The ‘Share Economy’ Is Actually Shaded In Grey

January 24, 2013 4:10 am

Forbes has an article today praising the wonders brought about by what has come to be known as the ‘Share Economy’ – ‘Airbnb And The Unstoppable Rise Of The Share Economy’. While the article revolves around the AirBnB story, it tries to drive home a bigger point – that the ‘Share Economy’ is here to stay. One word in the title says it all: ‘Unstoppable’.

The regulatory issues around such sharing are now well known. Lease agreements might make an AirBnB rental outright illegal, as many New Yorkers found out the hard way. The same is true for people sharing cars – there are many licensing issues there as well (count out Zipcar, we are talking about individuals renting out stuff they own). Homes and Cars are the real big ones – which is precisely why there are so many rules that govern them. Not so many rules for a camera lens obviously.

The issue with the Share Economy is this: when applied to homes and cars, there are just too many serious grey areas. Allowing someone to use that spare bedroom in your house is more complicated than we think. There is a reason why AirBnB did not exist until the economy went into a depression – there are just so many grey areas, the risks outweighed the returns for the homeowner. If you think about it, when you give someone a lift in your car, you are really getting into a ‘soft agreement’ with that person. There are a lot of grey areas here – what happens if .. and who is responsible if … that is the reason why cab drivers need a license. Same holds for a scenario when you allow someone to rent your car for a couple of hours. In fact, the same is true for ‘AirBnB of xxxx’.

If you make a list starting with AirBnB at the top and then follow it up with AirBnB for Cars, AirBnB for Pets, AirBnB for Cameras etc, and arrange them in the order of risk – AirBnB would come out on top, and the Cars one will come next etc. Ideally, AirBnB for camera lenses would have been picked up first given the risk return equation, and then the world would have moved slowly from the bottom to the top in that list. But 2008 came along, people wanted that extra cash quick, and they picked up the one on top of that list: homes. Then came cars. Then ..

Both from a regulatory standpoint and personal risk standpoint, the list of things you own that you can share, is full of grey areas. You can try to polish it up, call it unstoppable, and even make billions from it – but the undeniable fact is this: The ‘Share Economy’ is actually shaded in grey.

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2 Comments for “The ‘Share Economy’ Is Actually Shaded In Grey”

  1. frank

    You love the expression “grey areas” dont you ? You used it 5 times in a single article. AirBNB is a great thing. I really believe people just need to make some money out of their properties considering how much the crisis is impacting hard the families and their balances. Government should just step back on it and dedicate their efforts to something really important.

  2. Gerry

    Because before the current economic blip, nobody ever rented rooms in their houses, right?

    IMO cars are a good deal more risky anyway in terms of the probability of expensive disputes.

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