January 31, 2016
Sir, John Kay is right about his 18th-century namesake (“What the other John Kay taught Uber about innovation”, January 27). Perhaps there is no better illustration of protectionism’s ills than Frédéric Bastiat’s Candlemakers’ Petition of 1845. The taxi industry has indeed developed a bunker mentality as a response to technologically driven cabs.
That said, by referring to Airbnb Professor Kay implies that the hotel industry is analogous to the Luddites. Nothing could be farther from the truth. Airbnb suggests that virtually all regulations, particularly in dense conurbations, are archaic and that it is a technology-based company. Perhaps a regimen that includes property, mortgage and transfer taxes at the same hugely discounted rates, light to non-existent fire codes, no disabled access requirements, de minimis insurance coverage and lower-paid contract workers instead of employees is what is needed. Unsurprisingly, it has never suggested that the same lack of rules apply to regular hotels as a way of levelling the playing field.
Airbnb’s technology is no different to that of any hotel company, big or small, in terms of its booking engine or web platform, with none of the burdens of regulations. Most tellingly, when something goes drastically awry Airbnb’s response has been to delist the offending lister while terming those incidents as rare.
Prof Kay may like to take a look at Airpooler and Flytenow, the flight-sharing companies that were shut down by the US’s Federal Aviation Administration. The reasons were obvious. Safety, insurance and training for private pilots is markedly lower than that for commercial pilots and planes. Speaking as a hotelier, private pilot and libertarian, to me the foregoing seems self-evident.