In a country where good fences are believed to make good neighbors, sharing is surprisingly in vogue. The success of sharing economy icons such as Airbnb and Uber has generated a wave of commentary on the cultural, philosophical, and social impacts of sharing. In the legal realm, however, a disturbing dissonance exists between excitement over this seemingly new way of doing business and regulatory floundering. Is Airbnb a hotel chain, a rental agency, or a website provider? Is Uber a taxicab service employing hundreds of drivers or a developer of an app? These questions remain unanswered. Yet policy makers cannot regulate the sharing economy without answering them.
This legal dissonance is caused by the failure to recognize the sharing economy as a distinct capitalist system that requires new regulatory approaches. To date, both regulators and scholars have evaluated sharing against a Coasian norm that assumes the dominance of the traditional firm, the primacy of private ownership, and the asymmetrical leveraging of information. This approach obscures the answers to basic, but crucial, questions about how the sharing economy operates.
Using “varieties of capitalism” theory, this Article argues that the sharing economy is a nascent form of a coordinated market economy, a form that flourishes in some parts of Europe. The key task in regulating this alternative capitalist system is to understand and regulate the institutions that support it. On the basis of this theoretical insight, this Article proposes a regulatory model that prioritizes an inquiry into the institutions of the sharing economy as a means to answer the questions vexing policy makers. It also applies the model to two of the pressing problems of the sharing economy, namely concerns about worker equity and consumer safety.