Legal Ambiguity as a Competitive Advantage: Airbnb's Use of Technological Novelty to Avoid Liability

46 Real Est. L.J. 352 (Winter 2017)

29 Pages Posted: 15 Jul 2018

See all articles by Casey Carder

Casey Carder

University of Arkansas at Little Rock - Department of Marketing and Advertising

Chase Edwards

University of Louisiana at Lafayette - Department of Economics and Finance

Stephen Burns

University of Arkansas at Little Rock

Date Written: December 1, 2017

Abstract

The peer-to-peer economy has unraveled thousands of years of codal and jurisprudential safeguards that were put in place to protect travelers and other patrons of public accommodations. Several large companies have generated billions of dollars in revenue from property rental without owning any real estate other than their corporate office and the warehouses for their server farms. When called to account for damages suffered by their guests, the companies employ a variety of legal strategies to shield themselves from liability. This paper exposes Airbnb's strategic use of its own technological novelty to pick and choose the legal theory that best serves its interest in any given case. In doing so, the company circumvents established law applicable to traditional lodging suppliers; avoids legal liability for the harm done to its guests; and gains a significant competitive advantage over traditional businesses in the hospitality industry.

Keywords: Sharing Economy, Gig Economy, Airbnb, Lodging, Law, Liability, Business Organization, Transfer of Risk, Hospitality, Novelty

JEL Classification: K13, K22, K23, K11, K10, M38, M21, M14

Suggested Citation

Carder, Casey and Edwards, Chase and Burns, Stephen, Legal Ambiguity as a Competitive Advantage: Airbnb's Use of Technological Novelty to Avoid Liability (December 1, 2017). 46 Real Est. L.J. 352 (Winter 2017), Available at SSRN: https://ssrn.com/abstract=3201649

Casey Carder

University of Arkansas at Little Rock - Department of Marketing and Advertising ( email )

Little Rock, AR 72201
United States

Chase Edwards (Contact Author)

University of Louisiana at Lafayette - Department of Economics and Finance ( email )

Lafayette, LA 70504
United States

Stephen Burns

University of Arkansas at Little Rock ( email )

Little Rock, AR 72201
United States

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