Posted by: Ray Brescia | December 17, 2019

(New) Governance and the Sharing Economy


Recently, the ride-hailing company Uber released a study that provided data on the number of murders, sexual assaults and traffic fatalities linked to Uber rides in the United States in 2018.  The New York Times summed up the result of Uber’s study as follows:

Uber said on Thursday that it had reports of 3,045 sexual assaults during its rides in the United States in 2018, with nine people murdered and 58 killed in crashes, in its first study detailing unsafe incidents on the ride-hailing platform.

The number of incidents represented a fraction — just 0.0002 percent — of Uber’s 1.3 billion rides in the United States last year, the company said.

Uber addressed the frequency of incidents in relation to the overall number of rides by saying that there are nearly 4 million rides a year in the U.S. — 46 every second — and that in “99.9%” of those rides, there were no incidents. Still, they recognize that even .1% is “unacceptable.”

This sort of transparency is a great start to reducing these incidents, as Cindy Southworth of the National Network to End Domestic Violence, who is also a member of a body that advises Uber on safety, told the New York Times:  “That a company is willing to peel back the drapes and let us look into what is happening is, to me, the success.”

But where do we go from here in terms of figuring out how to regulate Uber and other sharing economy companies, entities that sometimes try to inhabit a legal vacuum, where organizations go to great length to avoid government oversight for fear that such oversight will stifle innovation?  And how does government catch up to such entities, who seem to roll out new products and new approaches daily?  Government is historically slow moving and bureaucratic.  The sharing economy is neither of those things.

With a wonderful group of other authors, I was honored to contribute to a collection of research on law and the sharing economy: the Cambridge Handbook of the Law of the Sharing Economy, edited by Nestor Davidson, Michèle Finck, and John Infranca.  My chapter explores whether so-called “New Governance” approaches might possibly lend some insights into how to regulate the sharing economy. New Governance models can be described as follows:

Developed in response to changes in technology, economic forces, globalization, and a need to make regulatory systems more experimental, adaptive, transparent, and responsive, New Governance models promote an engaged dialogue among stakeholders: regulators, the regulated, and consumers.  They straddle the government, private, and civil society sectors in a search for optimal approaches to regulation that encourage innovation while protecting consumers.

By being transparent about the data regarding a range of violent incidents related to Uber services, the company appears to be engaging a range of critical stakeholders in a conversation about the best way to address safety in the services delivered through the platform.  Such transparency and engagement are hallmarks of New Governance approaches and may help lead to the type of outcomes that Uber hopes to achieve: i.e., 100% safe operations through its platform.

My chapter in the Cambridge Handbook explores whether New Governance models including these and other features might offer approaches for regulating the sharing economy while encouraging innovation, transparency, dialogue, consumer protection, and broad stakeholder engagement.  You can now read the chapter, entitled “Finding the Right ‘Fit’: Matching Regulations to the Shape of the Sharing Economy,” here.

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