Clinton's sharing-economy remarks draw reaction in Silicon Valley

Reuters News
Posted: Jul 13, 2015 10:10 PM

By Sarah McBride

SAN FRANCISCO (Reuters) - Presidential contender Hillary Clinton's comments on Monday on the sharing economy struck a nerve in Silicon Valley, home of such companies as Uber, Instacart and Airbnb.

   "This 'on demand,' or so-called 'gig economy,' is creating exciting opportunities and unleashing innovation but it's also raising hard questions about workplace protections and what a good job will look like in the future," Clinton said in her first major economic speech as a Democratic candidate for the November 2016 presidential election.

Sharing economy companies like ride service Uber and home rental service Airbnb typically rely on independent contractors rather than full- or part-time employees. The companies argue that they offer workers greater flexibility, but others say the workers miss out on key benefits such as workers' compensation.

Clinton said that she would "crack down" on bosses who misclassify workers as contractors when they deserve employee status, which is the subject of several class-action lawsuits, including against Uber. Employees draw more benefits than contractors.

But some involved in the sharing economy argued that they provide important benefits. "Governmental leaders should be happy and look for more ways to encourage that type of innovation," said Shawn Carolan, a partner at Menlo Ventures who is an Uber investor.

"These are well-paying jobs, well above minimum wage when people drive, offer lots of flexibility in schedule, etc.," he said in an email.

Others cheered Clinton. "She's right: needs more thoughtfulness," tweeted venture capitalist John Lilly Monday.

"More concretely: we should have real conversations about what the future of work looks like, and how we want things to be."

Bill Gurley, a venture capitalist at Benchmark and Uber backer, said that local politicians rather than those on the national stage tend to see the benefits of sharing-economy companies faster.

"Most of the mayors around the country are starting to see how Uber can impact drunk driving, how Uber can impact traffic congestion," he said. "They can hear from their citizenry more closely."

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Uber and Lyft, its rival in the ride-sharing business, declined to comment on Clinton's remarks.

The Democratic hopeful has two Bay Area fundraisers approaching, including one given by Chris Kelly, an early Facebook executive who is friendly with several Uber executives and investors.

Shyp, a shipping company that recently announced it was switching its workers to employee status, did not want to take a stand on what other companies should do.

"All of these business models are incredibly different," a spokesman said.

(Reporting by Sarah McBride; Editing by Leslie Adler)