Government regulation of the peer economy may seem like a parent nagging about a curfew, but is amending regulations also necessary for mass adoption of sharing platforms? John Kuo, of Nerd Wallet, recently examined some of the perspectives on regulation for collaborative consumption.
Kuo spoke to Collaborative Lab’s April Rinne, who pointed out that many regulations governing sectors being penetrated by peer-to-peer ventures predate the internet. The concept of a platform facilitating the sharing of individuals’ goods and skills was unfathomable when these regulations were drafted, meaning that amendments are required in sectors where collaborative consumption activity could currently be considered unlawful or beyond the reach of current rules. Governments are also concerned because they may be outside the reach of some taxes!
Those interested in promoting collaborative consumption for the masses have reason to play an active role in developing new regulatory frameworks. If not, they may wind up with unworkable restrictions or overbearing monitoring. Regulations are necessary for the peace of mind of consumers, investors, operators, freelancers and governments. They can also ensure trouble free operation of a sharing economy, especially if advocates are involved in the drafting process.
Kuo also spoke with University of Pittsburgh Business Professor Catherine May Lamberton, who highlights that a forward-thinking government should not apply barriers to innovation. Opposition by competitors such as taxi unions to the implementation of ridesharing, is not reason enough to inhibit the growth of this sector. In a free market economy, consumer choice governs which players end up on top. Supporting older, less efficient paradigms of consumption through restrictive regulations is counterproductive. Andrew Pontii of Sunrun agrees, stating that new ideas should be encouraged, not stifled, so that innovation can prosper.
Lamberton also allays concerns by offering the fact that sharing economy players are often more self-regulating than traditional businesses. Through the currency of reputation, users report bad behaviour and poor quality in real time, as each interaction occurs. She also reassures us that laws governing fraud, contracts and negligence will continue to protect consumers as they venture into the sharing economy.
Read Kuo’s article in full here.
Also check this Sydney Morning Herald article from the weekend, which covers regulatory issues being encountered by Airbnb in Sydney right now.
