Following the emergence of for-profit, sharing economy platforms, such as Airbnb and Uber, the sharing economy has departed from its initial idea of using idle resources for primarily economic exchanges, a move which has negatively affected and caused externalities for various stakeholders. Hence, this thesis investigates the dark side of the sharing economy and its regulation.

The overarching aim of this thesis is to enhance our understanding of the negative consequences of the sharing economy and their possible mitigating regulatory mechanisms, both conceptually and empirically. Conceptually, this thesis presents a systematic and comprehensive externalities-based regulatory framework, encompassing the negative consequences affecting sharing economy stakeholders economically, socially, and environmentally, along with their possible regulatory mechanisms. Empirically, it investigates stakeholders’ preferences for the regulatory approaches proposed in the framework and assesses the effectiveness of a specific regulatory mechanism in alleviating a particular negative externality of the sharing economy.

This thesis makes several contributions to the literature on the sharing economy. First, through a systematic literature review, it presents a detailed framework that outlines the various negative aspects of the sharing economy and their potential regulatory mechanisms. Second, it experimentally provides a comprehensive understanding of the regulatory preferences of sharing economy stakeholders, identifying which regulatory approaches they favor. Finally, it offers insights into the effectiveness of a specific regulatory mechanism in enhancing regulatory compliance within the sharing economy.