The emergence of a new phenomenon widely referred to as the sharing economy has experienced rapid growth over the past few years along with the digital evolution, allowing people to share and optimize underused personal assets on a much larger scale. The fast-paced growth of the sharing economy has taken root worldwide in both the developed and developing countries. In recent years, the sharing economy has disrupted traditional markets and generated difficult legal questions and political debates in various parts of the world. The growth of the sharing economy has led to growing pains for the platforms, participants, and regulators. The problems include legal disputes, taxation, and trust mechanisms. Despite these disputes, however, the three countries have legalized or attempted to authorize the sharing economy in different tactics while trying not to disrupt innovation associated with the sharing economy.
The objective of this paper is to identify better policy options in the sharing economy for Korea by examining different countries’ policy implications. To achieve this purpose, the structure of this paper is divided into five chapters. The first chapter of the paper develops a conceptual framework that supports to define and explain the sharing economy. The next three chapters touch upon different conflicts and policy implications of the sharing economy across the United States, Europe, and China. Finally, the paper concludes with a discussion of policy implications of the sharing economy for Korea.
The cases of the US, Europe, and China are three examples of various levels of the sharing economy. The following are the speculated policy characteristics of the sharing economy across three different countries proposed based on the scope of this study. The sharing economy in the United States can be said to be found on the principal driven by the market-based approach. On the contrary, most European countries are subject to more restrictive rules to ensure adequate legal and social protection for all including traditional players. In the case of China, the regulation of the sharing economy is more strongly orientated towards measures for social challenges and economic benefits. The ambiguity or lack of regulations for accommodation sharing are prevalent across all three countries. Large cities in both the US and Europe have begun implementing regulations on accommodation sharing or have launched investigations with the aim of bringing the sharing economy into compliance with existing laws. On the other hand, China is in the early stage of regulation development.
The regulation of ridesharing varies widely across three countries comparable to short-term rentals. The United States focuses on creating a fair competitive environment by allowing platforms to enter but at the same time supporting the taxi industries instead of banning ridesharing platforms. Some countries in Europe are outlawing ridesharing platforms to protect the traditional market or making platforms to comply with the similar standards as the traditional market. China has legitimized ‘online car reservation service’ as a part of taxi services, and has improved related regulations such as pre-permission for the platform and driver, and requirements for strengthening responsibility.
A careful and detailed analysis of country-level experiences lead to the following policy implications. First, the introduction of regulation needs to be done as carefully as possible, and more flexible regulatory frameworks are needed to respond to changing market conditions. Second, it is necessary to promptly establish the legal basis for accommodation sharing by strengthening the role of the platform to deal with conflicts such as taxation and disputes generated by the sharing economy. Lastly, in the case of ridesharing, it is advisable for regulatory authorities in Korea to first deregulate much of the current restriction and lower barriers to entry rather than raising them. In the long run, however, it is recommended for the market to ensure a quality environment for all participants to compete fairly.