Generally, you make the rules as simple as possible instead of a complex ouroboros of legislation that requires a full team of lawyers to understand. The other rule would tend towards “no need for government approval.” You shouldn’t have to ask the gov for permission to start working in the space, you should just have rules you need to follow while you do. Approval processes that inevitably take years are by far the most dangerous regulatory moat, if a startup can’t enter the space and start making money quickly that startup is many times less likely to exist.

The moat is still gonna be there. Austin TX went through this when they banned lyft and uber and had some "in house" startups launch rideshare apps. They didn't fare that well after uber/lyft came back in.

You can make it difficult for everyone at the "national" level of operation, but then how does a smaller company ever get there from a "local" start?

What even constitutes a "small business" when it comes to gig economy? Most of the workers don't even count as employees.

There's going to have to be a -lot- of legal changes to constitute something worth while. And legal stuff moves slow on purpose (so that it doesn't bork things before they're understood... and also, it's just slow).

Don't let lobbyists for these companies craft their own regulations, and actually listen to academics without a conflict of interest from our world class, publicly funded schools of economics for once.