This article analyzes the ways in which digital platforms such as Uber and Airbnb shape the costs of the three stages of pre-deal, deal-making, and post-deal: 1) search costs; 2) bargaining and decision costs; and 3) policing and enforcement costs. The article shows how platforms – based on digital large scale multi-sided networks and sophisticated algorithmic pricing may impact the relevant transactions costs at all three stages. It then suggests that regulators must consider the comparative advantages as well as risks that come from the platform delivery as well as the possibility that certain traditional regulations may be updated by platform innovations. With examples from dominant sharing economy companies and considering various regulatory challenges ranging from zoning to permitting and licensing to employment protection and consumer safety, the article aims to provide a framework for regulators and policymakers considering the regulation of new digital business models.