Crime Sharing: How the Sharing Economy may Impact Crime Victims

ABSTRACT

The sharing economy (e.g., Uber, Lyft, Airbnb) is growing rapidly. It is a disruptive innovation in how people cooperate and share services and products in many ways. One of the likely outcomes of this change is reducing crime and transitioning from publicly provided justice systems to prevention and alternative dispute resolution. These changes occur because the sharing economy alters the opportunity structure of committing a crime and enhances safety by increasing digital place managers, guardians, and handlers. Further, the sharing economy places victims back at the forefront of concern and often identifies alternative dispute resolution outside the criminal justice system. These changes are evident from a content examination of 40 popular sharing platform websites. Findings indicate that 78% have a rating system in place, 50% have a help section for problems between sharers, 80% provide access to contracts on their websites, and 63% specify arbitration if disputes cannot be settled. These findings indicate that the sharing economy and private regulation are impacting the structure of the justice system, enhancing safety, reducing the private ownership of products, empowering victims with knowledge of sharing partners, and providing access to private arbitration to solve disputes.

KEYWORDS:

• Crime
• sharing economy
• gig economy
• disruptive innovation
• victim
• virtual controllers
• alternative dispute resolution

Introduction

Through the advent of technology, society is rapidly transitioning from an ownership-centric society to a sharing society. The sharing economy, peer-to-peer property-sharing through an online platform (i.e., Airbnb, JustPark), is growing exponentially. As people share resources (e.g., homes, cars, tools, clothes, books, garages, pools, and more), often a contract is agreed to among the sharers, which has the potential to reduce crime and provide alternatives to the public criminal justice system. In the sharing economy, the protection of shared personal property and services is not bound by the slow and limited resources of the publicly provided justice system or by a handshake promise but transferred to written contracts between individuals that can be enforced by private means.

The growth of the sharing economy and the disruptive innovations that follow are paradigm shifts in two significant areas. First, reductions in crime, increased safety, and enhanced trust occurs as rating services give insight into past behavior, and technology removes anonymity and provides for “digital controllers.” Second, contract violations can be resolved in private courts, thus transferring the focus from the “government-as-victim” back to the actual victim (i.e., the one who suffered the loss), increasing individual rights, empowering individuals, and fostering restitution to victims.

This research considers these two changes in the economy through a theoretical perspective and a review of 40 popular sharing economy websites. It begins by defining and examining the sharing economy’s current state. Next, the article examines how the sharing economy reduces crime, risk, and poor behavior by altering opportunity, enhancing trust, and offering dispute resolution services. Following this, the transition from the “state” as the victim to the individual as the victim is described. The article then focuses on how the sharing economy is set to provide a disruptive innovation to the three parts of the public criminal justice system (i.e., police, courts, corrections) and provide enhanced alternatives that service individuals through prevention, risk reduction, dispute resolution, and making victims whole if a loss does occur. Finally, a path forward is presented, calling on the market to provide the services necessary to enhance justice, liberty, and safety in the sharing economy.

The sharing economy

The phrase “sharing economy” rose to popularity around 2008, likely due to several factors. First, the 2008 recession swept across the U.S., resulting in many needing to find additional income avenues and cheaper alternatives to goods and services. Second, increasing social media and smartphone (i.e., technology) usage. These shifts and disruptions in societal norms likely drove the dramatic increase in the sharing economy. While the phrase’s origins are somewhat unclear, Jemielniak and Przegalinska (2020), in their book Collaborative Society assert that the sharing economy concept can be attributed to Felson and Spaeth (1978) in their study Community Structure and Collaborative Consumption: A Routine Activity Approach.

Regardless of the exact origins, different persons often use the term differently. To address the confusion, Schlagwein et al. (2020) examined 152 uses of the term within the academic literature, carefully observing and documenting the common understanding and usage. Using a stepped process, they systematically consolidated each aspect of the phrase to determine the prevalent and common understanding of the “sharing economy.” They began by extracting primary definitions. Next, they identified the semantic facets and aggregated the semantics into characteristics. Lastly, they grouped characteristics by category and developed a definition. For example, the authors identified phrases such as “platform,” “apps,” “social media,” “through technology,” and more into the characteristic “I.T. facilitation,” which describes the infrastructure of the sharing economy. As a result of this compressive analysis, Schlagwein, Schoder, and Spindeldreher define the sharing economy as “the sharing economy is an IT-facilitated peer-to-peer model for commercial or non-commercial sharing of under-utilized goods or service capacity through an intermediary without transfer of ownership” (p. 829). This definition serves as the basis for the present study.

Several key concepts expressed within this definition are (1) the presence of technology facilitation, (2) peer-to-peer contacts, and (3) short-term sharing of a good or service without transfer of ownership. In other words, long-term rentals, sales transferring ownership (e.g., Craigslist, eBay), and company-to-person sales are generally excluded. Moreover, the “gig economy,” where individuals provide services temporarily (i.e., editing services, virtual assistants, etc.), similar to contractors or freelancers, is excluded from this study as there is no direct property transfer and often no physical contact between two individuals. This is not to say that all services are excluded, but an essential aspect for inclusion in this study is the presence of a short-term sharing of a good when accompanying a service. For example, ride-sharing includes using a good (the vehicle) and service (the driver). When a service and a good are included, the platform is included in the present study.

