
recognizes Mr. Passmore. Five minutes to summarize your
testimony, sir.
STATEMENT OF ROBERT PASSMORE
Mr. Passmore. Let us turn on the button first. Good
morning, Chairman Burgess, Ranking Member Schakowsky, and
members of the committee. My name is Bob Passmore, Assistant
Vice President for Personal Lines Policy at the Property
Casualty Insurance Association of America, better known as PCI.
On behalf of our nearly 1,000 member companies, I thank you for
your invitation at--to speak today--at today's hearing.
PCI members are at the heart of the sharing economy. While
innovators in the sharing economy have designed new ways of
using technology to improve business models, insurers have been
innovating new ways of providing protection for centuries, and
similarly will be the grease that will enable the sharing
economy to reach its potential. The sharing economy is
typically not new commercial activity, but rather is a new
business model that allows individuals to use their personal
time and resources to engage in commercial activity, with the
potential to provide for more efficient use of resources for
society, while essentially creating millions of single-person
businesses.
Where the sharing economy poses the biggest challenge, and
the most controversy, is when they enter into a commercial
activity that is highly regulated when conducted by a
traditional business, such as a taxi company or a hotel.
Essentially the same activity, but on a much smaller scale, but
connected to a large sharing economy company. The policy
question becomes what is the appropriate level of regulation,
and does applying the same level of regulation render the
sharing business model impractical or impossible? Insurers are
certainly interested in the--understanding the answers to those
larger policy questions, but of primary concern for insurers
are critical insurance issues that are raised, as these
business models blur the line between what has traditionally
been thought of as a commercial or personal exposure.
A prominent example of this dynamic has been evident in the
emergence of ride sharing, or transportation network companies,
or TNCs. TNCs had initially relied on their--the driver's
personal auto insurance policies for coverage, with the
companies themselves providing some coverage that applied if
the driver's coverage was exhausted. However, most personal
auto policies specifically exclude coverage when the vehicle is
being driven for hire, leaving TNC drivers facing some
significant gaps in coverage. And since almost every State has
a motor vehicle financial responsibility law that requires
vehicle owners to have--maintain some kind of auto insurance
coverage, disputes in coverage litigation were inevitable. If
these coverage disputes would result in court decisions
imposing coverage for driving for a TNC on a personal policy
that was neither intended for--neither intended or priced for,
this potentially shifts the cost of this--of the risk
associated with driving for hire onto the personal auto
insurance system, requiring that all bear--drivers bear the
cost of the activities of a relatively small number of TNC
drivers.
The good news is that TNCs and insurers have been able to
reach a consensus on a model law that supports the sharing
economy business model, while providing appropriate
protection--insurance protection, as well as disclosures that
protect drivers, consumers, and insurers. The consensus model
also allows for the development of different private sector
business solutions for personal and commercial insurance
coverages that can evolve over time, and has already been
adopted in over half of the States.
Over the last year it has become clear that, while there
are significant insurance challenges presented by the sharing
economy business models, solutions can be found by following a
few principles. First, market-based approaches are preferred
for both sharing business models and insurance, but in some
cases State laws may need to be clarified to protect consumers
in policy language certainty. Awareness of issues is essential.
Many may not be aware if they have the right insurance when
they enter into these activities. There needs to be proactive
disclosures by the sharing business of what the insurance
issues are, what coverage the sharing business is providing,
and what additional coverage one may need to get prior to
participation.
Finally, State laws and regulations need to be flexible to
allow for different insurance solutions. The sharing economy
business model creates opportunities for both personal lines
and commercial lines insurance products, and the excess and
surplus lines insurance market is where many new businesses,
such as the sharing economy business models, find their
coverage, and those avenues need to be open to the sharing
economy business models as well.
PCI's mission is to promote and protect a competitive
insurance market for the benefit of consumers and insurers. Our
members are committed to developing and providing new insurance
products to support commercial and consumer innovation for the
sharing economy. We appreciate that Congress has taken an
interest in these issues, and look forward to continuing to
work on sharing economy issues in the future. Once again, on
behalf of our members, I thank you for inviting us to share our
views, and I would be happy to answer any questions that you
might have.
[The prepared statement of Mr. Passmore follows:]
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Mr. Burgess. The Chair thanks the gentleman. The gentleman
yields back. Mr. Baker, recognized for 5 minutes for
summarizing your opening statement, please.
STATEMENT OF DEAN BAKER
Mr. Baker. Thank you, Chairman Burgess, and Ranking Member
Schakowsky. I appreciate the opportunity to address the
committee. My name is Dean Baker. I am the Co-Director of the
Center for Economic and Policy Research. I want to raise some
general issues about the sharing economy. Certainly I would
agree with comments that have been made that it offers great
opportunities, basically, to take advantage of idle resources,
as Ms. Smith had indicated her labor, her free time. Of course,
with apartments, other sorts of idle resources to put them to
greater use, that is the great opportunity, the great benefit
of the sharing economy. The great risk is that it is--it--risk
undermining a set of regulations at national, State, and local
level that have often been put in place for very good purposes.
And that is my real concern that I want to address here. And in
doing so, I want to say I strongly disagree with Mr.
Beckerman's comment that this is simply the Internet version of
the Yellow Pages. We have that. It is called craigslist. We
aren't talking about that. These are companies that have an
active role in the operations that we are talking about here.
So very quickly, I want to outline four areas that I talk
about in my testimony, where regulations are being called into
question. First, labor regulations. Secondly, consumer, both
safety and quality regulations. Third, a question on property
rights that has come up in a lot of different contexts. Fourth,
anti-discrimination laws and regulations. And fifth, an
important issue that the committee should be concerned about,
issues of tax collection at all levels of Government.
Starting with the issue of labor regulation, as Ranking
Member Schakowsky raised in her opening testimony, we don't
know that sharing economy companies will provide the same sorts
of protections that we expect--that Congress and State and
local governments have given to traditional employees. So that
means wage and hour laws, do minimum wage laws apply, Workers'
Comp laws. These are issues that should concern us. We don't
want to see sharing economy companies benefit simply because
they are capable to undermine those laws. I should also point
out that in many cases, perhaps most cases, this is not an
insoluble task. For example, Uber could very easily use the
information that is available to ensure that all its drivers
are getting minimum wage laws, and they are paid in accordance
with wage and hour standards.
The second area, consumer safety regulation, we have
extensive sets of regulations to ensure that, when you get into
a cab, that the driver is a safe driver. I abuse my mother in
this context. She is an 84-year-old woman who is a very decent
person, and she has a Washington State Driver's License. I
really do not think she should be driving an Uber. This is the
sort of issue that we should be concerned about. We ensure that
people who drive cabs, drive commercially, have commercial
driver's licenses. We want to make sure that you have good
drivers for Uber, or any other car driving service. Cars should
be safe. Again, insurance issues. Insofar as those are being
settled, that is a big step forward, but I should point out
that was not the original intention of Uber. They would--that
was done under public pressure. In the case of--if we look at
Airbnb, again, are they renting rooms that are safe? You know,
do we know that they are--that they meet fire codes? This
should be an important concern. Certainly we make sure that
hotels--or at least we try to make sure that hotels are not
fire traps. We would want to make sure the same is true of
rooms rented through Airbnb.
The third issue has to do with property rights. Many
leases, many apartment leases, prohibit subletting. Many--in
many cases, someone could sublet through Airbnb in violation of
that lease. Again, does Airbnb bear responsibility? I would say
we would want a situation where they do bear responsibility.
Condo associations also often prohibit subleasing. Again, are
people renting out rooms through Airbnb, or whole units, in
violation of condo laws? And then, of course, it goes beyond
that. Very often you have rent stabilization rules, you have
zoning rules. These have all been called into question by
Airbnb. I am not saying Airbnb is necessarily wrong in these
circumstances, but we need clear regulation.
The fourth issue, discrimination. Again, we have well
developed sets of rules prohibiting discrimination based on
race, gender. We don't want discrimination against the
handicapped--handicapped individuals. We want to make sure--
case of--with Uber, we want to make sure we have handicapped
accessible vehicles. Again, this is something that is a matter
of legitimate public concern threatened by the sharing economy
companies.
The last point, we know in the case of traditional
employers they are obligated to take out money for taxes for
people, for their workers, and also, I should say, if you have
someone renting out a unit, that can be done through Airbnb.
This is a real concern. It is not a concern just for purposes
of tax collection. We don't want someone to come to April 15
and suddenly find they owe the IRS $5,000 because nothing has
been taken out of their paycheck.
So these are very real concerns. So just to sum up, the
whole point, to me, of the sharing economy is that it offers
greater opportunities. We want to take advantage of the new
technology. This should not be a way where firms are able to
prosper simply by finding a more effective way to evade the
law. Thank you.
