[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]


                     THE SHARING ECONOMY: CREATING
              OPPORTUNITIES FOR INNOVATION AND FLEXIBILITY

=======================================================================

                                HEARING

                               BEFORE THE

                         COMMITTEE ON EDUCATION
                           AND THE WORKFORCE
                     U.S. HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                               __________

           HEARING HELD IN WASHINGTON, DC, SEPTEMBER 6, 2017

                               __________

                           Serial No. 115-26

                               __________

  Printed for the use of the Committee on Education and the Workforce
  

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                COMMITTEE ON EDUCATION AND THE WORKFORCE

               VIRGINIA FOXX, North Carolina, Chairwoman

Joe Wilson, South Carolina           Robert C. ``Bobby'' Scott, 
Duncan Hunter, California                Virginia
David P. Roe, Tennessee              Ranking Member
Glenn ``GT'' Thompson, Pennsylvania  Susan A. Davis, California
Tim Walberg, Michigan                Raul M. Grijalva, Arizona
Brett Guthrie, Kentucky              Joe Courtney, Connecticut
Todd Rokita, Indiana                 Marcia L. Fudge, Ohio
Lou Barletta, Pennsylvania           Jared Polis, Colorado
Luke Messer, Indiana                 Gregorio Kilili Camacho Sablan,
Bradley Byrne, Alabama                 Northern Mariana Islands
David Brat, Virginia                 Frederica S. Wilson, Florida
Glenn Grothman, Wisconsin            Suzanne Bonamici, Oregon
Elise Stefanik, New York             Mark Takano, California
Rick W. Allen, Georgia               Alma S. Adams, North Carolina
Jason Lewis, Minnesota               Mark DeSaulnier, California
Francis Rooney, Florida              Donald Norcross, New Jersey
Paul Mitchell, Michigan              Lisa Blunt Rochester, Delaware
Tom Garrett, Jr., Virginia           Raja Krishnamoorthi, Illinois
Lloyd K. Smucker, Pennsylvania       Carol Shea-Porter, New Hampshire
A. Drew Ferguson, IV, Georgia        Adriano Espaillat, New York
Ron Estes, Kansas
Karen Handel, Georgia

                      Brandon Renz, Staff Director
                 Denise Forte, Minority Staff Director
                                 
                               ---------                                
                                                        
                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing held on September 6, 2017................................     1

Statement of Members:
    Foxx, Hon. Virginia, Chairwoman, Committee on Education and 
      the Workforce..............................................     1
        Prepared statement of....................................     3
    Scott, Hon. Robert C. ``Bobby'', Ranking Member, Committee on 
      Education and the Workforce................................     4
        Prepared statement of....................................     6

Statement of Witnesses:
    Beckerman, Mr. Michael, President and CEO, Internet 
      Association, Washington, DC................................    41
        Prepared statement of....................................    43
    Block, Ms. Sharon, Executive Director, Labor and Worklife 
      Program, Harvard Law School, Cambridge, Massachusetts......    29
        Prepared statement of....................................    31
    Johnson, Mr. Jonathan, Founder, Snapseat, LLC, Hartford, 
      Connecticut................................................    24
        Prepared statement of....................................    26
    Sundararajan, Mr. Aran, Leonard N. Stern School of Business, 
      Kaufman Management Center, New York, New York..............     8
        Prepared statement of....................................    11

Additional Submissions:
    Question submitted for the record by Sablan, Hon. Gregorio 
      Kilili Camacho, a Representative in Congress from the 
      Northern Mariana Islands...................................    78
    Ms. Block's response to question submitted for the record....    79

 
                     THE SHARING ECONOMY: CREATING.
              OPPORTUNITIES FOR INNOVATION AND FLEXIBILITY
              
                              ----------                              


                      Wednesday, September 6, 2017

                       House of Representatives,

               Committee on Education and the Workforce,

                            Washington, D.C.

                              ----------                              

    The committee met, pursuant to call, at 10:04 a.m., in Room 
2175, Rayburn House Office Building, Hon. Virginia Foxx 
[chairwoman of the committee] presiding.
    Present: Representatives Foxx, Roe, Thompson, Walberg, 
Guthrie, Rokita, Byrne, Brat, Grothman, Stefanik, Allen, Lewis, 
Smucker, Estes, Handel, Scott, Davis, Grijalva, Fudge, Polis, 
Sablan, Wilson of Florida, Bonamici, Takano, Adams, DeSaulnier, 
Norcross, Blunt Rochester, Krishnamoorthi, and Espaillat.
    Staff Present: Bethany Aronhalt, Press Secretary; Courtney 
Butcher, Director of Member Services and Coalitions; Michael 
Comer, Press Secretary; Ed Gilroy, Director of Workforce 
Policy; Rob Green, Director of Workforce Policy; Callie Harman, 
Professional Staff Member; Amy Raaf Jones, Director of 
Education and Human Resources Policy; Nancy Locke, Chief Clerk; 
Kelley McNabb, Communications Director; Rachel Mondl, 
Professional Staff Member and Counsel; James Mullen, Director 
of Information Technology; Krisann Pearce, General Counsel; 
Brandon Renz, Staff Director; Molly McLaughlin Salmi, Deputy 
Director of Workforce Policy; Olivia Voslow, Legislative 
Assistant; Joseph Wheeler, Professional Staff Member; Lauren 
Williams, Professional Staff Member; Tylease Alli, Minority 
Clerk/Intern and Fellow Coordinator; Kyle deCant, Minority 
Labor Policy Counsel; Denise Forte, Minority Staff Director; 
Christine Godinez, Minority Staff Assistant; Carolyn Hughes, 
Minority Director Health Policy/Senior Labor Policy Advisor; 
Eunice Ikene, Minority Labor Policy Advisor; Stephanie Lalle, 
Minority Press Assistant; Kevin McDermott, Minority Senior 
Labor Policy Advisor; Kiara Pesante, Minority Communications 
Director; and Veronique Pluviose, Minority General Counsel.
    Chairwoman Foxx. Good morning. A quorum being present, the 
Committee on Education and the Workforce will come to order.
    I would like to begin by welcoming our guests and 
witnesses. Thank you for joining the committee today for an 
important discussion relating to the future of our nation's 
workforce. America has always led the world in innovation and 
technology. It is the ingenuity of the American people that has 
helped create the most prosperous nation in the history of the 
world. That same ingenuity is what led to the rise of the 
sharing economy, which is changing the way we live, work, and 
connect.
    The growth of the sharing economy may be relatively recent, 
but the idea behind it really isn't a new concept. For quite 
some time, people have exchanged goods and services or shared 
their skills, time, or resources for a fee. Think about it. For 
decades, people have found ways to earn extra income through 
babysitting, renting property, dog walking, holding garage 
sales, cleaning homes, or mowing a neighbor's lawn. What is 
taking place in the sharing economy isn't much different. But 
the internet has brought this type of economic activity to a 
whole new level, and it has empowered people from all sorts of 
backgrounds to put their entrepreneurial ideas into motion.
    There is no question that this growing economic sector has 
improved the American quality of life. Consumers have more 
choices. People in need of transportation have more options. 
Families can easily rent out their home to help pay their 
mortgage. Individuals have a new way to sell their homemade 
goods and crafts. The sharing economy has also helped startup 
businesses get off the ground, and it has created new job 
opportunities that didn't exist before. Not everyone is looking 
for a 9-to-5 job. More and more people are increasingly drawn 
to flexible work arrangements, and that is what attracts them 
to the sharing economy. They want to be their own boss, control 
their own schedule, or earn extra cash while pursuing an 
education.
    The sharing economy has provided thousands of hard-working 
men and women the opportunity to do just that. Today, there is 
an estimated 3.2 million people working in the sharing economy, 
79 percent are doing so on a part-time basis.
    This is an industry that has really taken off. And, as we 
have seen throughout our history, innovation often occurs and 
flourishes during challenging economic times, which is 
remarkable and should be celebrated. It is a testament to the 
strength of our economy and the resilience of the American 
people.
    As the sharing economy continues to grow, we need to make 
sure outdated federal policies don't stand in the way. The 
self-employed individuals who rely on the sharing economy for 
work don't fit neatly into obsolete job categories defined in 
another era. So there are important questions over how we can 
modernize policies to meet the needs of the future. There are 
also questions over how sharing economy workers can gain access 
to affordable healthcare and prepare for a secure retirement. 
Not every answer can or should come from Washington. Innovation 
outside of Washington is needed to help tackle these 
challenges, and I have no doubt that the same creative minds 
behind the sharing economy will rise to the occasion.
    Earlier this year, a bipartisan group of committee members 
visited the San Francisco area to meet with leaders in the 
technology industry. We saw the operations of sharing economy 
companies firsthand. It is my hope that today's conversation 
will build off that experience, inform our future policy 
discussions, and help all of us better understand the realities 
of this emerging workforce.
    Before we get started, I would like to recognize and say 
farewell to a member of our committee staff who has dedicated 
more than 20 years of public service to the people's House, 
including 16 years of service as the committee's director of 
workforce policy. This is Ed Gilroy's final hearing with us. Ed 
loved this job and put his all into it. It is only fitting that 
his last hearing is about the future of America's workforce 
because he is always forward-looking and focused on policies 
that will have a positive impact on the lives of working 
families, not just today but for generations to come.
    Ed led our efforts to protect the rights of workers and 
employers, provide moms and dads more flexibility in the 
workplace, expand access to affordable healthcare for small 
business employees, preserve access to affordable retirement 
advice, and so much more. When we think about the success we 
had with the passage of the bipartisan Pension Protection Act 
in 2006 and with the Multiemployer Pension Reform Act in 2014, 
we have to think of Ed. He has guided us through countless 
hearings, markups, floor debates, field hearings, member 
briefings, roundtable discussions, and stakeholder meetings. 
And through it all, he's been a trusted adviser, dedicated 
public servant, distinguished colleague, and an invaluable 
member of our committee family.
    People come to work on Capitol Hill because they want to 
make a difference. And Ed can leave here knowing that he did.
    Ed, we're deeply grateful for your many years of service to 
the American people and to the House, and we wish you all the 
best in the years ahead.
    [Applause.]
    Chairwoman Foxx. We are really grateful to you.
    With that, I yield to Ranking Member Scott for his opening 
remarks.
    [The statement of Chairwoman Foxx follows:]

  Prepared Statement of Hon. Virginia Foxx, Chairwoman, Committee on 
                      Education and the Workforce

    America has always led the world in innovation and technology. It's 
the ingenuity of the American people that has helped create the most 
prosperous nation in the history of the world.
    That same ingenuity is what led to the rise of the sharing economy, 
which is changing the way we live, work, and connect.
    The growth of the sharing economy may be relatively recent. But the 
idea behind it really isn't a new concept. For quite some time, people 
have exchanged goods and services, or shared their skills, time, or 
resources for a fee.
    Think about it. For decades, people have found ways to earn extra 
income through babysitting, renting property, dog walking, holding 
garage sales, cleaning homes, or mowing a neighbor's lawn.
    What's taking place in the sharing economy isn't much different. 
But the Internet has brought this type of economic activity to a whole 
new level, and it has empowered people from all sorts of backgrounds to 
put their entrepreneurial ideas into motion.
    There is no question that this growing economic sector has improved 
the American quality of life. Consumers have more choices. People in 
need of transportation have more options. Families can easily rent out 
their home to help pay their mortgage. Individuals have a new way to 
sell their homemade goods and crafts.
    The sharing economy has also helped start-up businesses get off the 
ground, and it has created new job opportunities that didn't exist 
before.
    Not everyone is looking for a 9-5 job. More and more people are 
increasingly drawn to flexible work arrangements, and that's what 
attracts them to the sharing economy. They want to be their own boss, 
control their own schedule, or earn extra cash while pursuing an 
education.
    The sharing economy has provided thousands of hardworking men and 
women the opportunity to do just that. Today, there are an estimated 
3.2 million people working in the sharing economy. 79 percent are doing 
so on a part-time basis.
    This is an industry that has really taken off. And as we have seen 
throughout our history, innovation often occurs and flourishes during 
challenging economic times, which is remarkable and should be 
celebrated. It's a testament to the strength of our economy and the 
resilience of the American people.
    As the sharing economy continues to grow, we need to make sure 
outdated federal policies don't stand in the way. The self-employed 
individuals who rely on the sharing economy for work don't fit neatly 
into obsolete job categories defined in another era. So, there are 
important questions over how we can modernize policies to meet the 
needs of the future.
    There are also questions over how sharing economy workers can gain 
access to affordable health care and prepare for a secure retirement. 
Not every answer can or should come from Washington. Innovation outside 
of Washington is needed to help tackle these challenges. And I have no 
doubt that the same creative minds behind the sharing economy will rise 
to the occasion.
    Earlier this year, a bipartisan group of committee members visited 
the San Francisco area to meet with leaders in the technology industry. 
We saw the operations of sharing economy companies firsthand. It's my 
hope that today's conversation will build off that experience, inform 
our future policy discussions, and help all of us better understand the 
realities of this emerging workforce.
                                 ______
                                 
