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No Über/lyft (and airbnb, et al) are doing something different. Regulatory arbitrage - Purposely breaking the law in order to have a structural advantage over c

No Über/lyft (and airbnb, et al) are doing something different. Regulatory arbitrage - Purposely breaking the law in order to have a structural advantage over competitors. This guy didn't want others to play by one set of rules while he played by another (advantageous) set.

wyager 10y ago
> Purposely breaking the law in order to have a structural advantage over competitors. Not one of the the groups you mentioned makes a habit of breaking the law. They look for opportunities to get around the excessive weight of our insanely litigious and complicated regulatory environment. There is absolutely nothing wrong with this. They are helping humanity escape the productivity sink of pointless regulations, set insanely far along the diminishing returns curve. Think about how many billions of dollars of productive output are wasted every year so some idiot pencil-pushers can make sure the correct stickers are present on building materials.
Hondor 10y ago
Doesn't regulatory arbitrage mean following the regulations but taking advantage of loopholes in them? So it's not illegal. That seems a bit different from breaking them, possibly paying a fine, and still profiting anyway. The latter is what I've heard of Uber doing in some cases. It's also what shops do by trading on holidays where they're supposed to be closed.
- 15thandwhatever 10y ago
  Correct. Regulatory arbitrage is about finding and taking advantage of loopholes, and shifting business activities to other business units (or even locations) where while those actions are technically legal, they're very, very borderline. Then you generally couple regulatory arbitrage with money spent on lawyers and lobbying to monitor the existing loopholes, in order to make sure they don't disappear. What Uber/Lyft are doing is more equivalent to poker: a combination of betting (a large enough war chest to pay lawyers and fines) and bluffing (using marketing campaigns to garner public interest and shame/scare the establishment). When the stakes get too high (e.g. ride sharing laws in Austin, TX), they fold.

wyager 10y ago

> Purposely breaking the law in order to have a structural advantage over competitors. Not one of the the groups you mentioned makes a habit of breaking the law. They look for opportunities to get around the excessive weight of our insanely litigious and complicated regulatory environment. There is absolutely nothing wrong with this. They are helping humanity escape the productivity sink of pointless regulations, set insanely far along the diminishing returns curve. Think about how many billions of dollars of productive output are wasted every year so some idiot pencil-pushers can make sure the correct stickers are present on building materials.

Hondor 10y ago

Doesn't regulatory arbitrage mean following the regulations but taking advantage of loopholes in them? So it's not illegal. That seems a bit different from breaking them, possibly paying a fine, and still profiting anyway. The latter is what I've heard of Uber doing in some cases. It's also what shops do by trading on holidays where they're supposed to be closed.

15thandwhatever 10y ago
Correct. Regulatory arbitrage is about finding and taking advantage of loopholes, and shifting business activities to other business units (or even locations) where while those actions are technically legal, they're very, very borderline. Then you generally couple regulatory arbitrage with money spent on lawyers and lobbying to monitor the existing loopholes, in order to make sure they don't disappear. What Uber/Lyft are doing is more equivalent to poker: a combination of betting (a large enough war chest to pay lawyers and fines) and bluffing (using marketing campaigns to garner public interest and shame/scare the establishment). When the stakes get too high (e.g. ride sharing laws in Austin, TX), they fold.