Policy Studies Regulatory Reform

Embracing the peer-production economy

(The attached paper, co-authored by R Street Executive Director Andrew Moylan, appear in the Fall 2014 edition of National Affairs.)

Enthusiasts of the growing “peer-production” or “sharing” economy are convinced that the new decentralized, technology-based approach to connecting consumers and providers of services is going to revolutionize commerce and transform modern life. The true promise of this emerging sector  —  which has taken the form of ride-sharing apps like Uber, space-sharing platforms like Airbnb, work-sharing businesses like TaskRabbit, and a host of other emerging digital services — remains to be seen. But it is already becoming apparent that the sharing economy could have some significant political implications.

The key political questions are to what extent peer-production services should be regulated and how. These are particularly challenging questions for the left. Taking an accommodating, hands-off approach to such regulation would appeal to the educated, young, urban consumers of such services who tend to be liberals, but it would run the risk of alienating core liberal constituencies like unions, trade guilds, and trial lawyers — not to mention undercutting the default progressive faith in the wisdom of the regulatory state. For the right, there is more opportunity than risk, but making the most of it would require finding a way to shape a free-market message that would appeal to the largely young, wealthy city-dwellers who use sharing services and for whom the broader conservative agenda is largely anathema.

Managing the peer-production economy in a prudent fashion and standing up for its interests has the potential to pay huge political dividends for the party that does it best, but it will not be easy. To see why will require a grasp of how the peer-production economy evolved, why it is important (and how it has been oversold), and the challenges that our legal and regulatory systems present to its future growth.

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