Sharing Economy Titans Cozy Up To Regulators

In January, Chris Lehane, Airbnb’s head of global policy, uttered three words rarely heard in Washington, DC: “Please tax us.”

After years of bruising political and legal fights in cities around the world, Lehane had come to the U.S. Conference of Mayors to solidify the message that Airbnb, which had initially resisted the idea of collecting taxes from their users, is now decidedly pro-tax. And it’s not just on taxes where the company is changing its tune.

The New York Times reports: “The start-up, which is based in San Francisco, on Wednesday introduced a lengthy treatise pledging a renewed spirit of cooperation with local governments. Called the Airbnb Community Compact, the document outlines several ways that the popular company plans to work with municipalities, including sharing anonymized data on the hosts and guests who use the service, preventing illegal hotel landlords from operating on the platform, and promising to pay its “fair share” of hotel and tourist taxes in cities that have them.”

The article concludes by looking at the broader trend in the sharing economy: “All of these companies have organized to deal with this risk to reputation,” said Derek van Bever, the director of the Forum for Growth and Innovation at Harvard Business School. “The regulatory risk warning light is flashing bright red on their management dashboards.”

Like Airbnb, other sharing economy titans, such as the ridesharing company Uber, spent a good part of 2015 cozying up to regulators. After years of aggressive expansion, Uber is looking to make friends, the New York Times reported:

“The striking reversal in tone comes at a crucial time for Uber, which once somewhat prided itself on its antagonistic attitude. The company is now valued by investors at over $40 billion after the most recent round of financing, largely on the promise of rapid growth. To build a business worthy of that valuation, though, the company must prove to investors that it can continue its breakneck pace of expansion in markets abroad at the same rate it has domestically.”

“And to reach those targets, the company will almost certainly need better relations with governments around the world.”

This speaks to the fact that despite 10-figure valuations, even the sharing economy’s biggest players are still on the defensive – with politicians and electorates in cities around the globe able to pull the plug at any time. Recognizing that, Airbnb brought on Lehane and Uber hired David Plouffe. Both are longtime political operatives, who have brought political campaign style messaging to the startups’ communications shops.

The New York Times reports: “Mr. Lehane and Mr. Plouffe have both tried to frame their companies as middle-class saviors in a moment of economic anxiety and income inequality — themes that are playing out in the presidential election as well. Jeb Bush and other Republicans have bragged about their Uber rides on the campaign trail, praising these companies as the future of self-sufficient employment.”

Beyond messaging, the companies have also been looking for ways to proactively help governments solve problems.

Governing Magazine reports: “State and local governments have had a tumultuous relationship with Uber, Airbnb and other online companies that let people book rides, rooms, and goods and services from people rather than big businesses. Observers have focused a lot of attention on government attempts to control peer-to-peer services, yet some state and local governments are trying to use the sharing economy to their own benefit.

“So far, the efforts have been limited. Most recently, Uber announced a partnership with the National Center for Missing and Exploited Children in 180 cities to send Amber Alerts to their drivers. But interesting models have emerged in a couple of other areas.”

These kind of initiatives not only helps company’s external image, but also could address some of the morale issues the New York Times uncovered at Uber:

“Employees inside Uber, and several people with ties to Uber, all of whom spoke only on the condition of anonymity to protect their connection to the company, expressed concern that the negative attention could hurt employee recruiting and retention.”

“It’s not fun for Uber’s employees, who are bright and mostly wonderful, to have to keep explaining to their friends why they work for” an organization that would act that way, one person close to the company said.”