Puerto Rico is still trying to recover from 2017's Hurricane Maria, and much of that effort involves getting more tourists to visit the island. The sharing economy could play a role in that and other recovery work — something the government has noticed. What's going on in the U.S. territory, in fact, is the latest example of regulators and politicians to get their hands around the sharing economy, which continues to grow even as such services are beginning to lose their novelty.
According to CaribbeanBusiness.com, Puerto Rico Gov. Ricardo Rosselló recently signed “Senate Bill 840, which will establish a process for the design and execution of the government’s public policy on the sharing economy.” The bill requires “the Economic Development and Commerce Department (DDEC by its Spanish acronym) to establish the standards and guidelines” for the sharing economy.
The sharing economy is increasingly gaining the attention of politicians and regulators, and not always in ways sharing economy supporters could consider positive. For instance, New Orleans is the site of one of the most significant and ongoing backlashes against the sharing economy, a global trend that probably won’t kill off Airbnb and other major players, but could create more hassles and pressures for some companies struggling to make it in this big, crowded market. Earlier this year, city officials there banned short-term rentals of homes “in historic residential neighborhoods, [with] none at all [allowed] in the Garden District and the French Quarter,” according to a local news report.
Proponents of the ban said such rentals contribute to higher rents for locals and an overall lack of affordable housing. Opponents said short-term rentals such as those offered via Airbnb help bring more tourism dollars not only to the city at large, but also to neighborhoods that tourists might not otherwise visit — resulting in local property owners getting a cut of that tourism pie.
Similar backlashes are playing out elsewhere — and not just for rental property.
Shared scooters have functioned as a reliable source of controversy as transportation transitions into more of a service offering. Among opponents’ main concerns? Storage of scooters along sidewalks, and potentially too many scooters getting in the way of pedestrians, bikes and even automobiles in crowded urban centers.
Those controversies have notably played out in San Francisco, though other cities, including Chicago and Los Angeles, are going through them at their own pace.
Those efforts come amid a fresh sign that the novelty of the sharing economy is wearing off for some consumers. According to another report, “A new survey from Allianz has revealed that the popularity of sharing economy services in the U.S. is down this year compared to 2017, particularly with millennials, and that baby boomers are now the new drivers of the movement.” Not only that, but “it seems that Gen Xers are driving the largest downward trend in usage, with only 41 per cent saying they will use sharing economy services this summer — down from 60 percent two years ago — while 63 per cent of millennials are planning to use such services this summer (down from 77 per cent from two years ago).”
None of this is meant to imply that the collective power of all these backlashes will knock the sharing economy off its track toward more growth. In fact, it is expected to produce global revenue of $335 billion by 2025, up from $15 billion in 2015, according to one recent estimate. And investors are still pouring capital into companies operating in the sector. One example is Drivezy, the India-based carsharing startup, which is in the process of raising $100 million in equity funding and $400 million in asset financing as it seeks to expand.
The sharing economy remains a work in progress, and as the new law in Puerto Rico shows, authories have a keen interest in its development.