Social media has changed the way we do business by connecting us online to buy goods and services from each other. This has resulted in the rise of “peer-to-peer” sharing apps and websites that connect people to share goods and services, such as transportation and accommodation, among other things. Companies that create these apps – such as Uber and Airbnb – have recently attracted considerable attention worldwide.

Just last month Uber reported a valuation of $40 billion, which is more than the current annual revenue of the taxi and limousine market. Airbnb’s reported valuation is expected to exceed $10 billion. It is no surprise that these high price tag “sharing economy” firms are gaining international recognition.

The emergence of sharing economy firms is beginning to raise legal issues as the law attempts to keep up with advancements in technology. One of the important legal issues facing peer-to-peer businesses is consumer privacy. The protection of personal information is heavily regulated in many countries, including Canada and the United States. The ability to track users and retain consumer information therefore requires data collection procedures that can withstand legal scrutiny. This can be especially difficult when the parameters within which sharing economy firms are beginning to operate are not heavily regulated themselves.

Sharing economy firms can also run the risk of falling victim to industry-specific regulations not yet in place. For example, just last week China’s Ministry of Transport ordered that all taxi apps exclude private vehicles from their platforms. Therefore, firms using peer-to-peer business models intending to operate transportation services in China need to be aware of changes to the legal landscape that can affect the manner in which they provide their services.

These are just a few of the legal issues that sharing economy firms will continue to face as courts and jurisdictions determine how to regulate them. Companies looking to take advantage of these “uber” investment opportunities need to be mindful of the risks posed by the underdeveloped legal framework surrounding peer-to-peer sharing. Developing a robust business model that operates within the current regulatory framework and that can adapt to new changes in the law is important to the growth and success of these new apps.


Daniel Daniele ( / +1 416 216 2317) an attorney in Norton Rose Fulbright Canada’s Intellectual property practice.