Changes in Regulatory Laws Over the Sharing Economy Business on the Example of Brazil: A Crucial Point for Its Feasibility

Changes in Regulatory Laws Over the Sharing Economy Business on the Example of Brazil: A Crucial Point for Its Feasibility

Luiz Guedes da Luz Neto (Universidade Federal da Paraíba, Brazil)
Copyright: © 2020 |Pages: 16
DOI: 10.4018/978-1-7998-4543-0.ch001
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The shared economy gained importance in the early 21st century, gaining scale through the internet. With this, various business models were created, offering innovative products and services to people. Many of the businesses in the sharing economy, because of their innovative character, challenge state regulation, which still does not know how to fit them, because, as disruptive, these businesses no longer seem to fit into traditional legal categories. And this difficulty in the legal framework can create burdens on innovative companies that can negatively impact results, as well as maintaining these companies in the market in a competitive manner. The search for state regulation that can adequately frame new businesses born in the sharing economy is a major challenge for the state regulator, which must seek regulation that protects users without impeding the development of new business. The regulation of new businesses in the sharing economy is a great challenge in Brazil because this regulation creates a lot of problems to the companies born in the sharing economy.
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The sharing economy has been taking center stage this early 21st century, increasing its scale through the Internet, which is available anytime and anywhere through mobile devices. New business models have been created offering services and products in innovative ways to thousands of people and have impacted traditional trading, which initially did not know how to handle the competition.

Because of its innovative features, much business encompassed into the sharing economy has challenged the state regulation, which is not able to frame them. Since they are disruptive, such businesses seem not to match traditional legal categories.

This legal difficulty in framing the new activities of the sharing economy ambiance might create legal onus to innovative companies such that it will take a negative impact on their results and even compromise their presence as competitive businesses as well.

Considering this huge challenge for companies of the sharing economy, the following research question emerges: has the impact caused by state regulation directly affected the feasibility of sharing economy businesses, or is it a secondary and reflexive outcome?

As an answer for the above problem, here is the hypothesis: being drawn upon compelling laws in which the obedience is binding to anyone submitted to the authority of the state upon a particular territory, the economic state regulation has direct impact on the feasibility of activities in the sharing economy and depending on its shaping, it may even crucially compromise some modalities.

As a first step, a descriptive methodology is applied to analyze the regulation ambiance of the sharing economy in Brazil. Then a prescriptive approach is adopted through the design of a legal framework proposal aimed to generate conditions of feasibility for the business models of the collaborative economy. The analyzed experience is mostly that of Brazil due to the importance of that country in South America. Brazil has the capacity to influence neighboring countries with its legislative policy.

This work aims to verify how economic regulation over the sharing economy can directly impact the viability of its business models. The specific objectives are as follows:

  • Conceptual delimitations will be defined on the main categories employed in the study for the economic regulation of the sharing economy;

  • An analysis will be undertaken about the interaction between technology and the collaborative economy as a means for disruptive innovations;

  • The first reactions of the state regulator with regards to the sharing economy will be verified;

  • The need for a regulatory disruption to face reality created by the sharing economy will be ascertained;

  • The state legal regulation as an impact factor on business feasibility will be analyzed.

This theme matters a lot today. Although national legal frames are different requiring case studies, this world phenomenon seems to have practical and real outcomes over the dynamics of the national economies anywhere, since the regulatory challenge would have similar effects. This reasoning justifies the analysis of those businesses’ impact on regulatory economics. Therefore, regulation shaping might be a decisive dimension for business feasibility. Considering such a dimension on a large scale, it will generate whether a positive or negative impact on the nation's wealth.


Of The Conceptual Limits Of The Categories Here Applied

In this article, the concepts of “sharing economy” and “collaborative economy” are understood as synonyms being used to describe “an economic model based on the swap of assets, what may or not be remunerated” (Guedes da Luz Neto, 2017a). The sharing economy reached a range of uses because of information technology, which has erased physical barriers and decreased transactional operation costs as well.

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