There's a seminal case with potential global impact unfolding in New York where Airbnb, the world's hottest accommodation company, is waging an increasingly personal battle with attorney general Eric Schneiderman, who this this week filed an affidavit with the state Supreme Court claiming that most Airbnb listings in New York are illegal.
The Sharing Economy: An old concept made new through the internet-based sharing of underutilized space, skills, and stuff for monetary and non-monetary benefits. Recently, a proliferation of start-ups have created digital platforms to connect owners with consumers. These companies encourage people—and businesses—to use resources more efficiently and to share non-product assets (like time) as well as conventional “stuff.” Citizens can share space in their homes (Airbnb), seats in their car (Lyft, Sidecar, UberX), places to park (Park Circa), used clothing (ThredUp), outdoor gear (gearcommons), time in the day (TaskRabbit, Instacart), and even capital (Zopa, Prosper). This trend has attracted significant attention from thought leaders (in 2011, Time Magazine crowned it one of ten ideas that will change the world), venture capital (Uber recently received $258M in funding from Google Ventures, and a recent round of financing for Airbnb would value it above $10B), the media, and, most recently, Congress. Nevertheless, regulatory mechanisms have not kept pace.
Countless articles have been written lately about the very real business challenges created by the onslaught of new regulation in everything from finance to technology to healthcare. The gripes are justified. Ten years ago there were 2 or 3 major regulators that most big companies had to deal with; now there are hundreds, creating a global patchwork of complex, often contradictory corporate compliance hurdles for multinational companies.
The Financial Industry Regulatory Authority (also known as FINRA), the largest independent regulator for fall securities firms that do business in the USA), has issued an investor alert on bitcoin entitled Bitcoin: More than a Bit Risky, which aims to caution investors who may be looking to invest in the emerging digital currency.
A variety of Internet-enabled platforms for peer-to-peer commerce seem to be under regulatory siege. If settlement talks fail, Airbnb is heading to court to challenge a wide-ranging subpoena for New York City host information issued by the New York State attorney general. The urban transportation platforms Uber, Lyft and Sidecar have battled regulators in numerous cities – for instance, Sidecar left New York last spring after a sting by agents of the Taxi and Limousine Commission during a pilot program in Brooklyn led to the impounding of a driver’s car. A consortium of cabbies and drivers recently sued the city of Chicago with a claim that the city has allowed “unlawful taxi caste system” to emerge. RelayRides, a peer-to-peer car rental marketplace, suspended operations in New York a few months ago after being told that a regulator “believes there is noncompliance with certain unique aspects” of New York insurance law.
Renting a spare room to backpackers or slapping a mustache on your car and transporting bar-hoppers seems like an easy way to make money - until tax season rolls around.
The wealthiest nations in the world have widely divergent approaches to regulating Bitcoin, and some of them aren't regulating digital currencies at all, according to a report on 40 nations plus the European
Selfish behaviour will propel America's sharing economy. New matchmaking business models are thriving in large part by forging into grey areas of tax and regulation.
The proposal for a Regulation on the Telecom Package, issued by Neelie Kroes on September 11th despite vivid criticisms from both outside1 and inside the Commission2, pretends to defend the Net neutrality principle by stating in its article 23.5 that “providers of Internet access services shall not restrict the freedoms [of communication] by blocking, slowing down, degrading or discriminating against specific content, applications or services”3.
Sharing economy enthusiasts gathered together at an event put together by Let's Collaborate! and Suits to Silicon Alley last week to talk about the growth of the sharing economy and the subsequent implications with government in New York. Many peer-to-peer platforms face problems with outdated government laws designed for more traditional B2C industries or face no laws at all.
The clock could be ticking for businesses like Airbnb, Wimdu, 9Flatsand HouseTrip as new regulations gradually being introduced in some cities around the world begin to threaten their core business – but the problem is bigger than that.
Anyone who has ever rented a beach house on Airbnb or taken a ride with Uber has unwittingly stepped into a long brewing conflict over how the sharing economy fits in with local regulation -- often with regulators charging companies with disrupting local laws while earning massive profits by assisting in providing potentially illegal services.
A variety of Internet-enabled platforms for peer-to-peer commerce seem to be under regulatory siege. If settlement talks fail, Airbnb is heading to court to challenge a wide-ranging subpoena for New York City host information issued by the New York State attorney general. The urban transportation platforms Uber, Lyft andSidecar have battled regulators in numerous cities – for instance, Sidecar left New York last spring after a sting by agents of the Taxi and Limousine Commission during a pilot program in Brooklyn led to the impounding of a driver’s car. A consortium of cabbies and drivers recently sued the city of Chicago with a claim that the city has allowed “unlawful taxi caste system” to emerge. RelayRides, a peer-to-peer car rental marketplace, suspended operations in New York a few months ago after being told that a regulator “believes there is noncompliance with certain unique aspects” of New York insurance law.
In this video, Professor Bronwen Morgan from the University of New South Wales examines the interaction between regulation and rights in the context of social activism.
Ryan Lawler met with Arun Sundarajan, Professor at NYU, to discuss issues challenging businesses in the sharing economy. They talk about the need to regulate community-sourced services to ensure safety and quality, but what is the role of government in this system?
2013 marked the rise of the sharing economy and, as with any new market, questions on how to regulate it have also arisen. The two most prominent examples of this type of company are Uber and Airbnb, both of which have seen their fair share of regulatory challenges thus far.
latest sustainable business news - The sharing economy: is Airbnb's legal trouble a sign of things to come? (Challenges: The sharing economy: Airbnb's legal trouble a sign of things to come for resource-efficient businesses?
Just a few days after we pondered whether the clock was ticking on the sharing economy, news has emerged that European Airbnb competitor 9flats is closing down its Berlin operations. The news follows Berlin’s move toban short-term vacation rentals in the German capital.
On the surface, it's a classic disruption story: Airbnb, a scrappy internet company that matches cash-strapped travelers with people who have spare rooms to rent, grows large enough to pose a threat to the hotel market. It then finds itself under attack – in this case, from the New York attorney general's office, protecting the interests of the wealthy, entrenched hotel lobby.
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