The sharing economy is broadly characterized by peer-to-peer exchanges for renting goods or services utilizing Internet platforms. The sharing economy platforms focus on peer-to-peer economic transactions by facilitating the sharing or renting of space, assets, and labor in real time. Airbnb and Uber are popular examples of the sharing economy, which facilitate the sharing of residence, car, and labor. Such platforms are distinctive from other social media and e-commerce platforms which are oriented toward peer to peer communications and commercial goods transactions respectively. The sharing economy is also largely mobile first, i.e., the platforms are explicitly oriented toward the smartphone users. With mobile apps, users can request the sharing economy services from any place at any time. The sharing economy has grown exponentially over the last decade. PricewaterhouseCoopers (2015) pegged the sharing economy to grow from $15 billion dollars in 2014 to $335 billion dollars in 2025. The market value of some of the sharing economy platforms has surpassed long established firms in the sector. Uber (started in 2009) is valued at US $68 billion, which is more than each of the three big American automobile firms of Chrysler, Ford, and General Motors (Chen, 2015). Airbnb (launched in 2008) is valued at $30 billion, which is more than the Hilton hotel chain and nearly as much as the Marriott hotels (Schechner & Bensinger, 2016). Besides accommodation and car sharing, the sharing economy has spread across several sectors, including education, finance, goods, utilities, and workspace. The rapid rise of the sharing economy is pertinent in the context of adaptive and agile governance where public agencies are expected to adapt quickly to the environmental changes (Gong & Janssen, 2012; Janssen & van der Voort, 2016; Mergel, 2016). In this paper, we explore the opportunities and challenges of the sharing economy for public sector in general and digital government in particular. On the upside, the rapid rise of sharing economy presents new opportunities for the public sector. The sharing economy is innovative in using underutilized assets and spare labor. It holds environmental benefits as it re-uses existing assets at capacity. Adaptive governance in the context of sharing economy would imply that public agencies should take advantage of the new opportunities for both internal management and external public service delivery. Internally, agencies do not need to own and manage assets; they can be rented flexibly based on demand. Digital government processes could facilitate the sharing to use assets at capacity. Externally, public agencies could partner with sharing platforms to enhance public services like transit.