[The prepared statement of Mr. Baker follows:]
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Mr. Burgess. The gentleman yields back. The Chair thanks
the gentleman. Mr. Chriss, you are recognized for 5 minutes for
summarizing your opening statement, please.
STATEMENT OF ALEX CHRISS
Mr. Chriss. Good morning, and thank you Chairman Burgess,
Ranking Member Schakowsky, and members of the committee, for
providing Intuit the opportunity to be here. My name is Alex
Chriss from Intuit, and I am the Vice President for QuickBooks
Self-Employed Business. I appreciate the opportunity to speak
with you today about the sharing economy, and I am pleased to
provide some insights we have gathered from close collaboration
with our customers. I will also outline three recommendations
Government could take to ease the burdens of sharing economy
workers.
As context, Intuit was founded over 30 years ago with one
core mission that remains today, to improve people's financial
lives so profoundly they cannot imagine going back to the old
way of doing things. We currently serve more than 45 million
consumers and small businesses with our QuickBooks, TurboTax,
and Mint offerings.
In the past few years we have noticed an acceleration of a
trend that began decades ago. We believe this trend to be a
massive shift in employment towards a more independent, or
self-employed workforce. Intuit recently conducted a study
forecasting that self-employed will grow to represent 43
percent of the workforce by 2020. A very fast growing segment
of this new workforce is the sharing economy. According to our
data, 3.2 million Americans are earning income from the sharing
economy. Within 5 years, our survey suggests the total
population of sharing economy workers will more than double, to
7.6 million.
What is not--what is often not fully appreciated is that
the people who are self-employed and in the sharing economy are
ultimately a small business of one in the eyes of the U.S. tax
structure. They have a unique set of financial management
needs. They often co-mingle business and personal expenses in a
single bank account, making expense management and deduction
tracking burdensome. They get paid a gross amount, often on a
weekly basis, making visibility into their real income, or what
is safe to spend, nearly impossible. And they are often unclear
about their quarterly tax obligations, as this is most often a
new and unfamiliar requirement. It is with these unique needs
in mind that we created our QuickBooks Self-Employed offering.
We strived to make the business aspect of being self-employed
simple and pain free, while improving our users' cash flow.
I would like to outline three opportunities policymakers
could being to take action on to improve the lives of this fast
growing segment of the economy. The first is to clarify what
constitutes a record for Schedule C tax compliance. Sharing
economy workers find customers and income at the touch of a
button on a mobile device. If they are required to keep paper
records to verify their Schedule C deductions, this requirement
raises questions about the regulatory definition of what a
record entails. Flexibility with respect to the term record
would benefit the growth of this worker segment. The less time
people spend managing paperwork, the more time they have to
earn a living.
The second is to enable sharing platforms to give guidance
without triggering worker classification issues. Sharing
economy platforms can play a role in helping this segment of
the workforce meet and understand their obligations. Many
sharing platforms limit the advice they provide to workers for
fear of triggering employment regulations that would
characterize this workforce as employees. Providing this
information would be beneficial to the sharing platforms, the
workers, and the IRS. This creates an opportunity for
Government agencies that oversee classification guidelines.
Clarity around the type of communication companies can share
with self-employed workers will enable them to access helpful
information regarding financial literacy, tax obligations, and
savings.
Finally, the third recommendation is to update Government
programs to support the self-employed. A great example is the
Department of Treasury. They initially released its MyRA
retirement savings product to employees to access exclusively
through employers. They are now planning to allow individuals
to open accounts, but they were not initially being considered,
and had to wait for benefits to be opened up to them. Creating
a shift in mindset where self-employed are considered part of
the workforce is something Government agencies should
prioritize.
We encourage the committee to explore ways to adapt our
current structure to meet the needs of the sharing economy
workers so that the grown and success of this segment
continues. Once again, Chairman Burgess, Ranking Member
Schakowsky, and members of the committee, thank you for giving
Intuit the opportunity to share insights from our sharing
economy customers, and I look forward to answering any
questions you may have.
[The prepared statement of Mr. Chriss follows:]
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Mr. Burgess. The gentleman yields back. The Chair thanks
the gentleman. Mr. Lieber, you are recognized for 5 minutes for
an opening statement, please.
STATEMENT OF JONATHAN LIEBER
Mr. Lieber. Good morning, and thank you for the opportunity
to testify today. My name is Jon Lieber, and I am testifying on
behalf of Thumbtack. We are a San Francisco based technology
company that matches consumer with--consumers with service
professionals to help them accomplish projects that are central
to their lives. We are honored to be part of this discussion
here today on behalf of our growing technology companies and
the small businesses we serve.
Thumbtack's network of more than 150,000 active
professionals help customers get started with more than 5
million projects each year. We are proud to say that we will be
putting more than a billion dollars into the pockets of these
professionals this year, and multiples of that in years to
come. Our professionals are active across all 50 States, and
here in the District of Columbia, and they offer services
across more than 1,000 categories, from dog walking to bathroom
remodeling. About half the service professionals on Thumbtack
have been in business for themselves for 5 or more years, and
similar numbers report that they have one or more employees.
Two-thirds say that the businesses they run on Thumbtack is
their primary form of income.
Our most active categories are events, such as DJs,
photography, and catering, home improvement, including lawn
care, house cleaning, plumbing, and electricians, and we also
offer wellness services, like personal training, and a variety
of lessons, from Spanish to horseback riding. And though we are
headquartered in San Francisco, it is only our 11th biggest
market. We operate only in the United States for now.
Although the hearing today is officially about the sharing
economy, this name is frequently misapplied to a variety of new
business technologies that are connecting people together.
Thumbtack does not consider ourselves to be part of the sharing
economy. We like to say we are part of the real economy.
Technology is enabling the businesses who use Thumbtack to
work--find work faster and cheaper than they ever could before.
And not to pile on the Yellow Pages here, but while a previous
generation was limited to placing an ad in the Yellow Pages and
waiting for the phone to ring, Thumbtack directly connects
these small businesses to customers who are looking for their
services.
The ease of introducing small service businesses to new
clients is solving one of the biggest problems that these
businesses have. And along with back office support tools, like
those offered by Intuit, is lowering the cost of starting and
growing a successful small business. We believe that we are
empowering these professionals to realize their dreams of
working for themselves, and the stories that we hear from our
pros about what Thumbtack has enabled them to do are inspiring
and powerful.
In my written testimony I discuss some of the effects that
technological disintermediation is having on both consumers and
the professionals who serve them, and I would like to mention
two of them now. First is that although disruptive technology
companies are bringing attention to issues of worker
classification and workplace benefits, for small businesses,
like the ones that use Thumbtack, to grown, these issues aren't
new.
Because Congress has passed responsibility for certain
elements of the social safety net onto employers through a
combination of mandates, tax incentives, and payroll taxes, we
have created a two-tier benefit system in this country, one for
individuals who generally work full time at larger companies,
and one for everyone else. The decision to go work for one's
self has long meant giving up the comforts of traditional
employment, including paid time off, and a variety of tax-
preferred health and retirement benefits. And although Congress
has attempted to extend some of these benefits outside the
workplace through the Affordable Care Act and tax-free savings
vehicles, like IRAs, there is more that could be done. To the
extent possible, benefits should be tied to the worker, and not
their place of work, or their form of compensation.
Small businesses are also intimately familiar with issues
surrounding worker classification. Although many of the
businesses we speak with would love to bring on full time
workers to help them expand, the cost, not just in wages, but
in compliance and benefits, are often prohibitively high. The
decision to bring on a full time worker can frequently mean
with--dealing with unexpected and expensive mandates, such as
California's recent decision to require that all employers,
regardless of size, provide paid sick leave. Often it is far
easier to rely on independent contractors, who generally don't
qualify for these benefits.
The second issue I would like to emphasize for the
committee is the need for better measurement tools. Although
all signs point to the rapid adoption of technology that will
connect people together, and allow an increasing number of
people to work outside of the traditional employment system
over the coming decades, we don't have a great count of how
many people are actually engaged in this kind of work. The
Bureau of Labor Statistics hasn't had dedicated funds to study
this segment of the workforce, which they call contingent
workers, since 2005. Private researchers and corporations are
attempting to fill the gaps, but the Government should be doing
more to keep up with the pace of change in the labor market by
more accurately tallying and releasing data on the number of
self-employed and independent contractors on a more regular
basis.
Thank you again for the opportunity to testify, and I look
forward to taking your questions.
[The prepared statement of Mr. Lieber follows:]
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Mr. Burgess. The Chair thanks the gentleman. The gentleman
yields back. The Chair would ask unanimous consent that Mr.
Pallone be allowed to give his opening statement out of order
before we proceed to questions. Mr. Pallone, you are recognized
for 5 minutes.
OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF NEW JERSEY
Mr. Pallone. Thank you, Mr. Chairman. Today this
subcommittee has the opportunity to discuss one of the fastest
growing sectors of the U.S. economy, and that is the sharing
economy, which is just not millennials hailing rides and
renting spare rooms from their phones. In communities across
the country, Americans are using their computers and
smartphones to order a meal, find a gardener, sell homemade
crafts, and even request a dog sitter.
Just like Google and Facebook before them, businesses like
Uber, Lyft, and Airbnb are rapidly evolving from names into
verbs. One recent study predicts that the five biggest sectors
of the sharing economy generated $15 billion in revenues last
year, and could exceed $330 billion in a decade. In my home
State of New Jersey, Uber has already signed up 9,000 drivers.
These businesses can offer benefits for both buyers and
sellers. Some platforms provide temporary access to goods and
services that buyers might not be able to otherwise afford.
Consumers enjoy the convenience of being able to summon a ride,
request a dry cleaning pickup, or order groceries from a device
in their pocket. And sellers can benefit from a new source of
income, sometimes just by renting items sitting unused in their
basements or garages.
But the growth of the sharing economy has also raised a
number of difficult issues. Many services track their users'
location, potentially putting privacy and safety at risk. To
verify users' identity some apps store credit card information,
home and work addresses, and other personal information.
Consumers often have no way of knowing if their information is
protected from a data breach, or if it will be sold to or
shared with an unknown third party. In addition, may apps allow
both buyers and sellers to view ratings and reviews of past
transactions. These reviews can push bad actors out of the
market by making sure users are trustworthy and legitimate, but
it can also be difficult to tell if these reviews are accurate,
and it is unclear whether reviews and rankings alone can
protect users' safety.
As more Americans seek to provide services in the sharing
economy, the question of whether they are employees or
independent contractors remains unresolved. Other than that
logo on the door, there is little obvious difference between
Uber drivers and cab drivers, but for the workers a lot is
riding on the distinctions. Unemployment benefits and overtime
pay are just a couple of the workplace protections at stake.
State and local governments across the country are also
grappling with the regulatory challenges posed by the growth of
the sharing economy, including whether companies are
responsible for paying local taxes, providing insurance, or
conducting background checks.
The sharing economy is about transforming innovative ideas
into services we depend on, but that innovation must be coupled
with basic protections for all participants, including worker
protections, privacy, data security, and safety, and I am
confident that we can find a balance that protects consumers
while preserving innovation, and ensuring a level playing field
for businesses. And I think the--I, again, thank the chairman
for holding this hearing, and giving me the opportunity to make
my statement. Thank you.
[The prepared statement of Mr. Pallone follows:]
Prepared statement of Hon. Frank Pallone, Jr.
Today this subcommittee has the opportunity to discuss one
of the fastest-growing sectors of the U.S. economy. The
``sharing economy'' is not just millennials hailing rides and
renting spare rooms from their phones. In communities across
the country, Americans are using their computers and
smartphones to order a meal, find a gardener, sell homemade
crafts, and even request a dog-sitter.
Just like Google and Facebook before them, businesses like
Uber, Lyft, and Airbnb are rapidly evolving from names into
verbs. One recent study predicts that the five biggest sectors
of the sharing economy generated $15 billion in revenues last
year and could exceed $330 billion in a decade. In my home
State of New Jersey, Uber has already signed up 9,000 drivers.
These businesses can offer benefits for both buyers and
sellers. Some platforms provide temporary access to goods and
services that buyers might not be able to otherwise afford.
Consumers enjoy the convenience of being able to summon a ride,
request a dry-cleaning pickup, or order groceries from a device
in their pocket. Sellers can benefit from a new source of
income, sometimes just by renting items sitting unused in their
basements or garages.
But the growth of the sharing economy has also raised a
number of difficult issues. Many services track their users'
location, potentially putting privacy and safety at risk. To
verify users' identities, some apps store credit card
information, home and work addresses, and other personal
information. Consumers often have no way of knowing if their
information is protected from a data breach or if it will be
sold to, or shared with, an unknown third party.
In addition, many apps allow both buyers and sellers to
view ratings and reviews of past transactions. These reviews
can push bad actors out of the market by making sure users are
trustworthy and legitimate. But it can be difficult to tell if
these reviews are accurate, and it is unclear whether reviews
and rankings alone can protect user safety.
As more Americans seek to provide services in the sharing
economy, the question of whether they are employees or
independent contractors remains unresolved. Other than the logo
on the door, there is little obvious difference between Uber
drivers and cab drivers. But for the workers, a lot is riding
on the distinctions. Unemployment benefits and overtime pay are
just a couple of the workplace protections at stake.
State and local governments across the country are also
grappling with the regulatory challenges posed by the growth of
the sharing economy, including whether companies are
responsible for paying local taxes, providing insurance, or
conducting background checks.
The sharing economy is about transforming innovative ideas
into services we depend on. But that innovation must be coupled
with basic protections for all participants, including worker
protections, privacy, data security, and safety. I am confident
that we can find a balance that protects consumers while
preserving innovation and ensuring a level playing field for
businesses. I thank the chairman for holding this hearing and
look forward to hearing from our witnesses.
Mr. Burgess. The Chair thanks the gentleman, and the Chair
would like to remind members that, pursuant to committee rules,
all members' opening statements will be made part of the
record. We conclude, then, our witness testimony, and we thank
you for your presence and your testimony today. We will move to
the questions part of the hearing. And I will recognize myself
for 5 minutes for the purposes of questions.
Mr. Chriss, let me ask you, because the study that we both
reference, that estimated that almost 8 million people will be
participating in a sharing economy very soon, begs the
question, why are so many people showing up to participate in
the sharing economy?
Mr. Chriss. Thank you. I think one of the things that we
have seen, as people are coming in, and--we actually refer to
this as the on demand economy. On demand refers to not only the
ability to push a button, as a consumer, and get a ride, or
have someone deliver food to you, but also the idea that
workers are able to come in, and push a button, and get a job.
I think that is where we are seeing more and more people coming
in, when they have the ability to--before, just--literally at
the push of a button, find income.
This is changing behavior--just as we see from consumers,
this is changing behavior of workers. Right now we are seeing
79 percent--in our research, 79 percent of the workers in on
demand are working part time. Many of them are coming from
traditional jobs, and adding this to create incremental income
as well. And as they test their way in, I think we will see
that they continue to evolve. Many of these workers right now,
again, with our research, are less than 1 year working in on
demand. So while this is wonderful we are having this
conversation, it is so early in the game right now. It will be
interesting to see how it evolves.
Mr. Burgess. Ms. Smith, let me ask you kind of the same
question. I mean, how did you arrive at the decision that this
was something that you wanted to do?
Ms. Smith. It--it is a great opportunity to make money by
one's choice. So--I have worked in traditional jobs before.
This opportunity to log in and earn money on any schedule that
I chose, for any goal that I had, is just incredible. So that
was very attractive to me.
Mr. Burgess. Mr. Lieber, we will probably disagree about
the amount of money available to the Bureau of Labor
Statistics, but one of the things they do is provide to
Congress, the first Friday of every month, to the Joint
Economic Committee--I am no longer on that committee, but I
was, so--during the harshest part of the recession it was part
of my job to hear their report on the first Friday of every
month.
And we all talk about the unemployment rate, and the U-6
numbers, and what the employment rate really is, but it seemed
to me, studying for this hearing and understanding better the
sharing economy that--I mean, this is a way for some of those
people who have been chronically unemployed now, may have left,
may even have dropped out of the labor workforce participation.
But, again, you can punch an app and earn some money, that is a
pretty powerful notion, isn't it?
Mr. Lieber. Absolutely. And what we find of users of--
business users of Thumbtack is many of them are leaving a
corporate job, and they are kind of putting their finger in the
wind to test out if they can actually cut it as a full time
caterer, or a photographer. And by lowering the cost of getting
these people into their own business, and by delivering
consumers to them, we think that we are creating this
opportunity that didn't exist in years past, and making it
easier than ever for them to start and go work for themselves.
Mr. Burgess. And it is certainly not part of this hearing,
but having spent time on the Joint Economic Committee, and
hearing those figures from the Bureau of Labor Statistics, and
the people who were discouraged from ever finding or looking
for traditional employment again, I mean, this seems to be a
way back into the workforce that, really, probably wasn't even
available, or only available on a limited basis, as the years
of the Great Recession began to unfold. Would you agree that
this is a fifth pathway, if you would, back into employment?
Mr. Lieber. Absolutely. I think this represents a
tremendous opportunity for people. And what is--what is
exciting to me is that, for people who have a skill--say you
are a locksmith, and you are good at locks, but you, you know,
haven't had a chance to build out your customer base yet, this
is the opportunity for you to go online, find customers, and
get your business started quickly, easily, and start getting
customers pushed to you.
And we have heard a lot of stories like that, of people who
have been down on their luck, people who just left the
military, people who lost their jobs, or people who are looking
for what next to do in their lives. And they are able to come
to these platforms, come online, and start finding new work.
