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Note 008: Are Airbnb, Uber, and other marketplace companies good regulators?

Airbnb "Belong Anywhere"

Tech companies such as Airbnb and Uber in the so-called "sharing economy" have become the largest regulators in their respective industries. They regulate how you advertise your asset (house, car, driving skills, etc.), how and when you get paid, how much you get paid, and more importantly your "right" to be on the platform. Under their terms of agreement, they can un-list you or remove you from the platform without further notice.

These very companies have marketing campaign messages on inclusiveness and trust. These companies who claim that they're driven by building trust among both sides of their marketplaces have significant trust issues themselves. They don't trust their sellers nor buyers. They purposely hide contact information among each party, as if their value is advertising.

If the companies have become regulators, should the regulators now be regulated?

We're reading horror stories from sellers on Amazon, from hosts on Airbnb, and from drivers on Uber. Should government regulators be concerned with whether a house can be rented on a short-term basis or instead worried about the bigger issue at stake? People have responded very loud and clear that they're in support of "sharing economy" companies because they make sense because they provide more transparency in the process. Getting rid of them because their core product would be going against the people's will.

The fact of the matter is that there's no perfect regulator. The fact of the matter is that any regulator that has a monopoly (or even duopoly) will eventually abuse its powers. We need to make sure that sharing economy companies are here to stay and in line with our democratic values. At the moment, they're not representative of the values of our society, and we have the responsibility not to sit still.

There is hope that change will come with effective competition and hopefully increased regulation where it is needed. Uber is learning to play nice knowing that they got competition in many parts of the world, and improved control to treat its drivers properly. Airbnb is starting to lose its monopoly from the home sharing world as and are making a serious push into the industry. There's hope that the market will help fix this. If this doesn't happen, we will start seeing strikes, protests, or equals which will remind us of several generations earlier when industrialists tried to take advantage of its workers. That attempt resulted in massive organized labor that slowed progress.

Consciousness shall always be at the forefront of making important decisions. Giving monopoly power to an individual or company has never resulted in anything positive.

We are firm believers in a multi-channel distribution strategy for all marketplace businesses, even if the new channels lead to a small percentage of your sales initially.

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