Sharing Economy

Lyft President Says Patchwork Regulations Are Bad for Business

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"The dangerous thing is to have a patchwork set of regulations," says John Zimmer, co-founder and president of the ridesharing app Lyft.  "It can make it really difficult for a company to operate."

After starting the popular peer-to-peer transportation company in 2012, Lyft is now valued at $700 million dollars and present in over 60 cities across the U.S. Zimmer states that having services like Lyft is essential to city growth as it provides residents with affordable transportation and jobs. 

Lyft's popularity and success has made it a target for state regulators who are struggling to deal with the new sharing economy. Right after launch, the California Public Utilities Commission served Lyft—along with Uber and Sidecar—cease and desist letters and fined the company $20,000 over safety concerns. Though the company worked an agreement out with the state, it still faces similar opposition in others cities where they are disrupting entrenched businesses like taxi companies. 

"What we've realized is that there are many agencies at a state and local level and there are many interests and existing industries," says Zimmer, who sat down with Reason TV at the Atlantic CityLab conference in Los Angeles.  "So often when we work really hard to solve a problem with the state agency, then the legislature comes out with something that's being supported by trial lawyers or insurance companies or city attorneys have separate issues that they're concerned about. It's really challenging."

Though Zimmer states that the overlap of government agencies is a major problem in navigating regulatory hurdles, his solution is to create another agency that will encompass innovation and streamline the process similar to the Office of Civic Innovation established by San Francisco mayor Edwin Lee in 2012. 

But Zimmer adds: "I haven't seen yet a model within that innovation group where they start looking at regulations and they think forward five years, 10 years to think through 'how can we maintain the things that are important to us, but still allow for this type of innovation?'"

Produced by Alexis Garcia. Shot by Paul Detrick. Music by Podington Bear.

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