We need more, not fewer, government yelps – philly gas key staking


Rather than starting, as other agencies do, with prescriptive regulations, the CFPB encourages best practices the way private review sites do: by letting actual customers speak. Regulation becomes a backstop when consumer complaints unearth bad practices that market forces alone cannot correct.

The bureau designed its website to emulate the efficiency of internet-enabled services that create value through crowdsourced information. Whether by providing a marketplace to review existing businesses, such as Yelp or TripAdvisor, or building a platform on which both the service provider and the customer grade each other (eBay, Uber, Lyft, Airbnb, and VRBO), peer-to-peer ratings provide future customers with concrete metrics upon which to make informed choices.

It’s also a cheaper way to regulate, and one less prone to abuse. Before the rise of online rating services, regulators were solely responsible for certifying the business practices of regulated firms. Inspectors, for example, ensured that taxi drivers, hotel proprietors, and restaurants charged posted prices and met health and safety criteria.

In 2013, for example, California became the first state to define standards for drivers using ride-sharing services. But rather than deploying an army of examiners to determine whether the standards are being met, California requires the platforms themselves to ensure driver compliance, relying on individuals to provide more timely and accurate information and saving significant state resources.

In some industries, including finance, the government is in a better position than the private sector to gather and analyze the information. It’s unlikely a private rating service for banks would have had the incentive or ability to gather the data necessary to see that Wells Fargo was creating sham accounts.

Other opportunities to use data to improve government services are legion. For example, the 2010 National Broadband Plan, mandated by legislation passed in response to the economic meltdown and recession, proposed using digital platforms to advance a wide variety of national goals.

In every category specified by Congress, including health care, energy, education, and job training, the plan identified valuable new digital data sources. A Green Button initiative from the Energy Department provides consumers with information about their electricity use, helping them save both energy and money. Similarly, a Blue Button service from Veterans Affairs lets veterans improve their health care by providing clearer data about their medical histories.

And to unleash private innovation, the federal government in 2009 created Data.gov, which gives entrepreneurs and researchers ready access to vast stores of government information. Thousands of new apps and services have been built, ranging from statistics on TSA wait times to maps showing employment trends town by town.

Closing the CFPB database would be a major step backward in what has been a remarkable information revolution in government. As a principled conservative, Mulvaney should be advocating for more apps that empower consumers to make better-informed decisions, drive improved markets, and mitigate the need for more heavy-handed regulatory interventions.

Lawmakers across the political spectrum should be united in demanding the replacement of an antiquated analog public sector with more efficient and effective digital powerhouses built on broadband. While we can debate how best to drain the swamp of pay-to-play, the value of peer-to-peer is indisputable.