Towards the end of 2014 the UK government released a report on the sharing economy. The document, called Unlocking the Sharing Economy, looked at how government can support the growth of this burgeoning sector.
As it was authored by a fully fledged member of the sharing economy, it was perhaps unsurprisingly positive about the sector and it’s potential impact.
A recent report by George Mason University has attempted to take a slightly more balanced look. It is looking specifically at whether the regulatory environment is currently fit for purpose, and what changes, if any, need to be made in order for it to work with the sharing economy.
The paper begins on a positive note by outlining the numerous ways that the sharing economy has delivered value to the market, usually despite the absence of any regulatory support.
It outlines five core ways the industry has benefited society:
- It makes efficient use of under-utilized resources.
- It increases the number of buyers and sellers.
- It reduces transaction costs.
- It provides significant meta information, such as past reviews, for new customers.
- It services a section of the market that is often under-served
Suffice to say, the change has not been exactly turbulent free, and the rise of sharing economy platforms has prompted often bungled responses from local governments who often respond with regulations that are not fit for purpose in the new world.
The report argues that previous regulations were often born in a world where the supplier tended to know more about the market than the consumer. The web has typically made that problem redundant.
They suggest therefore that authorities need to approach this with a blank slate and look at regulations that are designed for the sharing economy rather than trying to retrofit existing ones onto it.
“The better alternative is to level the playing field by “deregulating down” to put everyone on equal footing, not by “regulating up” to achieve parity,” they say.
It’s certainly an interesting read if you work, or have an interest in, this burgeoning field. You can access the report for free here.