First Principles for Regulating the Sharing Economy

Abstract

This Article posits ten first principles on which a regulatory response to the sharing economy must rest. Given the rapid differentiation in the sharing economy, the Article gives particular focus to the short-term rental market, typified by Airbnb, as one lens through which to illustrate these principles. The Article then turns to review existing regulatory responses to the sharing economy. Here again, the Article focuses on regulations related to the short-term rental market with a particular emphasis on the two strictest existing local government regulatory structures, which are those of San Francisco and Portland. The Article next proposes a response beyond such traditional regulatory strategies, which this article asserts are not well suited to regulating the sharing economy. Instead, this Article proposes a markets-based mechanism, transferable sharing rights, which is better suited to internalize externalities of the most daunting challenges in the short-term rental market. Finally, the Article examines the corporatization of the sharing movement and the implications for regulations as sharing evolves from a peer-to-peer enterprise to a place where established market participants seek to assert themselves in the sharing economy’s new domains.

Keywords: sharing economy, Airbnb, San Francisco, Portland, Uber, collaborative economy, collaborative consumption, the mesh, access-based consumption, local government, land use, zoning, neighborhoods,