The big challenge for P2P marketplaces: regulation

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The big challenge for P2P marketplaces: regulation

The big challenge for P2P marketplaces: regulationThe big challenge for P2P marketplaces: regulation

There’s been a lot of excitement recently around the emerging sharing economy and collaborative consumption business models. Despite all the enthusiasm, regulatory challenges could dampen the outlook of many disruptive, peer-to-peer (p2p) business models.

As we have written about previously, the sharing economy has brought forth many innovative business models that enable individuals to save and earn money, reconnect with their local communities and shift to more sustainable and environmentally conscious lifestyles.

The innovative, untried nature of these emerging online business models also puts them in a head-on collision course with regulators. While many of these disruptive business ideas are shaking up established industries, like hospitality or urban transportation, in a good way, the regulatory framework they require is still missing.

Arun Sundararajan, professor at New York University Stern School of Business, recently gave an interesting interview with TechCrunch about how to regulate the sharing economy without blocking further innovation.

Its not surprising, when there is something new and innovative, for there to be regulatory challenges around safety,

he told TechCrunch.

Especially p2p marketplaces are faced with these issues, since they enable private individuals to undergo business-like transactions such as renting out their space, car or offering their labor. An increasing number of such transactions has begun to cross the line from being recreational or making a few extra dollars to becoming a significant source of income. This makes these activities commercial and, as Shareable Magazine has pointed out, puts many platforms in a legal grey area.

Here are some of the most pressing ongoing regulatory issues related to p2p business models:

Taxis Challenge Ridesharing
One of the most prominent regulatory issues of the past months has been taking place in on-demand ridesharing in California. The two San Francisco startups SideCar and Lyft enable people driving through the city to give others a ride by connecting through a smartphone app. Since these services’ drivers do not have certified taxi licenses (but do undergo extensive screening), California regulators sent them cease-and-desist letters, leading to an uproar in the California ridesharing community.

In 2010 Uber, a high-end on demand ridesharing service, was also in hot water for competing with regular taxis. The Taxi and Limousine Commission of New York (TLC), the only taxi provider in the city, refused to grant the company the right to operate in the municipality.

Do short term apartment rentals violate rental laws?
P2p vacation rentals — marketplaces that let people rent out their living space for short periods of time to travelers–are increasingly being challenged by city authorities. Many local laws in urban areas prohibit short-term rentals for under 30 days. Nor is the hotel industry exactly thrilled about its new competitors, who are neither regulated nor pay hotel taxes.

Just a few weeks ago, the New York Times reported that many Airbnb hosts in New York are breaking the law (unknowingly) and could be subject to five figure fines or eviction. This has unleashed debates on who is responsible for informing hosts on their local laws and who is accountable in the rare case that something does happen. Since these limitations are not stopping the p2p rental market from continuing to grow at a rapid pace, solutions to these legal challenges are needed soon.

Insurance and p2p carsharing
Even though the actual risk of being dropped by your insurance company when renting out your car on p2p platforms like Getaround, Autonetzer or Voiturelibis very low, it is worth mentioning that insurance is another important area in which the majority of marketplaces still lack a regulatory framework.

In his interview with TechCrunch, which you can watch below, Arun Sundararajan, emphasized that now is a good time to take a step back and look at what the role of regulators should be in the sharing economy. In an industry this new, there is still a lot of work to be done. But if marketplaces work together to raise awareness among regulators, it should only be a matter of time for these challenges to be overcome.

In 2013, we’ll be looking more closely at legal challenges and insurance issues for p2p marketplaces.

Source: Trustcloud

Twitter WordPress SEO HostingLinkedIn WordPress SEO HostingFacebook WordPress SEO HostingRSS Feed WordPress SEO Hosting Berrie Pelser, Ber|Art Visual Design:

Ber|Art Visual Design V.O.F. delivers high-end secure (PCI-Compliant) WordPress, Typo3 and Magento Linux Cloud VPS Hosting with professional Search Engine Optimization (SEO) plus Social Media (Social Network) integration, branding and strategy.


Door | 2016-11-01T18:07:13+00:00 14 december 2012|Categorieën: cloud computing, security, social media, social networks|Tags: , , , |

17 Reacties

  1. Florinel Nicolai Deciu 14 december 2012 om 07:50

    The post is great, world is reshaping and sharing economy will grow anyway because is a healthy one :).

  2. Amanda 14 december 2012 om 08:57

    great points here Berrie

  3. Claudiu Clau 14 december 2012 om 08:11

    social media discovery will be important via mobile apps /web apps.

  4. ????? ???????? 14 december 2012 om 08:37

    ?????????? ??????????. Interesting information.

  5. Stephanie 14 december 2012 om 09:37

    Very nice

  6. Dean M Waters 14 december 2012 om 08:39

    Regulation is always a problem, However people adjust, Excellent Article.

  7. Tom Laing 14 december 2012 om 08:45

    It's time that regulators faced up to the challenges posed by living in a time of diminishing resources and fostered and supported collaboration and sharing. There again I have always been naive and optimistic even when confronting control and economy of scale adversaries.

  8. George Jelinek-Lloyd 14 december 2012 om 09:21

    Trust is not a formula…. sorry!

  9. EA Leaders 14 december 2012 om 09:21

    Awesome Berrie you always trendy and good question. 🙂
    " New big challenge for P2P Marketplaces in 2013 year." Thank you Berrie.

    • Francesca Pick 15 december 2012 om 09:10

      Thanks that you like my article:-). I will be watching this field very closely and think it will be very interesting to see how many of the descirbed issues pan out next year.

  10. Bang Gowes 14 december 2012 om 09:34

    Great content, thanks Berrie!

    • Francesca Pick 15 december 2012 om 09:08

      Glad you like my article!

  11. Simon Hamer 14 december 2012 om 09:40

    Another good food for thought post, thanks Berrie.

  12. Ben Heys 14 december 2012 om 10:47

    thanks for the share, a good read!

  13. Sathish Isaac 14 december 2012 om 12:32

    very informative post!

  14. bewitched in salem 14 december 2012 om 14:56

    This is the first I’ve heard of the regulatory aspects. Thank you for the article Berrie.

  15. Aymeric 20 augustus 2013 om 19:01

    Hi, just to let you know that Voiturelib (named above) changed it’s name (now Drivy). New website url : Could you please change it on the article ? Thanks a lot !

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