Rational Choice Of Government Regulation In Emerging Industries

With the popularity of Internet technology and mobile terminals,the online car-hailing industry is booming.It quickly occupies a large market share with the advantages of convenience,speed and low price.At the same time,The phenomenon of market failure in endlessly promotes the creation and implementation of the government regulation of the online car-hailing industry.The government regulation of the online car-hailing in Guangzhou is taken as the main research content in this paper,using the regulation theory and the multiple principal agent theory to construct an analytical framework,putting forward the rational choice criteria based on the general rules of the market.Through a large number of interviews and questionnaires on the various stakeholders,such as the online car-hailing company,the online car-hailing drivers,the taxi drivers,the grass-roots law enforcement personnel and the passengers,this paper combs the legitimacy of the rules and regulations under the principle of territorial management,then makes an analysis about the various kinds of regulations in the current situation for making a judgement about whether the government regulation of the online car-hailing is in line with the rational choice of public interest and general rules of the market.The study found that under the new policy,the traffic congestion has been eased,the taxi industry survival situation has improved obviously,but the new failure phenomenon caused by the improper regulation: the policy principle of high-end differentiation has brought the increase of the passenger travel cost;The taxi industry reform was blocked,the unlicensed car reappeared and other problems caused the public interests to be damaged.According to the principle of territorial management,the local government has set up the new regulation policy of online car-hailing in different degrees and captured by the traditional industry interest groups.The local regulation policy has deviated from the direction of the central government to encourage the development of new industries.The strict market access has created to a new principal-agent relationship in the industry,resulting in the shrinking of the sharing economy;the information disclosure caused by moral hazard makes the regulatory department in the information disadvantage,so that the effective government regulation can not be implemented.This paper concludes that ignoring the characteristics of platform economy and sharing economy,using the traditional instruments to regulate the emerging online car-hailing industry,the way of “one-size-fits-all” has impeded the free competition of the market,and easily causedthe regulation failure.Based on these analyses,This paper puts forward some policy suggestions on the rational choice of government regulation in the newly emerging online car-hailing industry from the following points: respect of the market,defining the role of the government;the improvement of the top level design,the enhancement of the linkage between central and local authorities;innovating the way of regulation,easing market access,implementing the cooperative regulation based on the information regulation and other aspects.