The Myth of the Sharing Economy and Its Implications for Regulating Innovation

A deflated air mattress rests in the corner of Airbnb's world headquarters. It symbolizes how Airbnb allows regular, local people to earn extra income by renting out space in their homes. Yet, this symbolism fails to represent what the company has become—a unicorn receiving much of its revenue from professionals with full-time listings. The poorly folded wad of plastic exemplifies the Myth of the Sharing Economy, which has been consistently used to subvert regulation.The Myth convinces people that the sharing economy is comprised of self-regulating Platforms, which allow microentrepreneurs to utilize their excess capacity in an altruistic manner. However, the sharing economy is actually comprised of companies driven as much by market forces and failures as any taxicab company or hotel chain. The Myth possesses an appeal that is simple and seductive. It takes the familiar idea of sharing to make the claim that Platforms are unique and should be subject to new and different regulation or no regulation at all. This Myth not only harms Platform users, the environment, and the culture and diversity of communities, but it has enabled sharing economy Platforms to become powerful influencers in Silicon Valley, state legislatures, and beyond. While much has been written regarding the benefits of the sharing economy and how to regulate it, and disruptive innovations more broadly, this Article is the first to critique the sharing economy by exploring the intersection between narrative and regulation. It also distills lessons for regulating future innovations and demonstrates the importance of questioning the difference between rhetoric and reality to achieve public policy goals