Hunton Retail Law Resource

On November 17, 2016, the Federal Trade Commission released a staff report assessing the issues confronting consumers and regulators stemming from the rise of peer-to-peer platforms such as Uber and Airbnb. The report, The ‘Sharing’ Economy: Issues Facing Platforms, Participants, and Regulators, describes how the Internet has allowed sellers and consumers to connect in order to provide services between individuals. For example, apps such as Uber and Lyft allow passengers to bypass traditional taxi services in favor of matching with an individual drivers. These services have had major disruptive effects on traditional industries.

The report details several “trust mechanisms,” such as rating systems and money-back guarantees, that produce some level of accountability to consumers. However, the report also explores concerns expressed by regulators that these apps allow new participants to evade industry regulations designed to protect consumers and promote safety.

The report was borne out of a June 2015 FTC public workshop and the 2,000+ related public comments the FTC received. Panelists at the workshop offered differing views as to whether additional regulation of the sharing economy was necessary, and the extent to which they should be regulated. The report reflects the view that the sharing economy presents a variety of complex issues, and that any regulation must be carefully tailored so as not to needlessly hinder competition.