Mr. Burgess. Well, I kind of believe we are just beginning
to scratch the surface. Mr. Beckerman, let me just ask you,
because I remember my predecessor in this office, who at the
time was Majority Leader, in the late 1990s described to the
Dallas Chamber a situation with--this thing was new, it was e-
commerce. He said Congress doesn't understand it, they are very
likely to try to regulate it and tax it, and when they do that,
they will kill it. Do you think he was correct in that
assessment?
Mr. Beckerman. I think this is a new area providing
incredible opportunity, and Congress need to be a little
careful not to put too heavy of a hand on this and regulate it
too much. Because, as we are hearing from a number of the
witnesses, it is providing opportunities for them that didn't
exist before, and it is a great opportunity for our economy,
for people to get back to work, and earn extra money for their
families.
Mr. Burgess. Very good. Thank you, and my time has expired.
I will recognize the ranking member of the subcommittee, Ms.
Schakowsky. Five minutes for questions, please.
Ms. Schakowsky. Thank you. Mr. Baker, I want to ask some
questions, but first I want to read a piece of testimony that I
would like to put in the record for--from Indir Pamar, who says
he has a been a professional driver in New York City for 15
years. He says, I began working for Uber because I thought I
could earn more money than I had working for other black car
companies. Uber's rates sounded like a good deal. When I first
started working with Uber X, the minimum fare would be $12.
Uber would take 10 percent of each fare, and the rest would be
mine to keep.
Within just months, though, Uber changed its payment rates,
and while the price of gas and my car payment stayed the same,
the 10 percent commission I paid to Uber became 20 percent, and
the $12 minimum fare dropped to $8. And then he also says,
the--Uber's business model is flood the streets with cars,
regardless of how much work is available for them. In New York
City, Uber added 20,000 new cars to have us compete with 13,600
taxis, and another 40,000 black cars, and car service liveries
that were already on the streets. It says that Uber doesn't
care--if there are 100,000 trips a day, those trips could be
split between 10,000 drivers or 30,000 drivers.
And he--finally he says, Uber says they are not my
employer--to the point that you made--even though they direct
my every move, and control my income, and can punish me. With
Uber we have no voice. I don't get to set the rates. Uber takes
away my fare income if a passenger has a dispute with them over
the fare they set. And if a passenger complains that I took a
long route, Uber takes the money back without giving me a
chance to explain myself. Friends of mine have been suspended
because their passenger rating was too low, even though they
had been accused of doing nothing wrong. What was too low? Less
than 4.5 out of 5 stars, a B+.
So I just wanted to talk to--here is somebody who though he
was going to make more money, have more control, and finds
that, really, Uber, that says they are just a Web site, or just
a technological platform, is controlling their life.
Mr. Baker. Yes, well, I think this is very problematic, and
exactly the sort of situation that I think we have to be
concerned about. So just to be clear, you know, being able to
order a cab over the Internet, wonderful thing. You could be on
a smartphone, that is a great thing. But, on the other hand,
these people, for practical purposes, are employees while they
are on the job.
And, again, we aren't asking a lot if we are to tell Uber
that, you know, you have to make sure that your drivers make at
least the minimum wage. They have the technology to do that. If
they are competent enough, then they should be replaced by a
company that is. I mean, that is a very, very simple thing. So
extending employee-type relationships, employee-type rights,
for example, collective bargaining--again, people may not like
it, but that is the law. It doesn't make sense that you have
collective bargaining over here, but we are going to call
ourselves Uber, and now you don't have collective bargaining.
So these are issues that I think are very much a proper concern
of Congress, and of State and local governments as well.
Ms. Schakowsky. Let me just ask you this. So many sharing
economy firms have said that they are just an app. They
describe themselves not as employers, but rather as technology
platforms. So how would you compare the type of work being done
by workers who have traditionally been deemed independent
contractors, such as electricians, Realtors, or consultants,
with those in the sharing economy?
Mr. Baker. Well, traditional contractors, they control
their time, they control their wage rate, they control what
they do. I sometimes write a paper, sometimes I will be paid on
commission. Well, if someone contacts me, they say, ``We need
this in two weeks,'' I am going to decide what it looks like, I
will decide the content. That is really not the case with Uber.
They specify the rules.
In a lot of ways, that is a good thing. We want to make
sure that, when you drive an Uber, the car's safe, other
conditions are met, but that is not the situation of an
independent contractor.
Mr. Burgess. Let me--Mr. Lieber, in your testimony you seem
to suggest that most sharing companies fall into one of two
buckets, that those that have a mostly hands-off approach,
perhaps such as Etsy, and eBay, and others that impose certain
requirements on the independent contractor, such as Uber. Can
you further explain those two types?
Mr. Lieber. Yes. The distinction there is--we think of
there of being--as kind of a marketplace company, which is kind
of matching buyers and sellers in a marketplace, giving them
information to make informed decisions on their own, and a
dispatch company, which is directly pushing a service provider
to you. You know, you ask for your groceries delivered, and the
groceries then come to you. And I think these are kind of two
separate types of technologies that are out there today.
Ms. Schakowsky. OK. And so, Dr. Baker, do you agree that
there are two types of sharing companies, and would the need
for more or less regulation depend on which of those buckets a
company falls into?
Mr. Baker. I think that is exactly right. Inevitably there
will be some gray areas, but I think Uber's a very clear side
of the gray area. This is an employee-type relationship.
Ms. Schakowsky. Thank you. I yield back.
Mr. Burgess. The gentlelady yields back. The Chair thanks
the gentlelady. The Chair recognizes the gentleman from Texas,
Mr. Olson. Five minutes for your questions, please.
Mr. Olson. I thank the Chair, and welcome to our witnesses.
I am excited about the sharing economy, all this new
technology, new innovation. But with regards to these changes,
I asked myself, how does this impact the market? Is it good, is
it bad, and most importantly, is it safe?
My first question is for Mrs. Smith, Mr. Passmore, and Mr.
Beckerman. Unfortunately, we don't hear a lot about the good
actors. We hear about the bad actors, stories from back home.
For example, people who use the sharing economy to do harm.
Back home in Houston, Texas, a driver in the shared economy
assaulted an intoxicated woman. The background check missed him
because he had been in jail for most of that time. My question
is, who should be liable for protecting our consumers from bad
actors in the shared economy? Mrs. Smith, your thoughts, ma'am?
Ms. Smith. I believe that is an Uber policy question that I
am not comfortable answering.
Mr. Olson. Thank you, ma'am. Mr. Beckerman?
Mr. Beckerman. Thank you. I would add, I think there are a
number of safety precautions that are hardwired into the
technology that provides accountability that didn't exist
prior, and that does not exist on taxi cabs. And no industry is
100 percent safe, or 100 percent perfect.
Mr. Olson. You bet.
Mr. Beckerman. Certainly hotels are not, and taxi cabs are
not. But the two-way rating system, having GPS tracking, and
the background checks that all the sharing economy platforms do
on the ride sharing side are very comprehensive, and they seek
to have transparency, accountability, and trust for their
users. And I think that goes a long way.
Mr. Olson. Mr. Passmore, your thoughts, sir?
Mr. Passmore. PCI represents auto home and business
insurers, so I think the question gets a little bit beyond the
scope of what I am prepared to answer for. But, you know, what
we have tried to do is clarify the auto insurance issues to
make sure that, if you get involved in an accident, there is a
clear line of where the injured parties can go to collect for
their damaged vehicles, and injuries, and things like that.
Mr. Olson. And my final question is for the entire panel.
Start with you, Mr. Lieber. Sadly, my home of Houston, Texas,
is ground zero for human trafficking in America. Interstate 10,
according to our FBI, right through Houston, Texas, is the
number one highway for human trafficking to come through.
Girls, mostly, being sold into slavery right through my
hometown.
I have held several roundtables back home with law
enforcement officials, local mayors, all these people involved
in this. It is a real big problem. But I am concerned that the
bad guys can use the shared economy to promote human
trafficking. So my questions is, what can this shared economy
do to stop human trafficking? Mr. Lieber, your thoughts?
Mr. Lieber. Just speaking from Thumbtack's perspective,
there is--I mean, we don't offer any kind of services that
would be appropriate to be abused in that fashion. Trust and
safety is the number one important factor for Thumbtack,
getting you a trusted professional to do a great job for you,
and marketplace integrity is something we take very seriously.
Mr. Olson. Mr. Chriss, your thoughts, sir?
Mr. Chriss. Providing financial management software through
Intuit, I think this would be beyond my expertise to answer.
Mr. Olson. OK. Mr. Baker?
