The Myth of the Sharing Economy and Its Implications for Regulating Innovation
If you walk through the sundrenched spaces of the world headquarters of Airbnb, the online accommodation platform, you will notice that there are no private offices, not even for the CEO. Instead, the 72,000 square foot building is filled with collaboration spaces, many of which are literal translations of Airbnb listings around the world. If you look closely, you will stumble upon an unremarkable space, which is an exact replica of Joe Gebbia and Brian Chesky's apartment circa 2007. It was there that the two blew up air mattresses for the first time and allowed people to pay a small fee to sleep on their floor. It was there that they monetized their excess capacity, made rent, and birthed a thirteen billion dollar company. A deflated air mattress rests in the corner of the facsimile birthplace. It represents the inspirational story of Airbnb, where "regular, local people [can] make a little extra money by sharing their homes with respectful guests from around the world." Yet the symbolism fails to represent what the company has become. Only approximately 1% of Airbnb revenues come from sharing rooms like Gebbia and Chesky. By contrast, more than half of its revenues come from individuals with multiple Airbnb listings. Airbnb provides a communication platform that enables a cadre of new hoteliers to access customers. But, instead of utilizing excess capacity, these "hosts" are snatching up desired spaces solely for the purpose of listing them on the site. And in many places, these hosts benefit from loose or absent regulations governing their activities. The consequences of which are not only changing the makeup of neighborhoods and disrupting existing industries; they are helping Airbnb become a powerful influencer in Silicon Valley, state legislatures, city councils, and beyond.Airbnb is not the only unicorn that has emerged from the Sharing Economy space using inspiring rhetoric to subvert regulation. Uber, Lyft, BlaBla Car, and Lending Club have all seen incredible valuations under the assumption that they allow ordinary people to benefit from the exchange of excess capacity. How these companies have accomplished this regulatory arbitrage is something worth understanding, particularly as regulators prepare to address the market failures of future technologies. This Article demonstrates how Airbnb and others like it rely on the myth of the Sharing Economy to drive regulatory agendas. It argues that they use rhetoric to avoid or minimize regulation in the start up stage, some grow strong and powerful, and when it is time for regulation they push hard (and often succeed) to write the rules that govern them. The aim of this Article is less to propose concrete regulatory reforms for the Sharing Economy and more to explore the intersection between narrative, innovation, and regulation. As new technologies transform and disrupt existing paradigms, it is important to question the difference between rhetoric and reality in order to effectively achieve the desired ends of regulation. Part I examines the narrative Sharing Economy companies use to explain their business activities and demonstrates how the mismatch between narrative and fact has allowed these companies to avoid regulatory oversight. This initial lack of regulation, discussed in Part II, has given a handful of these companies the time and space to grow into behemoths that in turn influence the regulatory process through intense lobbying. The paper concludes by identifying specific lessons regulators can learn from the Sharing Economy in order to effectively regulate future innovations.