In defense of the peer-to-peer economy

sharing-economy-the-rise-of-peer-to-peer-networks-infographicBernie Sanders and Hillary Clinton, two of the at least five Democrats seeking that parties presidential nomination, have recently come out in opposition to a growing segment of the economy: the so called peer-to-peer economy. Sanders, in an interview with Bloomberg News, said he has “serious problems” with the popular car-hailing company Uber, claiming it to be “unregulated.” However, Uber is not unregulated. A spokesperson for the company told The Hill that 54 different jurisdictions already have regulations for ride-hailing services in place.
Hillary, in a campaign event in July, said, “This on demand, or so-called ‘gig economy’, is creating exciting opportunities and unleashing innovation. But it’s also raising hard questions about workplace protections and what a good job will look like in the future.” Adding that if elected President, she’d “crack down on bosses who exploit employees by misclassifying them as contractors or even steal[ing] their wages.”
Hillary did not state whether or not as President she would direct law enforcement to target people operating an AirBNB out of their home, or drivers for Uber or Lyft. Though local law enforcement does not need a Presidential decree to set up sting operations to target what police have deemed to be “bandit cabs” or people renting rooms in their home.
An undercover sting operation in LA recently led to three arrests of Uber drivers, who also had their cars impounded. CBS LA reports the drivers “said they were flagged down by a woman on the side of the road who was looking for a ride. The drivers explained they stopped to pick the customer up as they thought she could use the app right then and there if they pulled over.” The woman, who the drivers thought needed help, was not a damsel-in-distress, rather she was an undercover cop trying to catch a driver who would accept an off-the-books rides for cash.
One of the arrested drivers said, “My door was open and, next thing I know, the cops are behind with the sirens on.” All three believe it was entrapment, saying they’ve never asked people before if they needed a ride, and pointed to their near-perfect customer ratings.
In San Diego, Rachel Smith, a 70 year old retired school teacher who rented a room in her house through AirBNB, is facing a $25,000 fine for allegedly operating a bed and breakfast despite never serving her guests breakfast. Smith says she is technically exempt from the city’s legal definition of bed and breakfast. This technical exemption, however, did not pursued the judge, Catriona Miller, who ruled, “While [Smith] did not serve breakfast regularly in this establishment, it is the type of establishment where breakfast is typically served.”
I wonder if the exciting opportunities envisioned by Hillary included the opportunity to spend a day in court, or get your car impounded. Or if she envisioned that innovations inspired by the peer-to-peer economy would include new ways for police to raise revenue, such as posing as a damsel-in-distress, or judges claiming that even though a 70 year old woman never served breakfast she’s operating a bed and breakfast. Time will tell how many new ways legislators, judges, and various bureaucrats will create to shut down these would-be entrepreneurs. Government officials should not be looking for ways to hinder and regulate business, instead they should get out of the way and allow individual businesses, and business models, to succeed or fail on their own merit.