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Is the Internet making occupational regulation obsolete?

An online portal like Angie’s List could take the place of professional licensing, at least in certain fields, if a novel concept in Washington State gains traction.

Prompted by the expanding roles being played by the Internet, the state House Business and Financial  Services Committee held hearings  during the lengthy 2017 legislative session on a proposal to eliminate occupational regulation in certain fields and replace it with online Uber- or Yelp-style ratings of people offering now-regulated services.

The brainchild of a free-market think tank, the Washington Policy Center, the proposal found its way into a bill (HB 1361) sponsored by state Rep. Matt Manweller. HB1361 would replace some current licensing with an online rating system similar to those used by Angie’s list, Yelp, Uber, and Lyft. The bill proposes to use this “public feedback structure” to sideline current regulatory programs for animal massage, auctioneers, boxing announcers, fishing guides, landscape architecture, manicurists, and horse floaters (equine dentistry).

Manweller points out that the main advocates for licensing of fields like these are practicing those occupations. They often want to control entry rather than protect consumers, he says; the bills are “designed to make sure that outsiders cannot compete with insiders.”

When they say they want to maintain standards, “what they really want is to cut out a lot of competition and set very high barriers” for entering the occupation “so they can keep their prices high,” says Todd Myers of the Washington Policy Center, who helped draft the bill.

The public safety rationale for licensing requirements in fields like landscape architecture is weak, he adds. Over the last 10 years Myers found 16 instances of a Washington state landscape architect required to appear before the board; 15 of those were violations for operating without a license while one was for alleged malfeasance.

He argues that before the Internet age, consumers may have needed government oversight through licensing because information about professionals providing the services they received was scarce. With avenues like Yelp or Angie’s List, however, “We have an opportunity to use another system in a way in which we haven’t before. It’s time we come into the IPhone era.”

HB 1361 did not get beyond the committee hearing in 2017 but is slated to be reintroduced in the 2018 Washington legislative session.

The bill would:

• Require the Department of Licensing to create a user-friendly public website called the Washington Effective Licensing Port, for the public to comment and review all individuals working in one of seven specific occupations.

• Provide that the website allow the public to view postings regarding an individual registered with the website and allow consumers to post reviews of registered individuals on a five-star rating scale.

• Eliminate occupational licensure requirements related to the seven regulated occupations and instead require people working in those fields to register with the Washington Effective Licensing Port and create a profile.