Innovation

The NSW government is “putting a stake in the ground” by embracing disruption and the sharing economy

Denham Sadler /

 

The NSW government has planted a “stake in the ground” and signalled a clear intent to fully embracing disruption and the sharing economy, minister for innovation Victor Dominello says.

 

The state government released a position paper on Tuesday outlining the five key principles that will guide how it interacts with, and regulates, the collaborative economy.

 

The paper includes research by Deloitte Access Economics showing the collaborative economy was worth $500 million for the NSW economy in just the last year and provided income to 45,000 people.

 

The research includes sharing economy giants like Uber, Airbnb, Kickstarter and eBay, as well as locals including Airtasker.

 

Coming a month after Uber was legalised in the state, the paper aims to show how NSW will fully encourage and nurture the collaborative economy while also maintaining a fair playing field for industry and consumers.

 

“We’re embracing the collaborative economy through the prism of consumer protection, tailor-made regulation and a competitive environment,” Dominello tells StartupSmart.


“We demonstrated with Uber that you can do it. We’re saying very loud and clear that we are backing our rhetoric with action.

 

“It’s good to see government is putting its stake in the ground and saying this is where you will see us moving in the future.”

 

The paper follows in the footsteps of the federal opposition, which released its own set of principles late last year for how it would deal with the sharing economy, focused mainly on protecting the rights of workers.

 

Dominello says the actions will encourage more investors to pour money into the state.

 

“It’s a signal to the market that the NSW government is embracing the collaborative economy and all the good things that it brings,” he says.

 

“Embracing the sharing platform that is Uber is a big signal to the investors out there that are looking for a state or territory to invest in. We’re not going to bombard them with codes or attitudes.

 

“The NSW government is saying that we want to embrace this because we can see the exponential growth in this over the coming years. If you want to invest in it, come to NSW – it’s the place to be.”

 

The sharing economy could soon be worth even more than the estimates in the study, Airtasker co-founder Tim Fung says.

 

“The sharing economy could be far in excess of what the report is saying simply because there’s so much of this shadow market that doesn’t currently exist,” Fung tells StartupSmart.


“It’s not just rerouting existing supply and demand; it’s creating new supply and demand. It’s really hard to quantify how big an impact these markets could have.

 

“Peer-to-peer markets are not a phase or a technology fad. It’s something that is fundamentally going to change the way people do transactions and how commerce happens in society.”

 

The five guiding principles

 

The paper includes the “five key principles” that will guide how the government treats this new area:

 

–        Support a culture of innovation

–        Ensure regulation is fit for purpose in the digital age

–        Maintain consumer protection and safety

–        Promote competition

–        Adopt an agile approach to government procurement

 

It acknowledges that regulating this economy is the “key challenge” and says the government’s approach will be “flexible and proportionate to identified risks”.

 

“Effective regulation leads to better-performing economy, encourages competition and provide for better access to government services,” the paper says.

 

“Over-regulation can stifle innovation and entrepreneurship and result in lost opportunities to grow the NSW economy.”

 

When attempting to regulate the sharing economy, the government says it will make its objectives clear, strive to understand the costs and benefits of its actions, be “effective and proportional” and consult regularly with the industry and wider community.

 

An “inevitable” new approach

 

The government’s announcement has been a long time coming, DriveMyCar CEO Chris Noone says.

 

“This was almost inevitable as consumers have been leading the charge to embrace these services,” Noone tells StartupSmart.


He says the next step needs to be altering regulation to make it easier for these startups to operate.

 

“The focus on regulation should be directed towards making it easier and quicker for them to be switched from private use to commercial use while still complying with any licensing, registration or regulation requirements,” Noone says.

 

“The key to making this work is educating and empowering decision-makers at all levels of government to engage proactively with the sharing economy to create innovative solutions.”

 

The paper also says the state government will look to use sharing economy startups within its own operations based on cost-benefit analysis.

 

“Government will apply collaborative economy principles to its own activities where appropriate and simply processes to engage collaborative economy enterprises in delivering government services,” the paper says.

 

Fung says the government’s first actions in this space should focus on removing the legal uncertainty surrounding it.

 

“We’d like to see clarity given to larger organisations in relation to the sharing economy,” he says.

 

“Individual consumers are happy to use a product that works but when you’re talking about very risk-averse large organisations they’re not necessarily going to use them unless they’re told explicitly that it’s completely legal and they won’t be penalised.

 

“It would be great if government could make it 1000% clear what the rules are so there are absolutely no grey areas. We’re more than happy to play in the arena of what is completely black and white in the law.”

 

Turning rhetoric into action


For Dominello, the policy paper is another signal that the state government is walking the walk on innovation.

 

“For an innovative state, it’s not just about rhetoric – it’s a practical demonstration of putting words into action,” he says. “That’s what the government has to do.”

 

“You need the rhetoric but you also need to convert those words into action.

 

“We have done it, we are doing it and we will continue to do it in the future.”

 

 

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Denham Sadler

Denham Sadler is a former editor of StartupSmart. He was previously a journalist at the publication and has worked as a freelancer for the Guardian, the Saturday Paper and the ABC. In his spare time he likes puns and jaffles.

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