Thursday 18th April 2024

    Technological innovation and the law!

    This widely quoted HBR piece calls Uber illegal and asks that it be shut down. The argument made is that Uber's biggest advantage over incumbents is in using ordinary vehicles with no special licensing or other formalities, which reduces costs, thus making it cheaper for consumers and hence more popular. The entire Uber business model could be based on an illegality, it argues, and this is reflecting in their culture as well. Regular taxis follow the law and are hence subject to additonal costs in commercial insurance, registration, etc. This argument is not entirely true - In countries like India, a commercial license is required for Uber as well. More importantly, it doesn't account for the huge improvement in convenience (cab at the touch of a button), which one could argue is the real reason Uber (and its competitors like Lyft and Ola) are popular. However, it does raise the question - "Would innovative companies like Uber and AirBNB exist, if they had to strictly follow the law?" Perhaps, even Google and Facebook would not exist in their current forms if they had to ask permission before they collected our data. Innovation can often push legal boundaries. When is it ok to ask for forgiveness later and when should one ask for permission upfront?

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