The Business Times

The 'sharing economy' versus the regulators

US startups seen thriving in grey areas of tax, rules

Published Sun, Jan 5, 2014 · 10:00 PM
Share this article.

SELFISH behaviour will propel America's sharing economy. New match-making business models are thriving in large part by forging into grey areas of tax and regulation. As a result, fast-growing start-ups, such as Uber, Airbnb and Lending Club, face growing scrutiny from authorities. Like Amazon before them, though, self-interest should inspire some canny manoeuvring from these socialism-peddling capitalists.

Financially hard times and mobile technology enabled peer-to-peer options to proliferate. Citywide bicycle-sharing schemes in New York, London and beyond, along with operations such as communal Zipcar auto rentals, helped shift attitudes about ownership. Consumers are turning their homes into hotels, swapping clothes and meals with strangers, kennelling dogs, and making their cars available for hire. Often, there's even extra cash to earn.

Such businesses generally can't operate without breaking rules, however, even if some of the regulations are antiquated or simply designed to entrench incumbent operators. For example, Hailo, an app for hailing London's black cabs, charges a minimum rate in defiance of transport guidelines. Food sharers such as Mealku may run afoul of health standards. Many state regulators in the US have yet to sign off fully on institutions that directly match borrowers and lenders. Insurance-related questions remain open for ride-sharing options such as RelayRides.

BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to

New Articles


Get the latest coverage and full access to all BT premium content.


Browse corporate subscription here