Capitalism without intelligent regulation often means trouble, and Uber
has become the poster boy for this struggle. The ride sharing giant has fought bitter regulatory battles in many countries and cities, sometimes at the expense of sidetracking some of its most ambitious and promising projects.
Challenges of this nature are not new. Entrepreneurs have always had to negotiate with sceptical policymakers who wonder how new technologies and business models will or won’t fit into existing regulatory frameworks. Most innovative firms incur significant costs before they can meaningfully explore consumer appetite, and they don’t want that sidetracked. They realise, however, that consumers are more likely to have confidence in a new product if it operates within an existing regulatory framework.
Platforms and governments are natural partners
Faced with this conundrum, some experts have suggested a new path: self-regulation. “The platforms and the government, rather than being at odds, are very well aligned to being partners in regulating a lot of the commercial activities that takes place on the platforms,” said Arun Sundararajan, a professor at New York University Stern School of Business and author of The Sharing Economy, in an interview with Reinvent. “Self-regulation doesn’t mean no regulation; it means regulation by someone other than the government.”
Lobbying and moving into gray areas
While most sharing companies
are small, the larger ones are beginning to act like corporate veterans by investing in political lobbying.
In the end, entrepreneurs and policymakers must figure out a way to live and work with each other. Rules that govern the proper way that business is conducted provide not only a society safety net but a path for the future.
This is an excerpt from the article published on Tech In Asia. You can read the full article here