Legal Misclassification and Power Asymmetries in the “Sharing Economy”: Harnessing the Potential of Private Law
Dr. Juan Diaz-Granados is a Lecturer at the Australian Catholic University (Sydney, Australia). This post is based on his two recent co-authored articles, ‘Employees, Contractors and Hybrid Workers: Rethinking Legal Categories in the Sharing Economy’s Platform-User-Provider Model’ (2022) and ‘Power Imbalance in the Sharing Economy Platform Technologies: Potential Solutions from Contract Law’ (2023), published in the Australian Business Law Review (Thomson Reuters).
The so-called “Sharing Economy” –– or, more accurately, the Platform Operator-User-Provider (‘PUP’) model (1)–– is a phenomenon that represents many challenges from a legal perspective, mainly because it does not fit comfortably within traditional legal relationships. Some categories of legal relationships that would protect weaker parties do not account for the triangular legal structure that supports the model –– composed of three different but interconnected legal relationships between Platform Operators (e.g. Uber), Users (e.g. Uber passengers), and Providers (e.g. Uber drivers). Other categories of legal relationships that preserve the structure usually create power asymmetries between these actors. (2)
In these two articles, (Diaz-Granados and Sheehy, 2022) and (Diaz-Granados and Sheehy, 2023), it is argued that the commonly used classifications of worker-related relationships –– that is, the employment relationship and the independent contractor relationship –– are unfit to regulate the interaction of the actors involved adequately. These categories have been developed to address issues arising from orthodox bilateral legal relationships, not complex tripartite, technology-based interactions. Instead, customised legal categories such as Transportation Network Companies (TNCs) (3) or Transport Booking Services (4) provide alternative categories that achieve broader public policy objectives while maintaining the legal and business structure behind the model. Yet, in the absence of these new classifications, private law still offers a potential avenue of protection.
Particularly, an approach that integrates principles, doctrines and rules of contract law, implied terms, and general consumer law holds substantial potential in resolving the categorisation problem and redressing the power imbalance that pervades the “Sharing Economy” businesses. Contract law, therefore, can be used as an overarching tool to address the existing power imbalance within existing legal frameworks, offering surprisingly more regulation for the conduct of the “Sharing Economy” actors than is usually considered without the need for law reform.
(1) See, Juan Diaz-Granados & Benedict Sheehy, The Sharing Economy & the Platform-User-Provider ‘PUP Model’: Analytical Legal Frameworks, 31(4) FORDHAM INTELL. PROP. MEDIA & ENT. L. J., 997 (2021).
(2) For a full analysis of potential legal categories applicable to the model, See, Juan Diaz-Granados, Potential Legal Categories in the Sharing Economy's Platform Operator-User-Provider Model: A Taxonomic and Positive Approach — Part 1, 62(2) JURIMETRICS J., 197 (2022); Juan Diaz-Granados, Potential Legal Categories in the Sharing Economy’s Platform Operator-User-Provider Model: A Taxonomic and Positive Approach — Part 2 62(3) JURIMETRICS J., 241 (2022).
(3) See, e.g., CAL. PUB. UTIL. CODE (2014) § 5431(c).
(4) Road Trans. (Pub. Pass. Serv.) Act 2001 (Act) (Austl.).
Cite as: Juan Diaz-Granados, Legal Misclassification and Power Asymmetries in the “Sharing Economy”: Harnessing the Potential of Private Law, LAW AS SCIENCE: LEGAL METHOD LAB (June 22, 2023), www.lawasscience.org/legal-method-lab/legal-misclassification-and-power-asymmetries-in-the-sharing-economy-harnessing-the-potential-of-private-law.
