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The rapid growth of firms such as Uber, Airbnb, and Task Rabbit has attracted considerable attention – and controversy – from the media, policymakers and researchers. These firms, which provide online platforms to link workers producing goods or services directly with consumers, are often referred to as "peer-to-peer markets", the "gig economy", or the "sharing economy". To date, relatively little empirical research has been published on the size, scope or impacts of online peer-to-peer (P2P) markets, most likely because of data constraints. For peer-to-peer markets to emerge and thrive, there need to be favorable conditions for both supply and demand: potential workers find the wages provided sufficiently attractive to offer their time or other resources, and consumers are willing to pay for the goods and services. Most of the existing academic research and policy debate centers around the labor market implications: whether alternative work arrangements, including online P2P markets, are more or less desirable for workers. Less attention has been paid to the consumer implications, namely, how the availability of goods and services through these markets affects the well-being of consumers.2

This note considers the potential for spatial variation in the size and composition of online P2P markets from both the labor market and consumer perspectives. Some P2P platforms create virtual markets that do not require spatial proximity between workers and consumers, while others require direct personal interactions. What local area characteristics might lead workers to offer their labor through online platforms, instead of or in addition to traditional work arrangements or offline intermediaries? How do local factors affect consumers' demand for goods and services delivered through decentralized markets, relative to bricks-and-mortar establishments? How do spatial patterns of P2P workers and consumers vary by the good or service offered? In this note, I review the existing academic literature, lay out several testable hypotheses, and present some descriptive analysis based on a new survey of workers who earn income through online P2P markets.

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