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70 Vand. L. Rev. 1561 (2017)
Regulating Business Innovation as Policy Disruption: From the Model T to Airbnb

handle is hein.journals/vanlr70 and id is 1611 raw text is: Regulating Business Innovation as Policy Disruption: From the Model T to Airbnb Eric Biber* Sarah E. Light** J.B. Ruhl*** James Salzman**** Many scholars have invoked the term disruptive innovation when addressing the platform (sharing) economy, with sweeping claims about the dramatic changes this development promises for law, regulation, and the economy. The challenges raised by the platform economy are surely important, but we argue that recent scholarship focusing on the immediacy and novelty of the platform economy has been ahistorical, and has therefore missed the bigger picture about how to regulate it. History is full of technological and management advances that fundamentally disrupted business models for a brief period of time. When business innovation upends a preexisting business model in a regulated industry, the result can be a disjunction between the structure of the regulatory system governing incumbent firms and the firms disrupting the industry: a policy disruption. Policy disruption can result from conscious choices by entrepreneurs to exploit legal loopholes or to challenge regulatory protections for incumbents. But it can just as easily result from gaps in a regulatory regime or fundamentally new business models that solve problems legal regimes have been designed to address. This Article is the first to offer a comprehensive analytical framework of * Professor of Law, UC Berkeley School of Law. ** Assistant Professor of Legal Studies and Business Ethics, the Wharton School, University of Pennsylvania. *** David Daniels Allen Distinguished Chair of Law, Vanderbilt Law School. **** Donald Bren Distinguished Professor of Environmental Law, UCLA Law School and UCSB Bren School of Environmental Science and Management. The authors are thankful for the comments received on early versions of this work by Tom Donaldson, Elizabeth Pollman, David Spence, Kevin Werbach, and participants at workshop presentations at the BYU, Florida International, and Vanderbilt law schools, the UCSB Bren School, and the Legal Studies and Business Ethics Department at Wharton. We are also appreciative of the research assistance received from Sophia Huang, Alexander Cooper, and Adam Tsao. 1561

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