Did I really just see my neighbors get their groceries delivered in a driverless Uber?
It’s quite possible that I could seriously ask myself that question in 2030. If it is, we will be able to pinpoint the cultural shift that took place in the aftermath of the Great Recession as a primary instigator. A confluence of necessity and technological change led to our current situation, and it happened quickly. How did we get here and where will we go next?
People crave more connections through both collaborative opportunities and commerce, and at the same time expect on-demand services at their beck and call. The “sharing economy” is thriving as a result, and it is upending traditional industries, disrupting local regulatory environments, and serving as a bulwark for innovation and growth–all at the same time.
Cities, not smartphone apps, are the key to making this economy work. The urban environment is conducive to this type of activity; for centuries new ideas have flourished due to proximity, density, and urban economic activity.
Over 80% of U.S. residents now live in urban areas, and the growth in cities has outpaced the rest of the country. From 2000 to 2010, the urban population grew 12.1% compared to 9.7% in the overall US. This growth has gone hand in hand with a renewed focus on cities through culture, commerce, and collaborators of all stripes.
With more than half the world living in cities and this number continuing to rise, we will only see the intense focus on cities in all segments of society increase. The sharing economy, and the companies that have grown up within it are the latest, but certainly not the only disruptors that cities have seen and incorporated into their structures.
From taxi and car-hire services to on-demand delivery and home sharing, it is the urban environment and the density of space that allows for these services to thrive. As one example, the vast majority of cities that Uber and Lyft operate in have high population densities. And when San Francisco suffered high market demand for short-term lodging needs during events that swelled the local population beyond what traditional hotels could accommodate, AirBnB took off as a company.
Beyond the business side of the sharing economy, services from bikesharing to collaborative workspaces have taken off in just a few short years and spread rapidly. I remember a few years ago when you could walk down the streets of Washington, D.C. and the now familiar red bikes weren’t ubiquitous. By its third anniversary last September, Capital Bikeshare had already recorded its 5 millionth ride and has now surpassed 10,000 trips a day.
Co-working spaces and makerspaces have been rising across the world as people seek to learn from one another, discover new ideas at the intersection of fields, and form new businesses. Incubators and innovation districts are taking off both in the U.S. and globally, providing the platforms for people to share, thrive, and grow.
The sharing economy is a reflection of cultural shifts taking place. People are becoming more focused on convenience and collaboration than on space and stuff. The city of the future will continue to morph and change as new technologies come online and disrupt our current disruptive technologies.
Cities are welcoming these changes, but at the same time, leaders understand the need to make sure that regulations and taxing structures are properly aligned. City ordinances that govern old fields of commerce took decades to solidify, and while the opportunities of the new fields are great, the swiftness of their rise has been challenging.
Our cities are up to this challenge, though, and the National League of Cities (NLC) is helping them navigate and prepare for this changed environment through research, programming, and the development of a Sharing Economy Advisory Network that brings companies, policy leaders, and city officials together in the same room. Additionally, we are in the midst of a research project with the University Of Pennsylvania Fels School Of Government on ridesharing best practices.
The sharing economy that is flourishing during our current urban renaissance will only continue to grow in the coming years. We must harness the power of great ideas, encourage innovation, and develop robust regulatory structures that meet the needs of many. Cities are platforms for innovation, and we can all share in the prosperity of an economy built for everyone.