John Stossel: Sublet my people go
New York recently passed a law making it very difficult for people to offer short-term rentals via popular websites like Airbnb and Roomorama, which connect room-owners and room-renters. I could be fined $25,000 if I rent to tourists through those services.
"Tenants all over the city are begging their legislators for help. They were being harassed by strangers in the middle of night entering their building, moving into the apartments next door ... violating the fire code, the safety code, and harassing people, sometimes very aggressively, out of the buildings"
Krueger says that despite these services' rapid growth, their customers are unhappy — and that despite the online customer-satisfaction reviews and ratings that enable everyone to compare thousands of different offerings, and blacklist renters and homeowners who behave badly, customers are being duped.
This is how politicians think.
Jia En Teo, co-founder of Roomorama, has a different explanation for why businesses like hers are attacked by politicians: "Short-term rentals have been growing in popularity ... that has posed competition to hotels."
Even when regulators mean well — when they worry about safety or whether customers get basic services — regulations are based on the old, familiar ways of doing things, simply because regulators don't know anything else. That's great for old, familiar firms — but bad for the innovative startup that wants to try something different. And bad for consumers who might have benefitted.
But the new idea might be the next Microsoft. Or Roomorama. Or Lyft, a ride-sharing app that helps people find cars without having to use (heavily regulated) local taxi cartels. Like a Roomorama for cars, Lyft lets most any car owner give people rides. It, too, faces regulatory opposition.
Something can always go wrong — with businesses new or old. But unless we allow innovators and their customers to try new things, we'll be stuck in the past.
John Stossel is host of "Stossel" on the Fox Business Network. He's the author of "No They Can't: Why Government Fails, but Individuals Succeed."
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