While we wait to see whether Gov. Andrew Cuomo will sign legislation targeting home-share listings in New York, the governmental response to the sharing economy’s disruption is reportedly poised to go global. Officials from top tourist destinations like Paris, Barcelona, and Athens are talking to their counterparts in New York City about establishing a common framework of regulation for companies like Uber and Airbnb.
When regulators from multiple countries attempt to agree on rules for transnational companies and transactions, it’s sometimes called “harmonization.” That sounds like a good thing to most people, except that when regulators get together to decide on how much control they should have, there are generally few volunteers to give up their own powers. The question is whether the resulting rulebook, assuming that representatives of so many big cities could ever agree on one, would be a streamlined framework that encouraged innovation or simply every rule in Paris piled on every rule in Barcelona piled on whatever the dedicated public servants of Athens come up with.
That dynamic aside, there’s also good reason to be skeptical that this proposed alliance of big city mayors will achieve quite as much harmony as they’re imagining. The biggest conflicts that we’ve seen so far in the sharing economy space have been the protests by taxi drivers against the encroachment of Uber in cities like Paris, Jakarta, and Guadalajara. While taxis and urban transport are subject to city-specific controls in many places around the world as they are in the U.S., there are also lots of places in which the authority of mayors is largely irrelevant because of national labor regulations. Even the European Commission has now stepped into the sharing economy “regulatory guidance” game. Which means that the mayors of Bratislava and Helsinki can chat about how to regulate Lyft’s Prime Time pricing until the subsidized cows come home, but if they’ve got both their national parliaments and the EU making policy over their heads, not much is likely to change.
Perhaps more interestingly, though, is what would happen if there really was a regulatory cartel of the 10 or 20 biggest cities in the world. It would likely result in more restrictive rules on sharing apps in many cities, but it would also create a dramatic contrast between cities that are part of the cartel and those that are not. As much as every tourist destination likes to think it’s irreplaceable, many global travelers simply want to go someplace fun and interesting. As they say in the airline business, “We know you have a choice of airlines when you fly, and we thank you for choosing us.”
If, for example, Barcelona’s adherence to a future regulatory system made it more difficult to book an apartment on Airbnb or call an Uber there, potential visitors might just travel elsewhere. Sagrada Família is a beautiful church, but there are going to be plenty of beautiful churches, and other landmarks, in the cities that have chosen to let the sharing economy flourish as well. As my colleague Michelle Minton has suggested, the mayors outside this proposed scheme might even set up a competing alliance of cities, in which the freedom to offer innovative services became another one of their attractions. Competition is good for us as consumers, and it can be good for us as citizens, too.