Governments “versus” Innovation

It’s increasingly common to hear people complain that governments are slow, archaic and ‘anti-innovation,’ especially when the conversation turns to legal action against ‘new age’ companies like Uber and Airbnb. Uber users tout the convenience of the mobile app, availability of Uber rides and occasional freebies (water, magazines, mints etc.). Airbnb users highlight the wide range of affordable accommodation and community feel, and Airbnb hosts appreciate the added income (in some cases their primary income).

Governments are not so thrilled.

Apart from complaints by taxi unions and hoteliers, they also have to consider public safety and legal & economic implications. For example, many city and national governments have acted against Uber for non-compliance with license regulations, unfair competition and insufficient background checks. The list includes cities in the U.S., Brazil and India, and the countries Belgium, France, Germany, Spain, Taiwan, Thailand, Colombia and Canada. Airbnb users, on the other hand, tend to get in trouble for breaking local laws, rental agreements, insurance terms and even tax collection.

City Hall San Francisco Rally for Passing the Airbnb Law (photo: Kevin Kreji)
City Hall San Francisco Rally for Passing the Airbnb Law (photo: Kevin Kreji)

 

The way the two companies (are perceived to) have responded is vastly different. Uber’s position is that governments must update their laws to cope with current technologies. Airbnb is more collaborative, publishing studies about the benefit of Airbnb on local communities and negotiating arrangements with governments. For example, Airbnb now collects taxes on rentals in Portland, San Francisco and Amsterdam, and is working to simplify local renting laws.

Governments do benefit from some press in their favour, but don’t seem to have sufficiently addressed the accusation that they are “anti-innovation.” As Airbnb and Uber use online petitions to rally the pro-sharing economy audience, governments may *have* to start taking control of the way they are perceived.

 

This post is a part of our December monthly brief: Trends for 2015 – Governments “versus” Innovation

Nidhi Chimnani

Nidhi Chimnani

Nidhi is Director of Research and Insights at MSLGROUP. She tracks digital consumer trends for People’s Insights and is community manager of MSLGROUP’s insights community SPRINT. Tweet her at @nidhichimnani

One Response to “Governments “versus” Innovation”

  1. @PeoplesLab

    Governments “versus” Innovation http://t.co/IMEo0vQxu5

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