The sharing economy is broad and diverse, including everything from sharing pets, clothing, textbooks, boats, R.V.s, land, tools, cars, bikes, backyard pools, and more. People have always shared resources, such as a farmer lending a tractor to a neighbor or someone lending a dress and shoes for a night out with a school friend. Nevertheless, the historical difficulty has been what Munger (2018) describes as “transaction costs.” Transactional costs are trade or sharing barriers. For example, say you need a tool you do not have. At least three things need to occur, (1) you have to know a neighbor near you has the tool you need, (2) the other neighbor has to trust you well enough to lend it, and (3) you need to determine a method of paying for the use. There is a cost associated with each of these factors. In his book, “Tomorrow 3.0: Transaction Costs and the Sharing Economy,” Munger identifies these transaction costs in the following ways. Triangulation, information about the identity and location of a good, and an agreeing on terms. Transfer is a way of transferring payment and use of the product or service. Trust, is a way of assuring honesty and performance of the contract. These barriers are difficult to overcome, and this is precisely where technological innovations come into play.

Commonly known platforms like Uber, Lyft, Airbnb, and others do not own, sell, or rent any property on their sites. Instead, they serve as the clearinghouse by connecting individuals wanting to share with those looking to use, providing a means of payment transfers, and assuring trust – drastically reducing the transaction costs of sharing (Munger, 2021). Because technological innovations have allowed this triangulation to occur at a fraction of the costs (including time), the sharing economy has exploded in growth.

While the sharing economy can be challenging to identify and even define by nature, it is even more challenging to quantify the economic impact for three reasons. First, the platforms that allow for sharing are developed at record speed, and some of them survive while others do not. Second, many peer-to-peer platforms have extensive usage and others very little, and it is not often publicly revealed just how much is shared. Lastly, the very nature of these transactions is difficult to quantify. This is due to at least two cost calculation problems. First, establishing the value of the good or service exchanged, and second, the otherwise lost opportunity. For example, how should researchers calculate ride-sharing value compared to car purchases? The exact economic impact is difficult to calculate for these and other reasons. However, PwC (2014) has projected that the sharing economy will grow from $15 billion (in 2014) to $335 billion by 2025, a staggering growth of 2,133% in just over a decade. Schroders, an investment firm, released a report in 2016 on the sharing economy and identified traditional industries likely to face significant disruption from the sharing economy, including apparel and luxury goods, sports and travel equipment, peer-to-peer lending, online staffing, accommodations, and ride-sharing. While firm numbers are challenging to establish, the sharing economy is rapidly multiplying and disrupting the traditional economy.

Disruptive innovation

Disruptive innovations create a new market and eventually disrupt an existing market by displacing established organizations, products, and alliances (Ab Rahman et al., 2017). The term was initially coined by Bower and Christensen (1995) as “disruptive technology” and described how technological advances disrupt established markets. The concept was eventually expanded to include innovations rather than just technology and has been called one of the most influential business ideas of the 21^st century (Bagehot, 2017).

Disruptive innovations are often produced by outsiders, entrepreneurs, and startups (Bower & Christensen, 1995) and are best used when referring to a product or service evolution over time (Christensen et al., 2015). These advances can require more time to develop, but they penetrate quickly once accepted in the market (Assink, 2006). There is little doubt that certain aspects of the sharing economy are disruptive innovators and that technology is crucial in development. For example, Adams (2019) interviewed Christensen, describing how he believes Uber is disruptive.

Thus far, this work has provided a cursory description of the sharing economy and its growth, some of the ways it is changing society, and how it reduces transaction costs. The study has also briefly described a disruptive innovation and presented Uber as an example of a disruptive innovation. Many other platforms in the sharing economy may also be considered disruptive innovations, but that is yet to be seen. The following sections will address how the sharing economy may impact crime, change crime victimization (when it does occur), and may usher in justice system changes. Each of these changes may even be seen as a disruptive innovation to an entrenched system of justice.

Crime in the sharing economy

The disruptive innovations seen with peer-to-peer sharing in the economy may significantly impact crime. While empirical research is only emerging to address this issue, society’s change in routine activities and behaviors will impact potential victims and offenders in many ways. One example of this impact is the relationship between ride-sharing and DUI and road injuries and fatalities. An early study by Dills and Mulholland (2018) examined the impact of Uber’s entrance into a community and the impact on crimes related to alcohol (i.e., DUI, assault) and vehicle fatalities. They found that once Uber operated in a community for several years, fatal crashes declined between 17% and 40%. Other crimes, such as robbery, assault, and drunkenness, experienced no change; however, crimes such as DUI and disorderly conduct declined (Dills & Mulholland, 2018). Additional studies have found similar results; such as a 10–17% reduction in traffic fatalities in Brazilian cities after Uber’s introduction (Barreto et al., 2021) and Conner et al. (2021) identifying a reduction in vehicle collision-associated trauma and a decrease in arrests for impaired driving in Houston Texas due to ride-sharing. Reductions in DUI collisions can even be identified at the neighborhood level within a city and are likely based on technology adoption related to socioeconomic access (Blazquez et al., 2021). Additionally, the Lyft (2018) report indicated that some 88% of customers use Lyft to avoid drinking and driving, which reduces the opportunity to be injured or damage property due to a driver under the influence.

