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Daniel E. Rauch & David Schleicher, Like Uber, but for Local Government Law: The Future of Local Regulation of the Sharing Economy, 76 Ohio St. L. J. 901 (2015).

Abstract: In the past five years, sharing economy firms like Uber, Zipcar, Airbnb and TaskRabbit have generated both huge market valuations and fierce regulatory contests in America's cities. Incumbent firms in the taxi, hotel, and other industries, as well as consumer protection, labor, and neighborhood activists, have pushed for regulations stifling or banning new sharing economy entrants. Sharing firms have fought back, using their popularity with consumers and novel political strategies, lobbying for freedom to operate as broadly as possible without government interference. But to date, both participants and observers of these "sharing wars" have relied on an unstated assumption: if the sharing firms win these fights, their future will be largely free from government regulation. Local governments will either shut sharing down, or they will leave it alone. But this assumption is almost surely wrong. If sharing firms prevail in the current fights over the right to operate (and indications suggest they will), it is unlikely that cities and states will ignore them. Instead, as sharing economy firms move from being upstarts to important and permanent players in key urban industries like transportation, hospitality, and dining, local and state governments are likely to adopt the type of mixed regulatory strategies they apply to types of firms with whom sharing firms share important traits, from property developers to incumbent taxi operators. Using tools of agglomeration economics and public choice, this Article sketches the future of such policy regimes. Specifically, local and state governments will adopt some combination of the following policies in addition to insisting on consumer/incumbent protections: (1) subsidizing sharing firms to encourage expansion of services that produce public goods, generate substantial consumer surplus, and/or minimize the need for excessive regulation of the property market; (2) harnessing sharing firms as a tool for economic redistribution; and/or (3) contracting with sharing firms to provide traditional government services. The future of sharing economy regulation will be very different from its present, and these changes will pose profound legal, political, and ethical questions for our cities.