Thursday, January 23, 2014

Wherein government and technology collide

Apparently according to Ira Stoll at, technology has been winning - and while that's undoubtedly great news, imagine a world where tech firms didn't first have to fight governments to give people whaat they wanted?

The fecundity of the startup culture is on display at a new Web site (where else?) called Product Hunt, which lists dozens of new mobile Apps and Web sites each week. One recurring theme in successful startups is the ability to get around the regulations created by politicians like Obama. Companies are using technology to create a free market.

The foremost example of this is Uber, with its UberX service that turns ordinary drivers in their own cars into taxi drivers. Sidecar and Lyft operate on a similar model. A Boston lawyer who represented existing taxi services challenging the new entrants, Sam Perkins, told the Boston Globe, “SideCar and UberX have targeted Boston to make the guy next door and his Prius into an unlicensed taxi driver with an uninspected taxis and no safety equipment…Their goal is to eliminate the existing taxi system and its consumer protections.”

The government-imposed licenses, medallions, inspections, minimum wages, regulated fares, and “consumer protections” turn out to be replaceable, more or less, by an Amazon-style star-rating system and the incentives of independent drivers and ride-provider networks that want repeat business.

And it’s not just taxis. Airbnb is doing the same thing to hotels. If you stay in an apartment or house you rent via the Airbnb marketplace, you may not have a clearly marked fire exit map, or a statement of the maximum room rate, on the inside of your room door. Consumers, it turns out, don’t mind. Many of us would rather pay less money, avoiding exorbitant hotel taxes and the wages of unionized bellhops and chambermaids.

Eat With and Feastly may yet provide similar disruption in the heavily regulated restaurant industry. These services, recently highlighted by NPR, offer guests the opportunity to enjoy home-cooked meals in private homes. The hosts avoid health department inspections, liquor license requirements, and the need for workmen’s compensation, payroll tax, or disability insurance for waiters, dishwashers, or line cooks.

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