Shared economy booming

Services like Uber and Airbnb are revolutionizing the way millennials are getting from point A to point B

BY CHRISTIAN AGIURRE

Shared Economy is the concept of using a platform to allow people to buy, sell and/or share goods and services. Although this relatively new concept has gained traction among the younger generation – Uber and Airbnb –  the idea of shared economy is facing some regulatory issues.

Photo by Christian Aguirre

According to a 2015 shared economy report from the Ontario Chamber of Commerce, global revenue from shared economy companies in 2015 was estimated at $15 billion.

Now, the Government at all levels needs to find balance between tax and regulations, that won’t overburden businesses but will also protect the consumers.

According to the report, some jurisdictions like Toronto have begun to explore the concept of shared economy while others have banned shared economy companies from operating.

The report also admits that no jurisdiction has a comprehensive approach to tackling the new challenges that come with a shared economy and that shared economy companies have significant economic, environmental and community benefits.

Daniel Guttentag, a professor at Ryerson University and an expert on sharing and tourism economy believes that the shared economy has benefits.

“It does provide some income opportunities for the micro-entrepreneurs such as Uber drivers and Airbnb hosts,” says Guttentag.

According to a 2015 opinion poll by Legar, 40 per cent of young Ontarians are consumers in the shared economy. 63 percent find the shared economy more affordable with 49 percent finding it more convenient.

Toronto is getting big in the shared economy scene. Over 400,000 people use the ride-sharing service Uber to get around the GTA. In the accommodation market Airbnb offers over 5000 rentals in the city.

Guttentag says he believes regulating the shared economy is a complicated issue that cities across the globe are struggling with.

“I think that Toronto is absolutely still working through it and grappling with this and wrestling with all the implications and consequences of different policy ideas,” says Guttentagg.

A regulation was created to allow competition between traditional businesses and the shared economy alternatives.

Besides creating equality between traditional business and the shared economy, regulation is important to protect the consumer.

Courtesy: Airbnb

Companies like Uber and Airbnb have their own rules and regulations to protect their users. The problem arises because those rules may not take into account regulations put in place by cities for the traditional versions of the shared economy alternatives.

In 2016 the city implemented a vehicle-for-hire bylaw which leveled the playing field between Taxi and Uber drivers. This bylaw also protects consumers by screening Uber drivers and subjecting vehicles to safety inspections.

Last year the city of Toronto said that it was going to draft regulations for Airbnb.

Guttentag says that the regulation of Airbnb is a ‘thorny situation’ and that it’s impossible to please everyone.

“There are simply too many stakeholders involved and lots of valid concerns and valid arguments on both sides of the debate… The more you can bring the different stakeholders to the table the better you will be able to craft regulations that work as well as possible,” he says.

Airbnb made a statement in response to Toronto’s planned regulation. They said that they wanted to participate with the city and welcomed the process.

Traditional businesses have direct control over the services and products they provide. The case is different for shared economy companies. These companies provide a platform for people to provide services to users.

Shared economy services attempt to use a vetting process to maintain their standard quality, however sometimes there are cases where the services quality slips through the cracks.

The internet is littered with articles of Uber drivers mistreating customers, Airbnb accommodations not being what they were listed and cases of people getting ripped off on eBay.

Regulations put in place could serve as an added level of protection for consumers, which will create a better experience and benefits the shared economy.

 

 

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