The Sharing Economy: An old concept made new through the internet-based sharing of underutilized space, skills, and stuff for monetary and non-monetary benefits. Recently, a proliferation of start-ups have created digital platforms to connect owners with consumers. These companies encourage people—and businesses—to use resources more efficiently and to share non-product assets (like time) as well as conventional “stuff.” Citizens can share space in their homes (Airbnb), seats in their car (Lyft, Sidecar, UberX), places to park (Park Circa), used clothing (ThredUp), outdoor gear (gearcommons), time in the day (TaskRabbit, Instacart), and even capital (Zopa, Prosper). This trend has attracted significant attention from thought leaders (in 2011, Time Magazine crowned it one of ten ideas that will change the world), venture capital (Uber recently received $258M in funding from Google Ventures, and a recent round of financing for Airbnb would value it above $10B), the media, and, most recently, Congress. Nevertheless, regulatory mechanisms have not kept pace.
Small-scale, non-monetized sharing has historically been ignored or exempted by the legal system (though barter exchange is taxable). The tipping point is near, however, as sharing with strangers becomes big business. Forbes estimates the sharing economy generated $3.5 billion in 2013. To grossly generalize, the law tends to prefer binary divisions: public and private, business and personal, donation and sale, consumer and provider, and, most saliently, my property and yours. In the sharing economy, many companies blur these boundaries, resulting in a legal gray area. Proponents, typically a younger, urban demographic, tend to view the regulatory hurdles as protectionism, serving entrenched operators in the market like taxicabs and hotels. Yet, for municipalities, regulating sharing economy companies requires balancing the safety and welfare of the public with the potential for new economic development opportunities.
We've briefly highlighted a number of legal issues raised by the sharing economy. Read more at the Boston Bar Journal.