Studies on the impact of ride-sharing on DUI rates, collision injuries, and roadway fatalities continue to emerge and demonstrate a strong relationship. It is likely that the sharing economy will also impact other forms of crime and victimization. However, because the relationship between the sharing economy and crime victimization is just beginning to be studied, this section provides an overview of how the sharing economy will likely disrupt crime by reducing opportunity and impacting controllers.

Routine activities approach

Initially developed by Cohen and Felson (1979), the Routine Activities Approach focuses on crime’s situational contexts by examining how conventional everyday activities create crime opportunities. This approach helps understand crime by examining three aspects; a motivated offender, a suitable target, and the place the offender and target meet. Specifically, a motivated offender must locate a suitable target in time and space for a crime to occur; this relationship has been visually applied to what is commonly called the crime triangle (J. Eck, 2003).

The crime triangle provides the clarity necessary to understand crime opportunities and insight into crime prevention techniques. This approach was improved by J. E. Eck (1994) and empirically demonstrated by J. E. Eck and Wartell (1998) with the addition of “controllers” in the form of place managers, guardians, and handlers, which can be visualized as a double-layered triangle (see, Figure 1). Place managers are individuals who are responsible for monitoring and controlling behavior at a specific place. Guardians are persons who protect one another from criminal activity. Handlers are persons connected to a potential offender who influences to keep that person out of trouble. As with the inner triangle, if controllers (handlers, managers, and guardians) are absent or weak, preventing crime is difficult.

Figure 1. J. E. Eck and Wartell (1998).

The Opportunity approach has allowed researchers to understand the complex nature of crimes ranging from burglary (Johnson et al., 2007), robbery (Groff, 2007), and homicide (Beauregard & Martineau, 2015) to more complex crimes such as package theft (Hicks et al., 2022; Stickle et al., 2020), transportation crimes (Newton, 2014), and the theft of metals (Stickle, 2017). This approach’s full usefulness will become evident as we consider how the sharing economy has changed the structure of opportunity (the inner triangle) and the nature of controllers (the outer triangle) and helps us understand crime opportunities and prevention methods inherent within the sharing economy.

Opportunity in the sharing economy

Felson and Clarke (1998) stated the adage, “opportunity makes the thief” when describing the importance of opportunity and crime. They believed that opportunities play a critical role in crime, that crimes are highly specific, and tend to concentrate unevenly in time and space. Equally important, they maintain that reducing opportunities actually decreases crime, not just displaces crime. This is a crucial distinction and speaks to the importance of how the sharing economy changes the opportunity structure of crime and may lead to lower crime rates within sharing and adjacent areas.

Consider this example. A frail elder woman living alone leaves her home to travel to the local grocery store and returns with her products. Society sees this, but what is unseen are the opportunities for crime created throughout this brief outing. During this trip, the person’s home is left unguarded and at higher risk of burglary. While driving to and from the store, there is an opportunity for a staged vehicle crash to make a false insurance claim. Once in the parking lot, the empty vehicle increases the likelihood of theft (both the vehicle and contents). While walking to and from the store, there is an expanded opportunity for assault, robbery, or theft. An unattended purse or belonging can be taken even while inside the store. Conversely, consider the same woman places an order for her groceries, and someone in the sharing economy gathers her order and uses their car to deliver the items directly to her house. The opportunity structure for crime changes drastically and, in many cases, disappears entirely.

Another way the sharing economy may be impacting opportunities for crime is the reduction of everyday items available to steal or vandalize. As the sharing economy grows, the volume of product ownership may decrease. For example, it is unlikely that everyone in a neighborhood will need to own a cordless drill, bicycle, or lawn fertilizer – these items can be borrowed for the brief time needed (see Munger, 2018). A durable good is a product that a consumer purchases and is designed to last at least three years; these include phones, electronics, jewelry, tools, sports equipment, toys, bicycles, computers, home appliances, and more. Durable good purchases (excluding defense spending and transportation) on a per capita rate have declined 42.3% since the 2000 peak and have remained relatively flat since 2012 (Mislinski, 2021). While it is doubtful that the entire decline is related to the rise of the sharing economy, it provides an example of how societal structure and ownership have changed.

Bicycles are another example of how changes in availability impact opportunity and may result in reduced crime. In the U.S., less than 8% of people ride a bicycle once a month (Breakaway, 2015); however, over 70% own at least one bike (Handy et al., 2010). Unfortunately, there are believed to be 1.3 million bicycle thefts per year (Johnson et al., 2008). If most people only ride a bicycle a few times per year, why purchase and store one when with a few clicks on a website or app (e.g., Spinlister, Zilok, FriendWithA), a bike can easily be shared for only a few dollars and no inconvenient storage or maintenance is needed? The fewer items there are, the less theft may occur. In other words, a decrease in products leads to a decrease in opportunity, which may lead to a reduction in actual property crime.

