Asia must get to grips with Airbnb and the growing 'gig economy' to make business competition fair
Jenny Peng says the growing popularity of Airbnb and other short-term rental services makes it necessary to regulate the industry, not least to even the playing field
Having recently rented my first Airbnb stay on a vacation, I've started looking into monthly sublets on the site and imagined making extra income from a spare room. It's easy to appreciate how companies such as Airbnb and FlipKey empower individuals to generate income on their own terms.
But the downside of short-term rentals has gotten far less attention. By participating, we are putting job security and affordable housing at risk. Asia's infrastructure and governments are also ill-prepared to enforce regulations. For instance, neither the Hong Kong, Japanese, Singaporean nor any Asian government has proposed viable solutions to regulate short-term rentals.
For the unknowing, the online platform connects people who have space to spare with those looking for a short stay at a competitive price. Services such as these, along with Uber, are driving the "gig economy". Their platform enables people to become freelance service providers without the inspections and legal oversight that traditional lodging and cab industries are subject to.
Prohibiting short-term rentals altogether is avoiding a new reality that's here to stay
With the rapid success of gig economies, governments in places where Airbnb and FlipKey have gained a substantial foothold are scrambling to catch up by providing regulations and proper enforcement - mainly in the US and Europe. Therefore, governments, industry professionals and users should learn about the alarming side effects that gig services are imminently bringing to Asia.
In Hong Kong, leasing agreements do not have clauses allowing short-term rentals. These properties are also unregistered, which makes enforcing regulations nearly impossible. A lawyer who rented out a spare room in his apartment revealed to Marketing magazine that the government's inability to reform fast enough is a sign that "laws are often too conservative and behind the times".
Like Hong Kong, the Singaporean government has yet to announce when new regulations, if any, will be implemented. In the meantime, they've reverted back to their iron-fist governance by evicting those who rent out their public housing homes - a punishment many say is too harsh. In Japan, citizens are caught in a tug of war between Prime Minister Shinzo Abe's push to relax strict rules imposed on short-term rentals as part of his economic growth strategy and ultra-conservative lawmakers at the city level. According to Reuters, Osaka legislators voted down a bill in September last year to loosen regulations, citing noise and safety concerns.
Prohibiting short-term rentals altogether is avoiding a new reality that's here to stay. It's better to design policies that evens the playing field for all.