Finding the Right 'Fit': Matching Regulations to the Shape of the Sharing Economy
The Cambridge Handbook of the Law of the Sharing Economy, Nestor Davidson, Michèle Finck, and John J. Infrance, Editors (2018).
12 Pages Posted: 17 Dec 2019
Date Written: 2018
The very features of the sharing economy that make it so attractive as a business model—actors in the sharing economy adapt their business models quickly in light of and in response to new technologies, they rely on trust as an engine for economic exchange, and those exchanges are decentralized to facilitate “peer-to-peer” exchanges that are disintermediated—also make it difficult to regulate. This phenomenon challenges those who might oversee the sharing economy to balance the benefits of the sharing economy against the risk to consumers who might find themselves abused and or exploited in contexts that are rife with potential risk: i.e., in the backseat of the car of a stranger, in someone’s home, when purchasing an item from an unknown source through an online marketplace. The components of the sharing economy that make them difficult to regulate are not bugs of the system, but their core features. Yet to the extent we might seek to regulate these core features, we run the risk of stifling the very aspects of sharing economy approaches that set them apart as attractive alternatives to traditional business models. In order to continue to capitalize on the benefits of the sharing economy, regulators who wish to ensure an adequate degree of consumer protection within this growing sector of the economy need to find ways to balance innovation with regulation, experimentation with governance, and trust with oversight. This chapter attempts to explore ways in which approaches to regulating the sharing economy might seek to identify those aspects of the sharing economy that make it unique and which are core to the benefits sharing economy models generate and match them to regulatory approaches that will serve to encourage innovation while not sacrificing consumer protection. In an effort to find a good regulatory match, I strive to identify those core features and search for regulatory models that seem to be a good “fit”: i.e., models that might share these core components with the sharing economy itself. That search looks at these core features—the protean, disintermediated, and decentralized components of sharing economy models—and finds that so-called “New Governance” approaches to regulation appear most similar to the sharing economy itself. Indeed, using New Governance Theory as a guide, this Chapter charts a course for regulatory models that can offer guidance on a regulatory regime for those sectors where sharing economy businesses are currently thriving and where they might emerge in the future.
Keywords: sharing economy, new governance
JEL Classification: K00
Suggested Citation: Suggested Citation