    Mr. Scott. Well, thank you, Madam Chairman.
    I'd like to start by echoing your comments about Ed Gilroy. 
Ed has worked for several chairs and ranking members of the 
committee, and throughout that time, he's been accessible and 
open in discussion with Democratic staff and our members. And 
because of that, the committee has been able to work very well, 
and I want to express my appreciation and applaud his years of 
service. My staff and I wish Ed well as he departs from the 
committee.
    Thank you, Ed.
    I'd like to also offer my thoughts and prayers to the 
people of Texas, particularly those who have lost loved ones as 
well as those who remain displaced.
    Madam Chair, our colleagues stand ready to work with you to 
ensure that Texas has the resources it needs to recover and 
rebuild. A lot of those resources will be in areas under the 
jurisdiction of this committee. And so we look forward to 
working with you as we decide what our response will be.
    Today the committee is convening a hearing on the sharing 
economy. This term encompasses the marketplace of companies 
that use smartphone apps and technology platforms to connect 
consumers with goods and services. The sharing economy has 
revolutionized the way we live our lives. By just touching an 
app on our phones, we can get a ride, we can purchase 
groceries, find a plumber, and much more. In many ways, the 
sharing economy serves as another example of how America's 
brightest minds can create and build innovations that shape our 
world.
    But that's not the entire story. Today's hearing is not a 
victory lap because too many workers are still struggling to 
make ends meet. They have not received a raise. Their wages are 
not keeping pace with productivity. They and their families are 
not economically secure. The central question before us is 
whether the sharing economy's employment model helps reverse 
this trend or exacerbates the loss of worker protections.
    When businesses categorize their workers as employees, 
they're entitled to a range of statutory benefits and 
protections. For example, these workers as employees will be 
compensated for injuries sustained on the job under workers' 
compensation. They're protected against discrimination. They 
can join a union and collectively bargain with companies with 
which they work..
    The employee/employer relationship has been fundamental to 
building and sustaining America's middle class. A few sharing 
economy companies treat their workers as employees. The CEO of 
one such company said that the higher costs of doing so are 
offset by the company's ability to attract and retain high-
quality employees. She said consumers want to pay for the labor 
they believe in.
    However, most sharing economy companies do something else. 
They classify and sometimes misclassify their employees as 
independent contractors. As a result, these workers do not have 
access to overtime pay, a minimum wage, family and medical 
leave, paid sick leave, unemployment insurance, workers' 
compensation, retirement benefits, health and safety 
protections, and the right to unionize.
    Today's hearing presents an opportunity to explore whether 
it is fair, appropriate, and even legal for the sharing economy 
companies to classify workers as independent contractors. 
Today's hearing also challenges us to consider whether the 
independent contractor paradigm that is being used in the 
sharing economy and other industries reflects what the future 
of work will look like in the United States. And let's be 
clear, it's just not service-oriented work that's being 
threatened and displaced by the sharing economy. Traditional, 
steady, well-paying jobs are at risk of becoming just another 
temporary gig. For example, accounting and legal services are 
being advertised on a for-hire basis,placing in jeopardy the 
livelihood of local CPAs and law offices. X-rays can be read 
remotely, and that poses challenges to hospital radiologists. 
Other employees can simply advertise just-in-time temporary 
services and go from gig to gig or be placed on temporary 
assignment by an agency.
    The sharing economy appears to be leading us towards a 
future where Americans perform temporary jobs rather than 
fulfill lasting careers where they're not part of an employer/
employee relationship. If that's the case, and if the sharing 
economy does reflect the future of work, we must ask whether we 
want our children and grandchildren to inherit a future where 
workers lack the most basic employment protections.
    When it comes to the sharing economy, Congress must strike 
the right balance. Our guiding principle should be who wins and 
who loses. And we can support growth while still maintaining 
what should be a bipartisan commitment to workers' rights to a 
fair wage, safe workplace, and an ability to organize and 
collectively bargain. Any suggestion that we can do only one 
and not the other represents a false choice.
    Finally, I want to agree with Chairwoman Foxx that the 
sharing economy warrants the committee's focus. I appreciate 
you convening today's hearing. But on this side, we believe 
that there are other issues impacting workers that are equally 
deserving of the committee's attention. For example, 2.2 
million workers earn at or below the federal minimum wage of 
$7.25 an hour. It's been 10 years since Congress increased the 
minimum wage. We need to address the minimum wage. These 
workers deserve our attention. It's estimated that 2.4 million 
low-wage workers in the 10 most populous states lose $8 billion 
annually because their employer paid them less than the state 
or federally mandated minimum wage. These workers and other 
workers are victims of wage theft, and they also deserve our 
attention. An estimated 4.2 million workers would be newly 
eligible for overtime pay under the rules put forward during 
the past administration. However, this administration is moving 
ahead to weaken those overtime eligibility rules. We must fight 
to continue the overtime rule and codify it because workers 
deserve that attention.
    In the coming weeks, I hope that we can address these other 
issues as well as the important issue of the sharing economy.
    Thank you, Madam Chairman. I yield back.
    [The statement of Mr. Scott follows:]

 Prepared Statement of Hon. Robert C. ``Bobby'' Scott, Ranking Member, 
                Committee on Education and the Workforce

    Madam Chair, I would like to start my echoing your comments about 
Ed Gilroy. Ed has worked for several Chairs of this Committee. 
Throughout that time, he has always been accessible and open to 
discussion with Democratic staff and our Members. We appreciate that 
and applaud his years of public service. My staff and I wish Ed well as 
he departs the Hill and returns to the American Trucking Association.
    I also would like to offer my thoughts and prayers to the people of 
Texas, particularly those who lost loved ones as well as those who 
remain displaced. Madam Chair, my Democratic colleagues and I stand 
ready to work with you to ensure that Texas has the resources it needs 
to recover and rebuild.
    Today, the Committee is convening a hearing on the sharing economy. 
This term encompasses the marketplace of companies that use smartphone 
apps and technology platforms to connect consumers with goods and 
services.
    The sharing economy has revolutionized the way we all live our 
lives. Just by touching an app on our phones, we can get a ride, 
purchase groceries, find a plumber, and much more. In many ways, the 
sharing economy serves as another example of how America's brightest 
minds can create and build innovations that shape our world.
    But that is not the entire story; and today's hearing is certainly 
not a victory lap. Too many workers are struggling to make ends meet. 
They have not received a raise, and their wages are not keeping pace 
with productivity. They and their families are not economically secure.
    The central question before us is whether the sharing economy's 
employment model helps reverse that trend or exacerbates the loss of 
worker protections.
    When businesses categorize workers as employees, they are entitled 
to a range of statutory benefits and protections. For instance, these 
workers will be compensated for injuries sustained on the job; they are 
protected against discrimination; and they can join a union and 
collectively bargain with the companies for which they work.
    The employer-employee relationship has been foundational to 
building and sustaining America's middle class.
    A few sharing economy companies treat their workers as employees. 
The CEO of one such company said that the higher costs of doing so are 
offset by the company's ability to attract and retain high quality 
employees. She said, ``consumers want to pay for labor they believe 
in.''
    However, most sharing economy companies do something else. They 
classify and potentially misclassify their employees as independent 
contractors. As a result, those workers do not have access to overtime 
pay, a minimum wage, family and medical leave, paid sick leave, 
unemployment insurance, workers compensation, retirement benefits, 
health and safety protections, and the right to unionize.
    Today's hearing presents an opportunity to explore whether it is 
fair, appropriate, and legal for sharing economy companies to classify 
workers as independent contractors.
    Today's hearing also challenges us to consider whether the 
independent contractor paradigm being used in the sharing economy and 
other industries reflects what the future of work will look like in the 
United States. And - let's be clear - it's not simply service-oriented 
work that are being threatened and displaced by the sharing economy. 
Traditional, steady, well-paying jobs are at risk of becoming just 
another gig.
    For instance, accounting and legal services are being advertised on 
a ``for hire'' basis, placing in jeopardy the livelihood of local CPAs 
and law offices. X-rays can be read remotely, and that poses challenges 
to hospital radiologists. Other employees can simply advertise just-in-
time, temporary services and go from gig to gig, or be place on 
temporary assignment by an agency. The sharing economy appears to be 
leading us toward a future where Americans perform temporary jobs 
rather than fulfill lasting careers; and where they are not part of an 
employer-employee relationship.
    If that's the case, and if the sharing economoy does reflect the 
future of work, we must ask whether we want our children and 
grandchildren to inherit a future where workers lack the most basic 
employment protections.
    None of us wants that.
    When it comes the sharing economy, Congress must strike the right 
balance - and our guiding principle should be who wins and who loses. 
We can support its responsible growth while still maintaining what 
should be a bipartisan commitment to workers' rights to a fair wage, 
safe workplaces, and their ability to organize and collectively 
bargain. Any suggestion that we can only do one or the other represents 
a false choice.
    Finally, I want to agree with Chairwoman Foxx that the sharing 
economy warrants the Committee's focus. I appreciate you convening 
today's hearing. But my Democratic Committee colleagues and I believe 
there are other issues impacting workers are equally deserving of our 
Committee's attention.
    For instance, 2.2 million workers earn wages at or below the 
federal minimum wage of $7.25 per hour. It has been over ten years 
since Congress increased the minimum wage.
    That is unacceptable.
    An estimated 2.4 million low-wage workers in the ten most populous 
states lose $8 billion annually because their employer paid them less 
than the state or federally mandated minimum wage.
    These workers and the others who are victims of wage theft deserve 
our attention.
    An estimated 4.2 million workers would be newly eligible for 
overtime pay under the rules put forward by the Obama Administration 
last year. The Trump Administration is moving ahead with a new and 
likely far weaker rule.
    We must continue to fight for the Obama Administration's rule and 
codify it because these workers deserve our attention.
    In the weeks and months ahead, I hope these workers and others get 
the attention they deserve from this Committee. I yield back my time.
                                 ______
                                 
    Chairwoman Foxx. Thank you, Mr. Scott.
    And I want to thank you for your comments about working 
together to help the victims of the hurricanes across the 
country. We certainly send our sympathies out to those people, 
too, and we'll do whatever we can in this committee to assist 
them.
    Pursuant to committee rule 7(c), all members will be 
permitted to submit written statements to be included in the 
permanent hearing record.
    And, without objection, the hearing record will remain open 
for 14 days to allow such statements and other extraneous 
material referenced during the hearing to be submitted for the 
official hearing record.
    I now turn to introductions of our distinguished witnesses.
    Dr. Arun Sundararajan is a professor and the Robert L. & 
Dale Atkins Rosen Faculty Fellow at New York University Stern 
School of Business.
    Mr. Johnson is the founder of SnapSeat, LLC, a photo booth 
company operating in the Connecticut area.
    Ms. Sharon Block is executive director of Harvard Law 
School's Labor and Worklife Program.
    Mr. Michael Beckerman is the president and CEO of the 
Internet Association, a trade association representing leading 
global internet companies, including Airbnb, Etsy, Lyft, 
SideCar, and Uber.
    I now ask our witnesses to raise your right hand.
    [Witnesses sworn.]
    Chairwoman Foxx. Let the record reflect the witnesses 
answered in the affirmative.
    Before I recognize each of you to provide your testimony, 
let me briefly explain our lighting system. We allow five 
minutes for each witness to provide testimony. When you begin, 
the light in front of you will turn green. When one minute is 
left, the light will turn yellow. At the five-minute mark, the 
light will turn red, and you should wrap up your testimony.
    Members will each have five minutes to ask questions. And I 
think everybody knows we're probably going to have votes around 
11:45 or 12:00. I hope very much we can get through the hearing 
and be respectful to our witnesses before we have to go vote.
    Dr. Sundararajan, you're recognized for five minutes.
    Mr. Sundararajan. Thank you. Chairwoman Foxx --
    Chairwoman Foxx. Turn on your mike.

  TESTIMONY OF ARUN SUNDARARAJAN, LEONARD N. STERN SCHOOL OF 
    BUSINESS, KAUFMAN MANAGEMENT CENTER, NEW YORK, NEW YORK

    Mr. Sundararajan. Chairwoman Foxx, Ranking Member Scott, 
I'm delighted to have been invited to speak to you about the 
sharing economy, innovation, flexibility, and the future of 
work and education. Thank you for convening this important 
hearing.
    The sharing economy means different things to different 
people. The label departs from our everyday use of the verb 
``sharing,'' and I'm unaware of any consensus on a definition. 
In my 2016 book, which I nevertheless decided to title ``The 
Sharing Economy,'' I discuss why I find the term ``crowd-based 
capitalism'' more precisely descriptive.
    American capitalism has progressed over the last 200 years 
from markets that relied on Adam Smith's invisible hand to the 
visible hand of large 20th century corporations. As digital 
technologies blur boundaries between institutions of differing 
scale that have historically facilitated the provision of trust 
and the use of intellectual capital, what emerges are new ways 
of organizing economic activity that involve hybrids of markets 
and organizations. This is the sharing economy.
    They have five characteristics: first, exchange facilitated 
by a platform which aggregates demand, matches customers with 
providers, and provides some digitized form of trust; second, 
high-impact capital and asset-light or shared consumption; 
third, the supply of capital and labor coming from 
decentralized and heterogeneous crowds of providers; fourth, a 
blurring of lines between personal and professional; and, 
finally, blurring lines between compensated and casual labor, 
between work and leisure, between independent and dependent 
work relationships.
    As Chairwoman Foxx pointed out, full-time jobs evolve into 
a dizzying array of non-employment work arrangements featuring 
a continuum of levels of time commitment, granularity, capital 
ownership, economic dependence, and entrepreneurship. Home- and 
ridesharing examples are well known. But the sharing economy 
spans industries as diverse as commercial real estate, retail, 
food, healthcare, and energy.
    Of special interest are platforms for diverse 
entrepreneurial services. Some, like Upwork and Thumbtack, span 
a broad range of professions. Others, like Handy, focus on 
clusters like cleaning, moving, and home maintenance. Newer, 
specialized professional services platforms, like Catalant for 
management consulting and Gigster for high-end software 
engineering, are growing very rapidly. For example, today over 
20,000 highly qualified lawyers generate their income through 
the legal services platform UpCounsel.
    Its recent dramatic expansion not withstanding, the sharing 
economy represents but a fraction of our country's 
nonemployment or contingent work arrangements. Today, 20 
percent of our workforce generates all its income from non-
employment work and an additional 20 percent uses non-
employment work to supplement income from a full-time job. 
Also, many aspects of crowd-based capitalism predate the modern 
sharing economy. YouTube, whose content is provided by a 
distributed and heterogeneous crowd of creators, has more 
viewers than any television network in the world. eBay was a 
pioneer in digital peer-to-peer commerce in 1995 and has 25 
million sellers. Over 50 percent of Amazon's estimated U.S. 
sales of 125 billion are from a distributed and heterogeneous 
crowd of small businesses selling through the platform. This 
crowd-based transformation of retail is accelerated by 
platforms like Postmates and DoorDash that are, in a sense, 
digitally indexing what's in everybody's local physical world 
business.
    Crowd-based capitalism thus creates significant 
opportunities for small business growth. My academic research 
on the economic impacts indicates that, in the long run, the 
sharing economy will not just contribute to economic growth but 
may also reduce any economic inequality. My written testimony 
has the details.
    With these opportunities, however, come new challenges. 
When coupled with the rise in the cognitive capabilities of AI 
and robotics technologies, the sharing economy will transform 
how workers organize. And today's dominant model being a salary 
provided of labor and talent will be progressively less viable.
    In my last minute, let me focus on four challenges. First, 
the promise of lower economic inequality requires that we guide 
our new entrepreneurial and freelance workforce towards having 
genuine capital ownership, entrepreneurs running actual branded 
businesses, however small, that perhaps use their own time and 
talent but doesn't relegate them to being faceless, on-demand 
labor. Favoring platforms that are committed to this vision 
reflects smart capitalist government policy.
    Second, an economy with millions of microbusinesses 
operating through digital platforms requires a very different 
regulatory approach, one that must frequently delegate 
responsibility to where the data resides.
    Third, absent a well-defined employer, many facets of the 
social safety net need a new funding paradigm. New multi-
stakeholder partnerships, along with a fundamental reworking of 
many aspects of labor law are necessary.
    Finally, we must shift the focus of higher education, 
catalyzing the emergence of new institutions that support mid-
career transitions for displaced workers while shaping career 
paths for a more entrepreneurial workforce. Such education 
cannot be mere re-skilling. It must catalyze finding a new 
professional network, access to new opportunities, the ability 
to relocate, imbuing workers in flux with a new identity, 
rebuilding self-worth to allow transition with dignity. 
Templates for these institutions are likely to emerge from 
large corporations managing workforce transitions. Such 
forward-looking policy about education and the workforce that 
anticipates and reacts to these changes is central to the 
future competitiveness and stability of the country.
    Thanks again for inviting me to share.
    [The statement of Mr. Sundararajan follows:]
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    Chairwoman Foxx. Thank you very much.
    Mr. Johnson, you're recognized for five minutes.

