The Dark Side of
the Sharing Economy …
and How to Lighten It
Improving the sharing economy will require addressing myriad problems.
ists do not always respect the sensibil-ities of long-term residents. Conflicts
over tenement buildings helped motivate the first U.S. zoning laws5 that
sharing now circumvents. In addition, short-term rentals create shortages of affordable long-term housing
when nightly rates exceed monthly
rentals. Passing that tipping point
can hurt individuals at lower income
levels11 even as it boosts income for
homeowners. It takes time to balance conflicting needs, but sharing is
No Soup for You. In a famous episode of “Seinfeld,” one of the lead
characters was denied soup by a renowned but humorous cook.a
Sharing biases online is as natural as
sharing cars and couches. But when
a See the No Soup for You episode summary:
BECAUSE WE LOVE the shar- ing economy we want to im- prove it. But most pundits are telling only half the tale: Naysayers are too bombastic and boosters too unrealistic. Improving the sharing economy means
dealing realistically with its dark side.
To assure sharing will grow up, we
need to avoid market and regulatory
failures that allow parts of the market
to gain unfair advantage over others.
Regulatory arbitrage is not the right
answer. Instead, sharing must ultimately create real consumer value.
It is not too early to begin. Shar-
The Sharing Economy’s Dark Side
ing is quickly spreading. People al-
ready have access to rooms (AirBnB,
Roomorama), tools (SnapGoods)
cars and bikes (RelayRides, Wheelz),
and ad hoc taxi services (Uber, Lyft).
These two-sided platforms offer many
advantages by unlocking the value
inherent in sharing spare resources
with people who want them.
4 The size
of the sharing economy is estimated
at $26 billion.
1, 16 Internet mediaries
now match demand and supply in
real time on a global scale. The poten-
tial macroeconomic gains are colos-
sal, but problems abound.
The Hotel Zone. Transients and tour-
It takes time to
needs, but sharing
is growing quickly.