MPs demand sharing economy sites must be subject to regulation

MPs demand sharing economy sites must be subject to regulation

MPs demand the government ‘set clear’ objectives on regulating sites such as Airbnb and Uber. Ian Taylor reports

MPs called on the government to “set out objectives for the regulation of disruptive change” in the digital economy in a report last month, noting “a risk that regulation always lags behind technology”.

But industry associations argue little is being done to address the issue in Westminster or Brussels.

British Hospitality Association chief executive Ufi Ibrahim told the Commons select committee which produced the report that the ‘sharing economy’ and sites such as Airbnb involve “professional landlords operating outside UK regulations” on an “industrial scale”.

The BHA estimates 40% of listings on home-exchange sites involve professional landlords, that a similar proportion of London listings are by multiple‑property owners renting accommodation year round, and that the top 1,000 hosts net £150 million in annual revenue. It argues the lack of regulation is “endangering the public” and, among other changes, wants a cap on the number of nights a year accommodation can be let.

The MPs listened to senior figures from Airbnb and Love Home Swap as well as from other sectors and reported: “The tension is keenly felt. Often digital businesses do not have to follow the same regulation and compliance as incumbent businesses… Airbnb providers are not bound by health and safety regulations of hotels.”

They concluded “it would be ludicrous to try to hold back the tide of technology”, but suggested the government “ensure the legal avoidance of regulation is not the sole or primary source of competitive advantage” and said: “Regulation must… ensure businesses are not excluded from safeguards such as health and safety regulations.”

The MPs suggested the government “study ways in which platform providers become key players in ensuring users comply with current regulations”.

However, evidence from Amsterdam, where Airbnb is subject to regulation, suggests the problem is enforcement.

EC guidance on “how existing EU law should be applied” to the home-share sector, published in June, disappointed those seeking tougher oversight. Hotrec, the European association for hotels and restaurants, dismissed it as “foggy” and “ignoring the liability of platforms”.

The EC does suggest: “Member states should differentiate between individual citizens providing services on an occasional basis and providers acting in a professional capacity.” It also notes: “Consumers [should] enjoy a high level of protection from unfair commercial practices.” And it argues: “Collaborative economy platforms should fully cooperate with national authorities to record economic activity and aid tax collection.”

Hotrec said: “We see some positive steps, but many issues need clarification. Besides consumer protection, taxation and employment issues, the hospitality industry calls [for] the compliance of service providers with food and health and safety legislation.”

It called on governments “to set up the registration of activity” by ‘sharing’ platforms and said: “The solution lies in the enforcement of existing regulations at national level.”

UK industry consultant Andy Cooper pointed out: “The EC guidance will have little legal effect. There are no pan-European rules on accommodation safety, so there are no standards with which the sector could be forced to comply. Any laws which do exist are managed nationally. The EU cannot force individual member states to do anything.”

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