key: cord-0059563-4eu27jsj authors: Ayata, Zeynep title: Looking Ahead… date: 2020-09-29 journal: Global Perspectives on Legal Challenges Posed by Ridesharing Companies DOI: 10.1007/978-981-15-7035-3_13 sha: 3629a66934bcab7049a2933c223f7b63ada3c30b doc_id: 59563 cord_uid: 4eu27jsj This study has shown that Uber, like many other digital platforms and especially sharing economy platforms, has built a business model and an operation that disrupts, among other things, the legal system. Most of its elements do not fit into the normative framework that is expected to be applied. This often leads enforcers to give a prohibitive response to Uber’s activities. However, our study has shown many examples where, in the face of interdiction, Uber has changed its system, its standards, or its functions. On the other hand, in many jurisdictions included in this volume, regulators have also adapted to the change created by Uber and similar platforms. As this study has shown, Uber, like many other digital platforms and especially sharing economy platforms, has built a business model and an operation that disrupts, among other things, the legal system. Most of its elements do not fit into the normative framework that is expected to be applied. This often leads enforcers to give a prohibitive response to Uber's activities. However, Uber, similarly to all innovators and especially digital platforms, has one major advantage: flexibility. Our study has shown many examples where, in the face of interdiction, Uber has changed its system, its standards, or its functions. Hence, Uber does not merely provide flexibility for users; because of its business model and its dynamic nature, it is in itself adaptable. This characteristic is in sharp contrast with regulations. Norms are often rigid, but more importantly, they are not easy to change. Amending rules or adopting new legislation is a process that takes a long time and requires extensive expertise. Furthermore, if these processes are going to be democratic, which is evidently desired, various stakeholders need to be involved. Such democratic processes that need to be inclusive not only require more time but also necessitate the reconciliation of conflicting interests. Additionally, these features create transaction costs, making these processes all the more costly and time-consuming. It is also often argued that the lack of norms creates flexible spaces where innovation thrives. 4 For instance, Uber was one of the first companies to test driverless cars. The initiative led to the killing of a pedestrian in Arizona in 2018, and although Uber was not incriminated, there were reports stating that its software had flaws. 5 However, only two years later, Uber's self-driving cars were allowed again in certain states in the USA. 6 Uber could thus be the first corporation to deploy and commercialize this new technology. Driverless cars could eventually eliminate Uber's labor law challenges, which were discussed at length in this volume. It would also make Uber the pioneer of yet another new service through the use of sophisticated technology and software in an area that is not fully regulated. Whether innovation necessitates regulation-free zones or not, we can probably identify a pattern where such innovators, or at least sharing economy platforms, often emerge within or perhaps even choose such loopholes. 7 On the other hand, this study has shown that operating in these loopholes is not sustainable due to legal and social reactions. Regulators, competitors, consumers, and other stakeholders want to ensure that these disruptors also act within a specified framework. It is only the extent of regulatory intervention that varies. The real controversy is between dynamic and adaptable disrupters and rigid and resistant rule-makers. Hence, the essential question before us is how to overcome this incongruity. One noteworthy answer that may be found in the literature is, of course, flexible regulation. Several concepts and methods have been suggested by scholars as a solution to the stringency and slowness of law making. 8 These theories suggest a more flexible law-making that takes actors of the market generally and innovators specifically as more heavily than just stakeholders. According to these approaches, innovators should be included among the rule-makers. Such theories underline the importance of inclusive processes for democracy and transparency, but more importantly for ensuring compliance with the law. Moreover, some authors have even argued that corporations should be able to self-regulate their activities 9 and that along with other actors of the market, such as professional organizations, they should be able to determine their own principles of control and governance. 10 To what extent is self-regulation reliable and sufficient? Warnings against the limits of self-regulation can be found in the literature. In her seminal work, Ford argues that although flexible regulation presents many advantages such as transparency and inclusiveness, it also bears significant risks. 11 According to Ford, these processes may be dominated by the economically more powerful actors of the market and create problems in terms of equality before the law. Prassl argues, on the other hand, that some intervention will always be necessary in order to protect weaker parties, such as workers or consumers. 12 As the platforms will always have more bargaining power than these weaker parties, they will have more influence over policy-makers and legislative processes. Could Uber's rating and complaint system be trusted to provide enough protection for passengers, for instance? Our study has shown that most regulators were not convinced that it could. Indeed, legislators and courts in most countries are still reluctant to rely entirely on systems created by private parties to safeguard individual rights. Platforms are corporations that seek to reduce their transaction costs in order to sustain lower prices, and higher standards of protection may increase transaction costs and restrict their sphere of action. Thus, they may not necessarily have incentives to provide better protection, unless there is a pressing demand from users. However, users may not always be in a power position to exert such pressures on platforms. 13 In other words, market dynamics may not suffice for adequate control and protection. On the other hand, identifying the shortcomings of self-regulation should not lead to the conclusion that traditional regulation and regulatory processes should remain untouched. Sharing economy platforms such as Uber do offer benefits that should not be undermined. These platforms offer services at a lower price, have the ability to reduce information asymmetry, can utilize idle assets, and may offer higher quality. In the face of these benefits, outright bans do appear disproportionate. Thus, the emergence and expansion of platforms call for dynamism and change on the regulation side. Policy-makers have to reconcile these interests in order to encourage and sustain a variety of services in the market. Platforms also have to assume more responsibility and relieve social concerns. This requires not only active collaboration with regulators but also substantial changes in their policies. For instance, Uber may have to acknowledge that a driver who works forty hours a week may no longer be considered as self-employed, and the information with regard to his/her generated income is perhaps not his/her personal data. Although they may increase transaction costs, certain safety controls for drivers and vehicles are necessary in order to provide adequate protection of passengers. Uber should also accept its tax liability because tax evasion not only causes significant damage to the welfare system but also creates social disturbance. Concerns over congestion and pollution are crucial social and environmental problems, and thus, Uber should comply to a certain extent with local transport regulations. On July 28, 2018, I had to go from central Madrid to Barajas International Airport. I was returning from a conference at IE University, where I had chaired a seminar on legal challenges posed by Uber with presentations by several authors from this volume. On the day of my flight, Madrid's taxi drivers were on strike against Uber. Unable to call a taxi, I had to wait three hours for an Uber ride, which I shared with two other guests from the hotel. On our way to the airport, our immigrant Uber driver told us stories of the disputes and at times violent clashes between Uber drivers and taxi drivers in the city. This ironic anecdote shows how it is necessary for Uber, regulators, incumbents, and other market actors to find middle ground where the platform can survive without damaging individual rights and public interest. This volume, which provides comparative insights on these challenges, will hopefully contribute to the building of such an environment and the sustainability of the benefits of dynamic market forces. Responsive regulation: transcending the deregulatory debate Uber eats demand soars due to COVID-19 Crisis Regulatory arbitrage Uber is laying off 3700 as rides plummet due to COVID-19 Hill-FES-paper-California-Challenge-How-not-to-regulate-disruptive-bus iness-models Regulating the sharing economy The renew deal: the fall of regulation and the rise of governance in contemporary legal thought Humans as a service: the promise and perils of work in the Gig economy In review of fatal Arizona crash, U.S. agency says Uber software had flaws New York Times Waltz E (2020) How Facebook and google track public's movement in effort to fight COVID-19