Last year, when Time Magazine named 10 ideas that will change the world, high on the list was an entirely new concept: ‘collaborative consumption’.
Got a spare driveway? Rent it to a driver using ParkatmyHouse. Extra space in your shed? Let it out via Open Shed. A small job that needs doing? Find someone to do it through Airtasker. Old clothes? Exchange them with Clothing Exchange.
Also termed the sharing economy, the access economy, or the peer-to-peer economy, this new economic model is based on ‘access to’ rather than ‘ownership of’ physical and human assets like time, space and skills.
The ‘sharing economy’ has mushroomed in Australia, and Melbourne in particular has seen a range of initiatives start up.
Back in 2004, Melbourne was among the first to embrace the sharing economy concept with the launch of car-sharing. These days, Melbourne boasts bike-sharing schemes, community-owned energy projects, solar leasing projects, and carpooling schemes for city commuters. Our city rooftops now grow vegetables and host beehives, and the Melbourne City Council is developing other initiatives to encourage a shared use of resources in the city.
Operating in the sharing economy brings multiple benefits: profit, community building, strengthened local economies and reduced waste. But it’s becoming clear that these sharing initiatives also pose major challenges to our legal system.
That’s because our laws are based around ownership of goods, rather than access to them. Our legal frameworks have evolved to regulate established relationships such as employer/employee, landlord/tenant, developer/homebuyer, business/investor and producer/consumer.
The sharing economy often doesn’t fit within these categories. Is a person who spends time tending to a community share garden in return for vegetables an employee? Or a volunteer protected from negligence actions? What is the extent of their contractual rights and obligations?
This has already given rise to legal tensions in the United States. In the US, services like Lyft, SideCar and Tickengo connect individual private drivers with people who are looking for a lift, reducing traffic congestion and the need to own a car. But in many US states, these peer-to-peer car-sharing services are illegal. Last September, California was the first state to legalise technology-based ride-sharing services, providing a regulatory framework for them to operate.
In New York, Airbnb is being investigated for possible breaches of a 2010 law making it illegal to sub-let your apartment. New York City’s Attorney General has filed a subpoena for data on all Airbnb hosts in the city. Peers, an organisation that supports the sharing economy, is currently lobbying New York law-makers to introduce regulations to allow for Airbnb to operate legally.
Similar legal issues are starting to emerge from such initiatives in Australia. Community energy groups are grappling with their incorporation, while initiatives like rooftop gardens are being constrained by planning laws. Food sharers must comply with the same food safety rules as larger not-for-profit enterprises. Despite community support for sustainability projects, overcoming legal barriers is a significant impediment to sustainability projects getting off the ground. However, the need for specialist legal advice comes at a time when many projects do not yet have the capital to pay for lawyers.
The legal and commercial factors sustainability companies need to consider in order to get moving include determining the right legal structure, securing the right legal approvals and licences, developing an effective finance model, raising start-up capital from investors (which may include the community through crowd-sourcing) and offering a service that is in demand, understood by consumers and is simple to use.
Recognising the difficulties environmentally-minded companies face in navigating a minefield of laws and regulations, leading global law firm Ashurst has teamed up with University of Melbourne to establish a Sustainability Business Clinic.
The first of its kind in Australia, the Clinic begins this year and will see law students provide legal advice to start-up companies under the supervision and guidance of environmental lawyers.
Projects that are in the public interest benefit the environment and do not have the capacity to pay for specialised legal advice may have access to the Clinic. It is expected that a broad range of legal issues will arise, spanning environmental, planning, property, corporate, finance, intellectual property and energy law.
It is hoped the clinic will not only help sustainability initiatives get off the ground, but will also equip the lawyers of the future with the practical skills required to advise companies operating in the emerging and rapidly growing sharing economy. If Time Magazine is right, then these skills will certainly be in demand.
This article was co-authored with Katherine Lake and was first published in The Voice.