Another example of this concept is vehicle ownership. The Bureau of Transportation Statistics reported in 2011 that the average personal vehicle per household in the United States was 1.9, but the average household had only 1.75 drivers – people own more cars per household than the number of people eligible to drive them. Ridesharing may be changing this. Wu and MacKenzie (2022) studied ride-sharing comparing 2001, 2009, and 2017 and found that ride-sharing has dramatically increased and that the fastest growing purposes of trips are for mandatory trips, such as home to work and back to home. Schmidt (2020) found that for each vehicle shared in German cities, there was an annual reduction of nearly three new vehicles. Moreover, Lyft’s 2017 report indicated that 34% of those using their service avoid owning a car because of Lyft. If these reports are accurate, there may be less opportunity for car theft, car break-ins, criminal mischief to vehicles, and fraudulent insurance claims, simply because the opportunity is reduced as the rate of vehicle ownership declines.

Controllers in the sharing economy

Opportunity is not the only factor changing due to the sharing economy. As mentioned, controllers such as place managers, guardians, and handlers may also be disruptive innovations within the sharing economy. Many of these disruptions are founded on technological advances and the platform that connects the sharers. These advances, commonly called algorithmic controls (A.C.), have allowed controllers to move beyond a fixed person, specific location, or exact time to become “virtual controllers” that can monitor behavior across time, place, and person. These algorithmic controls monitor behavior in many sharing economy apps, including shared property and service providers like Uber and Lyft (Wiener et al., 2021).

Managers have historically been individuals who owned or controlled a place. Today, individuals and businesses provide the technology (i.e., algorithmic controls) to connect sharers in the sharing economy. They can set policies and standards for behavior and ensure both parties abide by them to use the digital sharing platform.

Guardians are persons who protect another person or place, such as security guards. In the sharing economy, guardianship has shifted, or has the potential to shift, to “digital guardians.” Today Uber, Lyft, and other organizations can monitor driving behavior, track location, help in real-time during emergencies, and provide photos and descriptions of those who are sharing to enhance trust and reduce anonymity. These and other related technological features act as a digital guardian who is always diligent and ready to reduce crime through the mere presence of these safeguards.

Today, a “digital handler” is the rating system used to record sharers’ experiences in the sharing economy. Handlers are connected to potential offenders and help keep them out of trouble; typical examples include parents, religious figures, and teachers. Many platforms allow for unilateral rating systems, and some allow for two-way or bilateral rating systems (i.e., both parties in the sharing agreement can rate each other). Ratings enhance the connection and trust further (Xu, 2020) as individuals know poor service or even criminal behavior will result in a reduced ranking of trust and satisfaction, which may impact their ability to work in the economy and influence their behavior even better than a traditional handler, who is unaware of day to day behaviors. Bilateral ratings have been shown to increase market competition in ride-sharing and other services (Ke et al., 2017), likely leading to increased customer care, increasing the sharers’ welfare (Jin et al., 2018), and providing positives results for both sides of the sharing agreement (Chen et al., 2020).

To illustrate these changes, this study offers an adaptation of a table and description by Madensen and Eck (2013) to describe the sharing economy changes (see Table 1). Specifically, identifying a “digital” manager, guardian, and handler with definitions, examples, and interests related to the sharing economy.

Table 1. Digital Managers, Guardians, and Handlers.

	Digital Manager	Digital Guardian	Digital Handler
Definition	The owner or controller of the technology connecting the sharers	Technology that monitors or protects another from harm	A rating system that provides reviews of past behavior and performance
Examples	The business which connects sharers	Reckless driving detection, GPS tracking, Photos of sharing participants, panic buttons	Sharing software, Independent review, and rating systems
Interest	Fulfillment of the agreement, brand reputation, customer satisfaction (both directions)	Protecting all parties	Allows sharing parties to make decisions based on past behavior and performance

Adapted from: Madensen and Eck (2013).

The sharing economy, in many ways, is an enhancement over traditional controls. If a company wants to know how its drivers perform, technology can monitor behavior, allowing behavior management. Concerned over the person bringing a young child home from school, technology allows a parent to watch a video of the person driving and track their movement, enhancing guardianship. Want to know if a neighbor will return a borrowed tool on time and undamaged? A review of their profile which includes past borrowing history (e.g., reviews, number of items borrowed) before the transaction, will enhance trust by influencing future positive behavior (handler).

The possibilities are nearly endless and are already disruptive to the status quo from a few years ago. In our society, most would never consider staying at a hotel without reviewing ratings, and reviews about crime are essential factors in deciding where to stay (Leung et al., 2018). Reviews are also frequently consulted when looking for a restaurant (Vu et al., 2019). Even casino reviews (Sosa et al., 2019) can be used to measure crime in the area. To be sure, not all sharing platforms have these controlling features, but many do. As these controls are built into the systems used to share products, services, and resources, crime will likely decline, and standards, safety, and trust will increase as digital handlers, managers, and guardians are enhanced.

