Lecture on the regulation of sharing economies

PowerPoint Presentation

Regulation of Sharing EconomiesMohamad Mova AlAfghani, [email protected]

Mohamad Mova Al'Afghani, Regulation of Sharing Economies

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Todays SessionsSession 1: Sharing EconomiesSession 2:Applying Regulatory Theories


Session 1:Sharing Economies



Sharing Economy BuzzwordsSharing EconomyCollaborative EconomyOn Demand EconomyPeer to Peer EconomyCollaborative Consumptions

Mohamad Mova Al'Afghani, Regulation of Sharing Economies | MBA-ITB, 2016

CharacteristicsConsumer to Consumer (Peer to Peer)Underutilized AssetsTemporary AccessPlatform/MarketplaceTrust and Reputation


DefinitionsHow do you define sharing economy?

The peer to-peer-based activity of obtaining, giving, or sharing the access to goods and services, coordinated through community-based online services

(Albinsson & Perera, 2012; Belk, 2010; Botsman & Rogers, 2010; J Hamari, M Sjklint, A Ukkonen 2015)Mohamad Mova Al'Afghani, Regulation of Sharing Economies

Botsman, 2013Mohamad Mova Al'Afghani, Regulation of Sharing Economies




Is sharing still caring?

Original sharing economies (ride sharing, nebengers). Shared value creationNetworked Monopolies Mohamad Mova Al'Afghani, Regulation of Sharing Economies

Networked Monopoly

Derive values entirely from the network of users rather than from producing a more easily replicable product or services=Monopoly Power

Crowdsourcing Networked Monopoly(RSA)Mohamad Mova Al'Afghani, Regulation of Sharing Economies

Job redefined

Current capitalism conditioned corporations to lessen their reliance on full time workers and increase the utilisation of part time, contract workers for cost-saving reason(Grossman and Woyke)


An issue in Labor Law: Job Redefined

Source: OnForceMohamad Mova Al'Afghani, Regulation of Sharing Economies







Gig Workers on the RiseTraditional Labor Law:Authority, 2. Wage, 3. Defined Jobs

What about gig works?Mohamad Mova Al'Afghani, Regulation of Sharing Economies

How can we protect gig workers?Health InsurancePension BenefitsNo-work pays

Trust funds? Increase Standard Premiums? Special Insurance?Mohamad Mova Al'Afghani, Regulation of Sharing Economies

Rate/Commision FixingNetworked Monopoly+Gig Workers= Rate/Commission Fixing

Sounds like another exploitation huh?Mohamad Mova Al'Afghani, Regulation of Sharing Economies

Session 2: Applying Regulatory TheoriesMohamad Mova Al'Afghani, Regulation of Sharing Economies


Law=Regulation?Authoritative rules backed by the legitimate coercive power of the stateMohamad Mova Al'Afghani, Regulation of Sharing Economies

What is Regulation?(Black, 2002)The promulgation of rules by government accompanied by mechanisms for monitoring and enforcement, usually assumed to be performed through a specialist public agency. Any form of direct state intervention in the economy, whatever form that intervention might take. All mechanisms of social control or influence affecting all aspects of behaviour from whatever source, whether they are intentional or not.


Regulation: Characteristics(Hood, 2001)Standard SettingInformation GatheringBehaviour ModificationMohamad Mova Al'Afghani, Regulation of Sharing Economies

Will Conventional Regulation Works?Is Uber = Transportation Company? Is AirBNB = a hotel? (hospitality industry)Is Mint(.com) = a Bank?


Blockchain = Almost Zero Accountability

https://blockchain.info/Mohamad Mova Al'Afghani, Regulation of Sharing EconomiesSource: WEFORUM

Self Regulation

More Decentralized Platforms = High Regulatory Cost

(i.e. dont spend taxpayers money supervising them all!)Mohamad Mova Al'Afghani, Regulation of Sharing Economies

Self Regulation (collaborative regulation)

Companies as regulatorsHigher incentiveLower enforcement costLess burden to taxpayers


Self RegulationGovernment determined goals Company set standards (negotiated regulation)Company enforce standardEnforcement mechanism: rating (by consumers), disband users from network (by companies)Government sets ultimum remedium for companyGovernment benchmark


The Role of Law in Regulation

Morgan and Yeung, 2007Mohamad Mova Al'Afghani, Regulation of Sharing Economies

Service Standard in Public Transport


Service Standard in Public TransportMohamad Mova Al'Afghani, Regulation of Sharing Economies

Service Standard in Public TransportMohamad Mova Al'Afghani, Regulation of Sharing Economies





Sharing Economies: Self Regulation(Ogus, 1995)

First, since self-regulatory agencies (hereafter SRAs) can normally command a greater degree of expertise and technical knowledge of practices and innovatory possibilities within the relevant area than independent agencies, information costs for the formulation and interpretation of standards are lower. Secondly, for the same reasons, monitoring and enforcement costs are also reduced, as are the costs to practitioners of dealing with regulators, given that such interaction is likely to be fostered by mutual trust. Thirdly, to the extent that the processes of, and rules issued by, SRAs are less formalized than those of public regulatory regimes, there are savings in the costs (including those attributable to delay) of amending standards. Fourthly, the administrative costs of theregime are normally internalized in the trade or activity which is subject to regulation; in the case of independent, public agencies, they are typically borne by taxpayers.


Trust=the new regulatory tool?


Trust=the new regulatory tool?Trust = currency in the sharing economyIs it reliable (does it reflect the true value of the services?)Can it be improved (and how?)Can we harness rating system as regulatory data? (e.g. for benchmarking purpose or perhaps enforcement mechanism)Mohamad Mova Al'Afghani, Regulation of Sharing Economies

The Proposal: Self Regulation for Uber, Gojek, etcReputation system (kind of) work, can be improvedEnforcement cost (e.g. banning drivers from the system) is very lowIntrinsic interest for service standard and trust-building (e.g. Gojek provides Helmet)Reduced regulatory cost (less burden to taxpayers)Learning by doing (regulating by doing)Mohamad Mova Al'Afghani, Regulation of Sharing Economies


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Lecture on the regulation of sharing economies