The sharing economy is just going to continue to grow, and governments will be challenged to understand and manage its implications while embracing its benefits. However, governments will be at a significant disadvantage if they wait too long and newer technologies and markets will have already been developed that do not follow traditional models. Think of the following: Uber is the worlds largest taxi service and owns no cars. Airbnb provides lodging yet does not own real estate.
How will local governments adapt to these new ways of doing business that are disrupting traditional business models? All we know now is that governments are a long way from even contemplating and accepting this new reality.
what the government could do us review all the aspects of those new business that keeps sprouting everywhere. Every business must coincide with the established law. If it complies, allow it. If not, try to restrict it. That is the way as can be seen on the recent ICO bans on China and South Korea, govetnment in action against on wht they see as threat on the less knowledgeable citizens prone to scams.