P2P regulation looming

The NSW Government has announced its intention to develop regulation of share economy businesses, releasing a position paper last week acknowledging the importance of the peer-to-peer sector to the state’s economy.

Innovation and Better Regulation Minister Victor Dominello says that the economic benefit of peer-to-peer businesses is undeniable, and that they need support as they continue to grow.

“Digital innovation is transforming the way people do business in every city and every country around the world. The reality is the collaborative economy is here to stay,” Dominello says.

“We are living in the information age and it is vital that government policies embrace new technologies and enable businesses to operate with certainty.”

“The economic benefits relating to the collaborative economy are already significant and will continue to grow, as more consumers choose to link or share directly with providers via online and mobile platforms,” Dominello adds.

The NSW Government’s position follows five principles: supporting a culture of innovation; fit for purpose regulation in the digital age; customer protection and safety; promoting competition; and agile government procurement.

Insurance Council of Australia (ICA) CEO Rob Whelan says that the government’s position paper is a welcome step towards ensuring that appropriate insurance policies are established and maintained.

“Insurers agree that sharing economy companies and those who operate them must have appropriate insurance policies to cover customer and third-party risk,” Mr Whelan said.

“The ICA’s member companies are already responding to market demands by creating products to protect the thousands of new micro-business owners and operators, and their many customers.”

“Initiatives like this one that seek to provide more certainty about the regulatory environment governing sharing economy businesses can help speed up that process,” he adds.

Furthermore, Whelan says that the ICA will continue to endorse competitive neutrality.

“The position paper states the importance of achieving the right balance of regulation so that innovation is not stifled,” Whelan says.

“While recognising the extraordinary economic potential of these new digital business platforms, the ICA believes traditional business models are entitled to a level playing field so they’re not subject to regulations and compliance costs that digital startups can skirt.”