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talkpoliticsSharing economy and direct deals between producers and consumer don't seem to be liked by traditional business (and most governments). The former views them as an active and potentially strong rival that isn't easy to deal with, therefore should be condemned as unethical; the latter hate the fact that this sort of interaction tends to elude regulation and taxation.
This is why both traditional business and governments are trying, mostly through regulation and legal action, to remove any sharing economy platform that they come across. It's hardly a surprise that the cities where Uber is banned usually do this after mass protests from taxi drivers and companies.
The short-term apartment renting platforms are also often subject to such pressure, and calls for stricter regulation (we've been seeing such a campaign in the EU). The motivation for this is also trivial: renting an apartment online, directly from the owner, is viewed as part of the grey economy and it is assumed (without evidence) that the offered apartments don't match the quality and safety standards and criteria.
The solution of these problems is often the employment of the big axe: in the case of Airbnb and the likes, there are ministers of tourism pushing for only allowing the advertisement of such apartments that are registered as per the local legislation, and imposing penalties when this requirement is not met.
Except, such an idea is not just hard to implement, it's outright harmful. It's hard because of the unreasonably high cost for its implementation. While in traditional business the companies conducting their business in a certain country could be controlled and regulated relatively easily, online platforms only have the role of a mediator, which doesn't really perform any role other than mediation, and is often registered under a foreign jurisdiction (for example the European HQ of Airbnb is in Dublin and the company operates as per the Irish law). Even if we assume it's possible to harmonize the legislation at a continental (European) level, tracking and controlling the whole enterprise would be too expensive and difficult, while these platforms will keep improving their technologies and methods for meeting the needs of their customers, overcoming all attempts to have their activity blocked. In a way, they'll always be a step ahead of the governments.
The attempt to regulate sharing economy is also harmful because it's essentially an attempt to halt the development of the tourist industry (in this case), which is against the interests of the customers. The reason that online accommodation platforms exist is because the consumers prefer them to traditional hotels and tourist agencies. And they prefer them because these offer a more diverse array of services, compared to the highly regulated and licensed places for accommodation, so the customers can directly access exactly the service that they need. Prices also matter here: since the unregulated direct market operates in a more competitive environment, it's forced to offer increasingly competitive prices and conditions beating the traditional hotels price-wise. That's because they're not burdened with all the registration, licensing and control regimes hanging over the neck of traditional business. So if these are somehow imposed here too, the ultimate loser would be the end consumer - the product would suffer both price- and quality-wise.
At the end of the day, the attempts to regulate online platforms at any cost is mostly a protective reaction of traditional business. It's much cheaper and easier for it to lobby towards a ban of any rival alternatives, rather than trying to directly compete with them and doing the effort to adapt and adjust to the new realities at the expense of its product and its established position on the market. However, these efforts only seem to be postponing the inevitable. The development of sharing economy, especially in the long-term, seems to be unstoppable at this point. So it might be in the interests of both governments and the public that they represent to get used to the new sort of competition, and come up with a plan to provide better alternatives instead of forcefully trying to block progress.
This is why both traditional business and governments are trying, mostly through regulation and legal action, to remove any sharing economy platform that they come across. It's hardly a surprise that the cities where Uber is banned usually do this after mass protests from taxi drivers and companies.
The short-term apartment renting platforms are also often subject to such pressure, and calls for stricter regulation (we've been seeing such a campaign in the EU). The motivation for this is also trivial: renting an apartment online, directly from the owner, is viewed as part of the grey economy and it is assumed (without evidence) that the offered apartments don't match the quality and safety standards and criteria.
The solution of these problems is often the employment of the big axe: in the case of Airbnb and the likes, there are ministers of tourism pushing for only allowing the advertisement of such apartments that are registered as per the local legislation, and imposing penalties when this requirement is not met.
Except, such an idea is not just hard to implement, it's outright harmful. It's hard because of the unreasonably high cost for its implementation. While in traditional business the companies conducting their business in a certain country could be controlled and regulated relatively easily, online platforms only have the role of a mediator, which doesn't really perform any role other than mediation, and is often registered under a foreign jurisdiction (for example the European HQ of Airbnb is in Dublin and the company operates as per the Irish law). Even if we assume it's possible to harmonize the legislation at a continental (European) level, tracking and controlling the whole enterprise would be too expensive and difficult, while these platforms will keep improving their technologies and methods for meeting the needs of their customers, overcoming all attempts to have their activity blocked. In a way, they'll always be a step ahead of the governments.
The attempt to regulate sharing economy is also harmful because it's essentially an attempt to halt the development of the tourist industry (in this case), which is against the interests of the customers. The reason that online accommodation platforms exist is because the consumers prefer them to traditional hotels and tourist agencies. And they prefer them because these offer a more diverse array of services, compared to the highly regulated and licensed places for accommodation, so the customers can directly access exactly the service that they need. Prices also matter here: since the unregulated direct market operates in a more competitive environment, it's forced to offer increasingly competitive prices and conditions beating the traditional hotels price-wise. That's because they're not burdened with all the registration, licensing and control regimes hanging over the neck of traditional business. So if these are somehow imposed here too, the ultimate loser would be the end consumer - the product would suffer both price- and quality-wise.
At the end of the day, the attempts to regulate online platforms at any cost is mostly a protective reaction of traditional business. It's much cheaper and easier for it to lobby towards a ban of any rival alternatives, rather than trying to directly compete with them and doing the effort to adapt and adjust to the new realities at the expense of its product and its established position on the market. However, these efforts only seem to be postponing the inevitable. The development of sharing economy, especially in the long-term, seems to be unstoppable at this point. So it might be in the interests of both governments and the public that they represent to get used to the new sort of competition, and come up with a plan to provide better alternatives instead of forcefully trying to block progress.
