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Rubio Campaign Press Release - How Marco Wants to Let Uber, AirBnB, and the Rest of the 21st Century Economy Flourish

October 06, 2015

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Remarks as prepared for delivery, October 6, 2015. Civic Hall, New York City.

I'm here today not just to tell you my ideas, but to listen to yours. I think that's a big part of what campaigning is all about. No one understands the needs of the on-demand economy as well as those of you who are building it.

Coming into this discussion, here's something I can state with absolute confidence: If there's one thing that matters in the 21st century economy, it's innovation. In order to be the leading economy on earth, America must be the most innovative economy on earth. It's that simple.

And whenever we talk about innovation, what we're talking about is problem solving. We're talking about finding ways to do things more efficiently, more affordably, and more conveniently than ever.

So I want to begin today by telling you about a problem I had earlier this year that American innovators, including many of you in this room, are attempting to solve. And then I want to tell you something you already know, which is that government is getting in your way of solving it.

My problem was this: A few months back, my refrigerator at home stopped working. It just died on us. And with four growing kids home for summer break, you can imagine I was facing some pressure to get it fixed. So I googled appliance repair companies in Miami and made some calls.

First of all, it was frustratingly difficult to get anyone to take me off hold or call me back. And when I finally got in touch with a real person, they told me, "No problem, we'll have someone out to your house in three days to take a look at it."

That just can't be how our economy works in the year 2015. Other things that took three days in the old economy now take three minutes — or three seconds. What struck me in that moment was the following realization:

Inevitably, somewhere not far from me, there was someone capable of repairing appliances who was just as eager to make some extra money that day as I was to have a functional refrigerator. The only problem was that this person and I had no way of finding each other.

That is a problem that will not exist within a year or two, at least not if American innovators have their way. And the reason is because of the on-demand economy.

This is a revolution happening right before our eyes. Also known as the "sharing economy" or "gig economy," the on-demand economy is allowing millions of professionals across multiple industries to connect directly with consumers.

The most obvious examples are companies like Uber and Airbnb. But just last week it was announced that Amazon and Google would be entering the on-demand market. And right behind these giants are thousands of small, innovative startups. If you haven't heard of them yet, just wait.

The on-demand platform is one example of an important truth facing us in this election, which is that the American economy is fundamentally transforming. Uber didn't even exist when our current president was sworn in. Today it's worth $51 billion.

And it's not just the fact that the economy is changing; it's the fact that it's changing faster than ever. It took the telephone 75 years to reach 100 million users. It took CandyCrush one year!

Yet while our economy is changing, our government is not. And both parties are to blame. Never before — at least not in my lifetime — has the political establishment in this country been more out of touch with the American people than it is today.

The result is a worsening friction between our mid-twentieth century government and our rapidly changing 21st century economy. Nowhere is this friction more apparent than in the on-demand economy. Here, innovative companies are running up against an antiquated tax code, burdensome regulations, and numerous outdated politicians.

And that's not all. These companies are also the victims of a coordinated attack from established businesses, which influence the political process to pass new regulations that block competition. We've seen this play out with taxi companies lobbying to stop Uber. And here in New York, the government is spending millions to try and stop Airbnb from threatening hotel chains.

I want to give you another example today. I want to tell you about a growing company based here in New York that, like all businesses in the on-demand economy, is facing unnecessary challenges as a result of our outdated government.

It's a company called Handy, and its CEO, Oisin, is here today.

Handy is an online platform that allows consumers to connect directly with home cleaners, handymen, plumbers and other home service professionals. It's quickly growing, now operating in 37 cities with over 11,000 professionals registered to use the platform.

Handy is groundbreaking for consumers for obvious reasons. It provides simple booking at the tap of a finger, a rating and review process that helps them find the best contractor for their needs, and an easy online payment system that eliminates haggling over prices.

But it isn't just great for consumers. One of the things I love most about the on-demand economy is the way it promotes upward mobility for the professionals who use it.

Through Handy, workers without the resources to start their own cleaning business, pay for their own advertising, or manage their own books can now have all the independence of self-employment and the customer base of a large established business.

Professionals who use Handy earn an average of $18 an hour, which is more than the typical worker in the field. Best of all, they set their own hours, checking into the app whenever they have time to take on a job and signing out when they have other obligations.

Many workers use this flexibility to pursue a higher education, which is central to upward mobility in this new century. Others use it to spend more time with their kids or work other jobs.

Innovations like Handy are part of the reason I'm so optimistic about not only saving the American Dream in this century, but actually expanding it to reach more people than ever before.

