Regulation

Sharing Arrangements Get Snared in Rigid Regulations

Flexibility isn't a government thing

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The rise of the sharing economy has been chronicled in books and magazine stories. It's brought half-billion-dollar exits (Zipcar to Avis), and billion-dollar valuations with IPO rumors for some of its darlings (Airbnb, Etsy). It's spawned startups dedicated to exploiting excess capacity in areas as diverse as children's clothing (Thredup), errands (TaskRabbit), transportation (Lyft, RelayRides), even home-cooked meals.

It's also occasioned a lot of rhapsodizing about the collaborative creation of a more sustainable, productive, close-knit, and abundant future. Sharing just feels good, too, which is the most important reason people do it.

But as the sharing economy reaches a critical mass, some observers are starting to see a potential shadow side emerging. The informal, good-vibes nature of the participatory economy can run afoul of regulations designed to ensure safety and fairness, both for those who provide goods and services and those who use them. In New York City, an Airbnb host was fined $2,400 for violating city hotel laws, and ride-hailing apps Uber and Hailo have faced injunctions by cab drivers for unfair competition in several cities, raising the question of just who benefits from sharing—and who doesn't.