Association for Public Policy Analysis & Management

In the last decade, the sharing economy has transformed cities. Short-term rentals, scooters, and ride-sharing have added well-publicized convenience and complications to urban life. Yet as cities adopt policy to respond to these new opportunities and challenges, states have stepped in to these areas typically under local control – land use, streets, and sidewalks – and overridden local regulations. This paper uses a unique multilevel data set of all U.S. state and local ride-sharing regulations through 2018 to examine how states and cities divide authority when faced with a new issue area. The analysis finds that cities, even those that adopted pro-ride-sharing policies, regulated the services like other transportation services and adopted regulations soon after ride-sharing services begin operating. States, however, do not respond to the entrance of ride-sharing services, nor do they adopt statewide versions of popular local policies. Instead, states adopt regulations that preempt local authority and favor corporate-preferred regulations when lobbied by ride-sharing companies, particularly in the year following a city adopting regulations that restrict local ride-sharing operations. In addition to providing the first comprehensive data set of local ride-sharing policies, the paper offers insight into how new policy is incorporated into existing institutions and provides a case study of how corporations and other interested parties can exploit regulatory gaps and venues in the federalist system to achieve preferred regulatory outcomes.