tv Politics and Public Policy Today CSPAN April 4, 2016 1:00pm-3:01pm EDT
>> yeah. so we did a test if you really could see where's the russian -- >> grade point or some kind of a song. and it was interesting. it was a lot of tests like this about feminism and how sexist are you because it's a great issue in russia. so the thing is -- when there is a small company and where the developments guy with us and it's all -- we're all in the same small flat. we can do a lot more than you think than you can do with the 20 people. so i think that's some slight comments. thank you so much. i think what's really important from what i'm hearing you guys say is you manage to create a
real connection with the reader, and i think that this sort of the creative exchange between you and you can feel that there's a real creative roes is going on. >> you feel it, too. >> of course. so you feel like you're a part of it. i want to ask elia. we will go to the questions from the audience in a moment, but i want to ask you a question that's something that a lot of people here think about a lot and that's the question about how do we counter russian propaganda and it's something that people have been thinking about now for a couple of years and there are thoughts about how do we organize it and i think sometimes people think of medusa as being a force that counteracts the propaganda, the kremlin propaganda. so what are your thoughts on that? we have the syncronizations a lot and it is in europe right now because every russians in
european countries watch television and it's an event and it's a problem, but i think the propaganda issue is a bad issue and and it's bad from the government and this caused pr propagan propaganda, and you can do p.r. if you are a journalist you can make a p.r. it's a main enemy for journalist p.r. actually, i think it is a bad conversation at all, but if we are thinking about it, and how to make this counter propaganda. okay. and then we have huge problems. first of all, and we reach an
audience and so if you make the propaganda, you need to make it television and you make the television and you need to be better than russian tv channels so you need to have at least so much money and we have russian tv channels and this is really huge money so the russian government really cares about television, and i love things that any other government can pay tv anchors and tv producers so much money as the russian state base and this is a part of russian state. and this is the first problem and the second problem is the russian oaudience, and the russian tv shows about gangsters and love and something and what happens in their life and it was made in russia and this is why it was interesting about
russians, played by russians and as they see -- they're watching movies and tv shows about themselves and this is why they're watching this tv and only the second reason why they're watching this tv is the news so you can just watch the news and you can make it and you asked from a year from now they accept russia. and many of russian tv shows, but still. so the thought is how this was okay. for example, you give this money and you give these people and we will make this television for us and it understands a russian audience and you have russian heroes on these tv channels and i don't know where you will get because they're in russia, too, so you make this great tv channel where expensive,
fantastic, great picture like channel 1 or channel 2. so here's the question how you will reach the audience? so, okay, you can read the audience on brighton beach and berlin. you can reach an audience in latv latvia, and i think that's really good because this audience needs a russian tv channel. for example, i'm from latvia right now and there is a big problem with information for latvian citizens or non-citizens and this is the status for russian language people in latvia, but they watch television and they don't have an option to watch any other television. russian people are bad in foreign languages. everybody know that. they're really bad. i don't know why, but that's not the reason not to talk with them in their own language. if you want to reach it you need
to do it. so yeah, you can make it for some jasper in europe or in israel or in u.s., but you can't reach a russian audience in russia. you need to be one of the button on your remote and this buttons are not available for anybody in europe. so there are so much progress and i don't know how to make it is the long answer. >> yeah, i will have a quick. the propaganda is a lie. it's a fake. it's something that never happens and something that never meant to be. so the only way you can do real counter propaganda is to tell facts and not opinions as elia said. so we have a former called fact
check and sometimes politics talk like putin had an open line with the russians and we put a lot of notes and we proved all that he said and we did a fact check like you do in all media and america and we just put it like a feature and we always do this with the word. we just try to stay -- we just try to tell you facts. was it or it was not happen? so i think there is -- our only way to -- to -- to deal with it. >> absolutely. and the important point also is that, you know, this truthful information needs to come in a form that it competes and is basically -- competes with entertainment formats so people need to be entertained and that's what you guys are doing. >> let's go to audience questions and we have
microphones who -- okay. please. right here in the front. okay. that's fine. that's fine. we'll come to you. >> hi. yevgen. thank you for a very interesting presentation. how do medusa or journalists have trouble covering russia, because i know you recently went to gros nia and chechnya and did an interesting piece. has that gotten harder and what's the process of covering on the ground reporting from russia? thank you. >> we have three special correspondents in russia right now and i can say they have some problems with it because the main problems for russian media is there are different situations in different countries. for example, with your journalist in russia and it is a big problem for journalist. if you are a journalist in russia you have a problem about the media or the owner of the
media and there are different ways to deal with media by state authorities. so the main russian way is to deal through an editor, through owners for editor in chief. if you're a journalist you can make your work, except a couple of things. so if you make it about chechnya. it's a huge possibility that you'll get huge problems until your death, and there is not so much, so, so dangerous themes in russia. i think if you write something about putin's family or putin's wealth, yeah. i think chechnya is the main dangerous thing. our journalists didn't have right now problems in chechnya. you know journalists which had two weeks ago huge problems and
he was beaten and their cars were destroyed so they had problems and yeah, it can happens. but our special reporters recover some issues in moscow and they go to the former soviet union countries and, yeah, they do their work. >> there is two thing, a bravery thing and you need it when you go to chechnya or something like that, somewhere dangerous and the second thing is information. in russia, officials and people, they don't use to talk to the journalists. they don't like it. you don't have statistics or adoption waiting or -- you don't have statistic and officials, they can just refuse your interests and refuse your
questions and they say oh, i don't want to talk to you and the people don't use it. the people likes to go to tv shows when you're going to be popular or something and they don't like to tell their stories, because they don't know what will go out of it. maybe their neighbors would look at them strange or something and there is two things. if you are brave or you don't need it and there is the theme when you don't need a lot of officials cooperation and you can make people talk to you, that it will be okay, but there is a lot of things you can do. >> because nobody talks. and there is a great example. i think it was a month ago and it was a very good russian newspaper and there was some
sentence and it goes like the source who wanted to remain anonymously, declined to answer, and this is how russian media works. you have people who they want to be anonymous and -- >> and they don't talk even anonymous. >> it's crazy about how it works in russia. >> it's great. okay. let's go to the front right here. thank you. i'm with bloomberg. you spoke about wanting to make your service bulletproof. we've heard a lot in this country about the chinese great fire wall against the internet and with regard to putin's russia, the impression is that as long as 80%, 90% of the people watch television -- sorry. he couldn't care less what foreign correspondents write and he couldn't care less about the handful of people and 4 million being a handful of russian terms
and watching what you say. so, will you explain what obstacles may exist for dissemination in the manner that you use via the internet and so on. >> most of the people have it, and i don't know the exact numbers and the russian statistics is awful. so -- the internet right now is huge. the internet right now is an interesting situation and russian internet. so we had one of the freest internets of the world and now we are in transition from the free internet to the regulated internet by the state, very regulated. this is a unique transition. i don't know if we had another country in such situation
because we had free internet five years ago and now we have laws against internet and their authority have easy options to block any setting on the internet, but the internet is huge and it grows fast, and the big russian media, the biggest russian media right now is albaca and this is a good internet and it's 20 million people. it's a big audience and if you want something to change you actually don't need the majority. you don't need an extremely big mass of people to change something and then -- i'm sorry. and then -- and i want to just to be -- to talk about the blocking problem and this is a problem and we can be blocked any time and they don't need to call a decision to block us.
they can do it by click, but we have many plan bs for it. we had some precedent and it was actually a month before and the authority blocked the tracker in russia and it was huge. tens and millions of people visited day by day because they get the content by it and the audience after the national blocking drops for 10%. so it's a good precedent for us because the people now knows how to unblock a blocked site. this is why we don't have a chinese wall. chinese wall is serious. the russian block is much more easier mechanism. they -- we think that they're trying to build a chinese wall
right now and we see some signs and they talk with chinese where make something documents with them and they bank some stufr, but i'm not sure that russians can just build it. you need to to have much more estate to have such thing. maybe they build it. i don't know, but we haven't yet. if there will be a wall there will be quite another situation. >> where do you get your money from? who are your main competitors? and where do you get your sources? do you have a network of journalists? do you use agencies? >> we don't talk about money. sorry. it's very dangerous stuff for us to talk about money because as i said the mean options to deal
with media from the state. so the money is the most dangerous part of the media and we try to be 100% transparent, but in this situation it's impossible. second question about where we get news and we have the -- we build some which are working for select and we're monitoring twitter, for example and we are seeing which tweets by agencies and the media are more popular than we just see it so we have some just from internet and this. we are not a news agency and we are not a newspaper and it is for us to get our own news and we adjusted filters and we're trying to give the people of the day and provide it to the
audience and the last question -- >> our competitors? >> yeah. and they are sometimes endorsed. they are sometimes -- [ indiscernible prep [ but we have the capital of russia. if we're talking about monetization and the media market and the media which we're not thinking about, but we don't think about the editorial and if we are talking about money and so there are competitor, too, with everybody. [ speaking foreign language ] >> okay. right there in the middle. >> hi. my name is yuri. i am one of the editors of our
website rafabola. i want to know about the challenges running independent media in russia. i appreciate your work really. >> thank you. >> but i have one question. earlier this month they freed russia and it was a unique event which bathered -- and the russian media and bbc and the voice of america and many others and there were participants like scholars and politicians and from the cato institute from the carnegie. yes, yes. and i was extremely surprised that the russian mainstream liberal media ignored this like
tv reign and medusa. i can guess the explanation for -- >> i'm sorry, if you could ask the question. >> why we ignore this event is this your question? >> yes. because it's really boring. some people who knows each other for tens of years and everybody will say about free russia. we'll say it one more time. okay. why we need to hear it one more time? it is not interesting at all and that's why what i said. you can say one thing for tens of year and you say it and say it and say it, okay, we know that you think so. thank you gary. thank you! it's just not interesting. sorry. >> okay. >> that was interesting, but not in such way. >> okay. okay. >> hi, retired international health care worker and first to compliment you on your visual and you have the principle of kiss, keep it simple, stupid so thank you for that.
