Wednesday, May 21, 2014

The sharing economy meets local regulation

As some folks know, I have been working on an article on local regulation of the so-called sharing economy.  And so, I am intrigued by today's news that Airbnb will provide anonymous data on its users to the New York Attorney General.  

This Airbnb case is the tip of the iceberg.  The disruptive technologies of the sharing economy will revolutionize municipal licensing and tax revenue structures:  it is only a matter of how fast they do so.  Cities will need to start thinking creatively about how to permit innovation the sharing economy enables while also shoring up their regulatory and financial bases.  To get a sense of what's at stake, consider:  San Francisco's hotel tax is anticipated to generate some $273 million a year in Fiscal Year 2013-14.

Legal academics have--to my knowledge--given short shrift to this emerging topic.  There is, however, a nice primer of the legal issues in the latest issue of the Boston Bar Journal, which is available here.

More thoughts on this from me soon...

Stephen R. Miller

| Permalink

TrackBack URL for this entry:

Listed below are links to weblogs that reference The sharing economy meets local regulation:


Good (and I think right on point) article from the Washington Post on this topic recently.

What preschoolers can teach Silicon Valley about “sharing”
By Catherine Rampell, Published: May 15


“Organic.” “Artisanal.” “Community-based.” “Social.” “Local.” “Fresh.” “Natural.” And the godfather of them all: “Green.”

These words used to have specific definitions and usages before they were hijacked by businesses and brand managers wanting to connote vague warmth-and-fuzziness.

“Sharing” is now at risk of linguistic appropriation and buzzword-ification, too — in this case by the entrepreneurs of Silicon Valley.

This week I attended a conference here called “SHARE: Catalyzing the New Sharing Economy.” As I learned from my fellow attendees — and as you may already know from reading about taxi-drivers’ scuffles with Uber or the New York attorney general’s battles with Airbnb — the app-based “sharing economy” is vast and growing.

It includes “home-sharing” (hosting strangers in your house, for money); “ride-sharing” (driving people around, for money); “food-sharing” (cooking for other people, for money); “closet-sharing” (giving away your used clothing, for money); “boat-sharing” (letting other people use your boat, for money); “book-sharing” (shipping off your old textbooks to needy students, for money); “parking-space sharing” (letting a stranger park in your driveway, for money); and pretty much every other kind of rental or purchase transaction you think of, but conducted through a decentralized network of “peers” newly haloed with the altruistic mission of “sharing.”

One woman told me she had recently quit her job to manage Airbnb properties full-time and called herself a “home-sharer.” I asked if providing lodging to tourists counted as “sharing” when she was charging them for this service. Isn’t that just, umm, a hotel? Or maybe a short-term rental? Well, she said, it wasn’t like she was getting rich like real hotels do (and so why should she have to pay hotel taxes?).

As you can tell from all my scare-quotes, I left the day’s events thoroughly confused about what “sharing” really is in the modern age. So the day after attending SHARE, I decided to consult another group of experts on the topic: preschoolers.

After all, sharing is one of the main things they learn. And these were not just any preschoolers but preschoolers in Silicon Valley — at the Oshman Family JCC preschool in Palo Alto, to be exact — so they should have a particularly fine appreciation of the more contemporary, app-driven nuances of the word.

“Sharing is a really big part of their curriculum,” one of the teachers assured me.

Notebook in hand, I confronted the chubby-cheeked Silicon Valley scions, my somewhat unfocused focus group. (Disclosure: My nephew attends this preschool. Rest assured, though, I interrogated his classmates with the same merciless objectivity as I would any other group of 3- to 5-year-olds.)

“What is sharing?” I asked, watching their expressions carefully.

“It’s giving people a turn,” offered a pint-size brunette. “It’s giving stuff to people,” said a fidgety little boy.

Okay, easy enough. That, of course, was the softball question. I asked a tougher follow-up: “Let’s say you want to play with my toy, and I say, ‘Only if you give me a cookie.’ Is that sharing?”

“No!” the kids cried unanimously.

“What is it?” I asked.

“That’s being mean!” said one girl. “Don’t be mean.”

I told her I wasn’t sure she had it completely right; offering a toy in exchange for a cookie-based currency isn’t necessarily mean. She then agreed it was more like a trade but was still pretty insistent that it wasn’t sharing, nor was any other transaction where I got paid for giving something away.

At its most benign, calling things “sharing” that are actually no different from traditional commerce is just empty marketing. It might also crowd out other activities that used to be done for altruistic purposes (like donating your old clothes to Goodwill rather than selling them on the Internet, or offering a friend a ride to the airport instead of charging for the service).

But more perniciously, this semantic sleight of hand has been used to justify tax evasion and other kinds of law-skirting. Of course you shouldn’t have to pay hotel taxes if you’re just “sharing” your home! And of course you shouldn’t have to submit to health-department restaurant inspections if you’re just “sharing” your kitchen with paying customers every night! Or get a taxi medallion or commercial insurance if you’re just “sharing” your car!

There’s nothing inherently unethical about monetizing skills or capital that are otherwise lying fallow, and no doubt many of these new “sharing economy” platforms are helping some 99-percenters make money in flexible, rewarding, creative ways. But to call these activities “sharing” is an insult to the intelligence of existing businesses, regulators and 5-year-olds everywhere.

Posted by: Jesse Richardson | May 22, 2014 6:19:30 AM