Mr. Baker. I don't know of things sharing economy companies
can specifically do, but the one thing I would say is that,
insofar as Congress puts--or State Governments, for that
matter, put in regulations in place to try to crack down on
human traffic, again, the point is it has got to apply to
sharing economy companies as well. So if you have regulations
that make it more difficult for, say, a traditional cab company
to be involved in this in some way, certainly you want that to
be applied to your ride sharing services also.
Mr. Olson. Thank you. Mr. Passmore? Any thoughts about
human trafficking, how--I mean, I know you are not quite
directly involved, but any thoughts how----
Mr. Passmore. Right.
Mr. Olson [continuing]. You can influence this, make sure
we separate the bad guys from the people who are getting abused
by these----
Mr. Passmore. Again, it is a little outside of our realm of
expertise, but I would say that, you know, if you are
applying--no, I think--I don't really think I am qualified to
answer that question.
Mr. Olson. Mr. Beckerman?
Mr. Beckerman. Safety and security is first and foremost
for all of our member companies, and, you know, those kinds of
activities I think are outside of the scope of the services
that our companies offer. But I think technology certainly can
help, and when you look at all of these platforms, the
community that they create, and the trust they create, I think
could be helpful in stopping some of this.
Mr. Olson. And, finally, Ms. Smith?
Ms. Smith. As a driver, I have never encountered anything
remotely connected to human trafficking, and so I don't feel
informed enough to give a detailed response on that.
Mr. Olson. Well, thank you. Thank you for your service, and
we can agree, go Air Force, go Navy, beat Army. I yield back.
Mr. Burgess. The Chair thanks the gentleman. The Chair
recognizes the gentleman from New Jersey, Mr. Pallone, the
ranking member of the full committee. Five minutes for your
questions, please.
Mr. Pallone. Thank you, Mr. Chairman. In May of this year,
Uber updated its privacy policy to allow the company to track
users' location whenever its application is open, even if
consumers are not actively using the application. In other
words, if I take a ride on a Monday, Uber still can be tracking
my location the following Thursday. And, of course, Uber is not
the only sharing economy firm to track its users. The constant
collection of that data does raise privacy concerns. So I
wanted to initially ask Mr. Baker, it is my understanding that
most consumers do not understand the extent to which mobile
applications, such as those created by sharing economy firms,
can access and store data about consumers' locations. Do you
agree with that statement?
Mr. Baker. I would be inclined to agree, but I have to say,
that is really not based on any data. It is just simply
anecdotal. I mean, I do know people, obviously, who will use
Uber. I will confess I have never used it myself, but, you
know, I do know many people, and they have no idea of what data
they collect and what they do with it. And I think it is
certainly a proper concern of Congress that there be, at the
very least, clear disclosure, if not actual regulation, on what
they can do with it, but certainly disclosure of what their
practices are.
Mr. Pallone. Well, from a--I mean, expressing the privacy
concerns that I share, but do you see any--well, I mean, what
about this idea of storing location data permanently, rather
than discarding it after the transaction is completed? Is there
some way--I mean, obviously, from a privacy concern, you would
rather see it discarded after the transaction is completed.
What would be your view on that?
Mr. Baker. Well, I think it would be totally appropriate to
say that, you know, to prohibit those companies from keeping
that data, because it is--well, on the face of it, you are
contracting with them for a ride, and that seems to me that
should be the end of the relationship, unless people
consciously decide they want a further relationship with the
company. But, again, I think most people are understanding,
when they are taking an Uber, they are contracting for a ride,
not to give away details of their lift to third parties.
Mr. Pallone. OK. Now, should sharing economy firms be more
up front about when, how, and why they are tracking user
locations, in your opinion?
Mr. Baker. I think absolutely. Again, I think, two separate
issues here. One, do you restrict what they can do? Open
question, you know, I couldn't give you a well-reasoned----
Mr. Pallone. OK.
Mr. Baker [continuing]. Answer on that, but that is one
issue. Second one, disclosure of what they are doing, and, to
my mind, that has to be a clear responsibility, that there have
to be clear roles so that everyone at least can know. I mean,
some people may not care, and that is fine, but a lot of people
may want to know that if they are taking an Uber, this
information is being kept and quite possibly shared with a
third party.
Mr. Pallone. All right. Now, some apps, including Uber,
give companies access to other personal information, including
users' contacts and address book. It is my understanding that
most consumers do not understand the extent to which mobile
applications, such as those created by sharing economy firms,
can access and store data from consumers' contacts and address
books. Do you agree, and you want to talk about the privacy
concerns with that?
Mr. Baker. Well, that is, to my view, you know, I have
heard accounts of that. I assume that they are true. But, to my
view, that is absolutely amazing. I mean, again, you are
contracting with Uber to get from point A to point B. You
aren't--at least I think almost no one is knowingly contracting
with them to give them access to their address book. So it is
very hard to see why they would have a legitimate reason to get
access to that sort of information.
Mr. Pallone. Well, let me go to Ms. Smith. In order to use
Uber, a person must download the Uber app, giving permission
for Uber to collect that person's address book. Can you explain
how that information is used by Uber?
Ms. Smith. I am not sure how it is used by Uber, but when
an individual does download the app, they are given an
opportunity to agree to what Uber may do. And, as far as the
location, I believe that the information may always be
collected only when the app is being used, or never. And so an
individual does have an opportunity to decline, if they are not
comfortable. And whenever you do download the app, there is an
agreement that you must agree to in order to use the app. So
everyone who uses the app agrees to the conditions that are in
the agreement.
Mr. Pallone. Well, let me ask Mr. Beckerman to comment on
that, and also, since there are only a few minutes--seconds
left. We all know the critique, Mr. Beckerman, that privacy
policies are too long and full of legalese, especially on a
mobile device. But how are your members taking steps to make
sure consumers are aware of the extent to which their
information is collected, and sometimes is shared or sold? Or
if you want to also comment on what Ms. Smith said?
Mr. Beckerman. Yes. Thank you for the question. First, on
the tracking, if you look at the settings in your phone, it
does indicate that the tracking only happens when the app is
open, and you are using it. And the ability to look at the map
and see where you are going is part of, actually, the safety
and security features of the phone. You know, my wife left her
purse in an Uber once, and we were able to retrieve it
immediately because of some of these features. And had she left
it in a cab, we probably never would have seen it again.
When it comes to data security and privacy, there are laws
on the books from Congress and the FTC that apply to all
companies, sharing economy companies, Internet companies, brick
and mortar companies, and I don't believe there are any gaps in
the coverage of protections that we have.
Mr. Pallone. All right, thank you. Thank you, Mr. Chairman.
Mr. Burgess. The gentleman yields back. The Chair thanks
the gentleman. The Chair recognizes the gentleman from
Illinois, Mr. Kinzinger. Five minutes for questions, please.
Mr. Kinzinger. Well, thank you, Mr. Chairman, and thank you
all for being here. It is helpful to us, appreciate it.
Chairman, thank you for holding the hearing of--that is the
first of what I expect will be a great series of hearings. I
think there is a lot to be excited about in the sharing
economy, and I appreciate the committee's consideration of the
economic benefits, new choices for consumers, and the
underlying policy impacts that have come to light.
Last week Business Insider ran an article on the sharing
economy that started with ``The rise of the sharing economy has
fundamentally changed the business landscape, and some
companies are going to have to adapt to survive.'' And I think
that sentence captures some essential characteristics about the
sharing economy. It is new, it is changing, and it is adapting
to meet market demands. In such a dynamic economic space, I
think the committee's approach towards this regulation is
pragmatic, and, frankly, the correct course. Sharing platforms
have provided two apparent benefits in particular. They have
given workers another source of income in addition to
traditional work options, and they have also given consumers
additional choices.
Ms. Smith--by the way--I am an Air Force pilot, so thank
you for your service. And I am still in the Air Guard. I love
it, so--but I want to say thank you for your service, and for--
I guess your son's as well, so that is fantastic. I appreciate
your testimony, and for highlighting that many Uber driver use
this service for supplemental income. Do you think this is
something you are going to utilize long term?
Ms. Smith. Yes, absolutely. Yes.
Mr. Kinzinger. And what is it you enjoy about it? What is
it that makes you think that this is going to be a long-term
process for you?
Ms. Smith. Just about everyone that I have driven has
expressed the joy, really, at having the alternative.
Mr. Kinzinger. Um-hum.
Ms. Smith. Whether they didn't have a car at all, or they
constantly relied on others to take them from place to place,
or a bus was not available where they lived, or a taxi was more
expensive. Whatever their reason was, they just were so
grateful to have the opportunity to have a means of
transportation that is affordable and safe.
Mr. Kinzinger. And as a user of it, I can agree. And I will
tell you what is neat too is the whole idea of the surge
pricing. If you don't have enough drivers, it helps drivers
come online, to say that there is a surge. Consumer makes a
decision, the supply makes the decision, and it kind of works
out for everybody.
