Tuesday, 8 July 2014

Uber and Airbnb challenge State regulation

With news today that the Catalan authorities have fined Airbnb €30,000 for proving too popular with holidaymakers, taxi app Uber also faces further legal challenges from states throughout Europe. What both have in common is that they cut out state regulation - of taxis and of hotel and tourist accommodation. Their joint demographic is likely to be young and on a budget; us oldies are less concerned with saving a few quid for a bed with no fire safety or a cab with no MOT.

Anyone who has ever used Barcelona airport will be familiar with the scene below; one in ten of the local population seems to be a cab driver, but with only a dozen fares every hour it can't possibly be a paying occupation. It is, I suspect, the local version of a Keynesian solution to unemployment.

Uber undermines the ability of the State to intervene economically by using control and regulation - and that's why States are so opposed to these apps. 

Together with the computer code behind Bitcoin - NOT Bitcoin itself, but the code for secure distributed ledger systems behind it that is set to revolutionise the traditional role of the State in economic management - these evolutions will cause changes beyond the ability of governments to control. 

We're just seeing the start of it.


Anonymous said...

It's not just taxis is it. This covers the regulation (read limitation) of cheap places to stay. This has had a marked effect on an apartment I rent out during the summer in the south of France. The only people that have rented it from me this year are those that have been before and liked it; they have stayed 4-5 times before and emailed me personally for bookings. Nothing at all from my two legitimate bookings websites; nada, zippo, zilch. So what? Some guy has an apartment in France?? Well the so what plays out like this. Because of the difficulties and costs (taxes are horrendous) of doing this, it is just simpler not to do it at all and next year we will close up and keep it for ourselves. Result? Our agents who are self-employed on low incomes will become unemployed on even lower incomes, because this isn't just about me, it's about the other 12 owners who will do exactly the same. The knock-on effect on local restaurants and bars will also be very negative.

Let's be clear on this; over-burdensome regulation causes economies to crash and jobs to be lost. Period! One more step towards the Brexit door.

Coney Island

G. Tingey said...

"A bed with no fire safety" could be a very, very, terminally bad idea .....
I have the greatest suspicion of Bitcoin - it's a goldbug-system, which really ain't a good idea.

Usual problem in fact.
Too much regulation & petty restrictions - really bad idea.
Nothing gets done, economy collapses.
No regulations & restrictions - equally bad idea.
Usually, people get killed, at the expense of a few people becoming extremely rich & powerful - the US' "Gilded Age" is the poster-boy for this.

Now, where does one desire the balance point to be?