Showcase your ideas on public policy and the role of markets by entering our essay competition. $9,000 in cash prizes will be awarded with $3,000 of this is designated just for high school students! Winning essays may be published in Fraser Institute journals and authors will have the opportunity to experience the peer review process.
2017 Topic: Regulating the Sharing Economy: Do the Costs Outweigh the Benefits?
The sharing economy, as defined by Christopher Koopman, Senior Research Fellow at the Mercatus Center at George Mason University, "is any marketplace that brings together distributed networks of individuals to share or exchange otherwise underutilized assets. It encompasses all manner of goods and services shared or exchanged for both monetary and nonmonetary benefit."
The sharing economy has fundamentally changed the way people think about traditional ways of transportation and vacation stays. In 2014, it was recorded that AirBnb hosted more guests on an annual basis than the infamous Hilton Worldwide chain. In New York alone, "between 2012-2013, over 400,000 Airbnb guests visited New York City generating over $632 million in economic activity in the city." Similarly, by 2015, only a few short years after its inception, Uber was active in over 250 cities worldwide and had completed over 1 billion rides - fundamentally changing the taxi industry as we know it.
Although synonymous with Uber and Airbnb, the sharing economy continues to break boundaries and drastically shape different industries in ways regulators and policy makers never could have imagined. Such disruption has forced regulators around the world to conceptualize ways to integrate consumer protection regulations into the sharing economy. However, as noted by Koopman et al., "the key contribution of the sharing economy is that it has overcome market imperfections without recourse to traditional forms of regulation."
QUESTIONS TO CONSIDER: Should industries participating within the sharing economy be held to the same regulatory standards as their traditional counterparts (i.e. Should Uber and its drivers be regulated the same as the Taxi company and subsequently its drivers in your city?) With a fundamental market change in how consumers wish to conduct business (i.e. shift to peer-to-peer services) can these traditional regulations really apply? Would such regulations improve the general well-being of our communities?