Legal and Institutional Impediments to Sharing Economy: Case of Uber’s Non-Uptake in Hong Kong

Abstract

Technological innovations can significantly impact market structures and the behavior of actors, necessitating legal changes. However, in the face of technological changes brought by sharing economy, there is a differential in the responsiveness of rule-making institutions across different jurisdictions. This article analyses the rule-making institutions that allow for the regulatory changes procured by Uber and the institutional impediments that may restrict jurisdiction in accommodating this type of crowd-based technological disrupters. Uber’s non-adoption in Hong Kong is compared to its success in the United States to evaluate the limitations of rule-making institutions in responding to the legal change required by sharing economy companies. Changes in the rule-making institutions themselves may be needed to accelerate technological innovations and economic growth. This article suggests that there is a lack of institutional adaptability in Hong Kong, where the rule-making institutions are unable to facilitate potential regulatory reform. While the feasibility of changing a particular jurisdiction’s electoral system and political systems may be low, jurisdictions can improve the accountability of their executive regulators by modifying the incentive structure.