PACIS 2022 Proceedings


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Due to the rapid evolution of platforms operating under the banner of the “sharing economy” and the unclear definitional domain of the term, it has been challenging for policymakers to adequately identify sharing platforms and shape effective and appropriate policies in the area of digitally enabled sharing. The Digital Sharing Economy (DSE) is a particular conceptualization and interpretation of the sharing economy that helps clarify its theoretical paradigm. By definition, the DSE is a resource allocation system whose theoretical domain reaches beyond traditional sharing but falls short of the formality of conventional markets (Pouri and Hilty, 2021). This has the important consequence of excluding the DSE from the formal economy. DSE sharing platforms are not designed to represent fully regulated marketplaces. The DSE is, therefore, neither a replacement for employment, be it full or part time, nor should it be viewed as an “end of employment” (Sundararajan, 2016). Rather, it seeks to enhance access through creating opportunities for resource providers – where sharing is based on price – to earn supplemental income and for resource users to earn savings in the informal setting of sharing. Recent policy pathways have been toward (partially or fully) regulating sharing marketplaces, yet a caveat is necessary. For example, the imposition of taxes on providers may reduce consumer welfare when providers factor the taxes into pricing (Narasimhan et al., 2018). Further, in order for the DSE to flourish, governments need to differentiate its regulations and policy formulations from those for conventional markets and businesses (Kim, 2019). At the core of this differentiation is the informality of the DSE. An important question that needs to be addressed in this context is the extent to which regulatory oversight is meaningful, given the non-formal nature of the DSE. A major policy concern would be, therefore, to determine the threshold beyond which sharing activities prove to be more analogous to professional employment and formal contracts. Finding this threshold is important because when it is crossed, activities need to be regulated, or categorized as formal, and could consequently be subject to taxation and other legal and social obligations. Policy formulation and implementation should take account of the fact that the DSE has its roots in the informal nature of sharing and should consider the various opportunities and risks associated with this informality.



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