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The New Innovation Battlegrounds Are City Hall And The State House - Forbes


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Incumbents seem quite resistant to The Shared Economy:

In cities and states across the country, two forces are engaged in battles with major consequences for the future of the Internet and the U.S. innovation economy.

The first force is new ventures harnessing technology—particularly the Internet and mobile—to challenge incumbents in a growing number of industries: From hotels (Airbnb) to rental cars (ZipCar, RelayRides, Car2Go) to taxis (SideCar, Lyft, Uber) to car dealerships (Tesla) to parking lots (Parking Panda) to textbooks (Chegg) to lending and fundraising (Lending Club, Kickstarter) to restaurants (food trucks) to boating (Boatband, GetMyBoat) to errand running services (TaskRabbit) to Internet service (Chattanooga, TN; Lafayette, LA; Google Fiber).

Many of these ventures are part of the new “sharing economy.” They are platforms that enable people to share things they own with others for a fee, sometimes called collaborative consumption. The new entrants are benefitting people throughout the country, saving them money, addressing real pain points, and offering new and better services.

And they’re finding large and growing demand: The global “sharing” or “peer-to-peer” property rental market is estimated to be more than $25 billion per year. Analysts predict more than 4 million North Americans will use a car sharing network by 2016.

The second force in these battles is city and state governments, which typically have long and deep relationships with established industries. Not surprisingly, and acting rationally from their perspective, existing businesses have been lobbying state and local officials to restrict new entrants.

And across the country, new laws are being proposed and enacted—and existing but out-of-date laws are being enforced—to protect incumbents from new Internet- and mobile-based competitors.

Our point isn’t that new services present no new issues. But far too often policymakers are invoking consumer protection but acting without a meaningful analysis of the real effects on consumers.

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