FTC Chief Calls for “Targeted” Regulation of Uber, Airbnb
FTC Chief Calls for “Targeted” Regulation of Uber, Airbnb
Edith Ramirez is taking a cautious step to rein in
“sharing economy” apps.
October 2, 2015
“Flexible” and “targeted” regulations of so-called
“sharing economy” services like Uber and Airbnb may be necessary, the head of
the Federal Trade Commission said Friday.
In a speech at Fordham University Law School, FTC
Chairwoman Edith Ramirez warned that imposing “legacy regulations on new
business models” can stifle competition and ultimately leaves consumers worse
off. But, she said, regulators shouldn’t shy away from enforcing important
consumer protections on issues like health, safety, or privacy.
“We must allow competition and innovation in the form of
these new peer-to-peer business models to flourish,” Ramirez said, according to
copy of her remarks. “At the same time, where necessary, targeted regulatory
measures may be needed to ensure that these new business models have
appropriate consumer protections; but they should be no greater than necessary
to address those concerns.”
Any new regulations might not necessarily come from the
FTC itself. While the commission does have authority over issues like privacy
and data security, it also offers advice to state and local agencies on how to
impose regulations without hurting competition.
Ramirez’s speech is the latest tentative attempt by
policymakers to try to grapple with the explosion of “sharing economy” (also
known as “peer-to-peer” or “on demand”) apps that can connect buyers and
sellers with the push of a button. The FTC held a workshop on the services in
June and has been sifting through public comments.
Uber, Lyft, and Sidecar allow users to request a car
ride; Airbnb allows users to book rooms from other users; and TaskRabbit allows
users to hire someone to complete a small job or task. But the services have
come under fire from local regulators around the world, and incumbent
industries like taxi drivers and hotels have accused the start-ups of having an
unfair advantage by ignoring costly regulations. Uber, for example, has been
banned in a number of cities, and its executives are facing criminal charges in
France.
Ramirez argued that existing regulatory schemes can
“entrench” old business models and prevent consumers from accessing exciting
new services. And she warned that agencies can be unduly influenced or even
controlled by the incumbent industries they regulate.
But she also argued that the government “picking winners”
by applying regulations only to the old companies “should be just as
undesirable.”
Finding the right middle ground, Ramirez acknowledged, is
“complex and challenging” and has “no simple answers.”
The FTC chief’s speech follows a hearing earlier this
week in the House Energy and Commerce Committee’s trade subcommittee, in which
lawmakers struggled to find the right approach to regulating these new
services. The subcommittee’s chairman, Republican Rep. Michael Burgess of
Texas, acknowledged that there should be some “limited government oversight” of
the companies. But he added, “I for one am more concerned about existing
regulations hurting new jobs than I am about the need for new regulations.”
Sen. Mark Warner, a Virginia Democrat, has argued that
workers in the on-demand companies should get disability insurance and other
benefits, but he has also called for a “regulatory time-out” to give the
government time to settle on the right rules.
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