The Uber dilemma: there should be room within the law for the sharing economy

PUBLISHED : Tuesday, 08 September, 2015, 1:20am
UPDATED : Tuesday, 08 September, 2015, 1:34pm

Following the crackdown on car hailing service Uber, another popular but unlicensed online business has come under the spotlight. We are talking about Airbnb, a worldwide short-term accommodation rental service. Although hoteliers have yet to follow the taxi industry in openly protesting, it probably won't be long before the government is required to take action.

Available in 34,000 cities across 190 countries, Airbnb is as popular as Uber, if not more. But unlike the car service provider which targets both locals and tourists, Airbnb mainly attracts travellers looking for an alternative to hotels and guesthouses. In Hong Kong, more than 1,000 property owners have signed up, with offers ranging from a simple bedroom in a family flat to a fully furnished apartment. Prices are competitive. But like Uber, it is operating outside the law.

The hotel and guesthouse licensing law makes it an offence for anyone to offer a sleeping place for less than 28 days without a licence, with the penalties set to be raised from HK$200,000 and two years' jail to HK$500,000 and three years' jail. But that does not deter people from getting around the law to make some easy money. In fact, few people realise that the operation is illegal in many countries, including the United States where the company was founded. A landlord in New York was fined US$40,000 for renting out his unit via Airbnb two years ago.

Enforcement in Hong Kong focuses on unlicensed guesthouses rather than individuals offering a spare bedroom or flat for travellers. This is understandable, given the lower safety risks involved in the latter. But there are other issues involved, such as possible breaches of legal building use and disturbance to other residents.

The concept of the sharing economy has become increasingly popular, since it directly matches demand and supply of services and goods through the internet. The success of Uber and Airbnb shows that many regulatory regimes can no longer keep up with the pace of technological and business development. There are issues waiting to be dealt with by the authorities the world over.

Until changes are made to accommodate such businesses, the operations of Uber and Airbnb are open to legal challenge. But their growing popularity around the world means enforcement alone cannot solve the problem. Given their convenience and wide acceptance in different societies, there should be room within the law for them.