MaRS Report: Anarchist Sharing Economy in Canada Can’t Go On Like This

The past decade has seen many industries transition from a model where a central provider offers the public goods and services to one based on peer-to-peer exchange. Governments and middlemen are being cut out of the equation as flatsharing, carpooling, and crowdfunding erode the regulation and accountability that govern a functional society.

We could be just years away from Lord of the Flies right here on our cosmopolitan city streets.

That’s the premise of a less hyperbolic 100-page report recently published by MaRS that calls for governments to revamp regulations to account companies like Uber and Airbnb having shaken up the transportation and accommodation industries, respectively.

“[The sharing economy] should be seen as an opportunity to create more effective regulation and better public value for its citizens,” says MaRS Solutions Lab director Joeri van den Steenhoven. “It’s not just about adding more rules, but revisiting the regulations, making them more effective, [driving] the public value that we want.”

While a more contemporary approach to laws that govern transportation, hospitality, retail, and even financial services could offer advantages to the public in individual cases, a large part of the conversation also concerns how to govern traditional industries threatened by the sharing economy. We’re all too familiar with the tug-of-war between Canada’s taxi industry and Uber, and there’s an equally fierce though more muted face-off between hotels and Airbnb.

What role should a municipal, provincial or even federal government have in deciding which side gets the upper hand?

Citing Uber’s arrival in Toronto four years ago, the report argues that the time for experimentation has passed and that “governments at all three levels need to continue to work together, intra-government, as well as with the subjects of regulation” to be proactive in getting “ahead of the curve, to think about what kind of sharing economy we want based on local strengths and needs.”

It calls on startups, community organizations, corporations, foundations, and government to work together on solutions, which, admittedly, is significantly easier said than done. Imagine putting the head of the Ontario Taxi Workers Union at a table with Toronto Mayor John Tory, an Uber executive, a TTC board member and the developer of a supersonic tube to collaborate on a mutually amicable set of transportation regulations.

It’s no wonder, then, that the report concludes with such uncertainties as “there is no single solution to a complex problem,” “regulating the sharing economy, where technology continues to evolve and disrupt, is not an easy feat” and “governments need to become digitally savvy.”

There’s also the danger of overregulation. Steenhoven warned that too many rules can stifle innovation, so cities need to create an environment that can allow new businesses and ideas can thrive. In Germany, for example, staunch adherence to traditional regulations within the transportation industry has pushed Uber out altogether. As Toronto continues to tackle how to mitigate the tension between taxis and Uber, it can look to cities like Edmonton, which has found a middle ground between imposing regulations on Uber and burdening them out of business.

It’s a perfect example of how government intervention can duly serve both the interests of a private enterprise and the public – a balance identified by the report as integral for Canadian cities to govern industries that shift at the pace of technology.