Statement of Principles on the Gig Economy (and Home Sharing)

Prior to task force meetings, ALEC posts these legislative member-submitted draft model policies to our website. The draft model policies are then discussed, debated, and voted on by ALEC task force members. Policies that receive final approval by legislators on the ALEC Board of Directors become official ALEC model policy. Draft model policies that fail to become official ALEC model policy are removed from the website.

Summary

In an ever-evolving economy those seeking to develop and contribute to the goods and services consumers need and demand should be respected as independent businesspeople. Government should be supportive of those seeking to contribute and not used as an impediment to deny or discourage these enterprises.

Statement of Principles on the Gig Economy (and Home Sharing)

Broad Overview:

The gig economy has several components, including:

  • Independent workers: People who are paid for a specific task or project.
  • Consumers: People who need a service, such as a ride or delivery.
  • Companies: Companies that connect workers to consumers, such as Uber, Airbnb, Lyft, Etsy, or TaskRabbit.

The gig economy has revolutionized the way people work and businesses operate. It can offer consumers a unique and fast alternative to regular business.  According to a recent Investopedia article updated July 22,2024. The gig economy experienced significant increases in 2020. COVID-19 lockdowns forced people to work from home and rely more on purchasing goods and services online, and these trends continued when restrictions were lifted.2 In 2023, nearly 64 million Americans, 38% of the U.S. workforce, were freelancers or gig workers, according to an Upwork report. Independent contract workers contributed $1.27 trillion to the U.S. economy.3

Addressing gig economy policy is crucial because this growing sector presents unique challenges and opportunities that traditional labor regulations fail to address. Millions of Americans now depend on gig work for flexibility, supplementary income, or even as a primary source of livelihood. However, these workers often lack the benefits associated with full-time employment, such as healthcare, minimum wage protections and unemployment insurance. As the gig economy expands—driven by technological innovation and the demand for flexible work—cities and states must create policies that balance worker protections with the freedom that makes gig work attractive. Without proper regulations, the gap between gig workers and traditional employees could widen, exacerbating income inequality and leaving many without a safety net​.

Specific Principles:

Support for Gig Economy Growth:

(a) Recognize the gig economy as a vital and growing part of local economies, offering flexibility for workers and increasing economic resilience.

(b) Policies should enable gig workers to thrive without unnecessary restrictions that hinder their flexibility or income opportunities.

(c) Ensure gig economy platforms, such as ridesharing and food delivery, can operate freely while balancing public safety and worker protections.

Flexible and Fair Regulation:

(a) Regulations should balance the need for public safety with the flexibility that gig workers seek, ensuring gig work remains a viable option.

(b) Avoid restrictive legislation, such as classifying gig workers as traditional employees, which can limit flexibility and reduce economic opportunities.

(c) Cities should focus on permissive, data-driven policies that adapt to technological advancements and the evolving nature of work.

Clear Tax and Compliance Framework:

(a) Create a transparent and straightforward process for gig economy workers and home-sharing hosts to comply with tax obligations, ensuring local governments benefit from additional revenue without placing undue burdens on participants.

(b) Simplify the tax collection process for short-term rentals, allowing homeowners to easily remit taxes without complex administrative processes.

Embrace Technological Innovation:

(a) Cities should adopt policies that encourage technological advancements, allowing new gig platforms and services to emerge and drive economic growth.

(b) Regulations must keep pace with innovations, avoiding outdated laws that stifle technological progress and limit entrepreneurial opportunities.

Balance Community and Economic Interests:

(a) Policymakers should ensure that regulations address the concerns of long-term residents while promoting the benefits of gig and home-sharing economies.

(b) Engage stakeholders from both the community and gig economy platforms to craft regulations that foster mutual benefit and minimize conflict.

Home Sharing as an Economic Driver:

(a) Encourage home-sharing platforms to thrive as they provide supplemental income to homeowners and support local economies through tourism.

(b) Avoid restrictive regulations that limit home-sharing, such as overly burdensome zoning laws or owner presence requirements.

(c) Use existing nuisance laws to manage potential neighborhood disruptions rather than imposing additional regulations specifically targeting short-term rentals.

(d) Also consider what guideline are appropriate for the newly emerging company platforms allowing for individuals or groups to rental swimming pools, sports courts (tennis, basketball, pickleball, baseball etc.) horsing riding facilities, rock climbing and other privately owner venues. While caution must be taken to assure safety and reduced neighbor and traffic concerns. These are growing and value tools for those seeking opportunities that may be limited in their area.

Equal Taxation and Transparency

Good policy that is enforceable policy that doesn’t pick winners and losers. Short-term rentals can help with tourism and be an asset to communities alongside long-term rentals, hotels and motels. If taxation must be considered, a pro-rata per unit that considers other units in the same market for taxes, permitting, impact fees, and incentives should be considered.

Food Delivery Services and Transportation Services

Recognizing and respecting these agencies as independent contractors and is fundamental to the principles of limited government that ACCE stands for. As the means of accessing urban areas and delivery of everything from fast food to groceries and other needed supplies become more important to those who may not have transportation, or are restricted in their ability to travel to get these goods, it become more important to have a robust network of delivery and transportation services. It can also reduce use of vehicle, congestion on city streets and improve the lives of many using these services as customers or vendors. This includes delivery service that have regularly and faithfully delivered to our homes for years. They move to embrace new options such a drones and small autonomous vehicles is import to reduce costs and congestion in our busy or even hard to get to rural properties in mountainous terrain or island locations.

Likewise, the evolution of various short-term modes of transportation requires cities to respect free markets. Where cars, scooters or other means of transportation that are rapidly evolving and the use of autonomous vehicles in some of these services should be embraced and supported as they develop. Remember there was a time that people scorned the automobile and saw no future! Can we imagine how rapidly these evolution can changes our lives? Government should seek to be a facilitator and not a roadblock in this evolution.