The wide-ranging responses reflect whether lawmakers view the sharing economy as a threat to local business or an economic opportunity
The rise of the sharing economy, where individuals rent items and services from other individuals instead of established businesses, has called legal systems of ownership into question around the world. Startups like apartment-sharing Airbnb and car-sharing company Uber have faced regulatory hurdles everywhere they’ve expanded, a true sign of technological disruption. Now, urban darlings like Barcelona, Amsterdam, New York, and San Francisco must ask themselves whether they’ll create policies to embrace the sharing economy, penalize it, or carve out some happy middle ground?
Europe’s so-so response to the sharing economy
Last week, the New York Times reported on how various European cities and countries have been regulating the sharing economy, with the headline reading, “Sharing Economy Faces Patchwork of Guidelines in European Countries.” Each city and country has developed its own response: Barcelona fined Airbnb for breaking local property rental laws, while Amsterdam passed legislation to encourage more local sharing services; Berlin has banned short-term rental services like Airbnb, while Paris has allowed home owners to use apartment-sharing services to rent out their flats as long as they fulfill certain safety requirements; Uber had been outlawed in Germany until Frankfurt overturned a ban in the middle of September.
Portugal has come to the sharing economy regulation game later and has seemingly benefited from other countries’ missteps, on both ends of the spectrum. Recently, the country drafted a new rental law that will not only help Airbnb and similar businesses grow, but also encourage home owners to register their property and – more importantly – pay taxes.
The U.S. had the same issues
Airbnb faced similar hurdles in the U.S., where city officials complained about property taxes lost from apartment-sharing. So, to appease local authorities, Airbnb started collecting taxes on behalf of some American city governments. Their trial city is Portland, Ore., and next month, they will start collecting property taxes in techie San Francisco.
David Hantman, head of global public policy for Airbnb, told the New York Times that the Portland trial had gone well, though he added that the company still needed “to figure out what each city thinks about who should pay each tax,” before it can consider extending the Portland plan to the more than 34,000 cities where it operates.
American bipartisanship may be dead but the sharing economy is oddly uniting
Uber last month hired David Plouffe, President Obama’s former campaign manager and White House advisor, to direct its “campaign” against “Big Taxi” and local transportation regulators across the country. At the same time, conservative Republicans like Senator Marco Rubio and anti-tax crusader Grover Norquist embraced Uber even though it is the darling of harried urbanites in Democratic enclaves like San Francisco and New York City.
The Republican Party is embracing Uber’s popularity in such hostile jurisdictions with a plaintive, “See, this is what we have been complaining about all along” pitch, complete with a “petition in support of innovative companies like Uber.” Republicans understandably salivate at the sight of liberals, for once, railing against government overreach – excessive licensing requirements, taxes, and safety regulations – threatening a service they love.
The inconsistency of disruption
The big regulatory clashes of the Internet era – the various iterations of net neutrality, the Microsoft antitrust case, the disputes over taxing online commerce, the Napster music download battles, the recent Aereo TV Supreme Court case, and the current fight over how to regulate Uber, Airbnb, and other “sharing economy” firms – haven’t produced conceptual breakthroughs for how to regulate other areas of the economy.
Instead, these “new economy” fights have deepened the dysfunction of our very old political system. Because they have typically involved definition squabbles and it is so difficult to change regulatory approaches rendered obsolete by disrupting technologies, these Internet-era fights stand out for their intellectual inconsistency.