Sidestepping regulatory risk

Chris Dixon dives into government regulation, a topic that receives occasional attention from tech media and the like. With Uber fighting the DC city council and New York laws affecting Airbnb, the cycle is on an upswing. I was unfamiliar with Nextel’s history, but history seems to be repeating itself:

What Nextel faced in 1991 is very similar to what many startups face today. Uber is being threatened by the taxi industry, Aereo by the TV broadcasting industry, and Airbnb by the hotel industry. Some industries, like finance, are so heavily regulated that almost any new idea runs into regulatory objections.

Reading these examples, my thoughts turned to Milton Friedman’s discussion of the hidden cost of regulations borne by consumers. Uber’s example illustrates the degree to which the internet has given consumers a more powerful collective voice. This seems like a natural counterbalance to rent-seeking behavior which, regardless of intention, can be a highly-leveraged and rational strategy. I suspect this strategy is more prevalent in industries with weak price transparency (real estate) and costs spread out over large populations (energy, finance).