Methodology

The present study seeks to apply a series of theoretical perspectives to crime in the sharing economy to encourage continued research on the impact of the sharing economy on victims and offenders. Insight into these perspectives is augmented by a website content analysis (see Robbins & Stylianou, 2003) of 40 sharing economy websites (see Appendix). These sites include sharing goods, services, spaces, and transportation. The author began by searching the internet for combinations of two key phrases; first, “sharing,” “economy,” “lending,” and “gig,” the second phrase included the item, location, service, or space to be shared, such as “car,” “ride,” “home,” “pet,” “garden,” and more.

Using a snowballing technique, once an item, location, space, or service was identified as something shared (e.g., parking spaces), additional searching for websites was conducted using the same or similar keywords. This leads to even greater identification of sharing services. For example, a search on “home garden sharing” led to websites that advertised “home pool sharing.” Several students assisted with the search, following the same pattern to avoid potential search bias and widen the possibility of unknown sharing opportunities. Each website reported by a student was added to the list, and categories were applied. If the concept was new, the search process for similar or adjacent terms began again. This iterative process was repeated until there appeared to be saturation of both the types of services, locations, and items shared and specifics surrounding the sharing. However, it should be noted that identifying sharing platforms can be challenging as many fail quickly, like any web-based company startup. The list in the present study represents the websites that the author could identify during the data collection of this project in early 2021.

Next, each website was reviewed and coded for the presence of (1) customer support, (2) rating of the sharer, (3) rating of the person sharing or bilateral rating, (4) presence of a contract or legal guidelines, and (4) a pre-identified legal remedy. This process involved the author reviewing the sharing website for the presence of these features. In some cases, a word search was conducted to speed up the location of specific terms. For example, when contracts could be located, a keyword search for “arbitration” or “court” would usually direct to the document section outlining the legal remedies between sharers. The results of this evaluation will be included after each section to augment the discussion.

Results

The content analysis results are summarized in Figure 2 and discussed below with application to the theoretical perspectives. A chart is also included to summarize the findings in four areas, the presence of contracts, bilateral reviews, unilateral reviews, and customer support centers on sharing websites.

short-legendFigure 2.

Digital controllers in the sharing economy

To determine the extent of controllers (i.e., handlers) in the sharing economy, 40 sharing websites were examined to determine if there was a rating system for (1) the person providing the service or good and (2) the person using the service or good. The results indicated that 77.5% (n = 31) clearly had a mechanism to allow users to rate the person sharing. However, far fewer, 42.5% (n = 17), had options to rate the person who used the service or product. Organizations allowing bilateral ratings tended to focus on transportation and more intimate sharing, such as clothing or pets. Also, larger sharing companies (i.e., Lyft, Uber, VRBO) appeared to have more bilateral rating options.

Additionally, these sharing economy sites were coded for digital management and guardianship. Websites that offered assistance when a user encouraged a problem or included areas for questions were included as providing management and guardianship. A slight majority of sharing sites, 55% (n = 22), included this feature. However, it should be noted that responsiveness was not assessed. Some sites indicated 24/7 monitoring, while others did not mention live monitoring or speed of response.

A high proportion of these organizations implement safety features into their platform without government regulations requiring such features. As the competition among these sharing platforms continues, additional safety features will likely be developed, thereby enhancing the sharers’ experience through management, guardianship, and handlers.

Victimization & dispute resolution in the sharing economy

Despite the positive disruptive innovations within the sharing economy that reduce crime opportunities and enhance controllers, crime will still occur. No known studies compare crime in the sharing economy with crime occurring in more traditional settings. For example, little is known about how crime at Airbnb compares to traditional hotels, how taxi crime compares to rideshare platforms, or if a neighbor is more likely to return a borrowed tool when connected via a sharing software than without the software. However, even though we have no empirical evidence, the sharing economy appears to be disruptive by altering how disputes are resolved and changing the victimization paradigm.

State as victim v. individual as victim

There are two systems of law in the United States; criminal law and civil law. One of the primary differences between these two systems is victimhood. Civil law, for example, deals with disputes between individuals and considers one individual the victim of a wrong. On the other hand, criminal law deals with the wrongs committed by an individual against a state or federal law, thereby making the government entity the “victim.” It is certainly possible to have instances where both occur; for example, a taxi driver robbed at gunpoint can file a civil case directly against the robber for losses and damages, and the government can take on the mantel of “victim” and file criminal charges against the suspect for breaking the established public law on robbery.

When determining which system of justice to use, legal contracts are critical. In general, when contract violations occur, these are seen as civil law violations. As such, if a person agrees to rent furniture for their home from the local store and to pay $375 monthly for 36 months but fails to make payment beyond the first four months, the local government is unlikely to view themselves as a victim of theft and will refer a complainant to the civil court. Conversely, if a property owner returns to find their home burglarized with their furniture stolen by someone who had no reason to believe the furniture belonged to them (i.e., had no contract or claim on the property), the government is more likely to view society/the state as the “victim” and agree to take the offender to criminal court.

These differences are not trivial, nor are the results. When crimes occur that are prosecuted by a government court (criminal law), the legal victim is the state or government, and the goal is to punish the offender and make the victim (the state) whole. Restitution, fees, or fines rarely involve an individual but are paid to the court or state. This process leaves the individual victim without compensation, voice, or control over the process.