i believe oligarch left to london and tried to reach back into russia with internet and so on, but isn't internet very much limited that only 20% say the city populations have any access to internet? does that limit you that much? >> to have the big cities access to internet? yes, of course. and i don't know the exact numbers to reach internet in russia, but it is huge, and i know that the main social networks and we can prove this on these numbers and it's tens of millions of audience each month and it's 60 or 70 million and it's not only rush abu i think 90% of -- i think. i don't have exact number, but i think 90% of young citizens from big cities use internet and use
the mobile internet, too and everybody uses it. it's fast and it's easier to access and it's cheap. >> so it's over -- the question i asked if it was over 20% of the reach. what's the% of internet? i don't know about the reach, and i don't know the exact number and we can talk about different audience and if we talk about seniors and it is bad and it is not about technology education, first of all and my debt is 86 and he used face book because he has grandsons who can show you how to use it and it is interesting in his life, but i'm not sure that this is representative and if we're talking about audiences under
40, so it's total. >> thank you. any other -- okay. right there. >> ana dabinski, bbg. >> nice to meet you again. >> what is your policy regarding trolling. >> no. when your site, when your platforms are trolled. what do you do about that? >> i don't know, but -- what trolling you're talking about? we have not comments. >> no trolling? >> we have not comments. >> nobody can troll us. we have some trolls like russian tv channel which visit on a regular basis so i think they need to make it which is not far away. >> just lock the doors. >> we just lock our doors and i think this is a real troll. so we are saw one report right
now and some journalist came from moscow and the main part of his job wases to find our office and we saw it was important. we don't know why because we have an adjustment on our website, but here, try to find us anywhere and at the end of this report, he found us and if you just ring the bell and you fi finally open the door. so now we are waiting for the second report and it is not yet life. >> we train our quota editor to make the troll again. so i said some suspicious guys on the side work. please lock the door and he locks the door. yeah. >> we are based in seven-room
apartment and we are just -- this is our trolls. >> so i want to ask you, can you sort of give us a general comment on the state of journ journalism in russia or russian language journalism in russia because sometimes you hear people bemoaning that the russian journalists are dead and there is so much censorship and pressure and the best people are leaving and they're going abroad. >> think the russian journalist is still alive and actually, ink the russian journalist isn't in good shape right now. we have tons of great journalists which are -- which are good -- which make good report ing and not in a good situation and they can work and we have no problems with hire
people and we have money problems, but if we want to the hire someone we have no such problem. there are tons of great journalists and there are not good editorials because i think this is a money problem, too, and the new media launched in russia and day by day. every year we see five to seek new media and this is sometimes -- sometimes they are not very interesting, but sometimes they're really cool and so they're -- their last 20 years, they gave us a couple of schools and the schools are not in universities and they're in the editorials and they give the media market the tons of good journalists and this is a problem because this media are
changed or closed or something. we have right now the problems with schools inside the medias. so you are talking about this moment and everything -- and i can say it is bad. we have bad around us and we have -- we have people. we can hire and we have good people in the editorial and we have some competitors, but if we're talking about the next five years, i don't know what happens next, but we don't know what happens tomorrow so maybe it's not a problem. >> so i'm curious how medusa is published in russian and also english and you have audiences in the u.s. and probably other english-speaking countries and how important is it for you and what are you trying to communicate to that audience? >> our audience in the english website is much, much, much smaller. actually, it's pretty small, but
it's more like media and there's not as much people that are interested in what happens in russia or former ussr right now and only students from these buildings and such buildings around the world and normal readers say they will use the new york times and what happens in the world right now and around them right now and if there is stuff in russia they'll read it there and we're making this media for to explain the professional community would have in russia, first of all and to give the u.s. and uk media, first of all the options to republish the content because it's just -- it's just the thing that sometimes it's cool and and
it's good for us and we will publish on the guardian and close it. so, yes, that's why. >> okay. so i want to ask you this. what would you say is the biggest story out of russia that foreign media gets wrong and what is or maybe underestimates and what would be the biggest story, say coming out of the u.s. that the russian media, good russian media does not get or underreports? >> the russian media doesn't get it at all. it's not -- it's not a question so russian news agenda is very isolated, as i said. so the main stories came from russia or from ukraine or right now from syria. if russian media talks about europe so they really like the
refugee problem or they talk about -- yes. actually i'm not -- i don't really good -- good listener for russian tv so i don't know what happens there, but if you are talking about rern media write about russia so the good point it was the western media that there are tons of media and they write different stuff. i'm not sure. i think that sometimes we see some general line, and i think that sometimes they write about what happens in russia and they think it's too simple. it's much more -- it's a different story and not so easy to understand in these ways and we really need to live there and
to talk with people on the ground and understand it, but actually, sometimes there are really good reports about russia and they make really good reports about it. sometimes you read something and you think you just write something and this is russia. this is not russia and is this russia and your mind? but i can say about the general end of western media and there are tons of different -- different points of view. >> okay. we have a question in the back there. >> thank you. very interesting report. >> thank you. >> wondering what is the demographics of your readership and based on the age do they care about different issues and
which issues are important to older people and younger people, et cetera? thank you. >> our main audience is under 35 so this is a young, active audience from the big cities. what issues they care about, and i can ask this question because there are many issues. we don't have such resources because we can see google analytics and they like it and it not helps us at all like travel or read, but we can see just what we make and what they like, and this is just a normal -- it's -- they -- i don't know. i can -- i can't say what we want them to like and this is much more important for us.
for example, we make more we're trying to make more stuff around the world and we have no correspondent, but we understand that we need to tell stories about what happens in the u.s. and in europe and it can be not so much important stories and this is not refugees or something like that. it's just what happens and what changes technology and social problems and elections and everything and we need to show people the clutch and they're not so much interesting, but we understand this is just very important to and to deliver the international agenda. >> please. >> it sounds it's coinsid earn
that you ended up in latvia and what was your work in the gazprom and in western europe and if that was different from the response within russia? >> it's not a bad coincidence. i'm thankful for that. we've had no problems with latvian authorities and it is a new experience for us that you have some particles and you just make business with it. for us it's fantastic. so it's -- when we're talking about a business so it's great. we have no problems at all, and i hope this is not why we're -- many people know us from around the world and you were talking about russians speaking community in latvia. so i think you have so much
problems and this is not a medusa. so we are just not thinking about us. we are not media for them. some of them read us, but there is -- i think they watch russian tv or read the local newspapers or something like that, but i don't want to talk about problems and latvia because i'm not a citizen of latvia, it is not good for me to talk about it, but i think there are many problems and they're thinking about inside latvia and we like ex-pats there. and one thing and the radio talk show latvia about medusa. it was a year ago and under the
latvian tv channel and said something when they visited the central market and it shows how people talks. so just to be in moscow and it's just the same people and the same things. they joke and everything like that and it was a scandal about it so like in russia, oh, my god and some -- there was many calls to this talk show and some woman said russia, latvia is our country, but russia is our mother land. latvia is our homeland and russia is our motherland and they came from our motherland to our homeland to say awful words
about our motherland. this was great, actually, but i'm not sure how this position is popular in latvia rid now. i think they have many problems by their own. >> okay. . please. >> wait for the microphone, please. you probably -- i'm sure you know every american business has a mission statement. do you have one, and if you do, what is it? >> actually we have a mission statement. they're five point, and i forget -- all of them. we like facts and we have more and for me right now it's the most important thing we have in the global war and we think of russia as part of the global war
and this is the main thing right now. yeah. i'll ask one final question as we're coming to the close of the event. what is the next big thing about medusa. what are you thinking about? what are your plans in terms of content? >> we don't talk about it in public. we plan to launch some projects inside medusa this year and as i said we have some experiments and some don't launch. actually, we have some newsletter, big newsletter for our audience and we use it every month, and i made some mistake there for a couple of times. and in two months, we will launch some new app and then in the year we don't have it yet. so i said something which is sometimes it's better to remain
the u.s. now that there was violence on both sides. >> yeah. yeah. yeah. >> i use that as an example. we are doing a lot of full reports and we're not -- >> yeah. tonight, c-span's road to the white house coverage continues and senator ted cruz holding a campaign rally in wisconsin ahead of that state's primary tomorrow. he'll be joined by former republican presidential candidate carly fiorina and utah
senator mike leigh. it gets under way tonight at 8:00 eastern on c-span. >> campaign 2016 continues on tuesday, april 5th and with the wisconsin primary. live coverage begins tuesday night at 9:00 eastern and tune in for complete election results and candidate speeches and viewer reaction. taking you on the road to the white house on c-span. c-span radio and c-span.org. >> the consumer federation of america recently held its annual assembly in washington, d.c. next, a panel of consumer activists discuss the benefits and risks of the sharing economy. participants share their thoughts on whether or not there needs to be more regulation for services like uber, lyft and air bnb. >> good morning, everyone.
