Wisdom.Applied Wednesday: Should the Share Economy be Regulated?

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What many are referring to as the share economy appears to be an outgrowth of our struggling financial times. As everyone struggles to generate income, fewer people are willing to pay for a new car or hotel room. Combine this with the rise of start-up culture within the app community and the result is a new classification of services known as the share economy.

The term refers to goods that you would normally purchase for personal use—such as cars, hotel rooms and more—which are now being shared by their owners as a way to make a small income on what they already own and provide an option for those who don’t want to spend the money.

One of the more popular options within this category is AirBnB—a medium that allows people to rent out their couches or spare rooms so anyone looking for a place to stay can find what are generally cheaper options, although a wide range of prices are available.

Another is Uber, a taxi service provided by people willing to use their cars as taxis. The GPS-location within the app allows users to find nearby drivers instantly. However, this service’s convenience comes at a premium. Similar services like ZipCar let you borrow a car conveniently parked in various locations for quick rides to school, work or the grocery store. When you’re done, you simply park the car in its designated spot.

What at first sounds like a boon to everyone, however, reveals itself to be a problem for established industries. Those within the hotel and taxi industries have spoken out that these services are unfairly competing with theirs by nature of the fact that they do not have to deal with the regulations that they do. By nature of not having these regulations, share services are allowed different price ranges, creating certain advantages. The opposition has taken steps including cease-and-desist letters from cities like New York and San Francisco.

It’s easy to sympathize with, for example, hotel businesses that have certain sanitary regulations to live up to that people opening up their guest room don’t. But at the same time, what these services do is aggregate what people have been doing since time immemorial, sleeping on a friend of a friend’s couch when you’re out of town or hitching a ride with somebody thanks to a post on a ride board at college.

What makes this current trend different is the scale on which it’s applied and the centralization of so many disparate hosts for which the organizing service receives monetary compensation. The confusion on how to handle these services reflects our collective confusion on just what the Internet is as it has moved from computers to smartphones and real-life application. Net Neutrality remains a relevant issue as the recent SOPA legislation indicates.

The Internet has taken otherwise understandable concepts such as free speech and free enterprise and rearranged their building blocks to make what used to be at least somewhat black and white divisions on what’s appropriate less so.

History has seen the unregulated Internet as victor before and I can imagine it happening again. Newspapers have taken a hit but have managed to survive despite the rise of self-reported news on blogs and Twitter. Where this leaves professional hotel and taxi services remains to be seen; however, should the economy recover well enough, people may move on from these services. If that’s the cases, I believe these alternatives may persist but in a reduced or changed capacity.

Cover Photo Source: Ivakoleva

Kaz is a Junior Executive at SJG. He earned BAs in English Writing and Business Marketing at Illinois Wesleyan University and is currently pursuing an MA in Advertising at The University of Texas at Austin. Outside the office, Kaz consumes gobs of media including but not limited to books, magazines, music, movies and television.