From Home Sharing and Ride Sharing to Shareholding

Summary

Airbnb and Uber add support to revision of Rule 701 to dramatically expand availability of Rule 701 for equity grants by “gig economy” companies.

On July 18, 2018, the Securities and Exchange Commission (SEC) published a concept release soliciting comment on ways to modernize and simplify Rule 701 under the Securities Act of 1933. In a letter dated September 21, 2018, Airbnb, Inc. responded to the concept release and proposed that a new exemption be created under Rule 701(c) that would apply specifically to grants by sharing economy companies to their participants. Airbnb refers to this exemption in its letter as the “Sharing Economy Award Exemption.” Uber Technologies, Inc. followed with a letter to the SEC on October 11, 2018, in which it similarly encouraged the SEC to expand Rule 701 and Form S-8 to cover the independent contractors that use its technology to deliver services.