>> welcome to the second day of consumer assembly. so glad you're all here. it is my honor to introduce chairman elliott kay who was sworn in as the tenth chairman of the u.s. consumer product safety commission on july 30, 2014, to a term that expires in october 2020. mr. kay served as cpsc's executive director from 2014 until his confirmation as chairman and previously at cpsc, mr. kay served as chief of staff, chief counsel, deputy chief of staff and senior counsel from 2010 to 2013. during that time, among other issues, he worked to address the chemical burn hazard to young children from the ingestion of coin cell batteries and played a key role in coalescing the leading organizations and companies in american football around a common goal of creating
a culture of change to reduce the risk of brain injuries in youth football. from 2007 to 2010 he was an attorney at hogan lovell's. prior to this he was an attorney to llp and a judicial clerk for the honorable sterling johnson jr. of the united states district court for the eastern district of new york. mr. kay has seefshed in numerous senior staff positions for representative john tierney, pat danner and earl hudo. as chairman of the cpsc, mr. kay has identified three major areas of focus that will advance his collaborative leadership approach. cpsc will further harness the experience and expertise of agency staff and safety experts in the private sector to achieve more safety advancements for the american public. cpsc will continue to prioritize and work to accelerate culture change around brain safety in youth sports and cpsc will
strengthen its line of defense to keep dangerous imports out of the hands of unsuspecting consumers. anyone who has heard chairman kay speak at a hearing or a conference leads with two strong perceptions at the cpsc. first, being a father to his two boys profoundly shapes the way he views his work. his compassionate and real-world coulding of being a parent in our complex world influences his mission at the cpsc. second, chairman kay has a deep and impressive understanding and knowledge of the many issues before the agency. he can definitely talk about both the big picture policy issues as well as details of a particular product safety issue as you are about to hear. it is my honor to introduce chairman elliott kay. [ applause ]
>> good morning, everybody. i want to start and this is by far the most important part of the speech so you can tune out after i do the introduction. i want to acknowledge rachel weintraub. [ applause ] >> and to be clear i would have done that even if she had done a very different intro for me. it says it rate here in my notes. in all seriousness, and as rachel mentioned i've been in washington a long time. i've been honored and privileged to work with many different and talented people, to see the different skill sets that are offered, and i have to say that there's nobody that i've come across who better combines both talent and skill and passion and knowledge of the issues and
effective advocacy than rachel weintraub and that really matters. it matters in terms of the credibility of the entire movement. in many ways, rachel speaks and is the face of the consumer movement in the united states especially when it comes to our agency that can give the consumer product safety commission. and so she bears that weight and she knows that. she bears that weight when she comes to represent your causes which in many ways are our causes, too, when she comes and talks in front of our agency. when she speaks on the hill. she knows that she carries that weight and it is that much more difficult and she has to walk that fine line and she does not make mistakes. she just doesn't. she's always right on. she's always at the heart of the matter and she's always the leading advocate when it comes to trying to affect change and the best example of that, and i'm going to call for one more round of applause for rachel and
the best example is the consumer safety product improvement act of 2008. tangible, real differences. changes, reenergizing an entire federal agency because of the work led by rachel. consumers, hundreds of millions of americans and even consumers worldwide because this trickles outside of the united states and hundreds of consumers in the united states and hundreds of millions of consumers. their lives have been tafrjibly improved because of the work of rachel. so let's do one more round of applause, please, for rachel. and i do mean that. [ applause ] it is -- so now you can tune out. it is such an honor to be here especially at the 50th anniversary of cfa. it's that much more special and so thank you for the invitation. i do want to acknowledge two of my fellow colleagues, commissioners bob adler and joe for being here. i really appreciate it. i think it also shows the spirit that we have collectively
developed at the commission to try to engage and demonstrate a more collegial, civil, bipartisan, non-partisan, depending on the issue, approach. it's not easy. there are a lot of things that pull in the other direction. i would say every pressure pulls in the other direction. there is no internal or external force other than what they bring as individuals and what i hope to bring as an individual and our other colleagues, commissioners robinson and buerkle will bring as individuals and no other forces to try to bring people together. it is obviously as we see from the campaign season, it is in my mind, it does not represent our best. i think we can be better as a society and i think the five of us and our staffs try to at least at the commission do it differently and do it in a way that i think represents the best of what you want us to be and gets down to actually having solid, non-petty, nonpartisan and nonpersonal discussions on the merits and i think we're a
better agency for that, and i thank commissioner adler for being here. >> so as rachel mentioned, and she's 100% spot-on. my entire approach at this job is starts and runs throughout the day and ends with being a parent. before i even get to work it begins when now my 11-year-old son and my now 6-year-old son wake us usually far earlier than we want to be woken up with something that they believe is urgent, meaning the ipad is not getting wi-fi reception and they can't do their video time. that, in their world, is a crucial moment that must be addressed by and it begins our whatever multi 15, 18-hour odyssey my wife and me of parenting in the morning and they have very different styles. my 11-year-old is a regulator in training. when we're at birthday parties and he gets a gift, he will turn to me and say is this compliant
with the federal toy standard? my 6-year-old is the reason childproofing was invented and he runs a foreseeable misuse lab in our living room and can do things with products i didn't think anyone thought was possible but it provides an incredible spectrum as i go into work each day and a frame of reference for how i approach my job. and all throughout the day, whenever we are talking about issues at the commission, my first reaction is -- how does this help parents? what does this mean for parents? we're going to go out and say something, are we provide parents with the type of information that's actionable for them? it's one thing to say that a product is not safe but to me that's not good enough. parents want to know what is safe. what should they do? and i think it's incumbent upon us to not only warn away from something but to guide toward something else so that they know that when they have that interaction with us, they've gotten all the information they need.
i'm motivated, as well, of course, and i think we all are, by the stories of other parents. whether it be children whose -- who have been hanged to death by window coverings, families wiped out by carbon monoxide poisoning in portable generators, children have died on atvs, rovs. there are so many consumer products. some more challenging. pools, drownings. every day i get the daily death report at the end of the day and it is the hardest part of the day to read the descriptions of the children that are killed by consumer products. and like any parent, i, of course, envision that being my children. and it is very difficult to force myself -- and i do force myself, because i think it is important to read those reports and to understand what other families are going through. that motivates us every day. and i know it motivates you. and i know it motivates you. we do not do this work alone.