    TESTIMONY OF JONATHAN JOHNSON, FOUNDER, SNAPSEAT, LLC, 
                     HARTFORD, CONNECTICUT

    Mr. Johnson. Thank you, Chairwoman Foxx, Ranking Member 
Scott, and members of the Committee, for the opportunity to 
share my story. My name is Jonathan Johnson, and I am here to 
speak on behalf of individuals who have been able to start 
their businesses and find success in the new economy.
    My story started in October of 2013 when, in the same 
month, I found out the good news that my wife was pregnant with 
our first child and the less good news that I was being laid 
off from my full-time job as an accountant. It took a couple 
weeks for the initial shock of losing a full-time income for my 
family to pass. But what I couldn't shake was seeing a photo 
booth at an event just one month before. I had been fascinated 
with photography since I was in high school. When I was laid 
off, I had the time to research what was happening in the photo 
booth industry and realized there was entirely new market of 
people and events looking for photo booths. So I decided to 
take a risk and start my own business called SnapSeat. I 
started SnapSeat with a partner and every spare dollar we could 
find. To fundraise the venture, I sold a coin collection, sold 
items from around my house on eBay, and took a good part of my 
personal savings.
    One thing I learned from this business is that we didn't 
need a big loan, a fancy business plan, or the most 
sophisticated equipment to get a business going. We needed a 
minimum viable product, the determination to go out and find 
our first customers, and to learn along the way.
    We made the investment. We took the risk. And we built a 
photo booth that mostly worked. It took me three months to 
discover what would lead us to our first real customers and be 
responsible for 80 percent of our business in our first year. 
On a friend's advice, I checked out and registered as a service 
provider on Thumbtack.com.
    Thumbtack is an incredible mechanism for both local 
customers and local service providers to create a market. 
Customers can go on Thumbtack, create a request for an array of 
services from plumbers, to website designers, photographers and 
more, and be contacted by local professionals with quotes for 
these services. For professionals like me, we receive real 
leads from real customers looking for our services. After 
registering, I started receiving leads the same day. Shortly 
after, I landed my first paying customer for a small birthday 
party 40 minutes away. It sounds cliche, but I really did drive 
both ways in a snowstorm to that first event. I was able to 
successfully complete my first job, get my first positive 
online review, and have some money to put into landing my next 
client. In that first year, I completed 47 events. And, most 
importantly, my wife gave birth to a healthy baby boy, 
Jeremiah, in May of 2014.
    In just three years, SnapSeat has grown from one photo 
booth to five photo booths and five employees. We have served 
over 600 clients in three states.
    One of the best parts of establishing a business is 
creating jobs. In addition, starting a project-based business 
has given me the flexibility to grow my business on my schedule 
and be home for my family. I truly believe that the only limit 
on the amount of success for my business is how hard I'm 
willing to work.
    In today's rapidly changing economy, it seems that more 
people are looking to make ends meet in the gig economy. I 
believe our public policy needs to reflect this with laws that 
help every person with an idea that is willing to risk their 
time, talent, and resources to succeed.
    Thank you for your time and allowing me to speak today. I 
am truly honored to be part of this discussion and be able to 
share my story.
    [The statement of Mr. Johnson follows:]
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    Chairwoman Foxx. Thank you, very much, Mr. Johnson.
    Ms. Block, you're recognized for five minutes.

   TESTIMONY OF SHARON BLOCK, EXECUTIVE DIRECTOR, LABOR AND 
 WORKLIFE PROGRAM, HARVARD LAW SCHOOL, CAMBRIDGE, MASSACHUSETTS

    Ms. Block. Chairwoman Foxx, Ranking Member Scott, and 
members of the committee, thank you for this opportunity to 
testify today on the important subject of the sharing economy 
and its impact on people who earn income from it, the 
workforce, and the broader economy.
    As you said, my name is Sharon Block, and I'm the executive 
director of Labor and Worklife Program at Harvard Law School, 
which is Harvard's center for research, teaching, and creative 
problem solving related to the world of work and its 
implications for society.
    I would imagine that everyone in this hearing room has used 
the services of an online platform at some point and most 
probably use some regularly. I know that I do. We value the 
ease that they bring to our lives in procuring goods and 
services with just the click of a button or the touch of a 
finger.
    The ability to order food, call for car service, or sell 
our unwanted stuff without interacting with a person, however, 
can allow us to forget sometimes that there are real people 
behind these platforms.
    I appreciate the committee's interest in exploring the 
standard of living for these workers and how our labor and 
employment laws do and should apply to this sector.
    One key question that the committee can address is whether 
the innovation and flexibility that marks the online platform 
economy is consistent with our historical structure of labor 
and employment laws that we enacted to ensure a basic level of 
economic security for American workers. I believe that it does. 
The framers of our basic labor and employment laws drafted 
statutes that did not define their scope in reference to the 
particulars of the jobs that were familiar to them at the time 
but rather in accordance with the timeless principle that the 
norm for workers in our nation should be the ability to earn a 
fair wage, be safe on the job, save for retirement, and avoid 
destitution during periods of unemployment. Although there are 
always new challenges arising from technological and business 
innovation, I see nothing inconsistent between the principle of 
decent labor standards and the dynamism that has always marked 
the American economy.
    The digital age of the American economy need not be any 
different. Online platform companies have a choice. They can be 
innovative and flexible while creating good jobs or while 
destroying good jobs. While the outcomes of employee status 
cases are dependent on the particular facts and circumstances, 
my observation is the business models premised on the need to 
provide a consistent branded service tend to require a level of 
integration and control of the workers involved that is 
indicative of employee status. This observation then raises the 
question of whether the application of current law stifles the 
innovation and impedes the flexibility that we all value in the 
online platform economy.
    The companies in the online platform economy are among the 
most innovative in history, and I have confidence that they can 
develop technological and entrepreneurial solutions to adapt to 
our nation's basic labor and employment laws, such as the need 
to track hours for purposes of calculating minimum wage or 
overtime or to engage in the give-and-take of collective 
bargaining. The proof that labor standards need not be an 
impediment to innovation can be seen in the online platform 
companies that are embracing employee status for their workers 
and continuing to thrive.
    In assessing the compatibility between the flexibility 
afforded by the online platform economy and our current labor 
and employment laws, I think that there are two important ideas 
to keep in mind. First, flexibility is not inconsistent with 
employee status, especially the flexibility about which we hear 
so much from online platform workers, which is the ability to 
work when and how much they want.
    Second, any assessment of how much online platform workers 
value flexibility must be made in the context of understanding 
the lack of basic labor standard protections that come along 
with that flexibility if it means giving up employee status. 
The high turnover rates in the sector suggest that many workers 
don't want to forego those protections for the long term.
    Finally, it's critical to examine what we risk if we make 
it easier to classify workers as independent contractors. Many 
workers in the online platform economy are low-wage workers: 
drivers, cleaners, home care workers. They have little ability 
to shoulder the risks to their livelihoods and their families 
that comes with the loss of the basic social safety net that we 
built in this country around the idea of being an employee. 
Moreover, we have to be very careful not to create an incentive 
for other employers outside of the online platform economy to 
downgrade the status of their employees, depriving them of 
previously enjoyed protections.
    I believe that the choice between the positive attributes 
of the platforms and maintaining decent labor standards is a 
false choice. We should all share the goal of growing the 
American economy in a way that creates a better future for 
everyone involved in this sector, platform owners, consumers, 
and workers.
    Thank you.
    [The statement of Ms. Block follows:]
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    Chairwoman Foxx. Thank you, Ms. Block.
    Mr. Beckerman, you're recognized for five minutes.

   TESTIMONY OF MICHAEL BECKERMAN, PRESIDENT & CEO, INTERNET 
                 ASSOCIATION, WASHINGTON, D.C.

