A legal fight over New York City dog-sitters highlights a bigger problem in America

Erin Fuchs
Deputy Managing Editor
Some dogs like this one prefer not to be boarded in cages. Photo: Erin Fuchs

The emergence of pet-sitting apps like DogVacay.com has spurred the city of New York to enforce obscure regulations requiring home pet-sitters to get licenses to board animals.

These new pet-sitting apps, which also include Rover and Wag, are part of the “sharing economy,” and a recent New York Times article likened their regulatory challenges to those faced by Uber and Airbnb. But New York City’s recent crackdown on home pet-sitters reflects an even broader problem in the US, according to David Schleicher, a Yale law professor and expert on regulating the sharing economy.

“The regulation is part of the broader problem of excessive occupational licensing,” Schleicher told Yahoo Finance in an email. “This problem, which affects Uber but not AirBnB (which has other legal challenges, just not this one) is a major issue in the United States.”

“Only a limited or no measurable effect on quality”

More than a quarter of all workers in the US require some kind of professional licensing, the Brookings Institution has noted. “These regulations serve to increase prices (by reducing supply) and — on average — have only a limited or no measurable effect on quality,” said Schleicher, who noted that licensing rules also make it harder for workers to move from state to state.

There has been growing opposition to occupational licensing requirements over the past 10-15 years by groups like the libertarian Institute for Justice, according to Tim Iglesias, a professor at the University of San Francisco School of Law. The Institute for Justice, in particular, argues that licensing rules burden low-income workers and aspiring entrepreneurs. Back in 2012, the Institute for Justice examined the licensing requirements for 102 low- and moderate-income jobs like barber and massage therapist and found that on average workers had to pay $200 and complete nine months in education and training just to get their license.

While licenses for some professions might be necessary, one could argue that you might not need a license to watch somebody’s dog in your home. Iglesias noted that it’s ridiculous to require somebody to complete training to watch animals in their home “unless they’re really special animals.”

In the end, consumers, pets and the economy could be hurt by professional licensing requirements for in-home pet sitters, according to Schleicher.

He noted in his email to Yahoo Finance:  “It’s not clear that, in this context, there is a good policy justification for all of the requirements that exist for pet setting. Further, if pet sitting is too expensive, it likely reduces the number of pets people keep (bad for animals that are not adopted) and causes other economic harm (if people can’t have their pets cared for, they may not show up for work, or may abandon leisure activities like vacations).  Neither animals nor customers seem to be protected by these regulations, which seem directed at protecting incumbent firms (although I am far from an expert on the details of the pet sitting industry!)”

Where is the appropriate line?

Like Airbnb and Uber, pet-sitting apps connect consumers with people trying to make extra money — DogVacay has even been dubbed “Airbnb for your dog.” And like Airbnb hosts or Uber drivers, many of the dog-sitters who use these apps are likely opening their homes to canine guests as a side job, noted Miriam Cherry, director of the William C. Wefel Center for Employment Law.

“You would be really restrictive if you said nobody can watch a pet in their apartment,” she said.

While that sounds restrictive, regulations in New York City technically prohibit just that kind of transaction. The city’s health department began investigating DogVacay when a New York state senator filed a complaint about the app. That state senator was approached by a licensed dog boarder displeased by DogVacay, according to The New York Times.

Ultimately, the health department found DogVacay promoted illegal animal boarding. Meanwhile, according to The Times, the app Rover has fought regulatory disputes in California, Colorado, and New Jersey.

Ultimately, Cherry says, we’ll likely see regulations that allow reasonable pet-sitting for money. So your neighbor might be able to watch a puppy for a week but couldn’t look after 28 cats all at once. “This is something that people really do need to talk about and debate about where is the appropriate line,” she said.

“A new dimension to the economy”

Iglesias, the University of San Francisco Law professor, agreed that cities will probably end up drafting “good, reasonable regulations” for in-home pet-sitting. And, he said, apps such Wag likely face less resistance than Uber, which draws the ire of taxi drivers, and Airbnb — which goes up against the hotel industry.

The dog-boarding industry, on the other hand, isn’t as deep-pocketed or entrenched as those that Uber and Airbnb go up against. Home pet-sitting also enables dogs to stay in a house rather than a kennel.  As Cherry pointed out, rescue dogs like her dachshund might be traumatized by going in a cage every time their owner goes on vacation.

“This seems like it’s actually adding a [new] dimension to the economy,” said Iglesias, who believes these apps will be viewed as less disruptive than an Airbnb or Uber.

Since Airbnb and Uber both face continued regulatory resistance and even bans, the entrepreneurs behind this new crop of pet-sitting apps should hope that Iglesias is right.

Erin Fuchs is deputy managing editor at Yahoo Finance.

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