many of you are here because this is your life's work, too. you share that passion of trying to make a difference and making sure that consumer products are not taking the lives of children, are not leading to serious injuries, that we're not going to have long-term changes to the lives of families because of something that shouldn't happen. please help us be better at our jobs. please even more and work with rachel in particular on this even more, submit commentses to our proposed regulations. please provide even more data our proposed regulations. please provide even more data and more research when we're trying to make a change. that makes a big difference to us. participate even more in our public workshops. we are going to be having one, for instance, on recall effectiveness. we need to hear your voice. please make sure you have a robust presence. take our safety material even more that's on our website. we have an excellent office of communications that puts out
life saving material. please take that material and disseminate it. it can make a difference. we are all in this together. and we've come a long way, a long, long way since the work that rachel did in 2008 on the consumer product safety improvement act to make a difference. we are now the world leaders on crib safety and other durable infant products. we have strong, very strong third party testing, independent third party testing for children's products. and again, thanks to rachel, we now have a publicly available database where you can not only search for reports of harm that have happened to other people, you can file our own reports of harm. please use safer products.gov is an excellent resource and an unfortunate way we have had to work around the anti-consumer safety and anti-transparency provisions of section 6b of the consumer safety product act. we are the only agency we know
of, only health and safety agency that has the limitations on us and thankfully because of the work of rachel and others we at least have that work-around. it is not good enough. i still believe that section 6b needs to be repealed. i think consumers are being harmed by its existence but we at least have the database to move us forward. so we have all this. we have a lot more. but we're not done. we have so much more to do and even though i am sleep deprived because my kids are waking me up early i do come in fired up every day to tackle more issues so i want to talk about some of the things we are working on right now. this is the year that i want to see real progress, real progress on longstanding, persistent hazards that continue to take lives. this is the year that i expect to see finally an effective
standard for window coverings. 30 years -- [ applause ] 30 years on average of a child being hanged to death once a month. that's just too much. it's got to stop. and thanks to the retailers, walmart, ikea, target, lowe's and hoe home depot in particular, in part, we are finally seeing a change. the status quo has ended.part, change. the status quo has ended. and now this is the year to see it through. this is the year i finally expect to see an effective standard for recreational off highway vehicles. again, enough is enough. we know that changes can be made to the vehicles. we know they can be made safer and this is the year we expect to see it. and this is a year i expect to see a proposed mandatory standard by cpsc staff for portable generators, one of the leading killers of products under our jurisdiction. we believe very strongly that design changes can significantly
reduce the exposure to carbon monoxide. there is at least one company out there from south carolina that is already showing that this is possible. we're calling on industry while we're moving through our rulemaking to go ahead and make the changes, make the life saving changes now before we have to do rule making and this is not a partisan issue. i have got the commissioners here. they both share that view, as well. the commission is behind trying to save lives with these products. let's change that. this is also the year that the agency is going to be an even greater force for consumer safety. and this is not an easy task. many of the folks out there that we regulate are law abiding and do the right thing. but not all do. we will continue to hold accountable those companies that break the law and put consumers at risk. and one of the areas that since
i've been chairman i have called upon is higher civil penalties, much, much higher civil penalties as the facts allow. prior to 2008, the highest civil penalty the agency could seek was a little bit under $2 million. congress raised that threshold up to $15 million and it gets indexed for inflation. i have said repeatedly and thanks to cpsc staff we are starting to see a significant increase in those civil penalties because the factors that we are seeing, the conduct that we are seeing in some of these cases, warrant much higher penalties. and i'm really pleased to announce today for the first time that cpsc has approved a settlement with a civil penalty of $15.45 million. [ applause ] that is the highest civil penalty the agency has ever had
by almost four times. the prior amount was $4.3 million. so we are now at $15.45 million. the company is gree. they produce dehumidifiers. you probably recognize them more under the names of frigidaire, ge, those types of names. it is totally unacceptable that a company would put out on the market and continue to keep on the market while delaying reporting to us and misleading us being untruthful to us about these products that provided a completely unreasonable risk to human life and to property from fire. that conduct is not going to be tolerated and if there's any confusion, if there's any confusion about what this civil penalty means, let's be very clear about it. it is not okay anymore. you cannot write these penalties off as a cost of doing business. we're going to continue to try to drive change in the way a certain segment -- i'm talking
about the bad actors. i'm not talking about the good actors. the bad actors. this should get their attention that we're serious about these civil penalties. i also want to mention nobody, just because we're talking civil penalties and not talking about this specific case, nobody should assume that criminal referrals to the department of justice are off the table. we will refer for criminal conduct investigations to the department of justice every case that we think is warranted. i'm so proud in particular and i want to mention this because it's important because there's real people behind this work on the gree settlement. the work of our office of general counsel and the cpsc staff and in particular one of our trial attorneys, daniel vice because it's because of his work that this case was seen through the way it was. he picked up a file, it happens all the time. work changes. somebody who had been working on the file didn't have a chance to
get to the bottom of it before she had to leave the agency. he picked it up, dusted it off, dug in, went through the paper work, he did the hard work and he found the nugget that led to the trail that resulted in this civil penalty. and so, i'm really proud of the work that daniel did and the support he got in the office of the general counsel and typifies the work that goes on every day at the cpsc. the last area i want to talk about, and again it goes back to being a parent, and this is probably the biggest part of what i hope to see the agency do is play our part in helping children reach their full potential. we can't do it all but there's two areas that might seem that they're disconnected that i think actually have a nexus. and the first one is chemical exposure to children. i took my kids to the dentist a little while ago and at the end you get those bags, of course, with the tooth paste and the toothbrush and in it there was a
plastic little car and before my 6-year-old could see it i grabbed it and i put in it my pocket because i didn't have the comfort knowing what i know that i could let him play with it knowing that he was probably going to stick his hands in his mouth. it made me angry as a parent i couldn't allow him to play with this truck, that i had to be concerned that he was going to ingest some type of chemical. it should not be that way. we should not have to worry about that as parents. a couch which is about as inert an object as there is in our house we should not have to be concerned that the flame retardants that are on the foam might get into the dust and children are ingesting that. that is not okay. in my mind. i don't think that parents should have to bare the brunt of wondering whether or not their children are being poisoned by chemicals in our house. it's one thing if you're talking about a hazard like a knife which is obvious.
yes, we can all appreciate that. but when it is a hidden hazard and we are talking about chronic exposure, i am not okay with that and i have spent every day that i have been at the agency trying to push us forward to being a force to getting answers to these questions. and i'm not opining on whether any particular chemical has a particular reaction. i don't know. i'm not a chemist. i'm not a toxicologist. what i do know is these public policy questions shouldn't be left to parents to have to struggle with. they shouldn't have to look at tiny font on a product to see whether there's a chemical in there they don't know what it is is even in there and they shouldn't have to wonder if bpa is taken out, what's replacing it and is that safe? that's not a burden parents should have to bear. that's a burden public policy makers should have to bear, and we're trying to bear it. congress needs to jump in, too. thankfully on artificial turf with crumb rubber in
playgrounds, another area that's a hot topic, we were able to work with epa and cdc to have a task force to look at the answers and that's a good model but that's not the way it should be. we should be coming together with congress and getting the right amount of funding, the right amount of authorities to make sure that we can really answer these questions and parents don't have to sit up at night and say is it safe for my child to play on that field or not. and similarly, it is not okay for me that parents have to wonder whether their kids are getting brain injuries playing sports. and you heard rachel talk about this as a priority of mine at the beginning. kids play sports and they should. and we put them into sports and we should. because they are supposed to come out of it on the back end as better people. they are supposed to develop character traits. they're supposed to develop physical fitness. they are not supposed to develop degenerative brain conditions. i don't know if they are or not, but there's enough science out
there that i am certainly concerned. it's changed the course of the way i look at my kids playing sports, and it has for parents all across this country. and so, this is the year in my mind and we have been working on this, working toward this, with the five professional sports leagues. they have a real role to play. they change culture. they move people. and so, we have sat down with all five of the commissioners of the professional sports leagues and said to them, you have a role to play, speaking with one voice, especially at the youth level to change the way parents approach sports. we should know, we should have certainty that when our kids play sports they're going to come out of it on the back end as better people. and products are not the answer. there's no super helmet out there. there just isn't. and i have had parents come up to me and say, hey, i just bought this $400 hockey helmet. my son's okay, isn't he? and unfortunately, i had to break bad news to them. there's probably no difference between that helmet and the $200 one or the $300 one. the marketing, unfortunately, is
influ influ influ influencing behavior and it's all off base. products are not the answer. the answer is less trauma to the brain and changing the way the games are played. and in my mind, no game's rules and no game the way it is played is more important than the safety of our children. and if somebody thinks that it's more important to preserve the way a specific sport is played regardless of what -- how the children come out of that, then i think we need to sit down and have a conversation about our priorities. [ applause ] so there's a lot to do. there is a lot to do. and we can't do it without you. rachel needs your help. we need your help. please, please have a voice. please follow even more closely the work that's going on at cpsc and epa and cdc and cfpb.
all of these agencies. there's great people on the inside that are trying to do what you want us to do. we're trying to make the changes that you want us to make that we all believe in for a better society but we need your help to do it together and i'm hopeful after this presentation, at least, you'll be inspired to go to cpsc.gov, saferproducts.gov and let's hear your voices even more. thank you, again. [ applause ] >> so i think we have time for one question. one. so -- >> better be a good one. >> if you're fast -- you could get to the microphone. go to the mike. and please identify yourself. >> yes. richard with the consumer federation of california. you mentioned the flame retardant chemicals. we have fought for about ten years now with the coalition of health, labor, consumer, firefighters and others to
change a very bad rule that california adopted in the '70s that has become the de facto rule so every -- every piece of furniture we're sitting on is loaded with toxic and ineffective flame retardant chemicals. we have made a lot of progress in california to allow for nontoxic and flame retardant options for upholstered furniture. is this an issue that -- i know we have tried over many years going back many, many years to get the cpsc involved in developing a standard. is anything happening? >> so i'm actually going to do something unprecedented and ask the commissioner to step up to that microphone because this is his -- he's leading on this and i don't want to steal his thunder. >> nice move, eliot. i'm wanting to put him on the spot with that, too. a good question before the agency, it is certainly not my issue but one we've been wrestling with for some time. there is also some concern about
the chemistry and flame retardants and the effect that has on personal safety. personally i'm adopting the legislation that would cut out the demand driver for the chemical in question and i think it provides an adequate amount of safety for the american consumer. there are a lot of different opinions on that from the flame retardant communities and other communities that have very intelligent efforts. i think it is time for cpsc to adopt tb 117 as a national standard. thank you. >> as a follow-up, he's led the effort internally and through the current operating plan for the staff to look at tb 117 and report the commission as to whether exactly what you were talking about, whether it makes sense to move forward in that direction. the comfort i have taken from it from the feedback of rachel and others, good news is that companies are changing and that is a positive. and after the years of it being the opposite and everybody following california and going down a certain path, it is very
encouraging to know they're moving to phase out these chemicals because to me, again, it's just not -- it's not acceptable they're in there, especially if as you mentioned they don't do any good. >> please join me in thanking chairman kaye. please stay in your seats. we have a very fast transition to the next panel on the sharing economy benefits and risks to consumers.