The Sharing economy changes this by flipping the victim’s status from the state to the individual who contracts with another person to complete a service or use a good. In most circumstances, when two individuals engage in the sharing economy, the digital platform they use provides a contract that each party agrees to abide by. These contacts may range in specificity depending on the nature of the service or goods shared and the organization’s strength connecting the sharers. For example, VRBO has an extensive contract that clearly states the length of sharing, specifies behaviors not allowed on the property, and other essential details. In comparison, Sparetoolz has a less complex contract.

Nonetheless, most sharing platforms have some form of contract that becomes a binding legal document when two parties agree to share. These legal contracts, in many cases, outline what remedies are available to either party and place control of the process and compensation to the actual victim. To be sure, this means that the victim may bear the cost of pursuing civil charges rather than relying on the state to investigate and file criminal charges. However, a key distinction is the shift of incentives and benefits. Sharing platforms are incentivized to keep all parties pleased with the process and share some legal liability for their interactions. Consider the discussion earlier of controllers (i.e., managers). Sharing platforms often have customer support centers (i.e., guardians) where users can lodge complaints and seek help. These organizations also have brand-trust incentives (i.e., handlers) to encourage responsiveness to these needs to ensure continued support for their service.

Ensuring victims, when losses do occur, receive proper attention through digital managers and are made whole for their losses is an important aspect often missing in the criminal justice system. An example of this is PayPal, which experienced, early in its development, a 10-million-dollar loss per month due to theft and fraud. An attempt to retain the assistance of the FBI proved futile, so the company turned inward and developed software mechanisms to identify and prevent fraud. As a result, it lowered losses from 40% to 1% (see Jackson, 2004). Lastly, the incentive is also tilted toward a potential victim who can easily file a complaint with the platform and receive compensation for damages, whereas a police report would likely not result in being made whole. The importance of victims being made whole can be observed in a study by Button et al. (2013), which described the experiences of victims of fraud and their involvement with what was termed, the “fraud justice network” in the U.K. Button and colleagues found 91.7% of fraud victims wanted their money back were more favorable views of dealing with their bank that local police.

Dispute resolution in the sharing economy

To determine the extent of liability in the sharing community, and specifically, if non-criminal court agreements were entered into when executing a sharing agreement, each of the 40 sharing sites was examined to determine the presence of an accessible statement on legal liability. 80% (n = 32) of the sites included easily accessible legal and contract documents. However, these documents’ nature ranged from liability between the users of the site and the sharing platform and contracts between the sharers. Additionally, 62.5% of the sites (n = 25) included language referring to required arbitration. Further investigation is warranted to determine the exact nature of the contracts between users.

It should be noted that some of the contracts may have been referring to suits against the sharing company and not between the sharers. However, it appears that many organizations guide dispute resolution and contracts. Additionally, some sharing services were not based in the U.S. and may have different laws and regulations.

However, with such a high number of contracts discussing binding arbitration (62.5%), it is a likelihood that alternative dispute resolution will increase in the sharing economy. Alternative dispute resolution and restorative justice efforts, especially in response to a regulation, tend to restore victims, offenders, and communities better than traditional criminal justice practices (see, Braithwaite, 2002a). Moreover, when developed bottom-up and at local levels, these efforts can be elevated to higher levels (see Braithwaite, 2002b). It is conceivable, then, that innovations by the private market in protecting consumers of sharing services and responding to victimization (through alternative dispute resolution and restorative justice practices) may be required by governments before entry into their jurisdiction (see Ayers & Braithwaite, 1995; Braithwaite, 2008; Levi, 2013). For example, local governments may require alternative dispute resolution and restorative justice practices to be clearly within a contract between sharers before issuing an operating license to Lyft. This would likely enhance safety and trust while regulating most justly (see Braithwaite, 2020).

Justice in the sharing economy

Crime is an ever-present concern within all societies. As society grows in technological sophistication, crime trends will change too. In one way, the opportunity structure for crime is more significant than ever, as we can travel, communicate, and meet with people more efficiently than ever. Simultaneously, the ability to control and monitor behavior has also proliferated. As the sharing economy expands rapidly, it can disrupt the justice system in many ways.

Policing system

The increase of the sharing economy and the technology surrounding it that changes the opportunity structure and increases controls will significantly impact crime and the policing system. As protections are enhanced, the controller’s (managers, guardians, and handlers) role will grow. Early studies in ride-sharing company algorithmic controls already indicate the role managers, guardians, and handlers play in the sharing economy. For example, Rosenblat and Stark (2016) found that Uber leverages significant control over how driver conducts their jobs. Norlander et al. (2021) compared Uber drivers to taxi and limousine drivers, reporting higher levels of administrative control over their behavior; however, Uber drivers still experienced a higher level of work enjoyment.

