If you remember surfing the information superhighway on Netscape Navigator, then you probably experience déjà vu when you read about Uber’s legal troubles. Uber is a smartphone application that connects people with drivers. Press a few buttons on your phone and – presto – a car arrives to pick you up. Less magical are the regulatory problems caused by Uber’s entry into the people-moving business, which is occupied by taxicabs, taxi brokers and limousine companies who follow heavy regulations in exchange for a captive marketplace. Every major city worldwide is dealing with this issue.

Industry-disrupting companies like Uber have been around since the birth of the internet. Because they use an inherently intangible medium in unanticipated ways, these companies often operate in regulatory grey areas. Naturally, lawmakers can only draft for the reasonably foreseeable future. Hence the historical disconnect between digital innovators and the law.

Numerous examples abound. Napster facilitated the free exchange of licensed, digital music in 1999. Google scanned copyrighted library books and shared excerpts online at no cost when it launched Google Books in 2004. Google Street View contravened privacy laws by capturing sensitive personal information from unsecured wireless networks during the mid-2000s. More recently, Airbnb has facilitated the short-term rental of private apartments without remitting hospitality taxes in some jurisdictions.

Jan-Mar 2016 issue

McCague Borlack LLP