In the last century, my mother worked as a maid in hotels. She had no control over her schedule, no influence over how much she earned, and few opportunities to set herself apart, yet she still achieved the American Dream. Just think what she could have achieved cleaning homes through a company like Handy. She would have had total control over her own financial life.

The on-demand economy is a miracle that only American free enterprise could produce. That's why it's so shameful that the biggest obstacle to the growth of this platform is our very own government.

In fact, think about this: I met the CEO of an on-demand startup a few weeks back who asked that I not mention his business today out of fear that it would attract attention from legislators, lawyers, and competitors.

What does that say? Do we want America to be a place where honest, innovative businesses have to hide to succeed? Of course not. We need to be the most business-friendly economy on earth. But right now, with the highest corporate tax rate in the developed world and a regulatory structure that's directly hostile to innovation, we're quite nearly the opposite.

Here are some of the obstacles that Handy and companies like it face every day.

First, our outdated tax code. Companies like Handy only have two options for how to classify the professionals who utilize their services. They can either be classified as full W2 employees or as 1099 independent contractors. But neither makes perfect sense.

If Handy's CEO, Oisin, classifies the workers as W2 employees, then much of the flexibility that makes working with Handy so appealing would disappear. He'd have to regulate workers' hours and comply with a litany of expensive requirements that would stunt the growth of his company.

So instead, Oisin makes sure the relationship complies with the 1099 independent contractor requirements. But this causes other complications. For example, the company can't provide training to its contractors, they can't make recommendations to them based on customer feedback, and they can't even ask them to wear a shirt or uniform with the Handy logo on it.

Oisin is also prevented from providing the perks and benefits that would allow him to attract more high-quality professionals to his platform. Think about how ironic that is. Our outdated politicians bash the on-demand economy for not taking better care of workers, yet our outdated government is the exact force preventing it from doing so.

This is why I've proposed a comprehensive tax reform plan that is both pro-growth and pro-family. And today, I'd like to discuss with all of you some additional ways to make the tax code more welcoming for on-demand companies. Some ideas I've had are to maintain the "physical presence" standard for taxation of online purchases, to stop discriminatory taxation of digital goods and services like app downloads, and to ensure the Internet remains tax-free.

But on-demand companies aren't only hurt by our tax code; they also face the uncertainty of a volatile regulatory environment. Just last Friday, the chairwoman of the Federal Trade Commission said the on-demand economy would require, quote, "targeted regulatory measures."

We have to realize that all of the best innovation in our economy is happening in the unregulated space. Yet Washington has imposed 60,000 pages of new federal regulations just this year, costing our private economy almost $70 billion in compliance costs.

As president, I will put an end to this. I will place a cap on the amount regulations can cost our economy each year. I will also require federal agencies to include an analysis of exactly how each proposed regulation would impact competition and innovation.

I believe the more America regulates, the more we create an opening for other countries to deregulate and draw jobs away from our shores.

Other nations are already scrambling to cater to the on-demand economy. Germany, for example, has created a middle ground between full-time employees and independent contractors. This classification, known as "dependent contractors," allows professionals to work for a single company, receive benefits and protections, and yet still retain control over their own work.

Whether this model is the best option for America or not is something we need to figure out. But here's what I know for sure: We have to change the way the political establishment in this country thinks about the new economy.

Right now, they recognize that the new economy doesn't fit our current tax code and our current way of doing things, so they ask themselves: How can we force the new economy to adapt to our old policies? I'd rather ask: How can we change our old policies to adapt to the new economy?

That has always been the American way. We are a nation unique in all the world — a nation founded on the idea that government doesn't get to choose what our economy looks like; the American people get to choose. And guess what? The American people have chosen.

They have chosen a convenient, fast, tech-driven economy — one with direct lanes of access to the products and services they need.

The American people have chosen an economy in which the most valuable retailer in America, Amazon, owns not a single store; the largest transportation company, Uber, owns not a single vehicle; and the largest accommodation provider, Airbnb, owns not a single hotel.

Free enterprise has brought us these developments, and free enterprise will bring even more developments in the years ahead. In fact, I believe free enterprise will work better in this century than it did in the last, because the new economy is all about innovation, creativity, and productivity, and we are the most innovative, creative, and productive people on earth.

I believe the 21st century not only can be a new American Century; I believe it will be. It will be as long as everyone in this room keeps doing what they're doing, and as long as Washington stops doing what it's doing andstarts looking for a better way.

Marco Rubio, Rubio Campaign Press Release - How Marco Wants to Let Uber, AirBnB, and the Rest of the 21st Century Economy Flourish Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/326147

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