Mr. Beckerman, as sharing platforms proliferate, is there a
way to maintain light touch regulations in a way that promotes
competition on a level playing field, and can local governments
peel back some unnecessary regulations on incumbents to some
equilibrium that encompasses sharing platforms to the extent
that they directly compete?
Mr. Beckerman. Thanks for the question. Yes, I think so. I
mean, we have seen two different kinds of regulations in local
communities. Some that were maybe written in the '70s and '80s
that just couldn't anticipate any kind of Internet platform at
all, and those are being peeled back. But we are seeing in some
areas new regulations that are put in with the sole purpose of
blocking, or discriminating, against these platforms, and those
are the ones we are the most concerned about.
Mr. Kinzinger. OK. And, Mr. Passmore, some commenters
suggest that the insurance problems are too hard to solve when
a sharing platform is involved. How has the insurance company
worked to solve the coverage issues in the transportation
network company context? Is the insurance industry hopeful that
insurance questions raised by other types of sharing platforms
can be resolved?
Mr. Passmore. Yes. As I mentioned in my testimony, we
have--we worked very hard with the sharing economy companies,
the TNCs, to develop a solution that would work, and is being
implemented in over half the States right now.
As for other sharing economy businesses, I think a lot of
them have sort of observed what has happened with the
transportation network companies, and sort of been more
proactive about making sure that their participants, whoever,
whether it is Airbnb hosts, or Thumbtack vendors, or what have
you, they are being more proactive and making sure that they
are aware of the insurance issues, making it clear what kind of
insurance they provide, and what they might have to get on
their own. Those kind of developments are very encouraging.
Mr. Kinzinger. And I think every major invention or leap in
humanity, or leap in technology, or leap in any way we do
business sometimes is met by resistance, and that is natural.
People feel uncomfortable, they don't know what the future
holds. But the great thing, I think, about a free market,
capitalistic economy like ours is we have the ability to adapt.
And adapting is what makes us great, and, frankly, why we
continue to lead the world.
So, with that, Mr. Chairman, again, thank you for doing
this. This is very beneficial, and thank you to the witnesses,
and I yield back.
Mr. Burgess. The gentleman yields back. The Chair thanks
the gentleman. The Chair recognizes the gentleman from North
Caroline, Mr. Butterfield. Five minutes for questions, please.
Mr. Butterfield. Thank you very much, Chairman Burgess, and
Ms. Schakowsky, and members. Thank you very much for holding
this hearing today, Mr. Chairman. I was just looking at the
memorandum, and I think it is a very appropriate topic. It is
sharing the--``How the sharing economy creates jobs, benefits
consumers, and raises policy questions''. A very appropriate
topic, and I thank you so very much for it.
As you know, Mr. Chairman, I am now the chair of the
Congressional Black Caucus. For several months now we have been
examining diversity among the Fortune 500 companies in America,
and we realize that taking on 500 companies at one time is a
daunting task, and so we have started to target the technology
companies in particular. And we have found that African
Americans have been largely excluded from all levels of
technology. African Americans are a missing link in the tech
economy, and until we see full participation in the tech
economy, America will never truly unlock its full potential,
and that is why I like the topic of this hearing. That is why,
as part of my role as the chair of the CBC, I have focused on
our efforts of increasing diversity within the technology
sector.
In May the CBC launched the CBC Tech 2020, which is an
initiative to bring together the best minds in the technology,
non-profit, education, and public sectors to chart a path
forward to increase minority inclusion at all levels of the
technology industry. The goal of CBC Tech 2020 is to achieve
full representation of African Americans at every level of the
industry in 5 years. Over the past few months I have taken this
message across the country, and even to the heart of Silicon
Valley. And now I would like to ask just a few questions on a
few of these subjects.
Let me start with Mr. Beckerman. Thank you for
participating, and thank all six of you for participating
today. Mr. Beckerman, as I said, I am interested in the
inclusion of African Americans and other minorities in the
technology industry, both as owners and employees, as well as
vendors. How many companies, if you know, are members of--well,
I am sure you know--are members of your association?
Mr. Beckerman. Thirty-six.
Mr. Butterfield. Thirty-six. Let me write that down, 36.
Mr. Beckerman. I am glad I got that one.
Mr. Butterfield. All right. I have got four here, so I
don't know how we are going to do on the other ones. Out of
your companies, how many have African American CEOs, if you
know?
Mr. Beckerman. I would be happy to get back to you on that.
Mr. Butterfield. All right. Question mark. Please get back.
How many have an African American on their Board?
Mr. Beckerman. I would be happy to get back to you with
those numbers.
Mr. Butterfield. All right. The reason I ask the Board
question is because we found, of the top 20 technology
companies, collectively they have 189 directors. And of those
189, three are African Americans, so we are particularly
interested in that as well. And do you know if any of those
companies have released their diversity data? I know they do
the EEO-1s, but have any of these made their diversity data
reports public?
And now we are seeing the trend in Silicon Valley that
companies are now opening up their EEO reports for the world to
see, and they are making a commitment to us that they are going
to work with us in trying to improve it.
Mr. Beckerman. Yes. I just want to say I appreciate what
you are doing, and our companies realize there is a lot of work
to be done, and they are making strides to improve, but I do
think that these platforms do create a lot of opportunities
both for direct employment, and what--the opportunities that we
see on the sharing platforms that we are talking about today.
But thank you for your work on this, and it is something that I
know our companies are striving to do better.
Mr. Butterfield. I really want you to pay attention to it,
and I won't call up the CEO's name that I met with in Silicon,
but all of you would recognize the name. He told us that there
is a correlation between the bottom line and diversity, that
you--that the profits are really related to diversity and
inclusion, and if you can get those two in sync, you can really
grow the economy, grow the consumer base, and the company can
do very well. So I look forward to working with you. And thank
you, Mr. Chairman. I yield back.
Mr. Burgess. The Chair thanks the gentleman. The gentleman
yields back. The Chair recognizes the gentleman from Kentucky,
Mr. Guthrie. Five minutes for questions, please.
Mr. Guthrie. Thank you, Mr. Chairman, I appreciate it. I am
also a member of the Education and Workforce Committee, and we
were having a meeting downstairs. Sorry I didn't hear all this
on a joint employer, and the definition of joint employer. So I
say that because I am from the business world as well, and
labor issues are something I have worked on and understand,
that labor classification issues are at the forefront of this
debate.
But in your--so this is to Mr. Beckerman. So in your
testimony you urged Congress to consider the real benefits of
the sharing economy before moving too quickly into regulations.
And what are some of the most critical benefits offered by
these platforms that would be affected if service providers on
these platforms are classified as something other than
independent contractors?
Mr. Beckerman. Thank you for the question. I think first
and foremost there is incredible flexibility, and we have heard
a lot of that today from Ms. Smith and others. On all these
platforms it is opt-in, and a majority of the people
participating on these services are doing so part time. They
are doing it to have new income, not necessarily replacing a
full time job that they had before, and the ability to be your
own boss. That is compelling to a lot of people, to be able to
set your own schedule, and really work for yourself as a small
business person, and I think that is probably top of the list.
Mr. Guthrie. OK. Again, Mr. Beckerman, when we consider the
extent of consumer protection regulations that should exist for
sharing platforms, we have heard today that reputation
mechanisms, like rating systems, lessen the need for certain
consumer protection regulation. What kinds of consumer
protection regulation should apply to apps, such as Uber?
Mr. Beckerman. There are a few things. When it comes to
data security and privacy, I just want to note that there are
laws in the books, and regulations, the FTC and other places,
that apply to all platforms, online and offline, and I don't
think there are gaps in that kind of coverage. But when it
comes to rating systems, there is incredible transparency and
accountability that really never existed before, being able to
rate the driver, and have the driver rate you, and on Airbnb,
and other platforms, being able to see peoples' past
experiences. And I think this is a new innovation, and it is
important.
Mr. Guthrie. And what about apps for TaskRabbit? Same----
Mr. Beckerman. Same.
Mr. Guthrie [continuing]. Situation? Well, thanks. I know
on Uber you can see the picture of the driver, and understand
there have been a couple instances in Chicago where somebody
has pulled up, say, you looking for an Uber driver? And they--
and it is not an Uber driver. So those protections seem to be
in there, if somebody checks their----
Mr. Beckerman. I think those protections are working, and
what you see with all these platforms you mentioned, TaskRabbit
and others, trust is first, but also a community has been
created where you want to have a higher level of service for
your customers because you know you are being rated on an
instant basis, and you are being rated many times throughout
the day. And I think that helps what you are asking for.
Mr. Guthrie. Yes. I think in the incidents in Chicago
people were getting in the car--somebody just pulled up and
looked like they were looking for an Uber driver, but if
somebody followed what Uber provided, either the picture, or
the car, the make, the model, that wouldn't have happened.
Mr. Beckerman. If they don't know your name, you know,
don't get in the car.
