While Uber, AirBnB, TaskRabbit and other online platforms have democratized access to a number of services and facilities, some are concerned about the public safety, health, and limited liability of these sharing economy practices. As these companies grow more popular, questions arise about their impact on small businesses: will peer-to-peer platforms materialize as viable alternatives to traditional providers? How are these businesses to be regulated and taxed? How are their workers to be categorized and treated?
Companies like Uber and AirBnb extol the value of what and, more importantly, how they are selling by claiming they are making the world work better in a modern setting: by making use of dormant or underused resources and allowing for more people to earn a living they’re providing a double-whammy positive impact on the economy. Consumers, meanwhile, typically pay less than they would if they purchased the item or service through a traditional provider, like a hotel or car-hire firm, or receive a more personalized experience. Further, there are environmental benefits: renting a car ad hoc rather than owning one, for example, means fewer cars are required and fewer resources must be devoted to making them.
However, not everyone sees this emerging market as a blessing. As with any new frontier, the advent and exponential growth of collaborative consumption presents as many problems as it does opportunities, particularly from the view of the already existing industries – like the taxi and hotel industries – and those in charge of regulating them. Regulators argue that all businesses should compete on a fair playing field where the same rules apply to everybody, and businesses that operate in the Sharing Economy blur that line. For example, Uber claims their more than 160,000 drivers in the United States are “self-employed independent contractors,” but just yesterday the California Labor Commission ruled that they are to be considered employees. This decision contributes to the growing number of questions for policymakers: How will this new sector impact the economy overall? How are these businesses to be taxed? Are on-demand businesses responsible for providing “employees” with benefits? Furthermore, with such unprecedentedly direct collaboration between consumers and providers, what mechanisms can be used to prevent or monitor illegal and criminal activity?
The laws that govern these industries predate gig economy businesses by 30 to 100 years, meanwhile the Sharing Economy is growing and evolving at a rapid pace. Before policymakers respond with new regulations, it’s critical to understand this new frontier, the validated benefits of collaborative consumption on the economy overall and the real concerns that workers and policy makers must navigate. The best way to get this right is through substantive research and analysis and facilitated dialogue among policy makers, platform owners, providers, and users. This approach ensures decisions will be based on data and that the perspectives of all stakeholders will be considered. This fascinating new marketplace must be better understood in order to reevaluate policy in a 21st century context.
"Research, analysis, and dialogue among policy makers, platform owners, providers, and users are needed to better understand this fascinating new marketplace in order to reevaluate policy in a 21st century context."