    Mr. Beckerman. Thank you. Chairwoman Foxx, ranking member 
Scott, members of the committee, thank you for inviting me to 
testify. My name is Michael Beckerman. I'm the president of the 
Internet Association, which represents the world's leading 
internet platforms. Included in our membership are more than 40 
of the world's most innovative companies, including sharing 
platforms such as Airbnb, Doordash, Handy, HomeAway, Lyft, 
Thumbtack, Turo, Uber, and Upwork.
    As an advocate for these companies at the local, state, and 
federal level, the Internet Association has witnessed firsthand 
how the tremendous economic opportunity of a sharing economy 
has been embraced by individuals and communities across our 
country. In some communities, policymakers and regulators have 
embraced new technology and recognized the consumer benefit 
from increased competition. In these communities, which span 
across all 50 states, we have seen a massive increase in income 
opportunities directly as a result of the sharing economy 
platforms, and communities are stronger when the sharing 
economy is also strong.
    In areas where policymakers and regulators have put up 
roadblocks to consumer choice and competition, the community is 
worse off. Opportunities are lost, competition is stamped out, 
and growth is stifled. The Internet Association suggests the 
following points to guide the committee as you look at these 
issues. Number one, it's critically important to recognize the 
sharing economy is diverse, it's rapidly growing, it's creating 
new economic opportunities with clear benefits to workers and 
other individuals. And, two, in listening to the grievances 
against sharing company platforms and considering proposed 
legislation and regulatory action, it's fundamental to assess 
whether these complaints capture genuine concern for worker 
protection safety rather than simply being complaints from 
incumbent industries against increased competition. There's a 
growing body of evidence and data that show that these 
complaints do not play out. I'll elaborate on each of these as 
I go on in my oral testimony and in greater detail in my 
written, which has been submitted for the record.
    First, the sharing economy is increasingly diverse in 
bolstering economic opportunity. There's new data collected and 
analyzed by the I.A. that shows that there are approximately 24 
million individual work opportunities across the country. Just 
two years ago, when I last testified on this topic, the number 
was between 1 and 3 million. The same I.A. research estimates 
that the sharing economy adds tens of billions of dollars in 
real income to hard-working individuals, even when we use our 
most conservative of figures. Other research from Brookings and 
others show that these economic gains are new and not coming at 
the expense of existing industries. Rather than cannibalizing 
markets, the sharing economy is opening up whole new markets 
and new demand that didn't previously exist. Evidence is 
mounting that participating in the sharing economy is a net 
positive for the micro entrepreneurs who participate in it.
    Research also shows that individuals are craving a 
different type of work arrangement which allows for fewer hours 
of work, for more time for their family and friends, and 
lifestyle, and on, an hourly basis, the sharing economy workers 
average approximately $34 an hour for work compared to $26 for 
payroll workers with the flexibility that doesn't otherwise 
exist.
    But more than simply an income source, the other side of 
the sharing economy is local opportunity. These platforms 
create new demand and bring tens of millions of dollars to 
local communities and individuals rather than to corporations. 
Online platforms are helping to eliminate prejudices and biases 
in work fields as well as serve otherwise underserved 
communities.
    One of the great things about the sharing economy, what 
makes it valuable and life-changing, is the flexibility. You're 
working for yourself. You're not working for a technology 
platform that's connecting you. Workers are not required to put 
in a set number of hours or show up at predetermined locations. 
Platforms don't tell their partners when they have to work, 
where they have to work, how they have to work, or if they have 
to work at all. You can simultaneously engage with multiple and 
competing platforms without any prior approval.
    Despite the dramatic growth of the sharing economy and the 
millions of participants who continue to benefit from it, the 
evidence is clear that incumbent industries have not been hurt. 
Brookings' research showed no evidence of harm to the taxi or 
hotel industry as a result of ridesharing and short-term 
rentals, and evidence from Thumbtack has shown that the sharing 
economy platforms are opening up opportunities to women and 
minorities in fields that have otherwise been closed off.
    Lastly, the Internet Association would encourage the 
committee to think about whether arguments against sharing 
economy platforms truly reflect genuine concern for worker 
protection safety or whether they're, in fact, complaints 
against increased competition. The internet has, since its 
inception, lowered entry barriers for new entrants, lowered 
cost for consumers, which is a positive. As with the early 
internet, today's sharing economy platforms are spurring 
increased competition and worker/consumer choice in our 
economy.
    In summation, the sharing economy is an exciting innovation 
that collapses the distance between those offering services and 
those consuming services. The sharing economy provides clear 
benefits, and evidence of this fact must be taken into account 
before taking legislative or regulatory action. I appreciate 
the time to testify and look forward to answering your 
questions. Thank you.
    [The statement of Mr. Beckerman follows:]
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    Chairwoman Foxx. Again, thanks to all the witnesses for 
your excellent testimony.
    Dr. Roe, you're recognized for five minutes for questions.
    Dr. Roe. Thank you, Madam Chairman. First of all, thanks 
for having this hearing.
    And I think this is a very exciting time in the American 
economy. And I actually see this almost as a new industrial 
revolution. Technology is allowing us to do things we didn't 
imagine just 20 short years ago.
    And, Mr. Johnson, you took me back about 40 years when I 
hung a shingle out and just had a few employees. And now that 
small medical practice has several hundred employees now, 
providing good jobs for people and good services in our 
community, and particularly your comment about taking risk. You 
put everything you had on the line, everything you had down, 
and signed the note, and started your business. And I admire 
you for that. And I think one of the things that people have 
never done, that there's great joy in that -- and no one ever 
asks how many hours a week you work. I can assure there are 
many nights and days that you worry about whether you're going 
to make payroll or whether you're going to be able to keep your 
business afloat. So congratulations on that.
    One of the things we can do to stop the sharing economy and 
this growth, this incredible growth, is to regulate it to 
death. And that's basically what ends up happening here in 
Washington. To fix a small problem, we end up stomping out an 
entire way to make a living.
    Mr. Beckerman, I want to ask you a couple of questions 
briefly. As you well know, some policymakers have expressed 
support for classifying all workers as employees. Some 
companies, including Managed by Q and Hello Alfred, have 
already decided to classify their workers as employees. What do 
you think would happen to the sharing economy if companies -- 
in general, if legislation were enacted to classify all workers 
as employees, not just contractors?
    Mr. Beckerman. Thank you for the question. I do think it's 
problematic. As I stated in my testimony, one of the great 
things about these platforms is you're really working for 
yourself. The traditional model does not necessarily apply 
here. You're certainly not an employee, and I think the 
independent contractor model is working for the individuals 
that choose to engage on a multitude of these platforms.
    Mr. Roe. I agree with you, because in our business we use 
both employees and contractors. We use both. And not everybody 
who came to work at our office was an employee. Some were 
contractors.
    And, Dr. Sundararajan, I wanted to ask a question. Each 
year, with the new advances in technology which allow 
individuals to connect in ways that we didn't imagine a few 
years ago, some State and local governments are not embracing 
these advancements. Instead, they are beginning to implement 
policies to regulate many aspects of the sharing economy. What 
do you think are the implications of regulating so early, and 
will it have an effect on impeding growth? And will these 
policies become outdated even before they take effect?
    Mr. Sundararajan. I think that the transition to a sharing 
economy requires an entirely new approach to regulation, one 
that redefines the boundaries between what government entities 
do and what is delegated to platforms. And so, you know, it's 
not surprising that we see a regulatory response to the sharing 
economy, because it is creating new ways of providing familiar 
things. But I think in the long run, the right solution would 
be to examine whether the reason for regulating in the first 
place still exists now that you have a third party that might 
be mitigating market failure, and if there is a need for 
regulation, whether some of that responsibility can be ceded to 
the platform that has historically -- that generally has better 
data than the government entity for enforcing and for actually 
conducting the regulation.
    Mr. Roe. Mr. Johnson, would you care to make a comment 
about if you were -- I don't know whether you're -- are 
employees or contractors. Would you like to jump in and answer 
that, respond to that?
    Mr. Johnson. Currently, the people that -- the people on my 
team are hourly employees.
    Mr. Roe. In your case, they are.
    Madam Chairwoman, I'd like to yield back. I know we have a 
vote in just an hour.
    Chairwoman Foxx. Thank you very much for being such a good 
role model.
    Mr. Grijalva, you're recognized for five minutes.
    Mr. Grijalva. Thank you. Thank you, very much, Madam Chair.
    Let me ask all the panels a topical question. We're talking 
about online platforms and sharing economy in this hearing, and 
it's an important hearing. And the question to the panel is 
just that 800,000 members of our country, the DACA recipients, 
which as of Monday find themselves in great peril and risk 
regarding their protection and indeed their very presence in 
the country, given the Trump's administration decision to end 
the DACA executive order and laying that on Congress to codify 
into law DACA within six months or less -- I think there's much 
more urgency than waiting around for six months, an iffy 
situation at best. During this process, 400 industry leaders 
sent Trump and congressional leaders a letter pleading that 
Trump preserve the DACA program and that Congress pass a Dream 
Act as a permanent solution. In that letter were the leading 
online platform enterprises, for lack of a better word: Lyft, 
Uber, Airbnb, and 19, 20 additional ones who are considered the 
pioneers of the successes of online platforms and sharing 
economy.
    Studies have been done empirically that talk about the 
contributions to the economy. Putting aside the humanity issue 
here, as difficult as it is, but let's just talk about the 
economy: Ending the ability to work legally in this country for 
these DACA recipients, of which 97 percent are in school or 
working, 5 percent have started their own business, 16 have 
purchased their first home, 65 percent have made major 
purchases like vehicles, and the GDP over 10 years, their 
contribution is $460.3 billion and about $25 billion in taxes 
to Social Security and Medicare. So my question, as we talk 
about the economy as a whole -- but given that we're talking 
about this -- do you feel or do you believe that DACA needs to 
be a program that is preserved, protected, that we do something 
fair and just, not just for the 800,000 and the 685,000 that 
are working or going to school right now but, more importantly, 
in this topic, for the economy?
    So it's to all the panelists, whoever wants to give the 
committee an opinion.
    Mr. Beckerman. I'd be happy to jump in, Congressman. Thank 
you for the question. I think it's an incredibly important 
topic. Certainly, we would encourage Congress on codifying DACA 
immediately. The Internet Association member companies have 
been very, very vocal on this, and our CEOs have been very 
vocal on this for a while. And, frankly, I'm really proud of 
the leadership role that our CEOs and companies have taken on 
this important issue. Certainly, it's a human issue. But to 
your question, it's vital to our economy, and we'd urge 
Congress to act immediately.
    Mr. Grijalva. Anyone else?
    Ms. Block. And I would just say I certainly appreciate 
those remarks. And I don't think anybody could say it better 
than you did about the contributions of these people who are 
affected by the DACA decision. So, again, appreciate the 
leadership of some of these companies in coming forward to 
speak up on this issue.
    Mr. Grijalva. I yield back, Madam Chair.
    Chairwoman Foxx. Thank you, Mr. Grijalva.
    Mr. Walberg, you're recognized for five minutes.
    Mr. Walberg. Thank you, Madam Chair.
    And thanks for the panel being here.
    This is just a really exciting topic to deal with as we see 
it growing in front of our eyes.
    Mr. Beckerman, individuals who are participating in the 
sharing economy are coming from a variety of situations, as has 
been very clear. If you watched it or heard your testimony 
today, some may already have full-time employment, providing 
them access to health benefits and other benefits. Others 
participate in sharing economy as a replacement income, part-
time income, don't have access to retirement benefits, health 
benefits, and the like. Do you have a sense of how many in the 
sharing economy desire health and/or retirement benefits, at 
least options through their participation in sharing economy 
platforms? And then, secondarily, do the benefits sought by 
different workers vary depending on the type of sharing economy 
they engage in?
    Mr. Beckerman. Yeah. Thank you for the question. We'd be 
happy to share with you the reports and data we've put out on 
this. It does vary based on platform. But I believe a majority 
of participants are doing so part-time as side income and as 
they need it. But to your -- the second part of your question, 
there are different platforms, and there's some where people 
are using their time, others where folks have underutilized 
assets, such as Airbnb or Turo, where if your car is sitting 
now in the parking lot of Rayburn, you can be renting it out as 
you sit here through this platform. And so there's differences 
on the platform. So we'd be happy to share our data that we 
have --
    Mr. Walberg. So those specifically wouldn't necessarily be 
looking for benefits?
    Mr. Beckerman. Exactly.
    Mr. Walberg. Mr. Sundararajan, do you have anything you'd 
add to that?
    Mr. Sundararajan. There are many businesses that run 
through the sharing economy where the resemblance to what we 
used to think of as, like, you know, the traditional model of 
work, full-time employment, is somewhat tenuous. You know, I 
mean, running a business through Etsy, running a business 
through Airbnb, or renting out your cars on Getaround or Turo, 
these don't have as much resemblance to a traditional model of 
earning a living. And so, in thinking about how we are going to 
fund the social safety net and provide benefits to people, most 
of whom -- most human beings aspire to these, sort of to 
stability, to be getting the same amount of money every month, 
to different kinds of workplace protections. It's just that the 
-- sort of going back to a model where someone called the 
employer is providing all or part of the funding is no longer 
viable as more and more of the workforce are entrepreneurs like 
you see on Turo or --
    Mr. Walberg. So encourage that entrepreneurialism and let's 
see what happens.
    Mr. Sundararajan. Encourage it, but also start to think 
about, like, you know, what kinds of multi-stakeholder 
partnerships, what kind of partnerships between the platforms, 
the government, and the individuals, can be put in place that 
allow for the money to be allocated to providing these benefits 
and stability.
    Mr. Walberg. Thank you.
    Mr. Johnson, thank you for sharing your personal story 
about becoming an entrepreneur. Many who work on sharing 
economy platforms cite flexibility as one of the benefits of 
this work arrangement. Could you cite some examples for us how 
flexibility has improved the quality of life for you and your 
family?
    Mr. Johnson. Thank you for your question.
    I'm very grateful for the flexibility that I have being a 
small business owner and entrepreneur. Specifically, also, my 
particular industry allows me flexibility. When I serve my 
customers isn't necessarily typically even on a Monday through 
Friday, 9 to 5 timeframe. We are serving customers on nights 
and weekends and at events and parties, and that allows me a 
lot of flexibility to create my own schedule. I also have 
flexibility to decide when I'm going to punch in and punch out 
and work on my business and developing my business.
    And the other great thing about my particular company is 
I'm able to extend that to some of my employees, where one of 
my employees is my office manager and she's allowed to work 
virtually from home. And I can enable them to kind of set their 
own hours or be flexible in taking shifts as these events are 
happening. It's been a great joy for me to see Jeremiah be at 
home, starting a business, and my son was born. And now I have 
-- also have a five month old, Paul, and it's been a really 
special experience to be able to spend this time at home with 
my family around starting my business.
    Mr. Walberg. Well, thank you. Wish you all the best. Many 
more questions to ask, but I'll relinquish and yield back.
    Chairwoman Foxx. Thank you.
