Will Liberals Strangle the “Sharing Economy” in Its Crib?

Posted: Jul 07, 2014 3:02 PM

Editor's note: This column originally appeared in the July issue of Townhall Magazine.

“The sharing economy” and “disruptive technology.” Those are the terms liberals now use to help them comfortably embrace the free market and its creative destruction.

When it comes to Craigslist crushing the classifieds, Uber creating a great taxi experience, or AirBnB offering an entire universe of room rentals that never before existed, urbane liberals are largely on board. I’m happy they could join me on the same side of an issue for once.

Now, if only they could send the memo to regulators and unions. As the Internet allows more and more people to exchange more and more things without the government playing much of a role at all, more people are served in more efficient ways.

Win-win, right?

But the government and a motley crew of bureaucrats and entrenched interests feel darned left out of the process, and we can’t have that, can we?

Uber, an app service that allows you to get a town car without ever making a phone call or scrounging for cash, has fought regulators and taxicab unions in most major cities, sometimes several times over. The entrenched cab industry that does a terrible job for its customers is none too excited about this up-start company that makes getting a taxi a painless and often enjoyable experience.

Thankfully, Uber has spent lots of time and money making sure it wins those fights, and the service has won fans in every city it is allowed to operate. A cheaper version of the service also allows people to drive their own cars around major cities in their downtime to make extra money, a boon to passengers and drivers alike in a bad economy.

AirBnB serves a similar function, allowing people to rent out spare rooms and empty apartments for brief stays and vacations. In this case, the entrenched hospitality industry is none too happy about an up-start company that makes getting a place to stay a painless and often enjoyable experience. AirBnB is now being put through its paces by New York’s Attorney General Eric Schneiderman.

A 2010 law made it illegal for “owners or renters of apartments in multi-unit buildings from renting them for less than 30 days unless they remain present,” according to New York Daily News and Associated Press reporting. To ferret out what Schneiderman deems illegal use of the site, the state subpoenaed large swaths of data on AirBnB users, going back three years.

There is evidence that there are genuinely bad actors running large operations on the site in violation of the spirit and letter of the law, but they are a tiny minority and the state’s request does not focus on them. In a disturbing move for Internet users everywhere, AirBnB gave up the goods, redacting personal information and addresses. Think of it as AirBnB’s metadata, with the option to upgrade to full data when the state finds a violator.

When it comes to this kind of service, Uber and AirBnB are the big kids on the block. They’re both valued in the billions, prompting liberal curmudgeons and scolds to argue that the “sharing economy” is just a way for Big Business to avoid regulations and taxes. But both services allow for a far more efficient allocation of resources, which means the better use of formerly underused resources, environmentalists would do well to note.

If the big guys don’t win these early fights, or when they make questionable compromises or deals with the devil, as we see with AirBnB, we will see less of the innovation the Internet has to offer our economy. They’re the whales, but their success has created a sea of pilot fish finding new and creative ways to make a buck and employ people while improving Americans’ lives.

Win-win, right?

Not if you’re a bureaucrat, crony, or regulator invested in sticking with old and staid ways of serving Americans mediocrity. •

Mary Katharine Ham writes at hotair.com and is a contributing editor for Townhall Magazine.