Why Hong Kong has to accommodate Airbnb and Uber – or slam the door on innovation economy

Peter Kammerer says while Uber and Airbnb are no different from other for-profit businesses, outright rejection of widely accepted ideas such as these risks Hong Kong shutting out innovation altogether

PUBLISHED : Monday, 17 July, 2017, 12:41pm
UPDATED : Tuesday, 18 July, 2017, 3:26pm

Uber, Airbnb and all those bike app companies that have sprung up of late have little, if anything, to do with the “sharing economy”. Nor are they marvels of technology to be fawned over. They are businesses for making profit, pure and simple, and should be treated by governments as such.

Hong Kong’s innovation and technology minister, Nicholas Yang Wei-hsiung, came in for flak after making that point to lawmakers last month. He was widely viewed as being anti-technology for hitting out at app-driven private car-hire services and online flat rentals. They could, he contended, only be allowed to operate if they first met government requirements and regulations. Without such approval, they were illegal.

No one can argue with such sentiments; there are too many greedy companies and weirdos out there, and employees and customers need proper protections. Registering and licensing is the only way to do that. Hiding behind the banner of the “sharing economy” cannot be allowed, particularly if there’s no sharing going on. I can’t see the sharing element in using an app to get an Uber car, paying to go from place to place on a bike, or going onto the Airbnb website to rent a room in someone’s flat.

Uber, Airbnb show Hong Kong’s inability to adapt to changing times and technology

The sharing economy only works at the grass-roots level. The online auction site eBay was like that when it started in 1995, being a platform for people to offload what they no longer needed. It was truly democratic in nature, allowing people to buy as well as sell. But eBay is now more an online store than an auction site; auctions account for a fraction of the listings.

Hong Kong is often held hostage by vested interests

Uber and Airbnb have been the flag-bearers of the sharing economy, and being headquartered in liberal San Francisco helps with the legitimacy of such a claim. But Uber has never been about sharing, even though it has promoted itself as a ride-sharing platform; it is just a tech-savvy private taxi service. Airbnb better fit the concept when it was founded, being about making a little extra cash from renting everything from a room to a sofa, and getting a more authentic experience from travel.

But it is now competing with the hotel industry. The recent link-up between Airbnb and Concur Technologies, an American company that provides travel and expense management to businesses, says it all; this is about standardising rooms for business travellers.

Hong Kong has well-established rules about both. Someone wanting to operate a taxi has to have a licence and meet standards and safety requirements. Anyone taking in guests for fewer than 28 days has to have a permit to ensure that the premises meet guest-house standards and are safe to use.

To ignore such rules can put lives at risk.

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But therein also lies a problem. Hong Kong, for all the government’s free-market claims, is often held hostage by vested interests. Authorities don’t like to disturb the status quo and can easily be successfully lobbied through the use of threats; the taxi industry has shown that time and again in blocking Uber from getting the necessary permits to operate legally. The 38 prosecutions between 2014 and 2016 of illegal private car services and the 454 of suspected illegal guest house operators show how protective the industries can be.

The government needs to be flexible with new business ideas, particularly when they have gained wide local and international acceptance. It’s too late to force out Uber and Airbnb; all that can now be done is to accommodate them and ensure that they meet our standards.

Peter Kammerer is a senior writer at the Post