    Mr. Takano, you're recognized for five minutes.
    Mr. Takano. Thank you, Madam Chair.
    And thank you to our witnesses this morning.
    Ms. Block, in your testimony, you mentioned that the size 
of the sharing economy -- or, as you call it, the online 
platform economy -- is estimated to be less than 1 percent of 
the workforce. Instead of focusing on this small sector, our 
time could be better spent focusing on policies that will raise 
wages and reduce income inequality for millions. And I 
wholeheartedly agree.
    I have been a champion of the Obama administration's rule 
to update the overtime protections for millions of workers. In 
1975, more than 60 percent of salaried workers fell under the 
income threshold and qualified for overtime pay. Now, less than 
10 percent do. The rule has suffered recent setbacks in the 
courts, but I still believe that this is one of the best 
policies to significantly improve wages of millions of workers. 
Can you talk about the overtime rule and other areas this 
committee should be focusing on to raise wages for workers?
    Ms. Block. Sure. And thank you for the question. And, 
again, I think it's well documented now that we have a real 
problem in this country with wage stagnation and increasing 
income inequality. And so I think policies designed to address 
those really critical problems are of the utmost urgency. So 
certainly the overtime rule is an important piece of that to 
ensure that people aren't compelled to work for free in their -
- you know, in those hours beyond 40 hours, certainly for that 
segment of the population that's below the overtime threshold.
    I think what Ranking Member Scott raised is the importance 
of raising the minimum wage. I mean, I had the honor of working 
for Senator Kennedy who floor managed the last increase in the 
minimum wage in the Senate. And the Senator has been gone for 
eight years, which suggests it's been a very long time since we 
raised the federal minimum wage. So I think that's also 
critically important in finding ways to raise American workers' 
wages.
    I think, also, the right to collective bargaining is a huge 
piece of finding ways to make the economy more fair and work 
for everybody. And so I think, you know, we need solutions that 
also help bolster that right. And I those are the primary 
policies that we need to focus on to address these really 
critical and urgent issues of wage stagnation and income 
inequality.
    Mr. Takano. Thank you, Ms. Block.
    Ms. Block, in his testimony Professor Sundararajan argued 
that minimum wage laws do not easily apply to the platform-
based world. But in your testimony, you argue that current 
labor laws can apply to these businesses, and they can still 
thrive. Can you respond to Professor Sundararajan's claim about 
minimum wage laws?
    Ms. Block. Sure. I mean, I think a critical part of the 
answer is that there is no one answer just as, in the non-
online platform economy, there are different business models. 
But I think we have a danger here of putting the online 
platform economy in one category and saying that our labor and 
employment laws don't fit. And I think if you look at the 
specifics of many of these businesses, which is what the law 
compels you to do, to look at the particular facts and 
circumstances, in fact, our current labor and employment laws 
fit quite nicely.
    You know, one issue that comes up often is it's difficult 
to track hours of workers in these online platform companies. 
But, again, we're talking about some of the most 
technologically advanced companies in history. So the idea of 
bringing that entrepreneurial spirit to that question, that 
there aren't solutions there, I find hard to believe. And I 
actually think what Mr. Johnson just shared with us was really 
instructive, the fact that he treats his workers as employees 
and has found a way within the confines of our traditional 
employee-status law to afford them flexibility. So, again, I 
think there are a lot of false choices that dominate this 
conversation, and that choice between flexibility or the 
protections of employee status I think is one example of that.
    Mr. Takano. Well, you mentioned Managed by Q was a 
successful business that has incorporated labor protections in 
its business model. Can you highlight a few other success 
stories?
    Ms. Block. Sure. There are a number. There's a company, 
Hello Alfred, which provides sort of personal home services. 
I've had the opportunity to be on panels with companies led -- 
companies that do -- deliver flowers, that have been really 
successful in having employee status. So, again, it's a matter 
of looking at the business model. I think we need to remember 
that these entrepreneurs have a choice when they create their 
business model, when they create their companies, to create 
good jobs and to embrace the basic labor standards that come 
with employee status or not.
    Mr. Takano. Thank you. My time is up.
    Thank you, Madam Chair.
    Chairwoman Foxx. Mr. Smucker, you're recognized for five 
minutes.
    Mr. Smucker. Thank you, Madam Chair.
    Mr. Beckerman, I'd like to just follow up to that line of 
questioning that Ms. Block just answered. And I'll just echo 
some of the comments that were made earlier. I think the 
sharing economy is almost revolutionary in the opportunities it 
provides both for entrepreneurs, people who want to work part-
time, as well as consumers. And so, you know, I know -- you 
know, we have to be careful that whatever we do in terms of 
regulation doesn't stymie the development of the industry. We 
don't really know where it's going yet at this point. It could 
go a lot of different directions.
    So, again, as a follow-up to the conversation we had, some 
were interested in applying traditional labor laws, such as the 
Fair Labor Standards Act, maybe the National Labor Relations 
Act, to the sharing economy companies. I wonder if you could 
elaborate on the implications that this would have both for 
workers, in particular what effect would it have on lesser 
skilled workforce? For example, would you think they would have 
the same flexibility to work the hours they want? And could you 
also talk about how it would affect the companies? How would 
they be able to adapt to what I think would be a pretty vastly 
different regulatory structure than we have today?
    Mr. Beckerman. Thank you. First off, I think it's important 
to note that the question of independent contractors is not a 
new one and not one that has just come up with the advent of 
the sharing economy. And a lot of these issues that are being 
discussed are broad and impact a wider group of companies and 
individuals beyond just sharing economy companies. And, thus, 
probably that debate should be a broader one and not one just 
focusing on the sharing economy.
    But when you look at it, there are fundamental differences 
between arrangements when people are employees versus engaging 
with opportunities on various sharing economy platforms. For 
one, just the full flexibility, as you mentioned, being able to 
decide exactly your work schedule, exactly your work location, 
being able to engage on multiple and competing platforms 
simultaneously and back and forth, which doesn't exist in other 
employment models. I can't think of another example where you 
can just decide one day if you're not going to show up to your 
job or pick your hours exactly or, you know, work 
simultaneously for competing companies. That doesn't exist in 
the sharing economy. And it's important that whatever policy 
conversations that take place don't end up hurting the people 
that you're trying to help by adding new regulations or things 
that don't necessarily apply here.
    Mr. Smucker. I think Mr. Johnson's written testimony 
earlier pointed to numerous tax employer and business formation 
of filings and registrations that entrepreneurs must complete 
to register a business on the state, local, and federal levels.
    And, again, Mr. Beckerman, a question for you. As the 
Internet Association has reviewed these and other regulations 
across the country, can you point to specific states or 
localities that have been the friendliest to entrepreneurs and 
workers in the sharing economy? Is there anything that we can 
learn as legislators at the federal level from these states?
    Mr. Beckerman. I think that's a great question, actually. 
We have a report that we can submit to the committee that lists 
various states showing who has been friendly to internet-type 
businesses and others. And you can have lessons learned from 
that. I think some of the things that we see on the negative 
side, often policies or regulations are put in place that don't 
benefit consumers or the economy or workers but rather are put 
in place solely for the purpose of keeping out new entrants, 
and that exists too, and I think that's something that is 
important that the committee steer clear of as well.
    Mr. Smucker. Thank you.
    I yield back.
    Chairwoman Foxx. Thank you very much, Mr. Smucker.
    Ms. Blunt Rochester, you're recognized for five minutes.
    Ms. Blunt Rochester. Thank you, Madam Chairwoman, and 
Ranking Member Scott. And I really want to thank the panel. 
This is a very timely and interesting conversation.
    You know, when we talk about these issues, a lot of times 
people either see the glass half empty or half full. It really 
is about challenges and opportunities, and it's a great 
opportunity for some people to live their dream and to have 
flexibility. But there are a lot of people that I know that are 
actually having to patch together multiple temporary jobs, 
whether they're driving an Uber and they're doing other things. 
And so I think it's really timely that we're having this 
conversation now.
    I want to talk about and ask questions about the future of 
work. And, Ms. Block, you mentioned in your oral testimony the 
critical issues that are facing the online platform economy and 
innovation in this digital age. And so what can Congress do to 
make sure that workers in the online platform economy have 
access to workplace protections, such as minimum wage, 
unemployment insurance, and safe workplaces. I see the 
potential, but I also want to make sure that those who don't 
have a glass, let alone half full, have the protections. Can 
you talk about that?
    Ms. Block. Sure. Thank you for the question.
    I mean, I think one really important piece is to make sure 
that the laws that we have on the books now are enforced. I 
mean, the Department of Labor needs to be able to look at these 
issues for all employees in the sharing economy but also more 
broadly. You know, we're talking today about the sharing 
economy because it's interesting, it's growing. But, in fact, 
these issues are very present in much greater numbers for 
workers outside this sharing economy or online platform 
economy. There's actually more research about how fast other 
kinds of contingent work relationships are growing. And the 
problem of misclassification or payroll fraud, as some of us 
like to call it, is a very serious problem and much bigger 
outside of the platform economy. So I think making sure that 
there are resources to fulfill the intent of these statutes, 
which is to create this really basic level of protection, this 
basic social safety net.
    You know, I personally don't like to call things like 
minimum wage and overtime protections, workers' comp benefits. 
They're not benefits. They're not extras. They're not luxuries. 
These are things that the law and Congress for decades have 
said are really a fundamental part of making our economy work. 
And so ensuring that the law is able to do that I think is 
really critical for the Congress.
    Ms. Blunt Rochester. Thank you.
    Dr. Sundararajan -- did I say that correctly? You mentioned 
multi-stakeholder platforms. Can you talk briefly about that?
    Mr. Sundararajan. Well, what I mean is that, you know, 
we're entering a future in which more and more of the workforce 
are not going to have a well-defined entity that they call the 
employer that is responsible for some of the protections that 
full-time employees get today. It's not so much a 
classification issue. It's just the reality of the future 
workforce is one in which a majority of them are going to be 
independent in some way.
    And so when I talk about multi-stakeholder partnerships, I 
think of the individual having some incentive to contribute 
towards these benefits. If there's an institution involved, 
like a platform, them having some incentive to also contribute. 
And then the government sort of laying the foundations, 
creating the infrastructure that allows people, giving them tax 
breaks and so on, that allows this kind of new funding model 
for the safety net to emerge.
    Ms. Blunt Rochester. Great. Thank you.
    Mr. Sundararajan. Because the -- and in many ways, many of 
the platforms that have chosen the full-time employment model 
for their providers have done so in part because that model is 
well aligned with their business model.
    Ms. Blunt Rochester. My time is short. I'm sorry.
    One last quick question, and I have 40 seconds. Ms. Block, 
it's really regarding employees' approach to retirement. Can 
you quickly talk about the risk associated there?
    Ms. Block. Sure. So, if I understood the question, how 
employees can save for retirement?
    Ms. Blunt Rochester. Or just that -- the risk of this new 
online. We have 20 seconds.
    Ms. Block. Obviously, being outside of the structures that 
were set up to ensure that workers, after a lifetime of work, 
have a basic level of security in retirement creates a big 
risk. And, again, putting that risk on employees to take care 
of that completely on their own is sort of contrary to the idea 
of the safety net.
    Ms. Blunt Rochester. Thank you so much.
    I yield back.
    Chairwoman Foxx. Thank you.
    Mr. Guthrie, you're recognized for five minutes.
    Mr. Guthrie. Thank you very much. It's interesting, and 
just the last comment that my friend, Ms. Blunt Rochester said, 
I was thinking in my head, just before I get to my question, 
was, you know, we had a world where a lot of these laws were 
put into place where a bell would ring and a thousand people 
would walk into a Ford plant and a thousand people would walk 
out. And a bell would ring eight hours later and a thousand 
would walk in and out walk. And it was just this big industrial 
machine. We had a lot of these protections in place. And then 
we went to where I was just thinking where people -- they 
worked 30 years and retired. Then I remembered, not too long 
ago, people say: Well, nobody works for somebody for 30 years. 
They're going to rotate. And so you have 401(k) where people 
can move their retirement around. And so it just seems like 
people are making different choices. And that's what we have to 
look at as we move forward. I'm not saying that the old 
traditional industrial model is still there anyway, but people 
are making different -- completely, but people are making 
different choices.
    So Dr. Sundararajan, you said -- and there's a[VO1] -- 
there's a JPMorgan Chase that noted most of the people in the 
shared economy are looking for a second income. That's 
typically who is in it. However, I think you mentioned in your 
testimony of places like UpCounsel and Gigster.
    Are you seeing or do -- are you seeing a shift where this 
is becoming a prime -- people are using this as their primary 
source of income?
    Mr. Sundararajan. Definitely. There seems to be a trend 
towards two things. One is an increasing dependence on this 
kind of platform-based economy as your primary rather than your 
secondary income and, secondly, an expansion in the set of 
professions that are associated with these platforms. It's not 
merely driving a taxi or providing sort of, like, you know, 
home services: management consulting, legal services, high-end 
software engineering. The platform model seems to be well 
suited to these professions that have sort of lived on the 
fringes of companies anyway.
    And, you know, I think that the issues of, like, you know, 
how do we structure labor law to recognize that, like, you 
know, more and more of the workforce is not going to fit well 
into that full employment -- full-time employment bucket across 
a spectrum of professions is a critical one.
    Mr. Guthrie. Thank you very much.
    And, Mr. Johnson, in your testimony, you referenced the 
need for entrepreneurs to have better access to compliance 
assistance related to tax and regulatory requirements. We're 
bringing a lot of people into the entrepreneurial world with 
these kind of platforms, but not necessarily they have the -- I 
mean, when you first started with your first booth, you 
probably had to figure out exactly all the regulatory 
requirements that you had and local licensing.
    Did you receive any advice when you were setting up and 
hiring your first employees? And do you think currently that 
these provider platform companies would be good for giving you 
advice in the regulatory world?
    Mr. Johnson. Thank you for your question.
    I do think the platforms would be a great resource. This 
seems to be -- well, for me it was, on Thumbtack.com, a place 
where I did find my first customers. And to combine that with a 
place where they could help entrepreneurs have more resources, 
get more information. Even without -- the streamline -- the 
process of registering your business and all the different 
places that registration needs to happen both local, state, 
federal, the platforms would make a great place to provide that 
information and assistance.
    Mr. Guthrie. Because I just recently talked with some 
executives at Airbnb, and I think they were very cognizant of -
- you know, you have this -- groups of people out there 
participating in, essentially, the hospitality industry. And 
they were very, very cognizant of making sure that the people 
that signed up with them complied with local -- because there 
are a lot of local taxes and stuff related to hospitality. And 
that was the attitude I felt there that Airbnb had, that was 
part of their role to make sure that took place, which I 
compliment them from that -- for that.
    And, Mr. Beckerman, I have about a minute left.
    One of the biggest challenges for policymakers is a lack of 
understanding who exactly takes part in and what their goals 
