Like Uber, but for Local Government Law: The Future of Local Regulation of the Sharing Economy
If sharing firms prevail in the current fights over the right to operate (and indications suggest they will), it is unlikely that cities and states will ignore them. Instead, as sharing economy firms move from being upstarts to important and permanent players in key urban industries like transportation, hospitality, and dining, local and state governments are likely to adopt the type of mixed regulatory strategies they apply to types of firms with whom sharing firms share important traits, from property developers to incumbent taxi operators. Using tools of agglomeration economics and public choice, this Article sketches the future of such policy regimes. Specifically, local and state governments will adopt some combination of the following policies in addition to insisting on consumer/incumbent protections: (1) subsidizing sharing firms to encourage expansion of services that produce public goods, generate substantial consumer surplus, and/or minimize the need for excessive regulation of the property market; (2) harnessing sharing firms as a tool for economic redistribution; and/or (3) contracting with sharing firms to provide traditional government services.