Quick Tips

Is Your Side Hustle Breaking the Rules?

When ridesharing companies like Uber and Lyft started expanding, they seemed to adopt the cliche mantra “it’s better to ask for forgiveness than permission” when laying out their business plans. This is to say that these novel concepts mostly launched without regulatory approval, taking their case directly to consumers in hopes that the popularity of their services would make it harder for the proverbial “man” to shut them down. That strategy has proven to be hit or miss, yet as more and more Americans look to start their own side hustles, they may inadvertently be following the same path.

Being a major Disney geek and observer, a story in the O.C. Register caught my eye today. According to the paper, the Disneyland Resort has begun cracking down on Annual Passholders who purchase goods from the park with the intent to resell them online. More specifically, it seems they’re targeting those who utilize the discounts they receive as passholders to purchase these items.

As you might expect, this is a violation of Disneyland’s terms and conditions, which state “benefits and discounts are for personal use only and may not be used for any commercial purpose including, without limitation, to obtain or purchase items or services with the intent to resell such items or services.” Thus, so-called “personal shoppers” that help out-of-state fans obtain collectible goodies and those who put limited edition items up for bid on eBay may be running the risk of having their park entry privileges revoked. As some of those who have experienced this result told the Register, they’re still required to make payments on their passes even though they’ve been suspended. Therefore, while these resellers may have been able to rack up some cash in the short-term, they may be in for a long-term loss.

Although this may sound like a limited case, it actually raises an important point about side hustles. Sometimes what might seem like a smart way to make a quick buck could actually land you in a bit of trouble if you don’t do your research first. In the case of Disneyland, it sounds like you’ll just be out some money and be banished from the Happiest Place on Earth for a spell. However, it’s not hard to imagine a scenario where you might inadvertently be engaging in an activity that is illegal.

Okay, the threat of jail time over your hustle may be a bit hyperbolic, but there’s actually a much more probable outcome to these envelope-pushing endeavors: simply being shut down. And this doesn’t just apply to side hustles you’ve conceived of entirely on your own — they could certainly involve those aforementioned ridesharing companies and the like. Look at the Airbnb renters who have invested thousands into properties to list only to have new regulations wipe them out. While they might not have known this was a risk at the time, one could argue that they probably should have.

A common reason why many personal finance bloggers today say individuals should pursue a side hustle is to diversify their income and protect them against a myriad of situations. However, along those same lines, you should also be mindful about how reliant your side hustle is on factors you can’t control — including emerging rules and regulations. So, while it may seem like a good idea to ask forgiveness instead of permission and “get while the getting’s good,” just be sure to weigh the costs of getting caught before starting your side hustle.

Other Articles by Kyle Burbank