and desires are in this area. As you know, no data currently 
exists that definitely answers these questions.
    However, your testimony underscores the very diverse nature 
of both the sharing economy companies themselves and 
individuals who work on the platforms. Could you provide some 
insight related to the goals and desires of individuals 
participating on various platforms, for example, a ridesharing 
driver versus a seller on Etsy or a service provider on 
Thumbtack?
    Mr. Beckerman. Thank you.
    Yeah. Obviously, each individual is different, and the 
platforms that you're engaging on is very different for 
somebody that has a creative talent and wants to make something 
and sell it on an Etsy or eBay versus somebody that wants to 
drive part-time or someone that has an underutilized asset, 
like their apartment or home or car.
    But, largely, I think people like the flexibility, and they 
like the choice. And for many, this is a second income and an 
opportunity that they have and they like to engage in and 
choose to engage in. So I think it's important that we help 
these platforms grow and not overly regulate them or have some 
burdensome new law that would take the opportunities away from 
the individual that are getting so much out of this.
    Mr. Guthrie. I yield back.
    Chairwoman Foxx. Thank you, Mr. Guthrie.
    Mr. DeSaulnier, you're next, for five minutes.
    Mr. DeSaulnier. Thank you, Madam Chair.
    I want to thank you and the ranking member for this 
hearing. It's a wonderful follow-up to the meeting I was -- 
meetings that I was happy to be part of in the Bay Area when 
you came out. I want you to know I'm still recovering from your 
observation that I sounded like a Republican. Not helpful in 
the Bay Area to be -- and I also want to mention that, during 
that wonderful trip, I want to remind one of my colleagues from 
the other side that he threatened not to leave the Bay Area, 
that he was going to come live with me. So it was a wonderful 
trip.
    I think this is a very, very, very important discussion we 
have. And how this committee gets it right and to the industry 
being part of that I think is really the preeminent question 
for the Congress in the next couple of decades.
    Having -- living in the San Francisco Bay Area, working 
with many of these companies, trying to deal with these issues 
forthrightly, but having grown up -- and I'm reminded of this 
by Congressman Roe's comments about the Industrial Revolution -
- in Lowell, Massachusetts, where I listened to my 
grandparents' generation talk about the joys and the horrors of 
working in those textile mills, I'm reminded of how long it 
took us as a culture to figure out how we should have minimum 
wage, we should have child labor laws, that we should protect 
workers. And that was good for everyone.
    So, Mr. Johnson, I do also want to say that you reminded me 
vaguely, as I can remember, of myself when I was 26 and I 
opened my first restaurant and how wonderful it was. There is a 
cynical expression in the Bay Area restaurant business: ``Enjoy 
it while you can.'' That's not to presume that you won't 
continue to do well.
    But I do want to ask you a question. You're doing the right 
thing; you're the model we want of protecting your employees. 
So how will you feel if you -- and maybe this has already 
happened -- you have competitors in this industry in the shared 
economy who don't treat their employees as you are doing, and 
wouldn't you want to have some kind of threshold to make sure 
that you're competing fairly with them?
    Mr. Johnson. Thanks for your question.
    I think that -- there are these labor laws that do exist. 
And I really realized early on in my business that complying 
with the regulations that do exist are the minimum threshold of 
what I need to do with the business because, at any point, not 
complying with them could derail my entire endeavor. So that's 
how I decided to run my business.
    I think my -- the main point is -- for -- that I'm trying 
to communicate is that making it easier for businesses to 
comply with those regulations will help them succeed in the 
long term.
    Mr. DeSaulnier. I think that's a great answer.
    Mr. Beckerman, I engaged in some really wonderful 
conversations with many of your most important clients in the 
Bay Area to deal with both regional and international global 
issues. And one of my admonitions to them is you don't want the 
pitchforks to be coming after you, that some of the social 
displacement that your innovation is causing, you've got to be 
part of the solution. So you have a big constituency. Some of 
your clients probably feel that they should be part of that 
discussion; some of them shouldn't -- or won't be -- avail 
themselves to that open-mindedness.
    But people like to compare this to the Industrial 
Revolution, and I get frustrated with people who sanitize how 
long it took us in Congress and in this country to deal with 
the downside of the Industrial Revolution.
    So here we have an opportunity to not go through decades of 
struggle and strife and people losing their lives, having the 
Supreme Court say that the minimum wage was against the 
Commerce Clause, having them say that child labor laws 
similarly were against the violation of the Constitution. So 
people forget what a struggle this was.
    So here's an opportunity for us to have a meaningful debate 
with diverse opinions but recognize that we can't sanitize the 
fact that there's going to be social displacement. And right 
now, there are people who are suffering both because of the 
innovation. But if we don't address that forthrightly so.
    My question to you is: What I'm hearing individually from 
your companies, and do you get a sense from your -- all of your 
companies that there's a real initiative to embrace bipartisan 
discussion about how we deal with these social issues?
    Mr. Beckerman. Thank you. I'm going to appreciate that's an 
important question and topic.
    I'm really proud of our member companies on their social 
conscience and what their contributions are to their local 
communities and also our national economic community.
    These are companies that are providing a tremendous benefit 
for individuals and local economies in every --
    Mr. DeSaulnier. Mr. Beckerman, if you could make it a 
little brief, I've got 28 seconds.
    Mr. Beckerman. We're always happy to engage in a 
conversation.
    Mr. DeSaulnier. You're a professional.
    Ms. Block, in the remaining time, could you talk about -- a 
little bit about preemption. We're in a period where we want 
states to be innovators. For us in the Bay Area, we have this -
- we've innovated, but we want to protect our employees as 
well.
    How important is it for Congress to set a base level but 
let states go ahead and innovate?
    Ms. Block. Thank you. I think, you know, if you look at the 
Fair Labor Standards Act, that's how it has functioned for all 
this time. I think the troubling trend is that we're starting 
to see States preempt local minimum wage ordinances, which is 
rolling -- in fact, in some instances, rolling back protections 
for workers and decreasing their wages. But I think setting 
that national floor again for the minimum wage, we're just 
having a problem right where it's been so long, that Federal 
floor is so out of date that you're creating these huge 
disparities, and you really do have workers in many States 
being left behind.
    Mr. DeSaulnier. Thank you.
    Chairwoman Foxx. Thank you, Mr. DeSaulnier.
    Mrs. Handel, you're recognized for five minutes.
    Mrs. Handel. Thank you, Madam Chairman.
    First of all, Mr. Johnson, hats off to you starting a small 
business let alone one in this new economy is not only 
exciting, but being able to be successful at it is an 
incredible mark to your ability to identify a needed service 
product and your perseverance.
    You talked a little bit about the need to make it easier 
for companies to navigate through the regulatory climate. It 
strikes me that as both a small business person and in this new 
economy that you, perhaps, faced some unique regulatory 
challenges in trying to navigate through.
    Can you just briefly talk about a few that you felt were 
particularly onerous as you tried to get up and running and 
keep moving forward to be a successful company?
    Mr. Johnson. When starting SnapSeat -- and, you know, my 
background in accounting is kind of more focused in some 
business management at a nonprofit. That's really where my 
last, like, regular job was. I had some exposure to compliance 
and the, you know, insurance needed as a business entity in 
that end of a business. So, from my experience, that gave me a 
little bit of a leg up into understanding that there was this 
whole back end that was needed as far as compliance went.
    I only can imagine what it would be like for somebody who 
maybe has a skill or a service they want to provide and doesn't 
necessarily have that much exposure or experience with 
compliance with State, local, and Federal regulations and 
registering a business and paying -- remitting sales tax and 
all the things; that would be really challenging.
    So whatever we can do to kind of make it more clear for 
business owners, entrepreneurs, to have the info, the 
information they need on how to comply with those regulations I 
think would be very helpful.
    Mrs. Handel. One followup. Any particular area of labor law 
that was particularly onerous that you'd like to share comments 
on so that we could take that into consideration as we move 
forward as a committee?
    Mr. Johnson. Not really sure there's anything necessarily 
in particular. I mean, even just, you know, understanding how 
to become an employer in my state, you know, what was required 
of me to do that was, as I said, a challenge to navigate. And 
making it easier to do would be helpful.
    Mrs. Handel. Super. Thank you. Well, best of luck.
    Dr. Sundararajan, real quickly, you testified that it was 
critical to review how employer benefits, workers' comp, 
vacations, et cetera, are determined and paid within this 
sharing economy as it continues to grow and expand. Do you have 
any specific thoughts or ideas for this committee that we 
should keep in mind, again, as we do our work around this 
issue?
    Mr. Sundararajan. Thank you. Yeah.
    I think sort of like the touchstone should be to look for 
partnership models. You know, there was talk about, you know, a 
world in which you would work for 30 years and then you'd get a 
pension. And we don't live in that world, sort of like -- you 
know, that industrial world anymore. But, you know, the 401(k) 
has emerged as a way of, you know, incenting the individual to 
save towards retirement, providing the company with some way of 
contributing towards that while not taking complete 
responsibility and the government saying, ``Well, if you do 
this, you can tax defer your money.'' So that's the kind of 
partnership model -- that's the kind of template that you 
should be using to think about new ways of funding other slices 
of the safety net that used to be either provided through, 
like, employers responding to the market or through someone 
being a full-time employee.
    Mrs. Handel. All right. Thank you very much.
    Madam Chairman, I yield back.
    Chairwoman Foxx. Thank you.
    Dr. Adams, you're recognized for five minutes, but we'd 
appreciate if it went less.
    Ms. Adams. Yes, ma'am. Thank you, from one teacher to 
another.
    Thank you, Madam Chair, and ranking member for convening 
the hearing.
    And thank you very much for your testimony.
    Let me just get right to my questions then. So, Mr. 
Beckerman, you claim that online platforms are helping to 
eliminate prejudices and biases in the work fields. However, 
this statement is a contradiction by the fact that members of 
African Americans, Hispanics, and women in the tech industry 
lag behind those of their peers. So do you have any suggestions 
on how to ensure that diversity is not just reflected in the 
demographics of independent workers but also in the boardroom 
as well?
    Mr. Beckerman. Thank you. That's a great question.
    I think that's an issue that our companies and industry as 
a whole take very, very seriously and are certainly working on. 
And there's a lot of progress that needs to be made. And it's 
something at the association that we've been working on to 
help, you know, build a stronger pipeline of diverse candidates 
for jobs in our industry. And so, you know, we appreciate you 
working with us on that.
    On the other part of my testimony of opening up 
opportunities in underserved communities from the sharing 
economy platforms and -- they do certainly do that. There have 
been many instances from -- you can look in the hotel industry 
-- certain areas where there are no hotels or areas where taxis 
haven't served. A lot of those issues have been resolved 
because of the sharing economy platforms, and that's a real 
positive as well.
    Ms. Adams. Thank you.
    Ms. Block, we've heard a lot of discussion today about 
raising the wage. And I worked in the legislature for 20 years, 
10 of those trying to get the state minimum wage increase. And 
that was in 2006. We did $1. And then, of course, the federal 
government did what it did. And nowhere did we index it. And so 
people are still struggling because at $7.25, you can't 
survive.
    But you mentioned that we should be focusing on enacting 
policies that raise the wage and increase the overtime 
threshold and to encourage full-time employment. But based on 
what we know about the composition of the workforce, isn't it 
true that doing so better serves minority groups and the youth 
than focusing on regulation of the shared economy?
    Ms. Block. As we talked about before -- and thank you for 
the question. I mean, it is, to me, the most urgent question 
that faces us right now is, how do we raise wages? And as you 
mentioned, it is a particular challenge for minority work 
populations. And we still have an unemployment rate for black 
workers that is significantly higher than for the general 
population. And so, you know, I think looking at full 
employment is important for the economy generally. But it is 
obviously even more important for those populations that are 
still facing unacceptably high levels of unemployment. So I 
would agree with you.
    Ms. Adams. Thank you.
    Mr. Sundararajan -- if I mispronounced it, excuse me. What 
role should --
    Mr. Sundararajan. -- every congressional hearing with my 
name.
    Ms. Adams. I tried to do it by syllables, you know.
    What role should government play in ensuring opportunities 
in what you call ``crowd-based capitalism'' reach the 
economically disadvantaged?
    Mr. Sundararajan. I think that government should favor 
those platform models that have -- that imbue sort of a genuine 
decentralized ownership. And what I mean by that is, rather 
than the individuals who are connecting to the platforms just 
providing labor, we should really encourage those platforms 
that are inducing the creation of tiny businesses where people 
are making pricing decisions, they're making inventory 
decisions, they're merchandising, they're building a brand 
through the online reputation system.
    And the reason why I think this is particularly important 
is because, as we increase the fraction of the workforce that 
genuinely owns capital, that will naturally reduce inequality 
and increase sort of equitable access in the long run.
    Ms. Adams. Thank you.
    Madam Chair, I'm going to yield back.
    Chairwoman Foxx. Thank you very much.
    Mr. Allen, you're recognized for three minutes.
    Mr. Allen. Okay. Thank you.
    Madam Chairman, and -- boy, we got a lot of challenges in 
solving this issue with employment. Just from the standpoint of 
my time in my district, everywhere I would go, there were job -
- jobs -- lots of jobs. In fact, I believe there's like 6-1/2 
million jobs open in this country right now. The jobs in my 
district were in the $20 to $30 per hour range, with full 
benefits, by the way.
    And, of course, Mr. Beckerman, you testified that -- and I 
think there's over a million gig jobs open today, and you are 
saying that they're $26 do $34 an hour or more. Yet we've got 
45 million people in this country on government assistance and 
-- meaning healthcare and benefits and whatnot that the 
government's paying for. And then we have this massive teacher 
shortage in this country; why people don't want to become 
teachers. I think we got a lot of questions we got to ask about 
what in the world is this government doing and how do we 
correct this problem that we've got in this country, and how we 
can get our workforce participation rates up.
    Like -- one of the issues that did come out of my district, 
Mr. Sundararajan, is some fear innovations like the home-
sharing platforms are -- have an advantage over traditional 
hotel and lodging arrangements. One concern that comes to mind 
is the fact that the hotel industry is highly regulated while 
home-sharing platforms are not. To what extent do you think 
such concerns are founded? In other words, the Airbnbs are not 
regulated; the hotel industry is heavily regulated. And the 
hotel industry thinks that's a bit unfair.
    Mr. Sundararajan. Well, I think that we have to recognize 
that a lot of the regulations that apply to the hotel industry 
have been developed specifically for the hotel industry's 
business model. And the fact that not all of them are imposed 
immediately on an Airbnb host is important because an Airbnb 
host is not a large, sort of, multinational hotel. And so, you 
know, we will go through a transition period during which, you 
know, there will be an imbalance in the extent to which these 
different sectors of short-term accommodation are regulated.
    Mr. Allen. Yeah. Well, the issue is there are folks who are 
developing Airbnbs rather than just private homeowners who are 
doing it.
    Mr. Sundararajan. Yeah.
    Mr. Allen. And so, obviously, you know, they've got some 
real concerns there.
    Any suggestions on how we address the hotel industry 
concerns in this?
    Mr. Sundararajan. Well, I think that a good way to move 
forward would be to look at policy where people who are running 
what looks like a large hotel through the Airbnb platform, 
those are people who should be cracked down on, and we should 
restrict Airbnb to be genuinely sort of individuals who are 