>> good morning, and welcome to our next panel. i'm going to go ahead and let everyone settle in. good morning. welcome to the sharing economy benefits and risks to consumers. we are going to stick with that theme, changing the way the game is played. the shared economy, certainly, is doing just that. pleased to be joining with you today, i'm ramsey alwin, director of financial resilience, thought leadership at aarp and thrilled to have a panel here today of experts on this cutting-edge topic who will share with us what is the sharing economy? what's the scope of it?
is it as big as they say? what does it mean for us as consumer advocates? what are the benefits? what are the risks? what do we need to know and what questions do we need to ask at the state, local and federal level to ensure that we don't get swept away by the tsunami that is the sharing economy? today we have with us, brooks rainwater, senior executive and director of the center for city solutions from the national league of cities. brooks will start us off with an overview of the shared economy. brooks is the director at the national league of cities of the city solutions and applied research center. he oversees the center's research, partnerships, community engagement efforts to strengthen the capacity of municipal leaders to create strong, local economies, safe and vibrant neighborhoods, world class infrastructure and a sustainable environment. he's a strong advocate for successful cities and often speaks and writes on the shared economy, sustainability and livable communities.
prior to joining the national league of cities, brooks was director of public policy for the american institute of architects. while at aia, he developed the local leaders research series analyzing nationwide trends and sustainability and livability. in addition, spearheaded the cities as a lab initiative focusing on the key role that cities play in creating investigators of innovative practices leading the country's economies forward. we're pleased to have brooks joining us. we'll then hear from two different perspectives on the shared is economy. we will we start with christopher koopman at the research fellow for the project of american capitalism at george mason university. he specializes in regulation, competition and innovation with a particular focus on public choice and the economics of government favoritism. the research and commentary has appeared in "wall street journal," "new york times," "washington post," "usa today" and on and on. we'll then contrast his
perspective with dean baker, co-director of the center for economic and policy research. dean founded in 1999. the areas of research including housing and macroeconomics, intellectual property, social security, medicare and european markets. he's authored many books, such as "getting back to full employment," "a better bargain for working people," "the end of loser liberalism." excuse me. freudian slip. let me get that right. "the end of loser liberalism: making markets progressive." he has a blog, beat the press, which provides commentary on economic reporting. and well-known in d.c. and beyond. we have a fantastic panel. we'll go ahead and open up with brooks rainwater to share with us what is the shared economy and what as advocates do we need to know about it? >> thank you, ramsey. good morning, everyone.
good morning, everyone. it's greet join you here today. really have an opportunity to come here and talk to you about what's happening in the sharing economy and the work that we are doing in this space. and so i really want to start and talk about how we're really in this age of disruption and the sharing economy is both a catalyst and a broader reflection of where we are today and where we are going. and while this term disruption might be a buzzword, it perfectly encapsulates this moment in time. economics to politics -- all right. okay. and so much more. change is happening and happening more and more rapidly so i think to start off, we really need some kind of shared definition of the sharing economy. obviously, what i'm saying here somebody else might have a different definition of it but i would kind of say that the sharing economy is an economic model in which individuals are able to borrow or rent assets owned by others. it is usually precipitated by
technology for underutilized resources and our goal at national league of cities as we think about these critical issues around the sharing economy is to provide the cities with the usable resource to address issues that are both near and long term, while simultaneously helping them anticipate the game changing trends of the decades to come. you know, we really came to this looking at the regulation side of it. that we had mayors and council members coming to us and specifically talking about uber and airbnb saying these companies are coming into our cities, disrupting our existing regulations, and what should we do? what are the best practices out there? so from our perspective what we wanted to do was really think about, you know, what was it that kind of created this environment. why are we here right now? you know, three things really jumped out at us, that's urbanization, economics and user preferences and lifestyles so as we're urbanizing more and more globally, you know, 70% of people live in cities by 2050.
as we're urbanizing more and more globally, 70% of people live in cities by 2050, this creates a dynamic where people are looking for services, for experiencings in different ways. frankly, the cost of living in major cities is high. the great recession made people have less money. because of that, people are trying to find new ways to bring an income and utilize the experiences they want. the peer-to-peer economy is one way to do this. on the user preferences and lifestyles, five years ago smartphones weren't ubiquitous and uber wasn't a verb. that creates a different dynamic. app platforms we all know now have helped make the sharing economy mainstream. we are firmly entrenched in this kind of age of the smart city, and data has become the currency of now and going forward into the future. so it's worth kind of putting into the context that people crave more connections through both collaborative consumption and commerce at the same time expect on demand services at their beck and call. that's what's put it in the context of where the shared economy is thriving, disrupting
local regulatory environments, something that was kind of close to home to us, and serving as a basis for innovation and growth at the same time. all of this is coming together in a confluence that's affecting cities in many ways. we decided we needed to create a research agenda around it. the first thing we did a little over a year ago is kind of delved into what was happening in the largest cities in the u.s. we looked at 30 cities, ride sharing and home sharing specifically, and we wanted to find out if there was a posit e positive, mix sentiment or neglect ittive sentiment to these services. by and large what we found at the time, a rapidly changing field and has shifted since the. by and large what we found at the time, a rapidly changing field and has shifted since then is the majority of cities had a real mixed sentiment. some saw, you know, ride sharing and uber and lift much more positively and airbnb and those services in a more negative light, kind of reflecting on the different regulatory environments both have, the zoning situation was one we heard a lot from short-term rentals.
and that kind of gave us the first understanding from the national level within the city context, and so we wanted to dig in and kind of build that research out more. so we did end up best practice kind of case study research. we looked at a dozen cities, small and large, did in-depth interviews with those city leaders, brought that together with the other research that was out at the time, and within that context we found that there were kind of five key areas that cities were looking at and really thinking about. that was innovation, equity in access, economic development, process and implementation, and safety. safety was the big issue that we heard time and time again. you know, obviously here in this context consumer safety is the big issue. from cities it's the regulatory context, thinking about how we keep our citizens safe. so building off that research, we decided that we would do a national survey on the sharing economy, finding out from mayors and cocil members and cities of all sizes really what were
those critical issues. once again, safety came up. you know, safety was the primary concern. 61% of cities saw public safety, lack of insurance and general safety concerns as that concern. you know, other two kind of lagging ones were 10% saw protection of traditional service providers, industry participants as a big issue. 9% saw noncompliance with current standards. on the benefit side it was a little bit more dispersed. 22% saw improved services, 20% increased economic activity, and 16% on increased entrepreneurial activity. so as you can see, those benefits are, you know, more equally dispersed. we saw clearly the major concern of elected officials as it relates to all of this is public safety. building on the research we'd already done, this kind of gave us that picture. and we also wanted to find out what kind of growth cities were seeing. a clear majority of cities saw growth happening in the sharing economy, with 19% of them seeing
it as rapid growth. there was more growth happening on the ride sharing side than the home sharing side. 71% of cities were supportive of the overall sharing economy growth. but where it eats interesting is when you tease out how they see the sharing economy. from the concept, they like the overall concept, but when you look at ride sharing, much more supportive, 66%, and home sharing, 44%. as we've had follow-up interviews it really gets to kind of zoning and neighborhood issues and then also some of the issues with kind of commercial districts and hotels kind of having conversations about this as well. and so we wanted to ask the question on regulatory approaches, you know, what were cities actually doing to regulate this, what kind of laws were they passing. we saw a clear majority had not yet passed new laws. while they had not passed new laws, a clear majority of them saw it is important to do so. and so that's kind of led us to the current environment where we've seen laws being passed more and more and we're also seeing more and more push at the state level, which is something
from our perspective we really think local control and this happening locally is a place for a lot of this to take place. so, you know, from a reasonable perspective where we're building and going next is looking at some of the labor challenges that have been happening within the sharing economy. it's not sharing economy per se. the 1099 economy has been building for many years, and there's a lot of issues that come together as we think about the future of work. but this is one of those that seems to be pushing us in that direction. and we're hopeful that we can see these jobs become better jobs because at the end of the day in cities we want good jobs. and so that research will be continuing ahead this year. and, you know, as i want to close here, i just want to say that the sharing economy is a game changer for cities, for good and for bad. we see clear benefits and also definitely clear challenges. it's always critical to remember that it is the urban environment that both creates the platform for the growth in the space and provides the on the ground innovation for new idea to germinate and flourish. and with that, i thank you.
