Three Ways the Sharing Economy is Pushing the Boundaries of the Law

Many of the laws on which our economy is built and by which it is bound are decades, if not centuries old, and were created when the major function of the law was to defend individual capitalistic freedoms. As a result, it becomes more difficult to completely embrace this new wave of the sharing economy (also known as the “grassroots economy” or the “new economy” in certain circles).

This new concept, which is built on collaboration, the sharing of goods and ideas, and the building on or riffing off of existing assets, soon becomes complicated, and the law is compelled to adjust. And it’s beginning to register with the general public…

The demands for change are being made by organisations such as Spur (a member-supported non-profit), which isn’t merely waving a white flag at a distant sky. According to Spur, a Policy Agenda for the Sharing Economy is being developed, with the goal of developing from an open discussion about such concerns into a roadmap for updating outmoded regulations that are stifling potential company development.

However, until and until certain rules are amended, firms and entrepreneurs will continue to encounter legal barriers that may deflate or even derail whatever momentum they have built up in the process.

We’re being forced to redefine what it means to be an owner.

As an illustration, Car Sharing (a practise that has practically erupted in cities all over the world) is a great example of what I mean. From a legal viewpoint, car ownership has long been at the heart of almost every relevant statute. The owner is responsible for insuring the vehicle, demonstrating that they are legally permitted to use it, paying taxes on the vehicle, demonstrating that the vehicle is safe (via an inspection), and the list goes on.

However, how can one define ownership when a vehicle is actually shared by a number of people at once?

This creates a variety of legal stumbling blocks. For starters, many of these sharing services are forced to negotiate with insurance carriers on an individual basis because of antiquated insurance policies that were not meant to take this sort of arrangement into consideration.

The second point to mention is the problem of taxation: although the car-sharing business does not technically own the vehicle, it is nevertheless required to pay taxes on it. Then there’s the matter of parking. Depending on the city’s zoning regulations, it may be difficult for such services to offer its members with the quality of care they deserve if there is nowhere to keep vehicles while they are not in use.

It all comes down to the reality that laws were enacted to protect and control the activities of commercial organisations, whether those entities were corporations or individual citizens or businesses. It is necessary to circumvent or amend the law when the paradigm evolves, since the law creates restrictive obstacles rather than protective barriers.

Existing corporations do not have their rights protected.

However, despite the fact that it seems like a fantastic concept (and isn’t all that different from room swapping or renting, which have both been around for decades), a group of hotels believes that Airbnb’s economic model unjustly penalises them. As a consequence, they are exerting pressure on politicians to amend the laws that are in effect.

They argue that Airbnb circumvents the restrictions that prohibit hotel brands from operating in certain areas. Taking into consideration the many safety regulations, zoning requirements, tax rules, and other legal requirements that hotels must adhere to, it becomes clear that conventional hotels—but not Airbnb competitors—will bear a significant financial burden.. Individual “hoteliers” are operating at a huge financial advantage since they are bypassing all or at least most of the relevant laws—an advantage that the hotel lobby believes is unjust.

The answer to this problem is not straightforward. Government policymakers must take into consideration the reality that, in a growing number of instances, people are increasingly delivering the same sort of service that companies do. However, how can you adapt legislation established for businesses to match the needs of individuals?

Inadequate protection is provided for the general public’s safety.

Some believe that we live in a culture that puts an excessive amount of emphasis on the government’s control of our personal life. On the other hand, it is undeniably true that some government restrictions have saved millions of lives throughout the length of their respective legislative lifespans.

Consider the FDA’s restrictions, for example. These rules, which are intended to protect the United States’ food supply, track foodstuffs through every stage of the manufacturing process, from cultivation and manufacture through preparation and serving. It is possible that people will end up taking their own lives into their own hands if there is no monitoring in place.

To sum it all up, the FDA may be able to rescue you from eating tainted hot dogs from a street vendor, and it may also be able to verify that you’re eating excellent fillet mignon at a five-star French restaurant. Nevertheless, how does one govern the food service “industrie” at the macroeconomic level? What happens when the sharing economy alters our current understanding of what constitutes an industry?

One of the most age-old traditions has been revived thanks to the sharing economy: cooking for your neighbours. Individuals may bond through food via social media groups such as Shareyourmeal, Cookening, and Eat with Me. Essentially, these meals are made by neighbours and traded between them, as well as between strangers, in a manner akin to an ancient barter system.

This presents two fascinating questions: first, are such “services” taxable? Second, are such “services” taxable? And how does one see such a service when viewed through the perspective of food safety?

There are tight regulations governing public food preparation, whether it is carried out in conventional restaurants or even newer food trucks. The same goes for business companies that manufacture items in “home kitchens,” which are subject to safety inspections and may be forced to close if their facilities are not up to code. However, when someone is just preparing a meal for a neighbour, where should they draw the line?

Obviously, the FDA would not control every batch of cookies you send on to the kids next door, but it does shift the conversation: maybe the agency should inspect your kitchen if you’re exchanging food via one of the businesses listed above?

For the foreseeable future, conventional law, and by extension, legal practises, will be subject to constant revision and adaptation. America is falling behind the rest of the globe when it comes to properly embracing the new sharing economy—which, in essence, is a return to a more archaic and basic form of economics—and this is a problem.

Because of this, we may expect to witness a great deal of conflict on a personal level as well as at the municipal and state levels in the coming years. And, as the nascent sharing economy evolves, regulations must continue to extend their ever-increasing bounds in order to keep up with the changing times. Make certain that you are up to date on the latest developments and that you are protected against discriminatory laws.