Senate Peer to peer commerce, the sharing economy and regulation

So I just finished the latest Freakonomics podcast and it got me thinking.

Stephen Dubner looks at the rise of the so-called sharing economy; peer to peer transactions that supplant traditional businesses. Specifically - AirBnB, Uber, and EatWith - and how they interact with various cities in the US to regulate them.

A brief background for the uninitiated: http://freakonomics.com/2014/09/04/regulate-this-a-new-freakonomics-radio-podcast/

Core to this argument is the neo-capitalist innovations cropping up as a result of the increased interconnectivity we experience as a planet. Capitalism is the most efficient mechanism we know for natural price discovery; price equilibrium is determined when the willingness of a seller to sell is matched by the willingness of a buyer to buy. The problem is, capitalism needs ongoing creative destruction to ensure this natural price discovery occurs - when you don't have that, you have the bitter acrimony of the recorded music industry fighting off pirates from an increasingly untenable position.

AirBnB lets me find a place to stay that's not a hotel in a city I'm travelling to. It also lets me avoid the markups a hotel charges for location and to cover it's operating expenses. However, it does not have the same accreditation a hotel has - no fire and OH&S inspections, inadequate professional indemnity insurance. Arguably EatWith and Uber have the same issues to face.

Regulators want to regulate these industries heavily; the industries are suggesting that the regulatory regime is skewed in favour of existing interests and is not fresh enough to manage the AirBnb et al business model.

AirBnB founder Nathan Blecharcyk sums up his position as: "We’re not advocating that there shouldn’t be rules. We’re just saying that things have evolved and it’s worth taking a fresh look from the ground up."

EatWith founder Guy Michlin says, in support of the above; "I think that sometimes, or actually many times, the regulator is a little bit behind to catch up with technology… And if you think about Airbnb, it’s obvious that this is a phenomenon that’s not going to go away…. Obviously the regulator will need to come in and hopefully in a dialog with all the different constituencies, adapt and create a new regulation that fits the reality."

New York Senator, and party least amenable to the sharing economy model Liz Krueger says: "I want to look at more enforcement, perhaps increase fines, and penalties. I do have a very serious frustration that the kind of law that we really need needs to be federal because the state is superseded by federal law when it comes to regulating online business. Some people seem to think that if you’re a business model that’s on the internet it’s like magic and hocus pocus. It’s just business. And there’s a reason for government to regulate business, whether it has a physical site somewhere or whether it’s in the cloud."

So my questions to you, JC'ers, are:

1) Have you used AirBnB/Uber/Lyft/EatWith or similar peer to peer sharing economy apps? Either to rent out a service such as a room or a car seat or a meal; or to take advantage of one of these?

2) If you answered "no" above, would you? If not, why not?

3) Do you think that the regulators should try and regulate these as if they were traditional restaurants, hotels and taxi services? Why/why not?

4) Do you see these services as taking over traditional enterprise in that area?

 

1. not personally, but there are people i know that have, and the reported experience has been nearly universally positive.
2. yes
3. they're going to do it/try to do it anyway so whatever
4. if it provides greater value than the service/enterprise it is replacing, then yes. unless, of course, the replaced/obsolete service/enterprise refuses to die quietly.