[ applause ]. >> thank you for the invitation. thank you all for listening to me talk for a few minutes and letting me be part of this panel. can you hear me better now? i want to talk about three things specifically, but i do want to mention something. the sharing economy is much broader than uber, lyft, and airbnb. much broader than that, although if you only read what's in the news about the sharing economy, you would think it's ride sharing and home sharing and that's it. it extend into all sorts of things. there are services that provide on-demand chef experiences. someone will come to your house and cook for you. you can go to someone's house and eat there and they will co for you. a thousand tools. basically any underutilized resource you can think of, the sharing economy is allowing people to put that to productive use. what does that mean both for traditional industries as well
as consumers in those industries? and i want to start by noting first that competitive benefits and effects that the sharing economy has both on incumbent industries and also consumers within those industries. while many regulations and specifically i'm going to talk about ride sharing. while many taxi regulations may have served a beneficial purpose at one time and were intended to produce a beneficial outcome, it's becoming increasingly clear that these regulations have become outmoded and that these regulations may not be achieving their intended consequences. i will give you one example of this. how many of you have been to las vegas? quick show of hands. okay. how many of you took a taxi from mccarron airport to the las vegas strip? how many of you know if you were long hauled? blank stares, a shrug. i think i saw a hand or two. long hauling is an inherent problem in taxis.
there's an information asymmetry. the taxi driver is more familiar typically with the area he or she is driving in than the rider is. and not all drivers, but some drivers can take advantage of this and drive you longer than necessary to run up the fare. this is a problem that's been inherent in las vegas since the first taxi law was passed i believe in 1969, but other places as well. new york and chicago. i'll talk about those in a minute. in particular in las vegas the nevada taxi commission has been trying to combat this issue for some 35 years, 40 years now. they've really been aggressively going after this. they've done everything from git signs in the airport to giant signs along the road to undercover sting operations, to all sorts of attempted solutions to overcome this problem. however, it seems intractable. enter uber and lyft. now, simply, with the
smartphone, the gps mapping system, and a way to monitor both you yourself as the primary principal in this instance, being able to monitor the agent that is the driver but then also the platforms themselves being able to see if you've been taken the right way or the wrong way. it's putting consumers in a position where they are empowered to know whether or not on a moment's notice if they're being taken advantage of. now, add the reputational feedback mechanism to that, the five-star rating system that allows you, if something does go wrong from a ride sharing ride, be it uber, lyft, or any of the others, you can note it immediately to the platform and some response can be taken. usually within minutes, or longer, for the platform to resolve that issue in some way. now, compare that to some jurisdictions and their attempt to overcome issues in noncompliance.
you have the dctc at one point. i think they had a backlog of 18 months to resolve issues. if you have a problem in uber, typically it's resolved in 30 minutes to an hour, sometimes a little longer, but typically about that long, compared to the traditional regulatory environment which would require you to wait year and a half to know whether or not you've been overcharged perhaps $5 or $6. it's really putting consumers in a position where they're empowered in a way they have never been before, in particular in taxis. now, i mentioned chicago and new york city. there was a study recently done by scott wallace at georgetown looking at the publicly available data from the new york city taxi and limousine comission as well as chicago's. what he found is the number of taxi complaints per ride drastically decreased when uber and lyft entered the market. now, keep in mind this wasn't just long hauls.
these were things like broken air conditioning, rudeness, radio too loud, or not loud enough, issues that, for example, if you've ridden in a taxi in d.c., they have the taxicab rider's bill of rights. these things have all been mandated, but whether or not they're being achieved is left up to debate, but the entry of these new competitors is certainly forcing the current incumbents to become better. but it's also providing an tern tip for alternative for consumers who might not otherwise choose to ride in a taxi or unhappy with might not otherwise choose to ride in a taxi or unhappy with the current offerings, it gives them something different and something more. the second point. there are real issues of fairness. dean will speak about that as well. i do want to note one thing. when it comes to state and local regulators, there's essentially one of three options available when it comes to providing fairness within the market between new entrants and current incumbents. and that is in ride sharing, for example, you could extend the current model to all new
entrants so you could treat all ride sharing companies as taxis and just extend the taxi regulations to include everyone. there's a real fairness issue in that insofar as are these even taxis? they seem somewhat beyond. they are on-demand transportation, but are they taxis per se? it doesn't seem that they are. but also extending that model to these new services, just extend the types of barriers to entry that made it difficult for someone to penetrate the taxi market for the better part of the 20th century. you could also create new classifications. this seems to be what most states and localities are leaning toward is to create this transportation network company model with regulations specific to ride sharing. now, there are real fairness issues on this on two fronts. the first is it leaves the taxis hamstrung with these outmoded, outdated regulations, and allows these new competitors to compete on a broader, let's say, wider
basis than the taxis can. so there's a real fairness issue with that, but also in virginia, for example, it's $100,000 to get a license to be a tnc. you won't see a start-up transportation company popping out of richmond because that's a huge barrier to entry for the next round of innovators. third is a hard reset on the system all together. reboot the taxi regulations and think critically about every step of the process so you can take into account changes in the market, you know, new york taxi laws were signed by mayor laguardia. so the world has really changed since the 1930s in new york city. and it's high time to really rethink those systems. so you have 1 of 3 options here here which would take me to my third point, which is this provides state and local regulators with an opportunity to get it right for the future. it isn't just about harmonizing
today's competitors with yesterday's incumbents, but it is also keeping in mind that this is not the end of innovation and you will have another round of ride sharing or another round of on-demand transportation some time probably in the near future. again, i think you all heard about innovation in cars, you know, coming just down the road here. and you think that most of the transportation network company laws are written on a human driver paradigm. so as soon as these ride sharing companies roll out driverless cars, this entire debate starts again. so it's -- it's a great opportunity for regulators to think long and hard about the approaches that have been taken, learn lessons from the past, and provide a new approach for the future that empowers both consumers and enables innovators to provide a better service today, tomorrow, and into the future. thank you. [ applause ].
>> thank you for having me here. i appreciate christopher's remarks. i'm going to agree with much of the spirit. i don't know if we hammered out details we'd be on the same page. but this is a story you see a lot of places. clearly you have a great innovation and to a large extent, that's what uber, lyft, airbnb and the other economy sharing companies are about. they're innovative. there's also a big question of regulatory arbitrage. what i want to make sure, and we'll see if christopher and i are on the same page, we don't want companies profiting from regulatory or tax arbitrage. my favorite example. amazon. not knocking it. i use it. great innovation. order anything over the web. wonderful. but they still don't collect sales taxes in somewhere close to half the states. i can think of no argument that says if i get a tv at my neighborhood store, i pay sales tax, i get it from amazon, i don't. that makes zero sense.
that should have been dealt with long ago. it still has not. and in fact the amount of money that amazon has avoided by not collecting sales tax exceeds its cumulative profits. so it's been very big in its growth. we can argue what you think of amazon, this or that. it doesn't make sense to have a mom and pop retail store collecting sales tax and amazon says we don't have to, you ordered this over the web. that's the issue i see with uber, airbnb and other economy sharing companies. we want symmetric regulation. this comes up in different contexts. consumer organization, i do a lot of stuff on labor, what about the drivers? are they entitled to be treated as workers? minimum wage laws, overtime laws, workers' comp. are they covered by insurance when they're driving? the initial taxi industry isn't any better. often treated as independent contractors there as well. i think that's a bad situation because i think these people are effectively employees and this
is the sort of thing that can be dealt with. one of my points is i think there's a lot of bad faith here and i'm going to beat up on someone i really like, a good economist, alan krueger. he studied what uber drivers make on average. he got data from uber. he was, i presume, paid to do it. i don't know. but in any case, he got the data from uber. and he calculates what their gross pay was per hour. he goes, but we can't calculate net pay because we don't have data on miles driven. i go, that's too bad. wait a second. uber has data on miles driven. so this was a totally bogus comparison. looking at the gross pay, what do i get as an uber driver, then i have to pay for my gas, my insurance, for any tolls, depreciation on the car, and he's comparing that to the net of a cabdriver. that tells you zero because uber chose not to share the data with him. that's just bad faith. there are issues there. they could be dealt with if you deal with it honestly. on the issue of consumer
protection, again, we want to make sure that consumers have insurance that, you know, when you're in the cab you're protected adequately. uber has a policy. is it adequate? might well be. that should be subject to some regulation. it might be just, hey, we do this, look it over, is that fine? is it a good driver? i always pull out my 84-year-old mother for this. picking on her. wonderful person. she should not be driving an uber. she has a washington state driver's license. cab drives have to get special chauffeur's licenses that might well be excessive. but i want to be sure if you're driving an uber, you're a good driver. criminal records. they have to go through extensive background check, fbi checks. maybe that's too much. but, again, the point is there should be something. someone should have a reasonably good protection. obviously nothing is 100% foolproof, but the person driving your cab is not a convicted criminal who got out of jail yesterday. you don't want that. uber may do that, but there should be some assurance they are doing that. universal service.
