JACKSON — Today’s technology has helped usher in what is commonly referred to as the sharing economy. This is a broad term we use for an economic system where services are provided in exchange for a fee, via a third-party facilitator.
The most common examples of the sharing economy are ridesharing and homesharing apps, such as Uber, Lyft, Airbnb or HomeAway. On the surface, escorting people around town in a car or renting out a spare bedroom aren’t exactly technologically advanced ideas. It is the digital platforms or apps that have centralized the process and provided a certain level of comfort as a virtual middleman that has led to the explosion we are witnessing.
We see this in many other areas of our life as well. Peer-to-peer websites or apps, whether it’s Yelp, Facebook, Google reviews or others, do a better job of providing feedback to potential customers than any government inspector. Sure, government grades restaurants, but most people make their decisions on where to eat based on feedback from past customers. If an establishment was dirty, you’d read about it there, rather than from a government grade.
A common example of a profession that depends on positive feedback is home bakers, who are part of the rapidly growing cottage food industry. In deference to the incumbents who have paid a regulatory price, Mississippi limits what you can sell, where you can sell it, and how much you can make before you bow to the government and seek permission.
While many have attempted to warn us of the dangers of cookies or brownies baked at home in a non-government-approved kitchen, we can find high-quality food via reviews from happy (or unhappy) customers.
Once again, we’ve always had word-of- mouth reviews among friends, but technology has helped bring that to the masses, elevated peer reviews, and forced businesses to bring greater attention to customer satisfaction. In fact, if you suffer from repeated negative reviews, you will no longer be able to rent your house on Airbnb, nor will you be able to drive for Uber.
All of this is occurring naturally, rather than with the help of government. The response from those whose industry has been interrupted is not surprising. But it is unfortunate how government has attempted to intervene in the free market in too many instances.
When Uber first made its way to Mississippi, the reaction from many localities was to enact strict regulations. After all, the taxis had spent years building their industry cartel working alongside government. Now, you had a group doing it without government’s blessing.
One of the most egregious examples of an overzealous government was in Oxford, a college town who has a greater need for this service than most. They coordinated with the local taxi companies on regulations that effectively banned ridesharing options.
Today, Uber and Lyft operate freely in Mississippi thanks to the Legislature pre-empting municipalities and opening ridesharing statewide.
All of these new technologies are inherently positive. They are positive for the entrepreneur, who may need supplemental income and flexibility with their job so they can pursue an education and/or care for family. Regulating up and making it harder for these services to exist will hurt the people who need jobs the most. And they are a positive for the consumer who now has new options in what they can choose. This is voluntary exchange, and we should be encouraging it.
• Brett Kittredge is director of Marketing and Communications for the Mississippi Center for Public Policy, a nonpartisan, free-market think tank.