Key lessons from the Sharing Cities Summit

At a summit in Barcelona, cities from all across the world made it clear that they expect collaborative economy companies to play by their rules, and contribute to their goals.   No sectors were specifically mentioned and, as such, these principles will apply to a whole range of sharing economy sectors, including: car sharing, ride sharing, bike/scooter sharing, home sharing, peer-to-peer services and on-demand workers.

The declaration covered a lot of policy issues that cut across the sharing economy and the gig economy, including areas where most cities do not currently have powers to regulate. When taken as a whole there are three key themes that can be drawn out of the declaration which are important for companies using collaborative business models to consider in their dealings with city authorities.

1. Cities will seek to regulate the ‘collaborative’ economy differently

The declaration calls for a distinction to be made between “truly collaborative” business models and those which are not. This distinction will be made on the basis of factors such as “responsibility for negative impacts”, “fair economic models” and “mostly peer-to-peer” interactions. Those companies that exhibit these traits are to be considered “collaborative”, and will be regulated in a different way to those which do not show the traits. It is not clear whether the distinction will manifest itself as one of ‘peers’ against ‘professionals’, or in some other way.

2. Companies will be expected to contribute to cities’ public policy goals

The declaration calls for the promotion of sustainability and a view of new collaborative economy services more as part of city infrastructure, and less as commodities. SMEs may also receive subsidies and other support based on the “positive” impact that they have on cities. In real terms, this could mean cities introducing measures which seek to subordinate the profit motive to the policy goals of their administrations. We might for instance see caps imposed on ride hailing vehicles, or shared bikes and scooters distributed to the areas of cities where they are deemed to be most useful. We could also see greater collaboration between corporates and cities, such as the use of mobility companies’ transport data to help decision making in city planning departments.

3. Cities expect to be sovereign

The declaration places a heavy emphasis on the sovereignty of cities. It states explicitly that companies should not launch without the express permission of city authorities, a desire which in the past has not always been fulfilled. The declaration also discusses various oversight mechanisms which cities might use to track and control the companies operating in their territory, as well as a commitment for cities to share methods of inspecting corporate compliance between themselves.

Significant rhetoric

To some extent this declaration is a piece of rhetoric on behalf of the signatories. It is entirely possible that many of the cities who signed the declaration do not have competency over some of the areas which they would like to. For instance, until recently, Spanish cities did not have the power to licence ride hailing firms as this was a national competency. The concept of city sovereignty is therefore dependent on whether or not that sovereignty has been given to cities by their relevant national and regional governments.

However, that is not to say that this declaration is insignificant. It communicates a clear political will on the behalf of cities to exercise far greater control over the collaborative economy than has hitherto been the case. It also shows that cities have recognised that new technologies can help them to achieve some of their aims.

How to engage

If collaborative economy companies take anything away from this declaration let it be this: now is the time to start engaging with city authorities, and to show them how they can work with business for everyone’s benefit.

Inline Policy exists to help businesses understand and influence policy and regulation. If you run a collaborative economy business operating in the UK or EU and want to deepen your engagement with governments, both national and regional, or simply want to understand more about these developments, please do not hesitate to contact us.