On May 4, during the final week of the 2021 legislative session, Tennessee Governor Bill Lee (R) signed SB 872into law. SB 872 is a smart pro-consumer reform that bars local governments from regulating a host of popular online eCommerce platforms, such as AirBnB, VRBO, Uber, and Lyft. The idea is to stop local governments from putting onerous, unnecessary, and anti-competitive regulations on ridesharing, homesharing, and other ecommerce platforms, thus resulting in higher consumer prices and less selection. Such decisions will remain the purview of the Tennessee General Assembly. 

SB 872, sponsored by Sen. John Stevens (R), does more than protect businesses and consumers in the ridesharing and homesharing spaces. SB 872 also prohibits local governments from regulating the operation of an online marketplace facilitator or requiring an online marketplace to provide personally identifiable information of users. This means that counties and municipalities cannot regulate or tax marketplace facilitators such as eBay, Etsy, Instacart and others who facilitate transactions among users. Sen. Stevens said this change will prevent overregulation and will increase clarity by ensuring there is not a patchwork of regulations on online marketplaces across the state. 

“Cities in other states have attempted to impose minimum wage laws on ridesharing services at the behest of taxi cartels, place limits on fees charged by delivery services, and meddle in the independent contractor relationship that has significantly benefited self-employed individuals using these platforms to earn a living,” writes Justin Owen president of the Beacon Center, a Nashville-based think tank. “None of these regulatory attempts would be allowed under the new Tennessee law.” 

This reform will ensure statewide uniformity of regulation in Tennessee for emerging industries and technologies. Beacon Center’s Owen praises the work done by state lawmakers and the Governor for passing this bill, which he points to as a model that other states will be smart to adopt. 

“This is one of the most significant broad-based innovation freedom developments in Tennessee, which becomes one of the first states to pass such a law in the country,” Owen writes of SB 872. “Preempting local governments from imposing a hodgepodge of local regulations on online marketplaces will allow innovation to flourish. It could also make Tennessee a magnet for the next big innovation and all the jobs that could follow.”