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Lyft, Uber, and Airbnb can't avoid regulation forever. They've just been lucky so far. Eventually there will be a high profile incident—someone important will get raped or murdered. The political response will be 1000x what their lobbyists can handle.

It is inevitable. The reality is that this is how a lot of regulation starts. It doesn't always come from an anticompetitive place. We just forget that we actually asked for the regulation. Once we have, it's nice to always be able to blame the government or some regulator when something goes wrong. And then someone else can come in and "disrupt" the market by using a loophole of pretending like the regulation doesn't apply to them, when it's clearly intended to.

Excellent point. I think it is worth noting regulations can be classified into acute and chronic. Acute taxi regulation would have been disallowing criminal records after a series of rapes or robberies.

Chronic problems would be over charging - put it this way, the day before taxis were forced to charge a certain amount each mile, all taxis would have been free to charge different amounts as uber and lyft can.

We do ask for regulation - and always in response to symptoms. Regulation is not pre planned rational thought ...

And by important you don't mean the women who have already been raped or assaulted by Uber drivers right?

I guess, the GP intends to say some "celebrity" figure gets raped/murdered when he/she mentioned "high profile incident". The incidents of the women who have been raped or assaulted by Uber drivers, were not "high profile incidents", that will demand large front page news or equivalent news on TV on prime time for days or weeks altogether on Times like influential, popular news media.

Serious question: what is Uber/Lyft specific about a customer being assaulted? Is that inherently different than rapes or assaults by taxi drivers? Cause I'm sure there's been plenty of cases. Don't get me wrong, those are horrific, but I guess I'm failing to see what in Uber or Lyft makes it easier to happen or why it might require special regulation.

Maybe the fact that cab drivers need a licence and are thus screened more thoroughly?

I think the reason Uber/Lyft are especially vulnerable to this is because they present an easy target for politicians who are being held responsible for a crime in the area. Its much easier for politicians to respond to such a crime with "we're banning taxi apps" rather than identifying and tackling root causes.

Case in point - when an Uber driver raped a woman in Delhi, this is exactly what the Delhi government did.

Taxi drivers have a licence to lose.

But maybe a better chance of getting away with it

They probably mean American women.

What regulation are Lyft and Uber allegedly skirting?

Its different from jurisdiction to jurisdiction but basically running an unlicensed taxi or livery service.

Another issue that seems to be a major hangup in my jurisdiction (which has banned Uber from operating) is the lack of "proper insurance" for Uber drivers/cars.

Lyft's entire business model skirted regulation. At least when Uber started they required all drivers to have passenger carrier permits and commercial insurance. Then Lyft comes around and completely ignores the law. Completely. Uber starts losing business, and so then Uber responds in kind with UberX.

Now it's legal because it flies under the banner of "rider sharing". But we all know that there is really no sharing to be had. It's just a for hire service. The regulation will return, eventually.

> Lyft, Uber, and Airbnb are betting that reputation systems (ratings, reviews, etc.) will provide assurance for consumers just as well if not better than government regulation. So far the market is showing they just might be right.

Like Zenefits, the government regulation that Lyft, Uber, and Airbnb are skirting has one important consequence: It protects the rest of us who are not their customers from them. If a Yellow Cab driver does something dumb, malicious, or against the rules, I can complain to the city regulatory authority and that agency can take action. If it fails to take action, I can pressure my elected leaders to correct that stance. If it takes action in an open way that is transparent to the populace and finds that I am not correct in my complaint, so be it. I need not be a customer of Yellow Cab to complain about the actions of one of its drivers.

Replacing public rules enforcement with "reputation systems" is completely useless if I never enter into a business arrangement with those companies. As it stands, the only way I can complain about any of them--especially with Zenefits actively working to hide its bypass activities from the relevant authorities--is to be a customer and poorly rank some allegedly-independent-contractor. Or I can use Twitter and complain publicly but get drowned out by the noise.

That's no substitute, in my opinion.

Airbnb regularly pretends that their rentals are legal in their advertisements to consumers despite knowing that the majority of their revenue in places like NYC is derived from illegal whole-apartment-without-the-owner-present rentals.

I believe (after the investigations are concluded) that a word used to describe the operations for Zenefits will be 'fraudulent.'

For the rest, as you state, they have been largely clear about their opposition to perceived out-of-date regulation and have worked tirelessly across the country and world to have new rules or exemptions or trials put in place.

Being disruptive isn't the same thing as breaking the law with willful abandon.

I think the bigger difference is that the rules that Uber, Lyft & AirBnB are bending directly result in customer benefit whereas in the Zenefits case, there is little or no or even negative customer benefit.

Here's a good take: https://stratechery.com/2016/zenefits-and-regulation/

That's an excellent point. And Ben Thompson is super insightful as usual (I'm a huge fan of his).

I certainly do think the value prop to consumers for Zenefits' rule breaking was not very clear. However, I'd argue that lack of clarity stems from the fact that they were breaking rules in small and kind of sneaky ways, and not in a clear way baked into the core of the product.

If they were totally unappologetic about bending laws from the beginning - ie their pitch was more like "Zenefits lets anyone sell insurance and provide other services to small businesses, making these things more accessible and affordable" - then I think people would credit all benefit they get from Zenefits to its rule bending, and put up with a lot more of it.

Instead, Zenefits was kind of trying to have its cake and eat it too, which just pissed people off.

To be fair though, I suspect that creating an explicitly unlicensed insurance brokerage would be much, much harder to pull off than an explicitly unlicensed taxi service.

AirBnB might benefit the customer, but can negatively impact others in the area. For example, if someone is renting out an apartment in a secure building, just giving the keys to an arbitrary someone you're decreasing everybody else's security. Similarly for a house, if a house is being regularly rented by different people, it impacts the rest of the neighbourhood.

In my building, renting out with something like AirBnB is against their occupancy agreement. While I don't know everybody in my building, I certainly know everybody on my floor. I used to know everybody in the building, but a number of people have moved out and I haven't learnt all the new people yet. I'd be really pissed if I found out that someone was offering an AirBnB rental right next to me.

The main difference is that Lyft, Uber and Airbnb sell mostly to consumers who are quite happy to make their own decision about which state regulations to bend when it's in their interest.

Zenefits sells to HR departments whose raison d'être is to make sure the company complies with its duty of care to employees, including observing all the relevant regulations. The idea one of their partners might have been using inadequately trained and unlicensed insurance brokers that didn't really know what they were doing to sell their employees expensive health insurance plans is kryptonite for that partnership.

(and I say this as someone who always ran the blindingly obvious "how not to take a bribe or sexually harass your colleagues" compulsory videos in the background whilst getting on with more productive work)

Lyft and Uber both spent years pretending that their drivers were insured while carrying passengers despite very clear evidence to the contrary. Even today they pretend to prospective drivers that they won't end up screwed if they have an accident while 'on the app' but without a passenger. Airbnb did the same thing.