The sharing economy. Technology that makes it economically efficient for consumers to share, lease, or co-own expensive fixed assets including vehicles, housing, and expertise is bringing to the surface long-buried compromises, inside deals, and outright corruption in the mostly local licensing, inspecting, and insuring of transportation companies, hotels, and professional services. Some of the largest cities in the U.S. haven’t expanded the number of licensed taxis for decades, for example, creating an artificially low supply of vehicles and complicity in the exploitation by medallion owners of a mostly immigrant pool of drivers. Uber, Lyft, Airbnb and others seem doomed to continue running head-first into artificial and inefficient barriers to competition, at home and abroad.
Downes is co-author with Paul Nunes of “Big Bang Disruption: Strategy in the Age of Devastating Innovation” (Portfolio 2014). He is a project director at the Georgetown Center for Business and Public Policy.