Questions about the distribution of rights and responsibilities of citizens, governments and businesses are and will continue to be inescapable in today’s world. The line between public and private, which was always partially porous, has been blurred by modern technology. Of course, we are familiar with this. From Wikileaks and the Panama Papers to cybersecurity and counterterrorism, technological innovation is at once a friend, enemy or both depending on who you’re talking to.
The tension between public and private is moving even closer to home – literally. Take Airbnb, one of the growing number of success stories in the sharing economy, that enables people to rent out space in their own homes. Western governments in particular have generally responded positively to these developments. The British Government, for example, commissioned an independent review of the sharing economy which concluded overwhelmingly in favour of developments in this area. The report’s recommendations were welcomed by the then Minister of State for Business, Enterprise and Energy.
However, despite its benefits, the unregulated nature of the sharing economy has created a quandary for governments caught between embracing and limiting startups in this field. Where national and regional governments have regulated, companies haven’t always responded well. Airbnb is suing the City of San Francisco over the introduction of rules that require hosts to register with the City before advertising their property on the Airbnb platform. In some cases, companies have moved their activities elsewhere when running into regulatory obstacles (e.g. Uber and Lyft in Austin, Texas).
As the article below correctly points out, it’s misguided to see this as a battle between technology and government. In order to encourage efficiency while ensuring adequate protection for consumers, technology must be viewed by both governments and innovators as offering solutions as well as problems.
In the medium to long-run, this kind of thinking will benefit both parties. Technology offered by companies such as Accela can assist bureaucratic arms of governments much in need of an injection of agility. And startups are likely to generate self-regulatory measures to avoid further intervention from government, as well as enhancing their credibility.
For as long as both parties need to be convinced of these benefits, the regulatory battle continues.
