Technology

Rubio calls for tax, regulatory reforms for on-demand economy

Greg Nash

Sen. Marco Rubio (R-Fla.), a 2016 GOP presidential candidate, on Tuesday called for tax code reforms and restrictions on regulations that he said would help on-demand economy companies like Uber and Airbnb flourish.

“The on-demand economy is a miracle that only American free enterprise could produce,” he said, according to the text of his remarks delivered at Civic Hall in New York. “That’s why it’s so shameful that the biggest obstacle to the growth of this platform is our very own government.”

{mosads}He said that in the on-demand economy, “innovative companies are running up against an antiquated tax code, burdensome regulations, and numerous outdated politicians.”

His reforms, Rubio said, would limit the taxation of digital products and would “ensure the Internet remains tax-free.” Rubio also promised to target the ability of the federal government to regulate the on-demand economy.

“I will place a cap on the amount regulations can cost our economy each year,” he said. “I will also require federal agencies to include an analysis of exactly how each proposed regulation would impact competition and innovation.”

Rubio declined to endorse a solution for one of the major challenges in the on-demand economy: How to classify workers. Many of the companies view their workers as independent contractors who don’t get the benefits and protections given to many employees.

Although Rubio acknowledged that neither classification made “perfect sense” in the context of some on-demand service startups and said that this tax reforms were designed to help workers, he did not propose a specific way to resolve the question.

He pointed to Germany’s classification for “dependent contractors,” which lies somewhere between independent contractors and employees, as a potential way to address the classification issue, but did not give it his support.

“Whether this model is the best option for America or not is something we need to figure out,” he said.

Rubio also tried to make the complicated questions surrounding the on-demand economy personal. He said that his mother, a hotel maid, would have benefited from the startup Handy, which connects house cleaners with customers.

“She would have had total control over her own financial life,” Rubio said.

The Florida senator has long seen himself as an advocate for the on-demand economy. His recent book, American Dreams, includes a chapter entitled “Making America Safe for Uber.”

Rubio’s embrace of the on-demand economy is reflective of the way that companies like Uber have become stand-ins for significant transformations in the American economy, including the growth in freelance and “gig” work.

Republicans on the campaign trail have said that they are wary of impeding the fast-growing startups with new regulations. Democrats, in the meantime, have proven slightly more open to the idea — particularly when it comes to work protections — while still being careful not to alienate Silicon Valley with their positions.

In a speech earlier this year, Democratic front-runner Hillary Clinton said that the on-demand economy “is creating exciting opportunities and unleashing innovation, but it’s also raising hard questions about workplace protections and what a good job will look like in the future.”

Lawmakers and federal regulators have started to examine the on-demand economy as well.

Sen. Mark Warner (D-Va.) is currently crafting legislation aimed at building a safety net for on-demand economy workers.

And Edith Ramirez, chairwoman of the Federal Trade Commission, said last week that the on-demand economy might require “targeted regulatory measures.” She added that they should be “no greater than necessary to address those concerns.”

Tags Marco Rubio on-demand economy

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