For the past few years Airbnb and Uber have been fighting lawmakers in courts and hearings to open up space for their products. More recently, though, we learned that Uber had gone one step further by deploying technology and strategies, called Greyballing, to avoid regulators and sting operators.
With millions of dollars spent by Uber in court and to develop non-core technologies like Greyballing, I wonder if they’re better served by working with lawmakers and not against them? Or are lawmakers (and laws) inherently opposed to innovation and incentivized to help special, entrenched interests?
This is complicated. You are asking about regulators (not legislators) in general for all start ups, then using AirBNB and Uber as examples that exist to intentionally skirt the regulations.
Generally, depending on the regulated area such as public safety or health, fight (for small start ups) is difficult and very expensive. These people live to say no. I have spent time in public water and met many variations. Some place love innovation, some put the "no" in innovation. In all cases, the regulators had the ability to shut me down. Not fighting them is wise; you will not win. If you want to use persuasion instead of a fight, it is very different than the "in your face" of AirBNB and Uber. I believe the hubris of both has damaged all innovators as 'lawless wildcatters' who care not for the purpose of the regulations being enforced. The logic they use is that they are just platform, not the actual violator, not even denying that the regulation has applicability. However, they enable the violation and regulators have the power to shut them down for flaunting such. Ask Amazon about the "nexus" when it comes to sales taxes. I have had vehement arguments with friends about Air BNB and Uber who opine they, 'because they are new economy, the sharing economy" should not be regulated as hotels and taxis. Under that standard, then SpaceX, Tesla, and Solar City should also not have regulations. It is silly. Regulations do not always make sense, but they have been promulgated over years of local legislation as a direct result of solving a problem, real or perceived. Yes, some have been put in place to hamper competition, but when you own the court, it is folly to fight it. You will lose unless the law is changed. How you sell it will determine is it is changed, not ignoring it.
Maybe both are necessary in different moments but I believe more in collaborations. If we look at Uber, as you mentioned, they can build a lot with the governments, like they seem to be trying to do with Uber Movements platform. I would say that yes, there are some lawmakers that are "opposed" to innovation but there are also the ones that want to foster innovation at any cost.
I think working with governments (as much as possible anyway) should also be the first route. That doesn't always work though so in some cases, entrepreneurs aren't really left with any other choice but to fight.
It really depends on who is likely to win. You should only cooperate with regulators if they are likely to win. Otherwise, you should do like Uber. It is clearly obvious that the governor of the Jakarta province in Indonesia is totally powerless to stop internet-based ride-sharing platforms in his city, managed as they are, from god-knows-where on the globe. So, I would not negotiate with him whatsoever. Let him rail against your business, who cares? In Finland, they try to counter these things with massive fines, but that will only accelerate the inevitable, i.e. the next step, which is, that anonymous internet-based enforcement platforms would be much better at intimidating adversaries and inflicting reprisals than the other way around.
Unfortunately, as a PR person and marketing specialist, in order to change things with a BODY (of people) it is the entity or person who makes the most noise and gets the biggest following that ultimately makes that body change or adjust. It would be nice if you could work w/ lawmakers but they all have well-paid, and often overpaid, lobbyists demanding all of their attention.
Ex.: the huge ground swell for gun control still has not moved the needle with Congress because all of the money has beenbehind the NRA with their PAC's and lobbyists. It's sad but true, not like the original idea of the Founding Fathers I'm afraid.
Technology is far ahead of regulations. Regulations catch up years or even many decades later. Companies don't & can't wait that longer as some one else would over take them. On the other hand to influence regulators you need to large enough, would you think uber as small 5-10 person company and wanting to work with regulators. Any one would work with them?
My general approach is to work with ... not against. I have worked with legislators at the city, state and federal level. I often find that a lot of issues get "lost in translation" when crossing technical and legal jargon boundaries. I work "with" and not "against" as I found that the legislators I work with want to be more educated on digital / technology / and startup issues as are important to the economy and economic development, particularly at the local level.
Lawmakers and man-made law are indeed not there to bring justice but to justify injustices, aka "entrenched interests". Their action rests to an important extent on the use of force, which in turn very much rests on technology. So, what technology are they going to use to defeat technology? Therefore, fundamentally, Airbnb, Uber and other entrepreneurs should avoid cooperating. The powers that be will have to cave in anyway.