Hacker News Reader

Comment by mcherm | Hacker News Reader

Do you also feel that Uber and Lyft should constrained from day 1 not to operate without following all the regulations for taxi services like a requirement to have a medallion and to only allow drivers who have undergone an extensive background check?

Do you also feel that Airbnb, if it is going to work in the room rental space, should be required to comply with all of the regulations for the hotel industry (including collecting of hotel tax, posting of room rates on a placard affixed to the door, and installation of better-than-consumer-grade fire suppression systems)?

It sounds good to say "innovators can do whatever they like but need to follow the same rules as everyone else". But perhaps the existing rules are specifically tuned to the existing business model and will not be rewritten to support another business model unless that business model has been proven in practice. Or perhaps the existing rules are just excessively restrictive.

View on HN

I see your point, but I think it's fundamentally flawed: I think the very reason we can look at this and go, "it's just rental cars with an app" is because it's not all that innovative. Beyond that, these regulations exist for a reason, and if they're going to be argued against then it's on the part of the "innovator" to build a business model that distances them, in granular operational detail, sufficiently far from the old model to make those regulations irrelevant.

e.g., Do I also feel that if someone creates an airbnb for food production that they should still be required to comply with all the regulations of the food prep industry? Yes, I do. They're still putting food in people's mouths, and the bulk of the regulations exist to protect people who are eating strangers' food. IF their business model is so divorced from the old restaurant model that the risks the regulation addresses no longer exist, I'd be more sympathetic, but I've yet to see that be the case.

In this case, for instance: I'm interacting with you, the app, and buying a ride. You're selling me a ride. For the same reason we have food safety regs, you're required to make sure your fleet is safe and up-to-date. Why, precisely, would you be exempt from that just because you source your fleet differently than a traditional rental car company? There's nothing about the app/service that negates that concern. The business, in the relevant respect, is the same - so why should they get a free pass on the regs? Because they've chosen a different model for sourcing cars?

Fundamentally, no one is owed a business model. IF your business model is "same old business, peer sourced supplies, and an app" - that is to say, in most functional respects the same business that is already regulated - then yes, you should be subject to those regulations. The very fact that these business are so very easily slotted into existing regs is because they're so similar to existing businesses. AirBnB didn't have trouble with regs when it was actually people letting spare rooms; it ran into trouble with regs when a large percentage of their rooms came through single owners of multiple dwellings dedicated to airbnb. That is, when they became a hotel.

I dunno, you're sort of assuming that all regulations are equally important for safety, I think most people would agree some regulations are only there to protect existing businesses from competition. But all regulations have to be followed, so what do startups do about that?

When AirBnB and Uber started they ignored all the regulations except the ones they wanted.. and it wasn't that bad. It was just, do you trust that a random person will let you sleep in their house or give you a ride without having a bad experience. All the existing regulations that applied said "no, of course you need taxes to pay inspectors and check all these boxes to protect people", but it turned out... yeah, you could just let people do their thing and it would turn out ok and not cost that much.

Doing the same thing slightly differently and claiming the regulations don't apply is risky, but ultimately whether you win or not is if you can deliver better service for lower prices safely. If so, the public will back you and you'll eventually be allowed to operate but with some negotiated subset of regulations that will emphasize the safety parts (because the public likes those) and limit most of the anti-competitive stuff (because the public hates those parts). That's exactly what happened with Uber and AirBnb. There's really no other way to change regulations these days.

I think we need companies like that to come along and show just how badly entrenched businesses can regulate their way to being protected against competitors and capture higher prices.

If there's one thing I've learned from Uber and AirBnB, it's that if you say "less regulation for micro-businesses in Field X" the huge multinationals in Field X will declare they're not _actually_ in Field X, they're just brokers directing customers to the 5,000 micro-businesses that provide services.

Have you learned that you wish Uber and AirBNB were strangled by regulation before they got off the ground?

I feel that's just hyperbole. Collecting hotel taxes, for instance, would not have affected AirBnB one bit.

Have you learned that most major hotel chains actually operate like AirBnB, i.e., individual hotels are operated individually but marketed under the same brand?

When you understand how the hotel industry works, you suddenly realize that AirBnB is really no different from Hilton or Best Western after all.

Then lobby to change the rules. Don't ignore the rules just because you feel you're special.

Reply on news.ycombinator.com