Freeing online marketplaces from protectionist regulation

March 29, 2021 9:20AM

Discussions are heating up in the Tennessee legislature that would prevent the overregulation of new innovations. The idea is to stop local governments from unnecessarily regulating online marketplaces like Uber, Turo, Etsy, Handy, or other platforms that bring two or more people together to complete a transaction. It would leave that regulation to the state legislature, which would result in far less red tape and consistent policies across the state. 

Services like these have become increasingly popular, especially among younger generations who embrace the convenience of technology to find places to stay on vacation, hail a ride, and get food delivered to their doorstep. In addition, many Americans have relied on these platforms to supplement their income and even earn a living full-time.

But imagine creating the next Etsy for people to sell their handcrafted creations, only to be strangled with the red tape of hundreds of different localities. There are 441 different cities and counties in Tennessee alone. When local governments start regulating online marketplaces, they can make it impossible for those platforms to succeed, much less the people who benefit from selling their goods or services on them, or who otherwise use them to earn a living. 

We as a state pride ourselves on slashing red tape and getting government out of the way to allow free people to thrive. While we have done a great job at the state level to keep regulation at bay, local governments can often impose their own crippling restrictions on free enterprise. And while the state has already enacted numerous preemptive measures for existing services like homesharing and ridesharing, we don’t know what tomorrow’s innovation will be. Rather than wait and see, we should limit local regulation of all online platforms, whether they exist already or not.

Protecting online marketplaces is a huge step toward embracing entrepreneurs who utilize these services to provide for themselves and their families. It could also make Tennessee a magnet for the next big innovation and all the jobs that could follow. By preventing onerous, inconsistent, and often slapdash regulation from city to city or county to county, Tennessee can be a leader in innovation freedom.