Kirsten Crow’s Caller-Times article, “City Council May Reconsider Ordinance That Drew Ire of Uber,” tells us that there may be hope for the much-desired Uber and Lyft companies to remain in Corpus Christi. Councilman Chad Magill has shown an interest in allowing the local taxi companies and ride-hailing companies to reach an agreement through negotiations. This seems like the right thing to do. Too much regulation certainly can hinder the creative spirit, which can kill new businesses and make people look elsewhere to work, live, and vacation. Magill’s idea to suspend the effective date of the ordinance for 60 or 90 days so that the primary stakeholders can come up with a workable plan is a good idea, one that will hopefully lead to less regulation for all.
Regarding the safety concerns surrounding the ride-sharing companies, economists have long argued that stiff competition is often far better than detailed regulations when it comes to fostering safety and quality. In many municipalities, the taxi lobby has convinced policymakers that there are only two solutions: Either level the playing field by forcing ride-sharing firms to obey excessive taxi regulations or ban ride-sharing completely. Maybe these groups need to stop fighting one another and join forces to get rid of some of the fees and regulations that are not directly related to safety, such as the fees
The sharing economy, is not just about sharing. It’s about selling, swapping, trading, and bartering and is referred to as the peer-to-peer economy, the collaborative economy, or collaborative consumption. Companies, such as Airbnb, Snapgoods, TaskRabbit, Uber, Lyft, DogVacay, Poshmark, provide services that people want and are most likely here to stay. In a speech at Fordham University Law School, FTC Chairwoman Edith Ramirez warned that imposing “legacy regulations on new business models” can stifle competition and ultimately leaves consumers worse off. But, she said that regulators shouldn’t shy away from enforcing important consumer protections on issues like health, safety, or privacy. Ramirez ends her speech with questions that each governmental entity dealing with businesses that are part of the sharing economy must answer:
“Assuming these new business models may benefit consumers, how can regulators provide a regulatory framework flexible enough to allow them to realize their full potential? Do existing regulatory frameworks have to be reworked or even abandoned due to these developments? How do we also ensure that these same new business models do not inadvertently erode beneficial, existing consumer protections in such diverse areas as health and safety, privacy, and data security? Can the trust mechanisms built into some of these new business models replace regulation? How do we best avoid creating two distinct regulatory tracks – with one set of rules for the older, incumbents businesses and a different set of rules for the new entrants they now increasingly compete against? I would suggest that picking winners by creating a regulatory differential in favor of new entrants should be just as undesirable as retaining regulations that deter meaningful entry. And how should regulators appropriately respond to a highly dynamic marketing which the business models of today may be completely transformed tomorrow?”
Josh Brustein of Bloomberg Businessweek said, “The so-called sharing economy, which, depending on whom you talk to, is either a lightweight form of socialism or an artisanal flavor of capitalism spawned by the Internet.” Whatever the case may be, these kinds of businesses pose special problems for municipalities, including Corpus Christi, in terms of what to regulate, whom to regulate, and to what degree to regulate.
Related articles: “Does Anyone Really Know What ‘Uber’ Means?”