Opinion

Time to Adapt to a New Economy

Arun Sundararajan
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We need to create a regulatory framework for these new providers, balancing their lower risks with appropriately designed safeguards.
By Arun Sundararajan
Online services like Airbnb, Lyft, SideCar and Getaround are disrupting old economic systems rooted in firm-to-consumer interactions and individual ownership, and opening new ways to stimulate economic and social activity. This is blurring the boundaries between personal activities and the commercial provision of services. We need to rethink our local governance and regulatory framework to accommodate this new economy while ensuring that a few bad actors don’t bring down the entire system.

We are free to lend our apartments to acquaintances, pick up relatives from the airport, or loan money to friends starting new businesses. These are considered "personal" undertakings, unlike running a hotel, driving a taxicab, or being a professional investor, and have none of the additional oversight, licensing, screening, taxation or training expected of providers who conduct these activities as a full-time occupation.

Read the full article as published in The New York Times.

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Arun Sundararajan is a Professor of Information, Operations and Management Sciences, NEC Faculty Fellow, and Doctor Coordinator of IOMS-Information Systems.