Similarly, Wiener et al. (2021) found that Uber drivers positively viewed the company’s monitoring via the app. Further, Chan and Humphreys (2018) describe how Uber drivers are compliant primarily with company standards, and Liu et al. (2021) found that Uber drivers take shorter routes than taxies and explain the difference due to driver navigation technologies (i.e., company algorithmic controls). These studies indicate that Uber drivers are responsive to the company’s algorithmic controls and typically comply. These controls, which may vary by sharing company, may reduce crime by enforcing strict route following.

As a result, if a criminal act does occur, the police may no longer have to investigate, for example, which taxi picked up the victim, where the driver took the victim, or how long the victim and offender were together. A call to the rideshare organization will place this information within the police’s easy and quick reach. This means that not only will criminal investigations, when needed, be quicker and more evidence rich, but those engaging in a sharing activity will know there are controllers monitoring behavior – likely to reduce rude or criminal activity.

When a legal contract agreement is violated, police are freed from the responsibility to investigate and may refer an aggrieved party to arbitration or the civil court system. These changes will reduce police involvement with the public and allow a re-direction of needed resources to violent crime and other responsibilities. Perhaps the most significant benefit will be property disputes, as disagreements about when to return a shared item or its condition upon return shift from a criminal matter to a civil matter.

Public courts

As the sharing economy expands, more transactions will be conducted between individuals whereby a contract is expressly agreed to. This agreement transfers most violations in the sharing economy from the publicly available criminal court system into civil law or arbitration. This transfer will significantly impact the court system as fewer cases will be funneled through the overloaded criminal court docket. As the rate of contracts increases due to the sharing economy, more cases will likely be handled by civil or even private courts than criminal court systems. With most civil disputes outside of the preview of police agencies and limited resources, many agencies will not investigate cases with clear civil contract violations. As such, agencies often refer contract violations to civil court without acting. This disruption places control back into the aggrieved party’s hands and ensure that any compensation is directed toward them, not the government. Perhaps just as important, it keeps the victim of a crime as the focus rather than “transferring” victim status to the state or local government.

Public corrections

The United States incarcerates more persons per capita than any other nation holding 698 persons per 100,000 in 2020 (Prison Policy Initiative, 2020). Perhaps even more dramatic is the over 4 million people on probation or parole for a total population under correctional control of nearly 7 million people (Prison Policy Initiative, 2020). Of the nearly 2.3 million lodged in correctional facilities, about 17% are there for some property crime. As the sharing economy grows along with a changing opportunity structure and increased controllers, fewer criminal violations will occur, and if they do, more violations may be handled informally, allowing a complete bypass of the corrections system. To be sure, most of these crimes were not related to the sharing economy. However, many crimes with jail or prison sentences may be impacted. For example, studies described earlier found decreases in DUI, property destruction, and disorderly conduct when ride sharing opportunities were introduced. While it has yet to be calculated, it is likely that these reductions in incidents also resulted in reduced incarceration rates.

The path forward

The future of the sharing economy seems bright, and growth is occurring rapidly. As more and more products and services are shared, fewer crimes are committed (opportunity), and increased behavior controls (digital controllers) reduce poor or criminal behavior. As the sharing economy grows in usage, broadens in the type of items shared, advances in technology, and is responsive to users’ demands, the sharing economy may become a disruptive innovation that changes the structure of the justice system, enhances safety, and empowers victims. In several ways, this can already be seen in the present study of 40 sharing websites. Whereby 78% have a rating system in place, 50% have a help section for problems between sharers, 80% have access to contracts on their websites, and 63% specify arbitration if disputes cannot be settled.

When violations or disagreements occur, private arbitration focuses on the actual victim and may remove the publicly funded justice system from the process. This reduces involvement with police, courts, and corrections with the public and allows these services to focus on other forms of crime. This fundamental shift will impact crime, as will the control mechanisms as they become more advanced.

Lastly, some economists have called for privatizing police, courts, and corrections (Benson, 1998; Friedman, 1989; Rothbard, 1978; Stringham, 2015). They have called for private arbitration courts, behavior ratings, and insurance to comply with contracts and cultural norms (Hoppe, 2001, 2021; Rothbard, 1970, 2002). Until recently, many of these calls have been based more on conjecture or tightly controlled environments (e.g., Disney World) than in reality or large-scale open systems. However, this does not mean they are incorrect, but that society was not fully developed (technologically) to address such systems’ broad needs.

The sharing economy may be just the disruptive innovation needed to provide the path forward to reducing crime, enhancing safety, and placing control back in victims’ hands (when a crime occurs). These advances, made possible through technology, are impacting how and when society interacts and will have lasting impacts on how we view and respond to crime. It very well may be that the sharing economy will model and bring about disruptive innovations in the justice system. With this in mind, this study encourages and calls for vigorous research into the sharing economy and its impact on crime rates, victims, and public justice.

Disclosure statement

No potential conflict of interest was reported by the author.

Additional information

Funding

This work was supported by the Institute for Humane Studies, George Mason University [IHS016854].