i have a friend who did an analysis of the time it takes, and one of the issues, known record discrimination. a lot of african-americans have difficulty being picked up by a cab. uber is a great advantage. you sit there, they don't know you're african-american. great thing. he did some analysis looking at how quickly people got back and forth to underserved, minority communities. they found uber was better than traditional cabs. i said what if you don't have a smartphone and a credit card? he got really angry at me. that's a serious question. a lot of people still don't have smartphones and credit cards and they do take cabs. there's a lot of older people, poor people, they do their shopping once a month, they go to visit, you know, family member, loved one in the hospital, they need to take a cab. and if they don't have a smartphone, they don't have a credit card, we have to make sure they have a way to get there. so if you have a story, uber drives out the traditional service or downsizes enough that's very difficult to get a traditional cab, that's a big
issue. the medallions issue. i think there's an interesting question here. i'm not sympathetic to the people who speculate on medallions, but two points here. one, there are a lot of cities that have recently auctioned off medallions and i don't think it's good practice for the government to take money from people on a false pretext. a medallion has value because you're limiting the number so, if we sell off 20, 50, 100 medallions, then the next week you go, uber, you can do whatever they want, you kind of rip people off. and i just don't think that's a good practice from government. if you bought the thing 30, 60 years ago, some did, less concern. the other point about the medallions, there is actually a logic to limiting the number of vehicles. there are places certainly downtown manhattan that are seriously congested. michael bloomberg, when he was mayor, had the right strategy. you simply charge a congestion fee. he was prevented from doing that. the state passed a law prohibiting that. taxis, limiting the number of
taxi or taxi-like vehicles may well be second best. i would hold that out as a possibility. not defending the medallion system, but we may want to do that. reasonable question to ask depending how much congestion is due to cabs, how much could you stop by saying we only have x number of cabs. reasonable questions. point i would make in general is we want a standard set of rules. as christopher said, we want that to level the playing field between the incumbent industry and uber but we also want someone else to come in and compete with uber. you shouldn't have to hire president obama's chief political adviser in order to compete in the taxi industry. we should have clear rules. here's what you do, and you don't have to be politically connected to compete. those are some of the issues there. let me quickly run through some of the ones with airbnb, again, because it is a comparable sort of story. first off, safety issues. we have extensive regulations. this hotel has to comply with and ensure that if there is a fire, we can get out quickly.
what about the units rented through airbnb? well, airbnb is not inspecting them. is it safe? is this a firetrap? there has to be some indication. airbnb does not do that now. airbnb, a lot of people who are renting out via airbnb are violating leases. you can't sublet. in that apartment building i can't let out my bedroom five days a week or whatever it might be. your neighbors have a right. they didn't pay to live in a hotel. same thing with condo associations. these are real issues. i think that, you know, it's appropriate to say, airbnb has to be held responsible. also rent control. you may not like rent control, but it's crazy to say we're only to let you charge $1,000 for this unit but if you want to rent out an airbnb, you can charge $1,000 a night. you have to have a uniform set of regulations here.
taxes. you know, originally airbnb took no responsibility for ensuring that people paid their income tax and in many cities, certainly d.c., there is a special hotel tax. again, that's the sort of thing that airbnb should be held responsible for. are they handicap accessible? well, you know, again, you don't expect -- someone's not going to make -- they're renting out their apartment two weeks a year, if it's not otherwise handicap accessible, they're not going to make it handicap accessible. but that's a legitimate concern that we want to make sure people in wheelchairs can get access to hotels. again, they could come here. this hotel subject to all sorts of rules on that. if airbnb -- again, this isn't a hard thing to do. airbnb can know what percent of its units are handicap accessible. if they don't need that, you tax them to subsidize people that are handicap accessible. a last point along those lines,
discrimination, race and other issues. it may be the case, i don't know, i think there were some studies the other way, people less likely to rent from an african-american household, but, you know, do african-americans have a harder time finding an air bnb? because it's optional. you say i want to stay in your place. and, you know, we're not going to make someone, you know -- have someone in our home we don't want. we don't have an easy way to tell whether it's because they're african-american or some other reason. on the other hand, we can know, you know, what percent of the people who, you know, are getting rooms through airbnb are african-american. we could do that, and, again, if they're not -- you know, if african-americans have a difficult time renting units through airbnb. again, we could pay a discrimination tax. there are ways to deal with it. so the point is that we could find ways to deal with these issues. there are real issues. and i'll just say. i was on a panel a couple months back on the sharing economy and there was a representative of the industry group. what they said was we're just like the yellow pages on the internet. and i wanted to strangle her. not really. but that's just not honest. we have the yellow pages on the
internet. it's called craigslist. okay? that's the yellow pages on craigslist. you post on craigslist. it doesn't have a reputation that we're guaranteeing the quality, this or that. you post and people look at it and they understand. craigslist. airbnb is trying to present itself as a brand. uber is trying to present itself as a brand. we just have to deal with this honestly. i think you can take advantage of the innovations, which are real, but at the same time ensure that the protections that we are trying to have there with existing regulatory structure, ensure that they apply. that would be a win-win situation. thank you. >> thanks to our panel for laying out some of the benefits and some of the risks. we'll open it up in just a moment to hear from you, any questions or insight you may have. but i wanted to take a moment to drill down a little bit more on one of the benefits and risks that surfaced in the conversation, this idea of reputational feedback systems.
many of the sharing economy gadgets that technology has allowed us to have access to, they're convenient, low cost, and they have an opportunity to provide feedback in real time. what does reputational feedback systems, what does that mean for the world of consumer protections? i'd love to hear from the panel. >> i think reputational feedback systems are useful but not sufficient for consumer protection. at least right now. i could envision a future where particularly if these companies were to open their data systems and partnership with the public sector where you could create a system that was both reinforcing the existing regulatory system as well as creating that extra overlay layer. i think with the concern about safety that's been voiced by city leaders throughout the country and, you know, just the fact that these are new companies, that they're still in a growth mode, they're still hiring thousands of people and bringing this whole system
online, that you need to make sure that you have a strong regulatory system in place. so like i said, i really can see this moving in a direction where it can be a much more useful tool, but at the moment i don't think we're there yet. >> i'm a little more optimistic. so i think just in the context of ride sharing, so reputational feedback mechanisms in the ride sharing context. i would say two things -- it's a two-sided market, right? sharing economy is a two-sided market. it's producers and consumers. they're both a diffuse network and the platforms themselves, uber is allowing all of these people to connect together. for those of you that didn't know, every time you rate a driver, the driver is rating you. you can actually get your scores if you'd like them from the ride sharing companies themselves. you just have to ask. but it's making drivers better. drivers know they are being
watched very closely by the person in the car. but also the reputational feedback mechanism tied to the other pieces of the platform. that is when you get into the car you know the driver's name, you know the driver's description, you know the car he or she was driving, you know where they picked you up, where they dropped you off. so if, for example, you were defrauded, assaulted, mistreated in your ride sharing, your ride sharing car, you can use the reputational feedback mechanism to make it clear to the platform, something went wrong but also everyone who interacts with that driver after you knows that to a certain degree because their score reflects this. now, imagine or compare it to the traditional taxi system. here in d.c., have any of you ridden in a taxi in d.c.? can you tell the difference between the companies? all the cars are painted the same. you cannot tell the difference between any company.
