Taxis, hotels, government: Don't be afraid of a little sharing

Theglobeandmail.com
Dec. 9, 2015
By Tim Hudak

Tim Hudak is a Progressive Conservative member of the Ontario Legislature and former leader of the PC Party of Ontario.

As government contemplates how to respond to the disruption caused by Uber and Airbnb, I want to sound a note of caution: Let’s be careful not to repeat the mistakes of the past.

In the 1980s, we could have banned automated teller machines, and in the 1990s, we could have banned online banking. In each case, the government did not act, and bank tellers lost their jobs. True, there are far more people working in financial services today, and in higher wage positions. But the government could have saved the tellers and it did not.

We are faced with the same choice today. Will we ban the sharing economy, or will we allow Airbnb to threaten the jobs of hotel workers? Will we allow Uber to destroy our taxi industry, charging whatever price it wants?

Our great-grandparents’ generation destabilized the publishing industry. By opening public libraries everywhere, they allowed dozens of people to read the same book, while paying for it only once.

Today, we see neighbourhood after neighbourhood setting up tool libraries with no licence whatsoever. They haven’t been told to do this by the government, or by the tool manufacturers. Now, instead of 50 neighbours each having a drill gathering dust in the garage, they might have only two for the whole street. Some even have the audacity to say this is good for the environment.

Let’s be honest: It is more often the taxi-licence owners, not customers, who are worried that those customers might find Uber cabs to be unclean; hotels, not travellers, that panic at the notion that an unsuspecting student might spend the night in a room tossing and turning for fear of insufficient insurance.

The call for excessive regulation of the sharing economy is - without exception - intended to protect producers from consumers.

Public decision-makers shouldn’t fall for the charade. Competition is a good thing. New technology is the enabler of prosperity, not its enemy. Our job is to promote clear, well-informed decisions by consumers, foster human ingenuity and help those affected transition to a better place.

But the instinct of regulators faced with the prospect of economic change is to say, “Prove to me why this should be allowed,” instead of, “Prove to me why we should interfere.”

Let me offer a heretical notion: We should flip the burden of proof back to the side of economic freedom. What should government do about the sharing economy? My starting point is nothing. Don’t stop it; don’t set its prices, and don’t squelch it with burdensome regulations. Just leave it alone.

Of course, there are areas where we do need to tweak our laws to facilitate consumer-driven change. Taxi regulation was always silly and overwrought, but with competition from the sharing economy, it’s also unfair and economically unsustainable.

Let’s loosen regulation on the traditional taxis. Do the same for the hospitality sector.

But let’s start from that ancient economic wisdom that the customer is always right. Nobody is being forced to use Uber, or a tool library, or Airbnb. When you see a protest against any of these things, it is invariably sellers, not buyers, doing the complaining. We have all been taught to share since we were old enough to talk, and the instinct to share is as old as our civilization.

So when that bureaucratic reflex says we need to regulate this newfangled economy until it looks like a nice, well-behaved industry from the 1970s, it’s time for our leaders to tell the bureaucrats to stand down. There’s nothing to fear here. Consumers are exercising their freedom because they know what they want. Our governments should do something that’s extremely simple, yet somehow very tough for them: Go away, and let us share.