Founders and investors alike are often rewarded for betting on “disruptive” technologies, which in some cases means pushing legal boundaries. Sometimes, early stage companies hoping to mimic the success of companies like Uber and Airbnb brush issues aside related to employment law, municipal regulations or tort liability at their own peril.
Several notable “sharing economy” companies have recently reached multi-billion dollar valuations, causing them to become bleeding-edge targets for serious law suits and regulatory efforts. As the sharing economy develops, novel and far-reaching liabilities mushroom around these now deep-pocketed companies.
The below list of recent headlines highlights a few of the legal issues facing some of the world’s leaders in the sharing economy which have grown to global scale along with their companies.
House Sharing (Airbnb;KidandCoe)
- Property damage caused by guests, which sparked Airbnb’s Host Guarantee.
- Calls for new legislation in San Francisco restricting house sharing; residents claims that Airbnb creates an economic incentive for landlords to take units off the market in order to rent them out full-time to tourists on home-sharing platforms, cannibalizing much-needed housing stock.
Ride and Other Service Sharing (Uber; Lyft; Handy):
- Actions against Uber/Lyft (which may soon rise to class action lawsuits) and Handy, arguing that their drivers and cleaners should be classified as employees.
- Lawsuits claiming that driving apps are distracting and causing accidents.
But for all of the new liabilities being created, these companies are also proving value beyond saving users time and money, perhaps saving lives and encouraging legal behavior. Recently, on a trip to the airport, my Uber driver shared that he’s seen a notable decrease in the number of DUIs and inebriated drivers on the road in the last year as Uber use has surged.