- 11 Jun 2015
- san francisco,
- CITY AS REGULATOR
A few taps on a smartphone and you’ve borrowed space in a car with Uber, booked a low-cost bed for...
How does the city regulate business models in a way that allows for disruptive entry?
Regulatory compliance is something that all businesses should make sure they get right. This can be particularly challenging for companies which bring new business models to market that challenge the assumptions made by regulations from a previous era.
Digital technologies are increasingly disrupting previously well-defined industry boundaries, giving rise to new business models. These can create value for businesses and consumers alike.
Often it is the city authority that has to determine how these new models will be regulated, particularly in markets that operate at a city level, such as on-demand taxi services and short lets. This is a delicate balancing act.
High-performing cities are finding ways to accommodate innovative new business models into their local economy. This does not mean crudely deregulating markets, nor does it involve using regulation to protect incumbents. Rather, it is about taking measures to make sure that regulations keep up to date with new ideas and technologies.
Existing regulations are enforced proportionately
Regulations are reviewed and updated to take account of new business models
The full spectrum of stakeholders is engaged to craft balanced regulation
In advance of the Olympics, Tokyo has set a target of 20 million visitors a year by 2020. And as part of its economic growth strategy, the government has designated special zones in Tokyo and Osaka where regulations related to short-term lodging are set to be eased.
From February 2015, Airbnb will work with Amsterdam to collect tourist taxes from their hosts and pay this direct to the city. This world-first Airbnb-friendly law will see the two parties work together, with Airbnb ensuring that hosts are aware of their legal responsibilities.
In 2014, Seattle approved updated regulations to allow Uber, Lyft and other smartphone app-based transport services to operate legally. The result of more than a year’s debate between the city, taxi companies and ride-share services, the regulation allows a new industry to thrive while maintaining high levels of public safety.