sharing their homes.
    Mr. Allen. Okay. All right. Well, Chairlady, I'll yield 
back.
    Chairwoman Foxx. Thank you, Mr. Allen.
    Ms. Wilson, you're recognized for three minutes.
    Ms. Wilson. Thank you, Chairman Foxx and Ranking Member 
Scott, for holding today's hearing. And I also want to thank 
our witnesses for sharing your perspectives with us today.
    Today we are discussing the subject of extreme importance 
for our Nation's economy and our Nation's labor force, 
particularly those workers employed by way of technology -- a 
technology platform or smartphone app, which is being referred 
here today as the sharing economy.
    As a Representative from the city of Miami, certainly, 
businesses such as Airbnb, Uber, and Lyft are critical. Indeed, 
the sharing economy has dramatically improved our Nation's 
standard of living, both in south Florida and across the United 
States, and has become an integral sector of the American 
economy and spurred business growth while also benefiting 
consumers nationwide.
    Decades ago, hardly anyone would have imagined a day when, 
at the touch of a button on one's phone, it was possible to 
hail a ride, purchase groceries, or find a plumber with 
relative ease. Yet although the shared economy has brought 
tremendous benefits to our Nation, those who work in this 
sector still -- are still in need and deserve basic workforce 
protections. Indeed, unemployment insurance and workers' 
compensation should not disappear merely because one is 
employed in the sharing economy.
    Unfortunately, we have seen in many cases that the 
companies that participate in the sharing economy classify 
their employees as independent contractors. And as such, these 
workers are denied key work protections, such as the statutory 
right to the minimum wage, overtime pay, OSHA protections, or 
unemployment insurance, among others.
    This practice I believe is unfair. Moreover, the same thing 
has been happening in the construction industry and other 
related industries for years. Congress must put an end to the 
practice of wrongfully classifying employees as independent 
contractors. That is why I reintroduced legislation that seeks 
to improve the tools available to address this problem.
    The Payroll Fraud Prevention Act, House Resolution 3629, 
which I encourage all of my colleagues to cosponsor, is a bill 
which requires employers to accurately classify their workers 
and provide employees with notice of that classification. If 
passed, it will strengthen the Fair Labor Standards Act to 
ensure that more American workers, businesses, and taxpayers 
receive the fair treatment they deserve. Currently, there are 
simply too many workers being classified as independent 
contractors when in reality they are employees of a specific 
company.
    I would like to address a few questions to our esteemed 
witness --
    Chairwoman Foxx. Ms. Wilson, I'm afraid your time is up.
    Ms. Wilson. Oh, my time is up.
    Chairwoman Foxx. Thank you.
    Ms. Wilson. I yield back.
    Chairwoman Foxx. Mr. Thompson, you're recognized for three 
minutes.
    Mr. Thompson. Thank you, Chairwoman.
    Mr. Beckerman, I want to thank you for being an advocate 
for the sharing economy. As co-chair of the Career and 
Technical Education Caucus in the House, I often highlight the 
rapid pace at which our 21st century economy, driven by 
technology advances, and, in turn, our 21st century workforce 
is changing. You and I seem to be on the same page about that 
fact, but we need to make sure our federal policies reflect 
those changes.
    Now, you mentioned that state and local regulations have 
the potential to stifle job growth, especially in the sharing 
economy when they are misplaced or misguided. I do believe that 
overregulation can discourage bright entrepreneurs with 
valuable skill sets from joining certain industries.
    Can you explain how this would be detrimental to our global 
economy?
    Mr. Beckerman. Yeah. Thank you for the question.
    One, a lot of these platforms are global. And it's 
important, and the United States I think certainly has been a 
role model for the world in the policies we've had and the 
growth of these platforms being born in the United States.
    On some of the local laws and regulations that have come 
up, a lot of them, frankly, have just put been in place, the 
new ones, to keep out competition. And I think that's something 
that's certainly harmful to the global economy and the U.S. 
economy.
    Mr. Thompson. Thank you.
    Mr. Johnson, I want to thank you for sharing your personal 
story with us. And congratulations on both sons that you and 
your wife have had. Congratulations on your many successes.
    The fact that you were able to start and run a small 
business with few hiccups and no debt really is incredible. It 
certainly helps to demonstrate the benefits of the sharing 
economy.
    Now, you briefly mentioned the difficulty you encountered 
forming and registering your business on the local, state, and 
federal level. Can you elaborate on your experience perhaps 
with the Small Businesses Administration? Were you referred to 
the Small Business Administration or Small Business Development 
Centers, or did you seek out their help on your own? And what 
support do you feel they should offer entrepreneurs that they 
were unable to offer you?
    Mr. Johnson. Starting a business is definitely an 
overwhelming -- it can been an overwhelming endeavor. There's a 
lot of things you have to consider, whether it's financing and 
pricing, how much to charge, you know, what you're going to 
offer for services, and how to get your business off the 
ground, how to register it. You know, I'm just an advocate for 
seeing some mechanism that would enable business owners and 
entrepreneurs starting out to have the resources they need to 
be successful. I don't think it's necessarily like having to be 
capital and money or loans. I think that having educational 
opportunities and better understanding of what the legal 
requirements are, the laws they need to comply with, you know, 
a lot of things that we've -- have been discussed today. If you 
can give those -- these entrepreneurs like me more resources to 
comply, I'm going to imagine that they would.
    Mr. Thompson. And a lot of those are out there, to a large 
degree, through the Small Business Administration, specifically 
Small Business Development Centers. So I just encourage 
entrepreneurs to look there.
    Thank you.
    Chairwoman Foxx. Thank you very much.
    Mrs. Davis, you're recognized for three minutes.
    Mrs. Davis. Thank you, Madam Chair.
    Thank you to all of you for being here today.
    I know that we're talking about a piece of the economy 
that's relatively small, quite small. And yet many of the 
issues that are occurring are -- have been coming over a 
greater period of time, not just with the sharing economy. And 
so I appreciate that we need to really focus more broadly 
sometimes and not necessarily just targeting. But this is a 
very good conversation.
    Could you speak -- maybe, Mr. Beckerman, you could pick up 
on this. Traditionally companies, as you know, have played a 
key role in training and development for their workforce. And 
so, as we see increasing automation in some of the spaces 
within the sharing economy, what role do you think companies 
should still be playing in helping workers grow so that they 
don't really get left behind in the technology of the future? 
How can they play maybe even a different role than 
traditionally has been played?
    Mr. Beckerman. Certainly, well, certainly broadly, all 
companies, regardless of industry, have an important role to 
play in educating the workforce and ensuring that, you know, 
future generations have the skills they need to compete in an 
evolving economy.
    Specifically, when you look at these platforms, I mean, 
really, what they are, they're just connecting supply and 
demand. And so I think that does create a lot of opportunities 
for people with varying skill sets to be able to compete in the 
economy in ways that they previously couldn't.
    Mrs. Davis. Do you -- as we talk, you know, about 
apprenticeships, in even a new way today, do you see a role for 
them, or are they really so small in many ways that that's not 
a possibility to even think in terms of, how would you create 
those? How would you attract young people who, you know, are 
making some of their decisions as they're leaving high school? 
How does that work?
    Mr. Beckerman. Certainly, actually, it's something at the 
association that we worked on with organizations like After-
School All-Stars that do STEM and computer science programming 
for young people in middle school. And that's something that we 
have worked on and many of our companies have worked on, which 
is important for -- regardless of the job people are taking.
    Mrs. Davis. Anybody else want to comment on how they see 
that role?
    Mr. Sundararajan. I can -- so I think the role of a 
traditional large company shifts a little on the training front 
because what the humans do in the company is going to change 
quite significantly over the coming decades. And so a forward-
looking large company would not just be thinking about 
enhancing the skills of their workers to help them do their 
current jobs better but thinking about, how do I retain the 
talent that I have acquired if the work that this talented 
person does today is no longer something that a human being has 
to do? How do I transition them into doing something different?
    Mrs. Davis. And you see conversations.
    Mr. Sundararajan. Yes.
    Mrs. Davis. -- about that.
    Mr. Sundararajan. Absolutely.
    Mrs. Davis. That's great. I think my time is up.
    Thank you so much.
    Chairwoman Foxx. Thank you, Mrs. Davis.
    Mr. Grothman, you're recognized for three minutes.
    Mr. Grothman. A couple questions. I know one of our goals 
in the new economy is obviously -- you hear about lack of 
family-supporting jobs out there. And it would certainly be 
great if more people could make -- I suppose it depends around 
the country, the cost of living, whether a family-supporting 
job is 40,000 or 60,000, or what it is.
    But could you comment -- and I'll ask, you know, any one of 
the three. I'll give a question to Ms. Block later -- as to -- 
give some samples of earnings people are participating in the 
new economy and how those earnings would be affected if we 
regulated things a little bit more.
    Anybody here have any anecdotal evidence about how much 
people make at given jobs in --
    Mr. Beckerman. Sure. Go ahead.
    Mr. Sundararajan. I was just saying that there's so much 
diversity in the sharing economy that it's hard to come up with 
a meaningful average of, like, you know, this is how much 
someone makes.
    Mr. Grothman. Go with anecdotes. I would say probably the 
ability in the new economy to make $10,000 a year, and there 
are probably abilities to make a few hundred thousand a year. I 
just want some anecdotes.
    Mr. Sundararajan. I think the majority of people who 
participate in the sharing economy today and are running these 
tiny businesses are earning in the tens of thousands. But I 
think as we transition into the these platforms covering, you 
know, a wide range of professional services -- legal services, 
consulting, software engineering -- we are going to see a lot 
more of people earning in the hundreds of thousands rather than 
the tens of thousands.
    Mr. Grothman. Is there a lot more flexibility in the new 
economy for people who maybe don't want to work during the day 
or want to work on weekends or want to work at night or maybe 
because of their family situation only want to work 20 hours a 
week or people who need money a lot and want to work 70 hours a 
week? Could you elaborate on the flexibility in the new 
economy, and is this a good or bad thing?
    Mr. Sundararajan. There does seem to be far greater 
flexibility in the work arrangements that the sharing economy 
has created. I do acknowledge that, even within the confines of 
a full-time employment model, you can provide some flexibility. 
But the kind of absolute flexibility that you get from 
connecting to a platform when you want and completely setting 
your own work schedules, that is new.
    Mr. Grothman. It's a tremendous thing, because if I want to 
work 15 hours a week, I can. If I want to make a lot of money, 
I can work 60 hours a week.
    I will give one question to Ms. Block. And I'm not sure 
you'll really feel comfortable answering it, but it's just 
something that, looking at the four of you up here and this 
obviously the only hearing you've testified on, but over a 
period of years -- been here a few years -- it's not unusual to 
have four people before us. And the one person -- and I love 
the Democrats. I love you all. But the one person that the 
minority picks is the college professor. I notice that it's not 
the first time that's happened.
    Do you want to take a stab as to why it happens to work out 
that way?
    Ms. Block. Well, first, I'm actually not -- I'm sorry. I do 
work in a university. But, actually, the bulk of my career has 
been in government. And I've also been in this committee room 
many, many times sitting right there supporting my colleagues 
in different government agencies.
    But I do think that being in a university gives you an 
interesting perspective and a broader perspective, and you have 
the freedom to talk to lots of different people in a different 
way. So that I think that witnesses from academia can bring an 
interesting perspective to these conversations.
    Mr. Grothman. Thanks for coming over again.
    Chairwoman Foxx. Thank you, Mr. Grothman.
    Mr. Polis, you're recognized for three minutes.
    Mr. Polis. Thank you, Madam Chair and Ranking Member Scott.
    I'm very excited about this important hearing following up 
on the work of this committee. And I joined my colleagues on 
both sides of the aisle in California visiting and learning 
about this a few months ago.
    My first question for Dr. Sundararajan. In Denver, in 
Colorado, there's a new business model within the sharing 
economy of employee ownership. A good example is a co-op called 
Green Taxi. Drivers work flexible hours, and they enjoy 
ownership in the co-op, the taxi co-op. Employee ownership has 
potential across a number of different industries. There's a 
home care worker co-op, also in many ways part of the sharing 
economy.
    And employee ownership is a very good thing. It allows 
companies to invest in employees, expands business ownership 
opportunities, make sure that workers can share in the value 
they create.
    In your testimony, you spoke about the value of employee 
ownership programs like Green Taxi. Can you talk about how the 
sharing economy can foster an increase in capital ownership 
from workers, how value can be created on the capital side for 
participants in the shared economy, and how the Federal 
Government can encourage employee ownership along those lines?
    Mr. Sundararajan. Well, I certainly think that there is a 
long history of cooperative work arrangements working -- 
cooperative ownership arrangements working in certain sectors 
where you didn't have the need for a great amount of capital, 
where technological progress was relatively slow, and where the 
contributions of each individual were relatively equal. So 
taxis work better than, say, software engineering.
    I think that there's a unique opportunity to encourage the 
ownership of business by allowing providers to own slices of 
equity in the platforms that they provide towards, so provider 
stock ownership programs, so to speak. Because this would take, 
like, you know, sort of, like, you know, the digital enabling 
capability and the global scale of the large platforms and 
combine it with the decentralized ownership that we've 
historically seen in cooperatives. So I certainly encourage 
Congress and the government to look to ways to encouraging 
provider stock ownership programs.
    Mr. Polis. And to what extent can that occur today and to 
what extent do we need to change laws here to facilitate that 
kind of employee ownership for co-ops.
    Mr. Sundararajan. I think that the infrastructure for 
provider stock ownership, especially for companies that are 
privately held -- for platforms that are privately held -- is 
very challenging. As some of these companies go public, we may 
see some more of these emerge.
    Mr. Polis. Okay.
    And for Ms. Block, in the last 30 seconds, you may be 
familiar with blockchain and distributed ledger technologies 
that allow transactions to be made between individuals without 
the need for a middleman or a centralized server.
    How are you seeing blockchain or other innovations apply to 
the sharing economy?
    Ms. Block. So, other than that, I'm not particularly 
familiar. But I'm happy to look into it and get back to you.
    Mr. Polis. Great. Well, you only had five seconds anyway. 
So I will look forward to a written response.
    And I yield back.
    Chairwoman Foxx. Excellent timing.
    Ms. Stefanik, you're recognized for three minutes.
    Ms. Stefanik. Thank you, Madam Chairwoman.
    Our workforce is changing. As of April 2015, the millennial 
generation is the largest generation in our workforce. And in 
that generation, we have a few key differing characteristics. 
We're the most well-educated generation. We're also the most 
diverse education. We also tend to be more mobile in terms of 
moving where we live. We also face unique challenges, whether 
it's our entitlements crisis, whether it's our retirement 
savings crisis, or our student loan crisis.
    I'd be curious, Mr. Beckerman, if you could discuss how 
opportunities in the sharing economy specifically provide 
economic opportunity for millennials. And then, beyond that, 
how does it impact other generations beyond millennials?
    Mr. Beckerman. Thank you. Great question.
    All the points that you laid out is exactly why these 
platforms are, you know, tailor made for millennials and why 
millennials are using them.
    In my written testimony, I don't have the number right in 
front of me, we break -- I break down the percentage of people 
that are using the platforms to earn money, from millennials to 
baby boomers. And it's pretty well spread out. I don't know if 
-- I don't think the millennials are the bulk of it, but it's 
being used by a pretty diverse age group. But it's good for 
