The sharing solution

Mosul-swimmingLet us suppose that you drive your daughter to swim practice every week. Let us also suppose that it makes sense for you to offer a lift to her friends. The friends’ parents offer you gas money, which you gratefully accept. After a while it seems sensible to acknowledge there is also wear and tear on your car and your time to consider, so they throw in a few extra dollars: it is easier than splitting the driving with you. What if your daughter gives up swimming or goes to away to college but you carry on driving her friends in exchange for money from their parents. When, exactly, did you become a professional taxi driver? When will the state government be demanding that you are insured as a taxi company, or, if you live in New York City, be demanding that you have an expensive “medallion”.

While it is common sense that giving your daughter and her friends a lift to swim practice is not the same as running a taxi business, the exact point when you cross the line might be vague.

Traditionally, we have defined such things by the exchange of money – even gas money can be problematic. If you invite friends round for dinner you are cooking in a domestic kitchen, but the moment someone pays you for the food you are running a restaurant. 

Yet there are websites which enable you to sign up for “dinner parties” held at people’s homes with people you don’t know and for which you pay. There are others to encourage car-sharing among commuters and those that let you earn money by renting out a spare room now that that daughter has gone away to college. Connections which were hard to make when we relied on Craigslist are suddenly easier. 

The exchange of money as a defining point made sense not because it is relevant in itself, but because it broadly correlated with two other factors: scale and expectations. Regulations which would be burdensome to someone hosting monthly dinner parties for eight are manageable at a 50-seat restaurant that serves customers for breakfast, lunch and dinner. If you drive around all day and have 30 paying customers in your taxi your business is on a different scale to someone who gives one person a lift to and from work each day.

You also expect a restaurant to be subject to health inspections. You don’t expect that of a domestic kitchen, even if you paid for your meal. 

The digital, sharing, economy, has decoupled payment from both scale and expectations. So why should payment be the starting point for regulation? 

Some regulations expressly exclude small businesses. Perhaps the solution is a dual-key approach: regulations kick in if the service is paid for and the ‘business’ meets some hurdle of scale. It would be a shame to clamp down on this sharing economy – especially as major cities often incentivize car-sharing as a solution to congestion. 

Some regulations should simply be repealed: New York has no reason to limit the number of taxi-drivers and the quality control scheme in London – drivers take a three year course to learn London’s streets – seems unnecessary in the days of satellite navigation. There will be a need for some regulation, but it should not strangle the sharing economy.

qlQuentin Langley is a Senior Lecturer in Marketing at the University of Bedfordshire Business School as well as a freelance columnist published in the UK and all parts of the US. He blogs on social media and crisis communications at

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