“Victoria should not regulate ride-sharing – it should remove red tape and let ride-sharing services flourish,” said Aaron lane, Legal Fellow at free market think tank the Institute of Public Affairs.
Yesterday, submissions closed for the inquiry into ride sourcing services being conducted by the Economics and Infrastructure Committee of the Victorian Parliament. In December 2014, the IPA published a research paper ‘The Sharing Economy: how over-regulation could destroy an economic revolution’, authored by IPA Research Fellow Darcy Allen and Senior Fellow Chris Berg. The IPA submission to the inquiry is based on this research.
“Victoria does not need a new scheme of red-tape on the sharing economy. Instead, the committee should adopt the approach of deregulating ride-sharing,” said Mr Lane.
“Although the current inquiry focuses on ride sharing services, it is important to note that the outcomes of this inquiry will set a precedent for Victoria’s regulatory approach to the sharing economy more broadly – for platforms such as Airbnb or Freelancer.
“Uber should be legalised, but it doesn’t need its own special regulation. Victoria should be reducing regulatory barriers to entrepreneurs developing new approaches to public transport, such as ride-sharing. The danger of introducing specific legislation to allow one operator is that it will create barriers to entry for new market entrants. There is more than one ride-sharing platform,” Mr Lane warned.
“The best form of consumer protection is the free market. Ride-sharing platforms use rating and reputations systems provide riders and drivers with a safer and more reliable service. The taxi industry has not been responsive to consumer experience because they have been shielded from competition.
Finally, Mr Lane slammed proposals for compensation for the taxi industry.
“The sharing economy is disrupting existing industries. Compensation for ride-sharing would set a terrible precedent for every other industry in Victoria that faces disruptive innovation. Taxpayers and consumers should not be asked to pay for barriers to economic progress.”
Read the research paper: The sharing economy: How over-regulation could destroy an economic revolution
Read the submission to the Victorian Economy and Infrastructure Committee