everybody, and millennials, in particular, like it.
    Ms. Stefanik. Other comments?
    Mr. Johnson, as -- I'm not sure how old you, but you look 
somewhat in my age range. Talk to me why you chose -- you know, 
you're not an employee of Thumbtack. You are a business owner 
and use Thumbtack as a service.
    How did that work for you? Why did you make that decision?
    Mr. Johnson. I'm very impressed with what Thumbtack has 
done as a business itself. And for me, it really enables a 
marketplace for people who are looking for local services to 
find local service providers, and for a local service provider, 
it allows me to find new customers daily based on the clients I 
know I can serve best. And what's really interesting about 
Thumbtack is that -- you know, you kind of talked a little bit 
about mobility or -- I mean, I could maybe pick up and start a 
photo booth company in New York City with, really, just a 
couple clicks. Or if I wanted to use some business coaching and 
help some other business owners based on my experience, I could 
start a business coaching profile on Thumbtack and start 
receiving leads in my inbox to do something like that.
    So it really is a mechanism for people to create small 
businesses and microbusinesses and generate more revenue or 
income for themselves.
    Ms. Stefanik. Great. Thank you.
    And one additional question.
    Mr. Beckerman, do you have data on the gender breakdown? 
How -- what percentage of the sharing economy is made up of 
women, for example?
    Mr. Beckerman. Yeah, I would be happy to get that to you. I 
don't have the number off the top of my head, but we have that 
in our datum reports, and we could share that with you.
    Ms. Stefanik. Okay. Thank you very much.
    I yield back.
    Chairwoman Foxx. Thank you.
    Ms. Bonamici, you're recognized for three minutes.
    Ms. Bonamici. Thank you very much, Madam Chairwoman. This 
is a good discussion and an important discussion.
    It's clear that our economy is changing rapidly. This 
conversation and others we've had about the sharing economy 
show that it changes much more rapidly than our workplace 
policies.
    I think we have to keep in mind what it means to our 
constituents when they go to a job that provides security and 
dignity and a living wage. In my home State of Oregon, the 
state legislature has enacted many policies that help with that 
security and dignity from increasing the already indexed 
minimum wage to giving workers access to paid sick days to 
easier ways to save for retirement and to scheduling 
predictability. All of those things help.
    But I wanted to talk about access to healthcare. And I know 
Mr. Johnson mentioned that in his written testimony how 
important that is. For people starting a small business, 
recognizing the importance of that access. Of course, before 
the Affordable Care Act, if someone had a preexisting condition 
and there was -- they could be denied. They were either in a 
job lock or stuck in an insurance policy and couldn't take a 
risk or start a new business or go somewhere because they were 
stuck if they or someone in their family had a preexisting 
condition.
    We've had a lot of conversations here on the Hill about 
repealing the Affordable Care Act. People across the country -- 
in fact, many small business owners -- spoke up. About one in 
five of the marketplace customers is a small business or a 
self-employed individual.
    So I want to ask you, Ms. Block, to talk about the 
importance of the Affordable Care Act, which we all acknowledge 
isn't perfect but is providing that opportunity for individuals 
and small businesses, talk about the importance of the ACA to 
workers in the sharing economy.
    Ms. Block. Sure. Thank you for the question. I'm happy to 
talk about the importance of the Affordable Care Act. And, you 
know, I think you really articulated it. If part of what's 
important in our economy is to have dynamism and people being 
able to move from opportunity to opportunity, the Affordable 
Care Act is a really critical piece of that. And, again, in 
thinking about creating a safety net so that people can have 
the dignity of work and be able to continue to participate in 
the economy, being able to have reliable healthcare is -- 
seems, obviously, a really important piece of that. So 
incredibly grateful that the Affordable Care Act is still 
there. But I think that's -- all of the factors are as true for 
people working in the sharing economy as they are for anybody 
else.
    Ms. Bonamici. Right. Thank you.
    And my time is about to expire. I yield back.
    Thank you, Madam Chairwoman.
    Chairwoman Foxx. Thank you very much.
    Mr. Espaillat, you're recognized for three minutes.
    Mr. Espaillat. Thank you, Madam Chair, Ranking Member 
Scott.
    Certainly, the sharing economy is revolutionizing economies 
all over the planet. And, obviously, it's a very exciting time. 
But with that comes some concerns. And I wonder, Ms. Block, if 
you can shed some light on what measures can be taken to ensure 
that consumers are protected in initiatives such as Airbnb, 
Uber with regards to, for example, safety, liability issues. 
There's a great deal of concern that that's not being really 
looked at in a comprehensive way, the impact that it may have, 
that, in fact, the sharing economy may try to circumvent some 
of these regulations that are so important to consumers.
    And the second question is for any of you if you like to: 
Do you see any danger in the sharing economy sort of like 
turning its head on encouraging or strengthening monopolies. 
For example, will Uber rule the world? Will they take out 
yellow cabs, livery cabs, that are smaller mom-and-pop 
operations that provide significant economic traction in 
neighborhoods? Because of their economic power, will they rule 
the world, and is there a danger for monopolies as well?
    Ms. Block. Sure. Thank you for the question.
    And starting first with consumer regulation, though it's 
not my field of expertise, I think a lot of the issues that you 
want to look at in that sector -- in that area are the same 
that you look at in terms of labor and employment law. It is -- 
the fact that the service is being enabled through technology 
really make a difference in the application of the law. What 
was the intent of the consumer protection law, and is it 
equally applicable to a ridesharing service where you just 
happen to call the car through an app as it is through a taxi? 
I think often that answer is going to be no, just as for labor 
and employment. It doesn't really matter to a driver whether 
they got that assignment to pick up somebody through a 
telephone call from a cab company or through an app. What they 
are doing in their relationship to the company that made the 
assignment is the same. So I think you just want to go back to 
not being necessarily distracted by the fact that it's 
technology. I mean, companies evolve over time throughout the 
history of our economy. It doesn't mean that the basic values 
embedded in either consumer protection law or in employment law 
don't apply anymore.
    And, again, I'm not an antitrust expert, so I'd be really 
careful about talking about the role that Uber plays in terms 
of whether there's a danger of monopoly. But I do think your 
question brings up an important issue over whether there's a 
level playing field. And, again, this comes back to this same 
issue of whether regulations should apply in the same way to 
different actors in an industry just because they are 
technology-enabled and what impact that has on that company's 
ability then to compete in that sector.
    Mr. Espaillat. Thank you.
    I yield my time.
    Chairwoman Foxx. Thank you very much. I will now recognize 
myself for three minutes.
    Dr. Sundararajan, thank you again for being with us today. 
Again, thanks to all the witnesses.
    You mentioned in your testimony the sharing economy means 
different things to different people. But if you read our 
legislation, you see we're very keen on having standard 
definitions around here for what we do and what kind of public 
policy we want to put in place.
    You have alluded in your comments to the need to determine 
some standard definitions and to define what is it we want to 
accomplish in order to decide what regulations. And Mr. 
Beckerman has talked a little bit about data.
    What data do you think would be most important to determine 
who's participating in the sharing economy and for what 
purpose?
    Mr. Sundararajan. You know, I certainly think that we could 
benefit from having clear numbers on the number of people who 
are participating across different industries, the amount of 
time that they are spending on these activities, and not 
everybody's contribution is best measured in time. You know, a 
lot of it is in capital, but also, you know, what revenue they 
are generating from these activities.
    Chairwoman Foxx. Are you doing any of that research, or do 
you know anyone who is?
    Mr. Sundararajan. Well, I've been working for the last four 
years on trying to convince different privately held sharing 
economy platforms to sort of create a way of reporting this 
information. I think I'm making some progress. But a little bit 
of encouragement from you would certainly not hurt.
    Chairwoman Foxx. Thank you very much.
    Mr. Johnson, again, thank you very much for being with us 
and sharing your personal story. You mentioned about using 
Thumbtack's platform connecting with -- you with your first 
client.
    Did you -- what alternatives did you have to using 
Thumbtack, and do you think you would have been as successful 
without Thumbtack?
    Mr. Johnson. I think in today's economy, and in my 
industry, digital marketing is very important: platforms like 
Thumbtack and having a direct connection to people interested, 
having a website where I'm generating leads, even social media, 
Facebook, Instagram, all important in attracting and acquiring 
customers.
    And I think about even today what I would be doing if I 
wasn't receiving so many clients digitally. And I would be, 
like, maybe knocking on doors at PTAs and, you know, wedding 
venues and trying to make networking connections. And I really 
feel like people are really interacting more digitally. And 
that's -- it's just -- it's kind of a natural extension of what 
people are already doing, that they're looking for service 
providers digitally.
    Chairwoman Foxx. Thank you very much.
    Mr. Scott, you're recognized.
    Mr. Scott. Thank you, Madam Chair.
    Ms. Block, it's been noted that, when you're in the kind of 
gig economy, your income has wide fluctuations. A lot of people 
have trouble dealing with this because their monthly expenses 
don't fluctuate. They have a mortgage or rent, car payments, 
food, utilities.
    What can be done to kind of smooth those out? If you can go 
periods where you don't get a contract, so you have, really, no 
income, in the employment situation, you get unemployment 
compensation. What can be done to help people deal with the ups 
and downs in the gig economy?
    Ms. Block. Sir -- and thank you for the question. I mean, I 
think you've hit on one of the things we can do, which is to 
make sure that, to the extent the people do -- are in actual 
employment relationships, that they're being treated as such 
and then that they, therefore, do have access to unemployment 
compensation if there are periods of time where there isn't 
enough work.
    I mean, I think there are also interesting conversations to 
be had about adapting the unemployment compensation system to 
deal with income fluctuations.
    But the last thing I'd say is I also think it's a really 
important question to look at why people are needing -- why 
people have these income fluctuations, why people are needing 
to fill in their income with short-term engagement in the 
sharing economy. I mean, why don't people -- why don't -- why 
aren't we creating enough good jobs that pay enough for people 
to have a full-time job that can allow them to support their 
families? Why do they need to drive Uber cars at night to 
supplement income? I mean, I think that's actually the really 
important question that we have in our economy today when we 
look at how many people are coming in and out of the sharing 
economy and what that does to their income.
    Mr. Scott. In addition to that, I think some may need 
access to some kind of insurance for loss of income due to 
injury, family situations, as well as just fluctuality within 
the contracts.
    Can you say a word, in the last few seconds I have, on the 
impact this has -- you served on the National Labor Relations 
Board -- what the sharing economy has to do with the right to 
organize?
    Ms. Block. Again, to the extent that people who are 
actually in an employment relationship who are employees are 
being misclassified as independent contractors, that's taking 
that really basic right to have sort of a voice in their 
workplace and in their economy away from them. So I think it's, 
again, another critical, important aspect of ensuring that 
people who are properly classified as employees, you know, that 
-- that right is enforced is, you know, exactly what you 
mentioned, that they lose the right to [audio malfunction in 
hearing room.] But even outside of that, to people who truly 
are independent contractors, again, it's a big economy to be 
operating on your own. And so finding ways that they can stand 
together and have some voice in these platforms -- and I think 
the idea about finding ways to encourage cooperative ownership 
of these platforms is a really, really interesting one and one 
that I think is worth more examination and conversation.
    Mr. Scott. Thank you, Madam Chair.
    Chairwoman Foxx. Mr. Scott, thank you.
    I'll now recognize you for your closing comments.
    Mr. Scott. Thank you, Madam Chairwoman.
    I want to thank our witnesses. This has been a very 
constructive discussion. I think there's a lot Congress has to 
do to react to the innovation and technological advances in our 
economy.
    The sharing economy has spurred business growth, benefited 
consumers, reduced inefficiencies, and improved lives. But 
there are a lot of complications. The right to organize is just 
one. Middle -- good middle class wages in the auto industry 
didn't happen by accident. They happened because those wages 
were negotiated. And without that negotiation, those wages 
would not have been good middle class wages.
    We need to make sure that people have a safe workplace and, 
to the extent possible, some kind of consistent income. A lot 
of people have trouble, if their income varies wildly from 
month to month, making basic expenses.
    We need to continue working on this because there are 
challenges that we're going to have to address.
    And, of course, Madam Chair, there are other issues that 
we've mentioned that we hopefully will address in addition to 
that.
    So I thank you for the hearing and yield back.
    Chairwoman Foxx. Thank you, Mr. Scott.
    I want to say that I like to associate myself with the 
first part of your comments today. Let me see. You said 
Congress should support innovation, technological advances. The 
sharing economy spurred business growth, benefited consumers, 
reduced inefficiencies, and improved Americans' lives.
    Mr. Scott. How about that right to organize?
    Chairwoman Foxx. I like that.
    We agree on those comments. I think any time we have an 
opportunity to say that we agree.
    But then I think our views differ.
    Chairwoman Foxx. I often would say if I put a glass up 
here, an 8-ounce glass with 4 ounces of water in it, I almost 
always see it as half full, and my colleagues almost always see 
it as half empty.
    You know, we live in the greatest country in the world, the 
absolute greatest country in the world. And that is because of 
the freedom we have. I am so convinced of that. We have the 
freedom to create all these wonderful businesses and industries 
that have come about. I talk a lot about our phones. Thank God 
the Federal Government did not get involved with regulating 
cell phones. If it had, we'd be carrying bat phones around with 
us now, and we wouldn't have the technical innovations that 
have occurred. So I think any time you invite the Federal 
Government to start regulating something, you stifle 
innovation, I think.
    People have the freedom to be involved in the sharing 
economy or not. That is the way I look at it. And people can go 
to work in a factory, and if they are looking for a certain 
amount of security, if they're looking for a regular paycheck 
and the things that come from different jobs, if they're 
looking to utilize their talents, to work day and night, to 
work whenever they want to, or I think, as Mr. Beckerman said, 
where is it that you can just wake up in the morning and choose 
not to go to work and not risk your livelihood? The sharing 
economy gives ultimate freedom to people in this country. And I 
think we attempt to regulate it at our peril.
    And I just want to say it's not the government's role to 
create a level playing field. You know, they've tried that in 
Eastern Europe. They've tried it in Russia. Creating a level 
playing field brings everybody down to the lowest common 
denominator. It doesn't bring people up. It never has. And so I 
want to say I'm grateful for the people who have been 
innovative and creative and created the sharing economy. And I 
hope that we will continue to have the culture that will allow 
that to happen. I do think it would be useful for us to look at 
what's happening in other countries and see how their economies 
are being impacted compared to how ours is.
    But I want to thank our witnesses again today and say to 
everybody on the committee: Thank you for coming. This is a 
fascinating subject, and I hope we will continue to look at it 
and figure out ways, not for the government to regulate it or 
to stifle it, but to encourage it.
    There being no further business, the committee stands 
adjourned.
    [Questions submitted for the record and their responses 
follow:]
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    [Ms. Block response to questions submitted for the record 
follow:]
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    [Whereupon, at 12:09 p.m., the committee was adjourned.]

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