Sharing economy foes coming after our business

By Rujul Zaparde , written on January 23, 2014

From The News Desk

Today, we’re going to court with the City of San Francisco, which believes FlightCar, a peer-to-peer car-sharing service that has no employees touching ground at SFO, should be treated the same as the incumbent airport-based car rental companies. To borrow from Sunil Paul, CEO of Sidecar, that’s like saying “Airbnb is a hotel chain, that Travelocity is an airline, or that eBay is a store.”

Whether it has been the California Public Utility Commissions fighting ride share companies, New York’s attorney general Eric Schneiderman subpoena to Airbnb, Taxicab Paratransit Association of California going after SideCar, Lyft and UberX, or SFO coming after us, the sheer number of cease-and-desist letters, threats of lawsuits, and investigations into sharing economy startups seem like fishing expeditions.

With the rise of the sharing economy, we’re not the first startup and won't be the last to face these challenges. I'm not close enough to other companies to speak on their behalf, but why are regulators so afraid of startups and innovation driving the sharing economy? Don’t they know we’re just trying to bring a new economy of scale to people who want to share their unused personal assets with others for a fee at a fraction of their normal cost?

We understand regulators are simply doing their job of protecting consumers and society at large. We have also experienced their frustrations in having to bucket-list a new breed of company with like-minded established companies that are very different at their core. We understand regulators are tasked with doing everything they can to make sure the government gets every penny it believes it deserves and to ensure public safety. But the laws being forced on us were drafted for the Industrial era. They are outdated and unsuitable for a tech-driven world where consumers connect with other consumers to exchange value directly. The new world requires new rules drafted from a new perspective, an approach that champions new ideas and successes for consumers and public entities alike.

We understand many are not yet on board with the sharing economy and that sharing a valuable possession with a complete stranger is a foreign idea to many. However, just because regulator and brick and mortar foes are lawsuit happy, that doesn’t mean the model is going away anytime soon.

In 2013, the sharing economy heated up to the tune of 52 percent of Americans reporting having rented, borrowed, or shared things they used to own, and 83 percent of everyone saying they are willing to do it. Forbes estimates that the sharing economy put $3.5 billion directly into people’s wallets in 2013.

With the sharing economy valued at over $26 billion and challenging the notions of business, incumbent brick and mortars are nervous that sharing economy startups will reduce their marketshare and revenues. At first Wal-Mart was afraid of Amazon and other e-commerce companies  yet everyone fared well with plenty of marketshare and revenue.

Sharing economy companies are in no position today, nor do they have the desire, to completely displace the incumbent way of doing things. In fact, we want to capitalize on what they are not doing and create an entirely new economy that gives everyday consumers an opportunity to put money in their own pockets. So, instead of worrying about sharing economy companies, big-asset incumbents should take the challenge to innovate, improve service levels and efficiencies and pay more attention to their customers’ needs and wants.

Imagine how much faster Wal-Mart would have grown its e-commerce business if it focused on innovation before Amazon changed the way we shop forever. There’s plenty of room for both of us, so please don’t try and stop us from bringing a new perspective to old industries. Maybe even seek partnerships when it makes sense.

The new sharing economy era requires a mindset that embraces startups and gives us room to grow. This new approach requires a completely new way of thinking by the foes of the sharing economy: regulators and incumbent businesses. It requires startups to have the freedom to market new innovative service models and provides incentives for entrepreneurs to grow large companies that significantly benefit local companies.

We’re not asking for the keys to the kingdom without doing the hard work to get there (we startups work hard to make our customers happy). We are asking for a clearly defined set of rules that that aren’t designed to favor incumbents -- and allow us to rise to the occasion to satisfy a new customer base with rising expectations.