The kumbaya sound of the "sharing economy" hums right by the fact that the irresistible middlemen who make it easy to find a place to stay or a cab at your fingertips do so for a hefty profit. And when profit and public infrastructure like housing and transportation collide, regulators are bound to follow.
Just yesterday, France passed a rule that drivers for Uber and other e-hailing services will have to wait to 15 minutes before picking up passengers because their "hurt traditional cab drivers," who have to pay exorbitant fees for their taxi license.
Germany has already gotten started. On January 1st, a new law will go into effect that makes it illegal for owners of Berlin's 12,000 to 15,000 "private holiday apartments to rent them to tourists for short breaks." The law was enacted as a response to the capital city's lack of affordable housing. Those who disobey risk being fined €50,000 ($68,940).
Earlier coverage about the law described Airbnb as vehicle for landlords that want to kick out unwanted renters so that can make more money off of Berlin's thriving tourist sector. Last month, Spiegel Online reported:
According to official estimates, 12,000 apartments have been taken off the long-term rental market for this more lucrative purpose — they are seen by landlords as a good way to get rid of unwanted tenants and increase the yield on their investments as increasing numbers of tourists flock to Berlin. Websites such as Airbnb make the process of renting out apartments for short stays easy and economical.
The law provides for the possibility of restricting the ban to the worst-affected neighborhoods, and also allows for exceptions where the public interest is served, such as housing for asylum seekers, medical surgeries, nurseries or child-care providers. The ban does not apply to fixed-term leases for workers posted to the city, au pairs, interns or embassy staff, stressed Iris Spranger, a member of the center-left Social Democrats (SPD), the senior partner in State of Berlin's ruling coalition. It is unclear how the new rules would affect people who rent out their own apartments for short periods when, for example, they are out of town.
"The government coalition has made sure that aside of this very tough regulation of this bill, the Sharing Economy remains an important part of the housing market. Berlin as a metropolis and Startup City benefits greatly from the Sharing Economy and the Internet industry. This means that an occasional provision of housing space to third parties who use the premises mainly for residential purposes, but also in a commercial manner, is not seen as commercial rental and therefore not subject to the statutory prohibition of misuse."
When the bill was still in proposal phase, Airbnb's head of global public policy David Hantman, who previously worked for Senators Dianne Feinstein and Chuck Schumer, said there may also be a licensing requirement for hosts:
The proposed legislation appears to include confusing rules about home-sharing and it's unclear whether or how these rules would apply to Airbnb hosts. For example, the law might give current hosts two years to continue hosting, but only if they register with the government and obtain a license. And the proposal gives few details on how and when that license should be granted.
Hantman also pointed out that there are 1.7 million apartments in Berlin, and only 7,000 listings on Airbnb, so "we know that Airbnb isn't having an effect on the number of homes available for rent." I've reached out to Airbnb about the licensing requirement and will update the post when I hear back.
Ubertarians will chalk this up to stodgy authorities holding back innovation to favor incumbents like the hotel or taxi industry. But even outside regulatory chambers, economic tensions are running high on the streets of Berlin:
Concerns among activists on Berlin's left-wing alternative scene that the city is being sold out to property speculators has fuelled opposition to holiday rents and led to a marked increase in hostility towards tourists. Ares Kalandides, a Greek-born city guide, recalled the shock he experienced while escorting Israeli journalists earlier this year.
"Suddenly a group of drunken twentysomething men and women started screaming at us," Mr Kalandides said. "I was shocked, embarrassed and angry, but I'm afraid that's almost normal in Berlin these days."
Airbnb and Uber are going to have to find a way to comply, unless they want investors to go cross-eyed reading the "Risk Factors" section of their S-1 filings.
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[Image via Airbnb]