Mr. Guthrie. So, Mr. Lieber, I am going to--how much time
did a person usually spend trying to track down local
professional services before Thumbtack?
Mr. Lieber. That is a great question, and we don't have a
scientific answer for you, but I am sure, from your own
experience, you have tried to hire a--somebody for your house,
a plumber--and my parents have lived in the same house for 40
years, they still don't know who to go to to find a plumber. So
they found Thumbtack is a really useful tool for them to bring
somebody to their house who is trusted, and is going to do a
great job.
Mr. Guthrie. Does Thumbtack reduce the cost of looking
for--I guess it is self-evident in your answer here--reduce the
cost for looking for the right professional?
Mr. Lieber. On both sides of the marketplace, we believe
Thumbtack dramatically reduces the cost, both search time for
the consumers--it is time you could be spent hanging out with
your kids, as opposed to calling people and trying to find
somebody who is right for you. And on the pro side, finding new
business is a really hard thing to do. Finding a new client,
you put an ad out in the paper, maybe, you know, the name of
our business is Thumbtack because it is named after the pins
people used to put on bulletin boards, where they would just
put this up on the bulletin board, and hope that somebody
called them. And that system is really outdated today, and we
think that we are lowering the cost of that, finding them new
customers.
Mr. Guthrie. Thank you very much. And it is good for our
businesses to have that opportunity. I always say--difference
in our system in the world and everywhere else is that
everybody that becomes a plumber, or skilled trades, eventually
usually becomes their own boss, especially in the plumbing
business and HVAC business. You see a lot of people with vans
with their name on the side, my name, Inc., and they are
driving around. And helping them market is a great opportunity
for those who provide it, as well as those who receive it.
Mr. Lieber. Absolutely. And a lot of these are skilled
professionals who are really great plumbers, maybe don't know
how to run their own business. And that is where companies like
Intuit and Thumbtack come in, to help them market themselves a
lot more--in a lot more sophisticated manner.
Mr. Guthrie. Because they are very much in demand. Mr.
Chriss, you had a comment on that?
Mr. Chriss. Just to pile onto that, one of the--having
served small businesses for a number of years, one of the top
challenges that our small businesses face is finding customers,
and many of these new platforms are now allowing them to,
again, with the push of a button, find that customer, to allow
the individual to spend more time actually making money.
Mr. Guthrie. It only works because you have customers
looking for them. So it is a win-win.
Mr. Chriss. It is.
Mr. Guthrie. Thank you very much, I appreciate that, and I
will yield back.
Mr. Burgess. The gentleman yields back. The Chair thanks
the gentleman. The Chair now recognizes the gentlelady from
Indiana, Mrs. Brooks. Five minutes for questions, please.
Mrs. Brooks. Thank you, Mr. Chairman, for holding this
fascinating hearing. I co-chair what is called the Women in
High Tech Caucus here. It is a bipartisan group that is about
promoting women and leadership in the tech companies as well,
and--so I talk with a lot of tech companies, particularly in
Central Indiana, where I am from, and I can't tell you how
excited the sharing economy is to so many people, and whether--
particularly when we have hack-a-thons, whether it is for
businesses, or whether or not it is for State Governments, or
Federal Government, there is so much energy and excitement
about the sharing economy, and the platforms that are coming
forward. And I--we also have what is called 1150 Academy in my
district, which is teaching people how to code, which is so
critical to all of this, and all of these new platforms.
But I have to tell you, there are--there is a lot of
concern, and--particularly generational, probably more than
anything, when it comes to this sharing economy, and the
questions about the sharing economy, so I think this type of
hearing--and I hope, Mr. Chairman, there are going to be more
hearings on this, because I don't think it is really cut and
dry on a lot of these issues. There are a lot of questions.
But I do have to ask, Mr. Beckerman, it--and I am a former
deputy mayor in Indianapolis, and I know that State and local
regulations can really get in the way, and I know that a lot of
these platforms, and a lot of these innovations have struggled
with State and local regulations. And I know that it often can
be used in many ways to block competition, and to block
innovation. Can you share a bit more about what we, in looking
at what the Federal Government should be doing, what lessons
can we be learning about what is happening maybe at State and
local issues around the country?
Mr. Beckerman. Sure, thank you. Competition obviously is
important for consumers in all communities, and our companies
have made great strides in working with local mayors and local
city governments to make sure their services are allowed to
operate in those communities. But I think the leadership of
this committee, and of Congress, talking to your local mayors,
and even your Governors, and, you know, taxi commissions, as
appropriate, that they should allow these services to operate
because it is benefitting consumers. It is providing more
choice, it is lowering costs, and that is what this is really
all about.
Mrs. Brooks. And so this is an education process you are
undertaking at mayor--with individual mayors, or at association
meetings, or how are you doing it?
Mr. Beckerman. Both. You know, the companies are actually
working city by city, town by town, State by State in a lot of
places. And you asked for some examples, you know, we have seen
areas where they are putting new regulations in place, such as
saying for--on the ride sharing side, you have to wait 40
minutes before a car picks you up, which obviously does not
have any consumer benefits at all. It is just meant to block
competition. Or regulations that say the minimum fare must be
$50, which is 10 times the fare of a taxi, which, again, has no
consumer benefits whatsoever. And so those are the things we
are trying to get rid of.
Mrs. Brooks. Thank you. Mr. Chriss, there were
conversations and discussions about protecting consumers'
financial data, and obviously, in today's day and age, when we
rely so heavily on technology for all--so many financial
transactions, how is this different, if it even is different?
How is the sharing economy any different than the other ways in
which we transact business, or is it essentially the same?
Mr. Chriss. I think in many ways it is still the same.
The--all of our partners, including ourselves, need to think of
data privacy as chief, and we need to maintain the stewardship
that we have of our customers' data. When it comes to consumer
protections, again, I think there isn't much difference that we
have seen in the number of companies.
I do want to mention, we have talked a lot about Uber as an
example here today. It should be said that we have seen over
200 other platforms, sharing economy platforms, coming in that
are impacting all sorts of different businesses. And so...
Mrs. Brooks. Can you give us some examples?
Mr. Chriss. Absolutely, and these would be ones that might
surprise you. So we have talked some about food delivery, and
caring for your dog, but there are some that are disrupting
industries like the legal industry. So one of our partners, Up
Council, has provided an opportunity for lawyers to come in,
and, again, find clients that are perfectly matched to them. Or
a company called Hourly Nerd, which allows MBAs to be partnered
with the right Fortune 500 company as well. So this is very
broad, and, again, we are very early in this journey, but with
over 200 now, it will be amazing to see how that grows over the
next few years as well.
Mrs. Brooks. I would be curious, Mr. Lieber, with respect--
because I think one of the things that we are--we are often
concerned about, whether it is with Airbnb, whether it is with
Uber, whether it is with the providers that you are--or the
people who are going into the homes, providing services, the
safety issues that are discussed, can you talk about that a
little bit with respect to Thumbtack, and how you educate your
customers, as well as the people who are providing the
services? What kind of safety issues are addressed, with
respect to--whether it is criminal history background checks,
whether it is just educating your customers about what kind of
background checks have been done or not been done, and
informing them?
Mr. Lieber. Yes. So we do background checks on every
professional who is active on Thumbtack to make sure that we
are delivering somebody that we can be proud of to your house.
Marketplace integrity is incredibly important to us. We have a
large team dedicated to that. We kick off any bad actors who we
think have violated our principles of marketplace integrity,
and we do everything we can to ensure that we are delivering a
trusted professional to your house. Reviews are a part of that.
We try to do everything we can to collect and aggregate reviews
so you have the most information to make an informed decision,
and we police this very, very carefully.
Mrs. Brooks. Thank you. My time is up. I yield back.
Mr. Burgess. The gentlelady's time has expired. The Chair
thanks the gentlelady. The Chair recognizes the vice chair of
the full committee, Mr. Lance of New Jersey. Five minutes for
questions.
Mr. Lance. Thank you, Mr. Chairman. I apologize to the
panel for being late. I was in continuing legal education over
at the Library of Congress, in the hopes perhaps someday there
will be a lawyer app that will employ me.
Mr. Baker, I certainly understand your point. Would it be
fair to say that the distinction between independent contracts
and employees is an ongoing discussion in our society, and has
been for quite some time?
Mr. Baker. Sure. I mean, the issues certainly pre-date the
rise of the sharing economy companies.
Mr. Lance. For example, I sold real estate. I was not the
broker. I was merely an agent, and I was treated as an
independent contractor, and I think that is traditional in the
real estate industry. Is that your understanding of it, as it--
how it works in real life?
Mr. Baker. To be honest, I couldn't tell you whether most
realtors are treated as independent contractors or employees.
I----
Mr. Lance. I believe most salespersons are treated as
independent contractors, although there certainly is
significant guidance. I was trained as to how to answer the
telephone. I was trained how to try to sell real estate, but
definitely I was an independent contractor.
