Beware of regulators of Uber, Airbnb, and other innovation

Among the many apps on my iPhone5 are Uber, the transportation service, and Airbnb, the lodging service. Both are innovation businesses that were developed in this age of technology and especially because of the “smart” phones millions or people utilize today. Unfortunately, governments want to regulate these advances in society in the name of safety, of course. Note to governments: Leave these innovations alone.

If you live under a rock, here’s an explanation. Uber replaces taxi services. Instead of calling as taxi company, you summon an Uber driver, who could be your next door neighbor or a friend down the street who is directed to your location and takes you to a predetermined location at a predetermined price which is paid for with your credit card in advance. No tipping is allowed. Uber is priced on supply and demand. Fees are low when there are many drivers nearby and the are few summoners, and prices go up when there are fewer drivers and more people wanting the service. Airbnb is an alternative to hotels and is replacing typical bed and breakfast entrepreneurs. This service utilizes spare bed rooms, empty apartments, etc., renting such to business and pleasure travelers. Prices are based on location, size of the lodging space (one room versus an entire apartment with several bedrooms; in town, out of town, etc.). There’s more to both, but you should get the gist.

Each service avoids city, county and state regulations attached to taxi services and room accommodation outlets. Taxi services see decreases in calls; many bed and breakfast locations have closed. Governments are seeing a reduction to income because neither Uber nor Airbnb are permitted. And, where the governments want to regulate, Uber has ceased to operate, depriving travelers of cleaner, more reliable rides that show up quicker than any taxi ever will. Airbnb providers have dogged the laws, plowing ahead with the service and challenging enforcement of regulation when slapped with a fine or notice to cease.

As governments grow, more income is needed to operate so city councils look for ways to increase revenue stream. Just when they think they are at the right mix, along comes innovation such as Uber and Airbnb. Goverments then seek to regulate in the name of consumer safety. “We’re from the government, and we’re here to help” is the message sent out. When that happens, beware, not of the innovation, not of Uber and Airbnb and other similar services, but of the government which wants to halt innovation, reclaim revenue lost to innovation and make it harder for the consumer to spend resources wisely.

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