Regulators take issue with one of Nashville’s newest on-demand startups
A startup birthed from the so-called sharing economy is facing pushback from a state regulatory board.The Tennessee State Board of Cosmetology and Barber Examiners will soon consider a consent order calling for on-demand beauty services startup Belle (officially Project Belle LLC) to cease operations the board considers unlawful and pay a $500 fine. According to the order, to be discussed at an Oct. 3 hearing, Belle is violating state law by allowing beauty professionals to do in-home services without itself having the licensing required for a cosmetology shop.
The startup, which we profiled earlier this year, disputes the findings in the order and claims it is not subject to those regulations. Kevin Walters, spokesman for the Department of Commerce and Insurance, said the complaint represents the department’s current position on the issue, and declined additional comment. (You can view the letter and proposed consent order sent to Belle here.)
It’s a scene that has played out many times over the past few years as disruptive businesses — like Uber, Airbnb and others — clash with existing regulations and businesses. That’s playing out in Nashville right now in the short-term rental industry, as Metro Council is considering further regulations on homeowners who rent out their places.
To some extent, Belle CEO Armand Lauzon said, the startup saw this type of issue, if not the specific conflict, coming.
“When you see any company like us or Uber or Airbnb … the old way of doing business is disrupted, and there seems to be always regulatory issues,” Lauzon said. “I guess it’s par for the course.”
The investigation into Belle’s business model was prompted by an email from a Nashville brick-and-mortar shop owner who called Belle’s model and the** “type of competition” it creates “disturbing.”**
But Lauzon and his attorney, Daniel Horwitz, argue that Belle is a technology company, not a provider of cosmetology services itself, so it shouldn’t fall under the board’s regulation. The company has also tweaked its software to require clients to certify that they fall into one of the exemptions called for by state law allowing services to be rendered outside a brick-and-mortar salon, according to a letter from Horwitz to the board’s attorney.
The article isn’t that clear. Project Belle provides software for customers to arrange appointments with licensed hairstylists who work from home. It will be interesting to see how things turn out with a State Cosmetology Board trying a software company.
Btw, whenever I read one of these stories I’m reminded of Heinlein’s story “Lifeline”. An inventor figures out how to predict when you will die. The insurance company companies sue him. He protests to the judge that if he loses he will start a whale oil lamp company and sue General Electric.