I was watching a lecture on the Sharing Economy by Michael Munger, and someone asked a great question at the end.

They wanted to know if this trend of companies like Airbnb, Uber, and Zipcar was going to create more big companies or help grow small businesses.

The speaker’s answer was that there is a distinction between big companies and valuable companies. Many businesses in the Sharing Economy space have a very high valuation but few actual employees. Some, like Uber, Lyft, and Instacart, hire thousands of contractors, which helps them to scale and spread quickly.

Because of this trend, the speaker argues that we may see traditional employment disappear, as he says —

“Productivity destroys employment…So what we may have to rethink is our commitment to a successful economy producing jobs, and thinking instead that a successful economy produces satisfaction. Jobs are a means to an end. And so, for a lot of young people, I think that the idea that you could work 20 hours a week and still have a satisfactory life sounds pretty good.”

But one point of concern is that these companies could be taking advantage of independent contractors. Those involved in the Sharing Economy may have to depend on inconsistent hours, unreliable income, a lack of insurance, and other factors that workers in traditional jobs wouldn't have to worry about.

How can the government and the Sharing Economy work together in a way that is fair and beneficial to both the average worker and the average consumer?

We’re in the midst of rapidly transforming times, and regulation is struggling to keep up with the pace. Hopefully we can find a diplomatic way to navigate through this uncharted territory.