Sharing economies, with their vast diversity of goods and services offered and rapidly evolving business models, have proven inconducive to traditional-regulatory approaches. Yet a complete laissez-faire approach or complete ban is not advisable. On the one hand, it is in the public interest to allow these new economies to continue to innovate, as they create value from unused assets, facilitate useful market transactions, and sometimes even lead to the creation of new goods and services to improve quality of life. On the other hand, some characteristics inherent in the design of sharing economies lead to negative externalities, disrupt city planning at the expense of third-parties, and sometimes even lead to inefficient market allocations or protections. Countering the vulnerabilities of government and industry requires co-regulation, but co-regulation itself is not a panacea. Designing a co-regulatory model that works effectively—addressing the blind spots in the market, properly identifying where to intervene or refrain, and increasing feasibility by relieving regulatory burden and building in flexibility where possible—requires careful consideration of the attributes of the sharing economy being targeted for regulation. This article identifies a framework for analyzing how to design a co-regulatory scheme that can effectively complement the inherent attributes of the sharing economies being regulated to improve effectiveness, the optimal level of protection of public interests over interest groups, and cost-effective feasibility.



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