so if you have a problem, you better hope you have a receipt, you got the driver's name, you looked on the side of the car. let's say something happens, you're a little frazzled at this point and you leave and you walk away and you say, oh, i forgot to get her name, his name, i forgot to get all of this information. it's lost, to you, to the world. you have no idea unless you paid with a credit card how to get that information. the reputational feedback mechanism is tied to everything else that has become sort of the hallmark of the sharing economy platforms empowers consumers and protects them in a way that simply there were dark spots. there were dark corners and dark alleys, if you will, in these traditional -- traditional industries. in particular in ride sharing. and i think the sharing economy is brightening up those darker spots. >> i would be skeptical on the consumer feedback. i think it is very useful and it is very effective, but you are
talking about in many cases a one-time, a rare event, but an especially bad one. so if someone gets assaulted in a cab, odds are that uber driver has not previously assaulted someone, and presumably they won't do it again. on the other hand, you don't want that to happen in the first place. with the traditional taxi services they go through an fbi check. not perfect. obviously, someone can go through a check and turn around and assault someone. what does uber do? maybe what they do is fine, but i want to know they're doing something to make it unlikely someone who is about to commit an assault is driving an uber. it doesn't do you a lot of good after they've done it you can give them a bad rating. the point is not to be in that situation in the first place. same thing with a bad driver. they're not in an accident every day. they're going along, having a conversation with your uber driver, you like them, fine. give them five stars. didn't do anything obviously bad. but maybe they are a bad driver and the next person who gets in they'll be in an accident and be seriously injured. again, that can happen with the
traditional taxi services. but they get a special license. my mother would not get that license. i don't know whether she could be an uber driver, but, again, i want to know that uber's doing something that makes sure my mother does not drive an uber. same thing on the -- good thing my mother won't be watching this. same thing with airbnb. again, we're concerned that hotels are not firetraps. and, you know, you go into a hotel -- i mean, an airbnb unit, and, you know, you have a nice time there and, you know, the host is nice, everything's good, give them five stars. but it turns out if there is a fire there's no way out. okay. so that may never appear. that's the sort of thing that airbnb could say. okay, do you have egresses, is there a way out, multiple ways out from this room if there's a fire? people may still lie and you can figure out the details of how you do that. the point is that won't be captured by consumer feedback except, oh, i was trapped in a fire. a little late. i think there is a logic to this regulation in addition to the obvious benefits of consumer feedback. i'd like to invite the
audience to share some questions or insights you may have. go ahead and use those mikes. please. >> thank you. i really appreciate hearing the regulatory side, the research side. we've got a lot of young adults here who don't have regular jobs, who end up home sharing, home sitting, sharing cars, et cetera, et cetera, and it seems like these newer, disruptive technologies or disruptive systems are addressing those needs. i appreciate the need for regulation, but i also recognize that there's this burgeoning pain, need, new economy because there's a changing world out
there. how would you address that? >> i think i would start and say that this is where it's actually exciting to see the differences happening on the ground because, to your point, i mean, i'll talk about ride sharing for a second, i was just in ft. collins talking with the mayor and city council member there, and ft. collins, colorado, and they were saying that didn't have taxis on ground before uber came. uber created a whole new service. indianapolis was another example they saw uber and air bnb as a real economic development tool. so i think you have those types of examples but also cities that for a long, long time have had existing taxi industries have had, you know, very strong hotel industries, so they've had kind of existing services where it's creating a competitive environment where there might not be an even playing field. i think that kind of gets at the dynamic. yes, mayors and council members overall welcome this innovation happening. but there is a need to make sure that we're creating a level playing field where it's necessary, but that might not be
necessary everywhere in the same way. >> yeah, but in terms of -- did she walk away? >> i'm right here. >> your question was about work as well. when you look at the data, recently we got numbers from the irs in terms of what has the growth in 1099s looked like versus the growth of w-2s between the year 2000 and 2014. the number of w-2s issued stagnated or slightly declined by about 4% or 5%. conversely, the number of w-2s increased -- 1099s increased by about 22%, 23%. so, you know, granted, for 1099s if you're worried about the future of work, 1099s at this current rate, for them to surpass w-2 as the primary form of work in america it would be like 2085. 209. we're a long way off. the future of work is far out there, i think, until
traditional employment goes away. but when you look at who's working in the sharing economy and, you know, a recent survey of sharing economy participants found two-thirds roughly, two-thirds of sharing economy participants. now, this is outside of uber and lyft. if you your only experience with the sharing economy is uber, lyft, and airbnb, you would think participants in the sharing economy are much older because those are huge capital expenses you need to start up. you need to own a home or lease a home, own a car. they're reducing these barriers to entry. uber and lyft have doing these lease to own progmsor rental programs. t for the most part when you break it out into task rabbit and instacart and all these other sharing economy companies, two-thirds of people are college age or recent college graduates and working professionals operating in the sharing economy. in a stagnating economy for a bunch of millennials who are graduating with a lot of hopes and little opportunity, this is an outlet for them. i would say to that, there's a story here of people finding opportunity beyond the consumer
side, but the producer side, finding opportunity that otherwise wouldn't exist in the traditional environment. >> i guess i would flip it over. i find it incredibly frustrating people somehow accept we're going to have a bad economy forever. this was like incredibly bad economic policy that allowed for the housing bubble to grow, allowed for the crash, and then cut off the recovery. so we got all these people in washington who decided that the federal budget is like the family budget. i'm sorry. it's not. that's just wrong. but nonetheless, you know, they go around and it's bipartisan, i'll beat up on president obama as much as republicans in congress. he's boasting about us reducing the budget deficit. then he's boasting about slowing growth and keeping people from having jobs. so i don't think -- you know, if you can't get anything else, if you can work for task rabbit, yeah, that's better than nothing. but we don't have to have a really bad economy. that's a policy decision. i would hate to see us mack our laws or regulations around the idea
we're going to permanently have a really bad economy where large segments of the workforce can't have normal employment. >> thank you. >> this side of the room and then we'll return. >> charlie leoco with travelers united. we're involved a lot in this whole sharing economy side right now. i think it was dean said it's sort of like a bulletin board. it is a bulletin board in a lot of cases. brbo, the home away, i mean, they were set up as online bulletin boards. you pay to put your name up there and then the transaction comes along and you get to work with someone. it's exactly like a bulletin board. and so what air bnb has done and uber has done is they've added other features to that to make it easier for transactions to take place. and so, as we follow that through, what we're running into, is we're going to run into areas where the cities and
states are going to have to come up with new ways of collecting their own taxes, because what we're finding right now, we used to have this whole economy of people renting out their homes, their condos, vacation rentals, and now that's coming online, and it's becoming easier and easier. and big companies like priceline, booking, expedia are starting to get into the act and they're willing to collect taxes en masse and hand them down to the states and let the states decide how it's going to get all divvied up. but whether or not the states and localities are going to be able to handle this money coming in is going to be another question. so do you see any -- what do you guys see in terms of, say, the benefits to the state and local economies from all of these additional tax collections and what they're looking at in terms of ways to use it to help make the sharing economy even better?
because there's going to be a big growth in income, which we just didn't used to have. >> i think this is one that the data still needs to be collected and research still needs to be better done on kind of substitution versus new creation of service. you know, because i think we to see that somewhat. you know, you definitely hear it anecdotally from people that they wouldn't have traveled if they wouldn't be able to use air bnb. but i don't think we fully know how many people are choosing to use those rather than staying in hotel rooms right now. certainly, from a tax collection standpoint, it is one thing i would credit air bnb with, the way their platform has been put together, that they are working with some cities to collect taxes in those cities. i would say that i understand that home away and brbo have created a different type of platform historically, but it might be a good, you know, business decision to figure out how they could do something similar, because it's pretty hard for a city to really figure
out, number one, which houses are actually put up on that marketplace, and number two, therefore collect the taxes. and so i think that as we move forward these kind of dynamic systems will work themselves out better, and certainly we see, you know, additional tax collection that could take place as a net benefit for cities. >> okay. so i have a comment, but also i think i'm going to tie it to something dean was saying before about arbitrage. so the example of air bnb, brbo, or what have you, and i think you mentioned some people say i wouldn't travel but for having these services, they make life more efficient and more cost effective. i think something like 90% people polled in a recent survey said that's why they're using the sharing economy, more effective and cost effective. but that's a -- i think that shines a large spotlight on issue the way hospitality taxes are imposed on travelers, on tourists.
you think, for example, if i were to go to atlanta, georgia, and stay in a hotel, i'm paying a huge tax to pay for the atlanta falcons stadium. they're funding the stadium through the hotel tax. or i can go through brbo and it's something like perhaps in some instance 15% to 20% cheaper because i don't have to pay that tax. as a consumer, i'm certainly going to go with the cheaper product. it's up to the producer to figure out whether or not they're compliant with the taxes. so i think even with the transportation, is that the sharing economy is providing arbitrage opportunities for individuals to find new innovative and efficient means to overcome things that have become otherwise inefficient, in some instance, anti-competitive. in terms of making cities better, i think something like air bnb is really forcing cities to rethink how they go about their tax policy and how they enforce their tax policy because they're clearly pushing people away from hotels and toward
other options because they're artificially raising the price. >> i guess i would say you want to try to set reasonable hotel taxes. i'm not a fan of paying for the atlanta falcons stadium, but you want to make sure they comply across the board. and obviously, it is more difficult, you know, air bnb with their platform, i don't think it is difficult, but if you have something that is more like craigslist, i can understand you're simply posting there. all they're doing is saying you get to post here, you pay us a fee, that's your end of your dealings with us, it's hard to hold them liable, and the city's kind of left, okay, how do we collect the taxes, which, of course, is going to be difficult on a case-by-case basis. >> thank you. >> rosemary sheehan, president of consumers for auto reliability and safety. we spend a lot of time trying to keep the auto industry from killing its customers. i want to throw this out there in connection with the ride sharing economy. there a