Regulate Uber, other shared services, say analysts

Peer-to-peer services like Uber for transportation, Airbnb for accommodation and TaskRabbit for personal services are disrupting existing marketplaces in a big way, say policy analysts, and governments should act quickly to regulate them.

More choice for consumers

“On the positive side, they (sharing services) are offering a lot of new choices to consumers,” says Sunil Johal, policy director at the Mowat Centre, which is a public policy think tank at the University of Toronto. He adds sharing services bring competition and innovation to some industries which have become stagnant.

ListenSharing services using new technology platforms have become huge with Uber worth $40 billion compared with the Hertz and Avis car rentals companies which combined are worth nowhere near that. Airbnb is now worth over $10 billion and serves people all over the world.

Unfair advantages

These services however sometimes have an unfair advantage over their traditional counterparts because they do not have to follow regulations. Often they circumvent policies set by governments. For example, they do not have to follow rules that ensure taxis are safe by licensing drivers. Nor does Airbnb abide by zoning rules which regulate where commercial and residential activities take place.

Governments around the world are grappling with what to do.  Johal suggests they begin by overhauling old and often onerous regulations so create a more equal playing field with more flexible rules. He suggests they swap permission to operate with access to the data belonging to sharing platforms.  That would help governments devise public policy.

‘Act quickly’

“It’s important for governments to act quickly,” says Johal. “The danger is not acting and just leaving things to unfold in a bit of a chaotic situation is in nobody’s interest. Consumers don’t know what’s happening. These companies have no certainty…It’s already threatening many of the existing operators in those sectors.

“So it’s in everybody’s interest that we move very quickly as a society and our governments move quickly to regulate fairly, efficiently and in a modern way that allows us to meet our public policy objectives, protect the broader public interest and have open, robust competition for consumers.”