Legal and Safety Issues in the Sharing Economy

Learn more about the legal and safety issues surrounding the sharing economy in this free lesson.

Legal and safety issues in the sharing economy

The sharing economy offers a wealth of opportunities for everyone involved, whether they are customers, hosts, or drivers. However, there are some legal and safety concerns that have yet to be resolved.

Sharing economy businesses like Airbnb and Uber operate within legal gray areas, simply because existing laws are still catching up to how these businesses work. This new economy has challenged housing laws, broken traffic regulations, and created labor disputes around the globe. Aside from legal issues, there are worries that the big companies in the sharing economy are not doing enough to ensure the safety of their customers, hosts, and drivers.

Legal issues

Before it became popular, there was little to no regulation over how the sharing economy operated. As it grew, however, lawmakers and established industries began to take notice. Hotels and taxi companies feel they are held to higher standards and pay extra taxes compared to Airbnb and Uber. This has created pressure for lawmakers to get the sharing economy under control, and governments are clamping down.

Airbnb hosts in San Francisco are now required to pay hotel taxes and follow other restrictions. Many European cities like Paris, Amsterdam, and Reykjavik now limit the number of days a property can be used as an Airbnb rental. And due to a fingerprinting requirement for ridesharing drivers in Austin, Texas, Uber and Lyft ceased operating there in May 2016.

Further legal pressure comes from ridesharing drivers, who have held labor disputes all around the world. Uber and Lyft consider their drivers to be contractors rather than employees. This distinction allows these companies to avoid labor laws that require a minimum wage and other benefits. However, this has caused drivers to protest, hoping for Uber and Lyft to provide better wages and benefits.

Safety concerns

Above all, the sharing economy is built on trust between the customer and the host or driver. Unfortunately, there are those who take advantage of this trust. Customers have been harassed, threatened, and assaulted. Drivers have had their vehicles damaged by rowdy passengers. Hosts have had their properties trashed by inconsiderate guests.

When these things happen, the company will investigate each claim. If a driver is being investigated for criminal activity, Uber and Lyft will suspend the driver’s access to the app while the investigation is underway.

In order to work for Uber or Lyft, drivers are required to go through a background check that searches their criminal and driving histories. However, critics say these checks are not thorough and can be easily thwarted. For instance, these background checks do not require fingerprints, nor do they look beyond the past seven years. Airbnb also performs background checks on its hosts but admits that its checks are limited.

Many people wonder if Airbnb and Uber are safer than conventional hotels or taxis. However, there are currently no reliable statistics showing whether the sharing economy is more or less dangerous than using a conventional taxi or staying at a hotel.

Safety tips

While sharing economy companies do their best to ensure the safety of everyone involved, unfortunate things still happen. Therefore, you will need to exercise precaution. Here are some safety tips you can follow, regardless of whether you’re hiring a driver or renting a vacation home:

The sharing economy revolves around trust, and this trust includes the belief that these services are both safe and legal. As long as these companies maintain this trust, the sharing economy will continue to thrive.