Appendix

Table

Type		Name	Website	Other Details	Customer Support Center	Review/Rating: Sharer	Review/Rating: Sharee	Contract/Legal Info Available	Legal Remedy
Goods	Clothing	Tulerie	https://tulerie.com/	Clothes sharing	Y	Y	Y	Y	Arbitration
Goods	Clothing	Wardrobe	https://www.wearwardrobe.co/	Clothes sharing	Y	Y	N	Y	Arbitration
Goods	Outdoor Equip.	Expeerent	www.expeerent.com/index.php	Renting personally owned camping/recreational gear	Y	N	N	Y	None
Goods	Textbooks	Valorebooks	www.valorebooks.com	Textbook rentals	Y	Y	N	Y	Arbitration
Goods	Tools	Sparetoolz	www.sparetoolz.com	Renting of personally owned tools and equipment	Y	N	N	Y	Arbitration
Goods	Various	FriendWithA	www.friendwitha.com/lp/em	Renting tools, electronics, and other day items	Y	Y	Y	Y	Self
Goods	Various	Zilok	www.us.zilok.com	Renting of person items	N	Y	N	N	Unclear
Goods	Various	Rent Items	https://rentitems.com/	Renting of personal items	Y	Y	Y	Y	None
Service	Delivery	Postmates	www.postmates.com	Individuals deliver food and other items to others.	Y	N	N	Y	Arbitration
Service	Dogs	BorrowMyDoggy	www.borrowmydoggy.com	Borrow dogs while owners are away	Y	Y	Y	Y	None
Service	Dogs	Rover	www.rover.com	Dog or cat sit, walking, or house sitting	Y	Y	N	Y	Arbitration
Space	Camping	Campspace	https://campspace.com/en	Renting areas of land for camping	Y	Y	N	Y	None
Space	Camping	Hipcamp	www.hipcamp.com	Renting areas of land for camping	Y	Y	N	Y	Arbitration
Space	Event	Peerspace	www.peerspace.com	Renting venues or spaces for events	Y	Y	N	Y	Arbitration
Space	Event	Splacer	www.splacer.co	Renting venues or spaces for events	Y	Y	N	Y	Arbitration
Space	Event & Tools	GarageTime	https://bookgaragetime.com/	Sharing Garage Space & Tools	Y	Y	Y	N	None
Space	Garden	Shared Earth	www.sharedearth.com	Space or tools to garden in return for share of crops	N	N	N	N	None
Space	Home	VRBO	www.vrbo.com	Home and vacation rental	Y	Y	Y	Y	Arbitration
Space	Home	Silvernest	https://www.silvernest.com/	Common for 50+ individuals	Y	N	N	Y	Arbitration
Space	Home	Airbnb	www.airbnb.com	Home and vacation rentals	Y	Y	Y	Y	Arbitration
Space	Parking	JustPark	www.justpark.com	Parking space or driveway rentals	Y	Y	N	Y	Arbitration
Space	Parking	ParkShare	https://parkshare.net/signin/	Sharing Parking Spaces	Y	N	N	N	None
Space	Room	Couchsurfing	www.couchsurfing.com	Lending couch space to people to travelers.	Y	Y	Y	Y	Arbitration
Space	Storage	Neighbor	www.neighbor.com	Self-storage and vehicle space for rent	Y	N	N	Y	Arbitration
Space	Storage	Stashbee	https://stashbee.com/	Self-storage and vehicle space for rent	Y	N	N	Y	None
Space	Storage	Stow It	https://www.stowit.com/	Storage Space for Vehicles	Y	N	N	Y	Arbitration
Transportation	Bike	Spinlister	www.spinlister.com	Personally owned bike rentals	Y	Y	Y	N	Unknown
Transportation	Boat	Boatsetter	www.boatsetter.com	Personally owned boat rentals	Y	Y	Y	Y	Arbitration
Transportation	Boat	GetMyBoat	www.getmyboat.com	Personally owned boat rentals	Y	Y	N	Y	Arbitration
Transportation	Cars	Getaround	www.getaround.com	Personally owned car rentals	Y	Y	Y	-	-
Transportation	Cars	Turo	www.turo.com	Renting cars from other persons	Y	Y	Y	Y	Arbitration
Transportation	RideSharing	Rdvouz	www.rdvouz.com	Ride sharing from one location to another.	N	Y	Y	N	Unknown
Transportation	Ride Sharing	Poparide	www.poparide.com	Ride sharing from one location to another.	Y	Y	Y	Y	None
Transportation	Ride Sharing	Uber	www.uber.com	Ridesharing, online taxi service	Y	Y	Y	Y	Arbitration
Transportation	Ride Sharing	Lyft	www.lyft.com	Ridesharing, bicycle sharing,	Y	Y	Y	Y	Arbitration
Transportation	Ride Sharing	HopSkipDrive	www.hopskipdrive.com	Ridesharing for kids &older adults.	Y	Y	N	Y	Arbitration
Transportation	Ride Sharing	Grab	https://www.grab.com/sg/	Rideshare	Y	Y	Y	Y	Arbitration
Transportation	Ride Sharing	GoJek	https://www.gojek.com/en-id/	Ridesharing	Y	Y	N	Y	None
Transportation	Ride Sharing	RideHitch	https://www.ridehitch.com/	Reidsharing	Y	Y	N	Y	None
Transportation	RV	RV Share	www.rvshare.com	Personally owned RV rentals	Y	Y	N	Y	Arbitration