The growth of the collaborative consumption market has allowed new and fascinating business models to prosper. Fuelled by the changing expectations of consumers and the shift away from ownership, businesses in the “sharing economy” are driving some of the biggest changes in how consumers think and buy.
But the industry comes with some caveats, and legal troubles are affecting how the industry continues to grow. Two announcements overnight have highlighted just how precarious early stages of this market can be – and how businesses must navigate a complicated legal field in order to succeed.
Uber has just announced all of its new drivers will need to undergo security background checks on both a federal and county level, in a new attempt to ensure they are complying with all relevant laws.
While most of Uber’s drivers are full-time employees, one of the company’s models uses contractors instead. Given this type of employment model, the business needs to take extra precautions to make sure customers are satisfied they’ll be taken care of.
Meanwhile, in New York City, a new report has warned some of the listings on home-sharing site Airbnb may actually be illegal. The state has warned the company previously due to some of the city’s rent-related laws, which restrict users from renting out entire homes or apartments – a common choice for Airbnb users.
Meanwhile, the company itself has argued its services have provided the city with an economic boost of more than $US500 million.
“Residents are using the money they earn to pay their bills, afford their rents or mortgages, and pursue their dreams.”
Both situations reflect the difficulties and risks which come with the new collaborative consumption model, one in which users are encouraged to become part-time entrepreneurs or stakeholders in a business. They serve as an example of what can be expected as this trend continues to thrive around the world.