These days, the sharing economy is all around us. One person might use her smartphone to get an Uber ride to a dinner arranged through Feastly. Another might hire a Taskrabbit to clean up his garden for spring and order custom pots for his flowers from a seller on Etsy. But do these new services come with risks to competition and consumers? And how should regulations governing traditional suppliers be tailored to apply to them? The FTC will take a look at some of the economic, competition, and consumer protection issues these novel platforms present when it hosts a June 9 workshop on the subject. Today, we posted a workshop agenda, revealing a terrific lineup of speakers and panelists, including economists, industry representatives and academics. We also invite members of the public to submit comments expressing their views.
Is it wrong to call it the “sharing economy”? Many think so, because transactions in this space typically involve an exchange of money for a good or service and don’t involve sharing in the way kids share toys in the sandbox. But in many sharing economy sectors, suppliers essentially share access to an asset such as spare rooms or idle automobiles, improving the utilization of the assets (for a price of course).
What’s so interesting about the sharing economy? Among other things, sharing economy platforms use technology to establish online marketplaces that allow buyers and sellers to transact with each other. In fact, while some platforms are big companies, sellers using the platform generally are small firms or individuals who otherwise might not be able to reach a large pool of potential buyers. Introducing these new sources of supply can benefit competition, but small suppliers can face challenges in meeting decades-old regulations designed for traditional suppliers. Buyers also need some assurance that they can trust the person from whom they are renting a room, with whom they are taking a ride, or whom they are asking to hang a picture in their living room.
Indeed, an important policy challenge posed by the sharing economy is how—or whether—to apply existing regulations to new suppliers. Applying decades-old regulations designed for existing suppliers may inhibit innovation and block new entrants from competing, but some regulation may be needed to protect consumers and to promote public interest goals. Traditional suppliers may also be disadvantaged if new suppliers competing with them are not required to comply with legitimate regulatory mandates. Commission staff addressed some of these issues in a prior blogpost regarding regulation of ridesharing services and in several related advocacies addressed to regulators in various jurisdictions. But tune in June 9th, when the FTC will spend the day hearing from thought leaders about some of these important issues. We are looking forward to learning more from workshop participants and from your comments.