Does Sharing Mean Caring? Regulating Innovation in the Sharing Economy

Abstract

Sharing economy practices have become increasingly popular in recent years. From swapping systems to network transportation to private kitchens, sharing with strangers appears to be the new urban trend. Although Uber, Airbnb, and other online platforms have democratized access to a number of services and facilities, concerns have been raised as to public safety, health, and limited liability of these sharing economy practices. In addition, these innovative activities have been contested by professionals offering similar services who claim that the sharing economy is opening the door to unfair competition. Regulators are at a crossroads: on the one hand, innovation in the sharing economy should not be stifled by excessive and outdated regulation; on the other hand, there is a real need to protect the users of these services from fraud, liability, and unskilled service providers. This dilemma is far more complex than it seems, since regulators are confronted here with an array of challenging questions. First, can these sharing economy practices be qualified as “innovations” worth protecting and encouraging? Second, should the regulation of these practices serve the same goals as the existing rules for equivalent commercial services? Third, how can regulation keep up with the evolving nature of these innovative practices? All of these questions come down to one simple problem: too little is known about the socially effective ways of consistently regulating and promoting innovation. The solution to these problems requires analyzing two fields of study, both of which seem to be at an embryonic stage in legal literature: the study of sharing economy practices and the relationship between innovation and law in this area. This Article analyzes the challenges of regulating the sharing economy from an “innovation law perspective,” by arguing that these innovations should not be stifled by regulation, but should also not be left unregulated. This Article closes by suggesting that innovation in the sharing economy requires fewer, but broader rules that do not stifle innovation, but also impose a minimum of legal requirements that take into account the specificities of innovative sharing economy practices, and that are open for future developments.