Coadec Executive Director Guy Levin wrote an interesting piece on Wednesday calling for a clearer view from government about positive disruption in the start-up space. Now I’m sure that government needs to have a view and encourage entrepreneurship, but this is a two-way street. There seems to be an almost “autistic” nature of the way in which tech startups can operate that fails to understand that just because you can do something doesn’t mean that you should do something.

Let’s take an example – the well-publicised taxi-cab disruptor Uber. In most developed cities, taxi services are pretty heavily regulated. In London, for example, to be licensed to pick up without regulation a driver needs to have been authorised by the Public Carriage Office, and have passed the “knowledge” test of the streets of London. Uber flies in the face of most of that (and of the regulated fare structures that drivers must also follow).

On the one hand there is a public safety and protection nature of all of this that (hopefully) ensures that we don’t get ripped off or murdered by cab drivers and they get us to where we are going pretty quickly. On the other hand the traditional “knowledge” is pretty much obsolete as I found last week when I needed to use my phone to direct a black cab driver to a pub within half a mile of Waterloo Station.

Is Uber acceptable disruption into a regulated market? Who knows. My personal view is probably just about, but we shouldn’t ignore the public protection offered by current structures.

Let’s take another example – AirBnB. A service that in some countries is leading to significant legal challenge because the letting of properties for short stays is a licensed and regulated activity. But moreover in some other places is leading to really weird distortions of the housing market.

Is AirBnB acceptable disruption into a (sometimes) regulated market? Who knows. And I don’t know that I have a view (although housing in London and the UK is distorted enough at the moment).

So let’s get more extreme. What about recruitment services? Or legal services? Or what about financial services? Or guns? Or drugs?

The answers lie on a continuum. And there are no black and white answers – only a series of greys. However, you can be sure that legislation and regulation won’t be able to keep up in “start-up” time, so it’s not enough just for Government to have an agenda here. It strikes me that the start-up community needs to develop its own ethical code within which it works that isn’t merely “If it’s legal”.

The role models of past-decade start ups (particularly the big US ones) don’t set a great example here. Whether it’s Facebook’s skirting around data privacy and protection or most of them skirting around international tax boundaries, despite the “Don’t be evil” placards of old it seems that ethics run the risk of being seen as the merely the county bordering Suffolk.

(Thanks to Paul Taylor for the Twitter conversation that led to this post.)

One thought on “An ethical code for disruptive startups

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