The Place of the Sharing Economy

Abstract

The sharing economy is grounded — situated in place — in ways that many other recent technological transformations have not been. And, as we have argued in prior work, the sharing economy is a particularly urban phenomenon. Appreciating the place of the sharing economy sheds light not only on the nature of this phenomenon, but also on the regulatory landscape it has engendered. This chapter, which will appear in the forthcoming Cambridge Handbook on the Law of the Sharing Economy, examines how the political economy of regulation and innovation in this sector has grown more complex as some sharing firms have circumvented local authorities and bargained for more favorable and uniform regulation at the state level. The result has been tensions not just between regulators and the regulated, but in some cases among regulators themselves as states and cities pursue different agendas. The tension between allowing space for local innovation — economic and regulatory — and establishing uniformity and oversight up the geographic scale is not unique to the sharing economy but is increasingly central to understanding the regulatory landscape. The chapter surveys these tensions and argues for a (cautious) presumption in favor of retaining a strong role for local regulation. While legitimate concerns about local parochialism and capture bear consideration, the advantages of experimentation and the reflection of local preferences auger against overly aggressive state preemption.