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The Question of Sharing Economy Regulation

It's time for a discussion to be had about implementing common sense rules that enable people to earn the supplemental income they crave, from assets they already own.

Because WeGoLook is one of the leaders in the sharing economy, I get some variation of this question a lot: what do you think of all this debate about sharing economy regulation?

There's no doubt that the sharing economy is causing decision-makers to face some tough questions about consumption, ownership, and safety. 

With any major economic shift, and the advent of the sharing economy is certainly that, there will be growing pains.

Our world and its business markets are changing. It’s estimated that by 2025, the sharing economy will have about $335 billion in revenue at the rate it’s growing.

The sharing economy is so simple, yet innovative. Uber, Airbnb, and WeGoLook allow independent contractors to put themselves into business by using mobile technology and assets they already own to connect with paying customers. 

The problem with the sharing economy seems to lie in finding fair ways to regulate it. Should it be treated like physical businesses, or regulated in a completely different way?

 

The Case of WeGoLook

For WeGoLook, we aren't involved in people's physical assets like cars and homes, so that aspect of the debate doesn't affect us.

We dispatch from our 30,000-strong on-demand workforce to perform asset verification tasks such as vehicle and property inspections. This verification involves taking photos, videos, and submitting reports based on the condition of a particular asset.

Some States have regulated that these types of tasks must be performed by a licensed adjustor.

But, as regulations change, we adjust accordingly!

WeGoLook has added licensed adjusters and auto appraisers to our community of on-demand workers. As such, when we receive a request our platform will only solicit those qualified to perform the work.

This is how nimble WeGoLook, and other sharing economy platforms, have become in the face of regulatory grey zones. This is how the new sharing economy works.

 

The Digital vs. Physical World

Over the years, as digital businesses have gained more momentum, the government has found it difficult to draw a line between digital and physical business regulations.

Many digital business owners, such as freelancers, aren’t as regulated by the government as physical business owners. Sure, they must pay taxes on their income, but for the most part, the government stays out of their way.

That said, government attempts to regulate sharing economy businesses, such as classifying gig workers for Uber as employees rather than independent contractors have been causing concern among workers.

They fear that government regulations will make it impossible for their businesses to be as innovative as needed to promote their unique business models. Many in the sharing economy feel that their businesses deserve a whole new set of rules different than physical businesses.

I would agree. Instead of fitting a round peg in a square hole, we need a whole new framework for which we regulate work in the digital era we find ourselves.

 

Is Regulation Stifling Innovation?

Business ethics professor, Kevin Werbach, has a different viewpoint. When confronted with the argument that regulation may stifle the innovation of these companies, he insists that way of thinking is dangerous.

Werbach explains that, although there is a digital world and a physical world, they are intertwined in more ways than we realize, essentially creating the world as we know it.

Airbnb, for example, allows users to go on its website to search for places in other cities to stay. But, they stay in a physical location, not in a bed in a digital world.

Many sharing economy businesses, though, argue that their business models are so different from physical businesses that regulations wouldn’t allow them to reach their full potential.

For instance, the Canadian Federation of Independent Business estimates that regulations cost small businesses like these about $31 billion per year, due to not allowing the businesses to grow as intended.

 

Finding a Fair Balance

Sharing economy regulations can be a great thing if they’re used wisely. Without regulations, innovation can quickly turn to negative impacts on other businesses and citizens.

Without regulation on Airbnb, for example, people can rent illegally, causing higher rent or other negative consequences to other tenants.

For Uber, improper insurance policies can leave accident victims with zero recourse to pay for expensive medical bills.

The stakes are indeed high when it comes to regulation these new marketplaces.

The sharing economy provides both digital services and physical services, and both need to be equally regulated. However, to do it fairly, the government should be prepared to modify and create new regulations as the sharing economy grows.

There is no one set of rules that will be fair to all businesses, and the government should carefully work with, and understand, this innovation wave to best preserve the innovation that these companies use to create winning business models. 

And winning they certainly are! Massive valuations aside, traditional industries are increasingly taking notice of the wave of high-profile acquisitions. This includes WeGoLook, which Crawford & Company acquired a majority interest in earlier this year.

It's time for a discussion to be had about implementing common sense rules that enable people to earn the supplemental income they crave, from assets they already own.

 

By Robin Smith, CEO and Co-founder WeGoLook

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#ImALooker

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