Daily Management Review

The European Commission takes Uber and Airbnb's side


The European Commission calls to stop prohibiting or limiting activities of mobile services like Uber and Airbnb. Instead, the Commission proposed to introduce uniform rules governing companies, representing the co-consumption economy.

Quinn Dombrowski via flickr
Quinn Dombrowski via flickr
The European Commission is calling on EU countries to stop pushing on mobile services like Uber and Airbnb to make them limit or completely forbid their activities. Instead, the regulator wants to introduce common to all the economic union rules for the activities of such companies. This should help newcomers on the European market, and protect co-consumption economy's participants from litigation with each country separately.

In the meantime, representatives of the shareconomy are forced to adjust their activities based on the laws of each country. In the vast majority of cases, the local laws are not designed for this new kind of companies, which leads to misunderstandings and sentencing on controversial matters, mainly protecting the market from new competitors. For example, Uber successfully operates in the UK, yet has many problems in France, Germany, the Netherlands and Belgium. The authorities of these European countries have introduced a partial ban on the mobile taxi service’s activities. 

However, one of European Commission’s proposal will hardly work for the path-breakers of the collaborative consumption. The EC suggest employing everyone who works for these companies. Apparently, Uber is not going to agree with this formulation. Uber’s founder, Travis Kalanick, considers Uber drivers as participants in the ride-sharing process that frees the company from paying insurance and taxes.

In a number of European countries, Uber faced strong opposition from local taxi drivers at the very start.

For example, a German union of taxi drivers Taxi Deutschland filed a lawsuit against the company. The reason for the charge was that many Uber drivers did not have license for passenger transport.

As a result, the District Court of Frankfurt am Main in March 2015 partially banned the service in Germany, and ordered all Uber drivers to obtain the necessary documents.

Last spring, Uber’s French office got searched. From 1 January 2015, the country enacted a law requiring all taxi drivers to obtain the necessary licenses and insurance. However, the French police suspected that majority of Uber drivers ignored this requirement. 

In June 2015, Uber service was officially banned in Italy. As a result of the trial, initiated by Association of Italian taxi drivers, the company was demanded to cease activity in Italy, or to employ taxi drivers with the official license.

Then, the London transport management also launched checks against Uber. According to The Guardian, the company's drivers massively falsified insurance documents, thus tricking Uber’s electronic document management system.

Airbnb suffer no less. Since May 1, the capital of Germany banned renting apartments in the city without permission of the local administration. Besides, portals that host house renting ads are now required to provide information on renters. 

According to Spiegel, those who do not obey the rules make themselves liable to a fine of € 100 thousand. The penalties relate solely to those who rent their homes out, not renters. However, it is not forbidden to take a guest room if the owner is living in the apartment together with the tenant.
Other cities around the world are also imposing regulations on Airbnb’s business. The Parisian authorities ordered the service to warn owners of apartments on violations of the right to lease. According to The Wall Street Journal, the company reached an agreement with the Paris authorities to launch in April a test project, which will last four months.

Airbnb is sending warnings to those who rent out an apartment more than 120 days a year, and to leaseholders – non-owners (this is direct law violation in Paris). The lawbreakers may face a fine of up to € 25 thousand. Earlier, the city’s officials insisted that each reservation of accommodation in Paris, carried out through Airbnb, was a subject to an 83-cents levy per night plus amount of property tax, depending on the department. Airbnb business also began to be levied in other cities around the world. For example, at the end of 2015 authorities of Barcelona fined Airbnb and its rival - Homeaway - for illegal advertising of tourist accommodation. 

source: ft.com