You state in your testimony, regarding Uber and Lyft, that
there have been several cases brought before the NLRB, and in
Federal Court, arguing that those working in these companies
are employees. Has either the NLRB or the Federal Courts
adjudicated any of those questions yet?
Mr. Baker. No, there has been no final adjudication on
that. Those cases are still pending.
Mr. Lance. I see. And do you expect that there will be a
decision at some point in the near future?
Mr. Baker. It depends on your definition of near. I suspect
we are talking about a couple years before we get anything
resembling a final decision.
Mr. Lance. I see. And anything that is adjudicated by the
NLRB then potentially could be appealed, probably to the United
States Court of Appeals for the District of Columbia. Is that
accurate?
Mr. Baker. Exactly, yes.
Mr. Lance. Yes. Thank you. Mr. Beckerman, I also was
greatly interested in your testimony, and you point out that
this is a growing phenomenon in this country, and that there
are internal checks regarding all of this. Could you elaborate
a little greater on your point of view in that regard?
Mr. Beckerman. Absolutely. There are certain transparency,
and accountability, and trust features that are built into the
platforms. Again, on the rating system, it is something that
doesn't exist in--for many of the incumbents. Being able to
track your location, in many cases, does make you safer. Or, if
you end up leaving your purse or your bag in the car, that
helps you retrieve that. And so there are a lot of things built
into technology, and that has worked out very well.
Mr. Lance. Thank you. I point out particularly of--four
points that you articulated. You stated, second, in weighing
these clear benefits against perceived harms, lawmakers should
consider whether sharing economy services may, in fact, be
safer for consumers when compared to their incumbent
counterparts. And number four, recognizing that sharing economy
platforms already self-regulate through various mechanisms that
are hardwired into the technology, such as consumer ratings,
payment systems, intense competition, and GPS tracking. I tend
to agree with that. This is obviously a growing phenomenon in
this country.
And, Mr. Beckerman, you state that in a pre-Internet age
the Yellow Pages served as a similar function that Lyft and
Uber serve today. Would you explain your point of view
regarding that?
Mr. Beckerman. Sure. At the basic level, these are
technology platforms that are removing friction between the
transaction, and they are connecting the supply and the demand.
Be it a plumber, or a driver, a home that you are trying to
rent----
Mr. Lance. Um-hum.
Mr. Beckerman [continuing]. And having that frictionless
transaction, I think, helps the economy----
Mr. Lance. Um-hum.
Mr. Beckerman [continuing]. And it certainly helps the
individuals on both sides of the transaction.
Mr. Lance. Thank you. Finally, in the last 50 seconds, I
will relate a story--when I sold real estate, the real estate
broker told me that if the property was 20 minutes farther west
from where the potential customer wanted to live, I was to
create interesting conversation in the automobile and drive as
fast as I could. Thank you very much. Mr. Chairman, I yield
back 27 seconds.
Mr. Burgess. The gentleman yields back. The Chair thanks
the gentleman. The Chair recognizes the gentleman from
Mississippi, Mr. Harper. Five minutes for questions, please.
Mr. Harper. Thank you, Mr. Chairman. Thanks to each of you
for being here today. And, Mr. Chriss, if I could ask you a
question? What has been your clients' feedback as they
transitioned successfully to sharing platforms as a source of
income, and then are they happy with their choice. So looking
for what the feedback would be that you are hearing right now.
Mr. Chriss. Thank you for the question. The feedback we are
hearing right now is certainly a happiness factor from being
able to be their own boss, and control their own income
streams. The shadow to that has been--not sure that they
understood they were becoming a small business when they
entered into this.
Again, if you think about the--for many of them the
feedback was it was so easy to download an application and
create income, and then I realized I now have to pay quarterly
taxes, I have to track my expenses, I have to track mileage.
Many of these folks are working in an app that is on the palm
of their hand, and yet when you ask a driver to open up their
glove box, it is littered with receipts. And so this change in
mindset, of going from, hey, this was very easy to enter into
this economy has been a true positive, with the shadow of, I
now have a whole bunch of obligations that I wasn't sure I was
set up to do.
Mr. Harper. And has there been a change in the way that is
now initiated, so that there is a better understanding from the
beginning for these?
Mr. Chriss. You know, there is, and, I mean, this is why we
created the QuickBooks Self-Employed product that we have, and
we have seen--certainly we track our customer success metrics
as well, and we have seen that with our product we put $3,800
of tax savings back into our customers' hands.
The difficulty, though, is there are still challenges
when--January to April of every year, when an independent
contractor receives a 1099, their first call is to their
platform, who sent them the 1099, and the response from that
platform is, I am sorry, I can't even answer your question, you
have to go find a tax professional.
Mr. Harper. Right.
Mr. Chriss. So there are still some real challenges in the
system that I think we could, again, create some clarity around
to make things easier.
Mr. Harper. You had mentioned in your testimony that people
who provide services through sharing platforms would benefit
from some guidance from the platforms on how to operate
successfully, and I guess that would be the main takeaway,
then, on what you are saying, is that training up front, that
knowledge up front, would be the biggest benefit for them?
Mr. Chriss. There are a number of our users that have come
in that, again, didn't even know what they were getting into.
They are happy to be where they are, but being able to provide
some guidance from the platforms, again, not necessarily
providing the answer, but at least providing the guidance would
certainly be beneficial.
Mr. Harper. So what they have to do on their income tax,
but also the regulatory requirements that may go with that as
well, it sometimes--can take some of the joy out of it if they
don't know that on the front.
Mr. Chriss. What we have seen from our customers is, once
they know, and once they are able to do the calculations
through our product, or through whatever, they are happy to do
it.
Mr. Harper. Good.
Mr. Chriss. It is the lack of transparency, and the lack of
understanding, that is the most difficult.
Mr. Harper. Mr. Passmore, when we talk about property
casualty insurance, and what that entails, what are the
incentives for the insurance industry to participate in the
sharing economy?
Mr. Passmore. Opportunity. Insurers like to sell insurance,
and----
Mr. Harper. Sure.
Mr. Passmore [continuing]. They are--these businesses
certainly represent opportunities to do that by developing new
products. A good example is the transportation network
companies, particularly in the States where they put in place
the clear insurance rules, so the rules of the road are
established, and certainty is established. We have seen
companies introduce a lot of different products.
One--a PCI member company, Erie Insurance, was one of the
first to introduce an endorsement that you could buy for your
personal auto policy to provide coverage for transportation
network drivers. And other companies, such as Geico, and
Progressive, and MetLife and Home, have all introduced
products. Some have had--some have introduced even separate
policies just for TNC drivers. Some have had partnerships with
some of the TNCs to develop products just for their drivers.
Mr. Harper. So do you see the future--how would you
describe the future for property casualty insurance in this
economy?
Mr. Passmore. Well, I think it is a great opportunity for
insurers, as long as there are clear rules of the road, and
certainty has been established. You know, with the TNCs, we
have had--we had a little bit of a bumpy road, but we got there
in the end, and we are making excellent progress on it now. We
may not need that kind of clarification in every other kind of
sharing economy model, but there may be some needs for that. So
the ability to develop that certainty, so the insurance
industry can grow along with the sharing economy, is going to
be very important.
Mr. Harper. And with that, I yield back, Mr. Chairman.
Mr. Burgess. The gentleman yields back. The Chair thanks
the gentleman, and the Chair wants to thank all the members,
and the witnesses, for being here today. Seeing that there are
no further members wishing to ask questions, I do want to thank
each of you for participating in today's hearing. Before we
conclude, I will yield to Ms. Schakowsky for a unanimous
consent request.
Ms. Schakowsky. Yes. I would like to add a statement of
Vaughn Armour from the New York Committee for Change into the
record, testimony that I referred to earlier of Indir Pamar, a
New York taxi worker, and, let us see--Uber worker, actually--
testimony from the Taxicab, Limousine, and Paratransit
Association, and testimony from Working Partnership U.S.A., San
Jose, California, into the record.
Mr. Burgess. Without objection, so ordered.
[The information appears at the conclusion of the hearing.]
Mr. Burgess. I also want to include the following documents
to be submitted for the record by unanimous consent: a
statement for the record from the American Hotel and Lodging
Association, a statement for the record from the Hotel
Association of New York City, a statement for the record from
the Texas Hotel and Lodging Association. Without objection, so
ordered.
[The information appears at the conclusion of the hearing.]
Mr. Burgess. Pursuant to committee rules, I remind members
they have 10 business days to submit additional questions for
the record. And I would ask our witnesses to submit their
responses to those questions within 10 business days upon
receipt of the questions.
So, again, thanks all to everyone here. Without objection,
the subcommittee is adjourned.
[Whereupon, at 11:55 a.m., the subcommittee was adjourned.]
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