Uber, Lyft, and other ridesharing companies may find new support in Washington, D.C. Elaine Chao, President-elect Donald Trump’s nominee to head up the Department of Transportation, has voice support for a light hand in regulating sharing or ‘gig economy’ companies, Fortune reported.
Chao previously served as secretary of labor under President George W. Bush for eight years and for two years as deputy secretary of transportation in President George H.W. Bush. So, assuming she will be confirmed, she will step into the Department of Transportation (DOT) leadership position with significant experience in both labor and transportation-related issues.
In addition to programs for rebuilding the U.S. transportation infrastructure, Chao will also set the tone for and direct the DOT’s programs and policies for electric vehicles, fuel consumption and emissions standards, and autonomous vehicles. While she has made no public statements about those pressing issues, Chao is already on record in favor of the “sharing economy.”
Former Fortune editor Dan Primack noted that when Chao spoke at an American Action Forum in November 2015, she urged moving on from old paradigms in favor of a lighter regulatory hold on “in the digitally enabled, peer-to-peer economy.” Chao used ridesharing company Uber as her first example, stating that, according to a 2015 Uber study of 160,000 drivers, the Uber drivers had average net hourly earnings equal to or greater than conventional taxi drivers and chauffeurs, even though only seven percent of Uber drivers worked 50 or more hours a week, compared to nearly one-third of the traditional drivers.
Chao also mentioned Airbnb in the same address, stating that of the 90 percent of Airbnb hosts who rent rooms in their primary residences, many wrote to the company saying Airbnb helped them avoid foreclosure. “It’s just one example of how workers are using the sharing economy as a bridge during challenging economic times,” Chao said.
Chao cited other peer-to-peer businesses, including people who participate in online marketplaces such as Etsy, Ebay, Amazon, and Craigslist. Again, she stressed that most of the people who ran these small, independent business ventures on larger marketplace platforms were doing so to supplement their incomes, not as their primary income source.
Chao’s major point to policymakers was that existing labor laws and workplace regulations, many of which stemmed from the Great Depression, were not relevant in the gig economy. She concluded her presentation saying, “I believe there is room in our economy for a variety of approaches. We need to preserve the protections of the past for those who need them, while crafting new solutions that better fit the preferences of workers in the sharing economy. The digitally enabled, peer-to-peer economy has provided an important safety net for many families during difficult times. At a minimum, government policies must not stifle the innovation that has made this sector such an explosive driver of job growth and opportunity.”
If Transportation Secretary Chao is able to remain consistent with her earlier positions, government regulatory groups that seek to tighten control of the sharing economy transportation businesses will likely find little support and a lot of pushback from the federal government.