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Sharing Economy Faces Patchwork of Guidelines in European Countries For Airbnb and Uber, an Uneven Response by Regulators
(about 9 hours later)
LISBON — Start-ups like Uber and Airbnb want European consumers to embrace their companies. Yet when it comes to persuading policy makers, these companies have run into regulatory hurdles that have exposed the European Union’s uneven response to technological innovation.LISBON — Start-ups like Uber and Airbnb want European consumers to embrace their companies. Yet when it comes to persuading policy makers, these companies have run into regulatory hurdles that have exposed the European Union’s uneven response to technological innovation.
Some cities are clamping down on the companies, like Barcelona, where Airbnb, an apartment-sharing service, was recently fined for breaching regional property rental rules. In other cities, like Amsterdam, politicians have passed legislation to help jump-start the local sharing economy.Some cities are clamping down on the companies, like Barcelona, where Airbnb, an apartment-sharing service, was recently fined for breaching regional property rental rules. In other cities, like Amsterdam, politicians have passed legislation to help jump-start the local sharing economy.
Some European countries are sending mixed signals: Uber, the car-sharing service, was banned in Germany until last week, when a court in Frankfurt overturned the ban. And here in the capital of Portugal, the latest country to address these issues, a new rental law is meant to help Airbnb and local rivals grow, while also encouraging apartment owners to register their property and — more important — pay taxes.Some European countries are sending mixed signals: Uber, the car-sharing service, was banned in Germany until last week, when a court in Frankfurt overturned the ban. And here in the capital of Portugal, the latest country to address these issues, a new rental law is meant to help Airbnb and local rivals grow, while also encouraging apartment owners to register their property and — more important — pay taxes.
As in the United States, where tech start-ups have also faced legal challenges, the wide-ranging response in Europe often comes down to whether lawmakers view the companies as a threat to local businesses or an opportunity to improve economic growth.As in the United States, where tech start-ups have also faced legal challenges, the wide-ranging response in Europe often comes down to whether lawmakers view the companies as a threat to local businesses or an opportunity to improve economic growth.
Whatever the reasoning, the patchwork of rules and regulations has left companies struggling to navigate regulatory changes.Whatever the reasoning, the patchwork of rules and regulations has left companies struggling to navigate regulatory changes.
“It would be paradise for us if we only had one regulator, not thousands of different authorities, that we had to deal with,” said Arnaud Bertrand, a French entrepreneur who co-founded HouseTrip, a European rival to Airbnb.“It would be paradise for us if we only had one regulator, not thousands of different authorities, that we had to deal with,” said Arnaud Bertrand, a French entrepreneur who co-founded HouseTrip, a European rival to Airbnb.
Neelie Kroes, the departing European commissioner for the digital agenda, has supported many start-ups as a way to promote growth and innovation. Some technology companies have even received financing from the European Union to challenge American leaders like Uber.Neelie Kroes, the departing European commissioner for the digital agenda, has supported many start-ups as a way to promote growth and innovation. Some technology companies have even received financing from the European Union to challenge American leaders like Uber.
Adolfo Mesquita Nunes, the Portuguese secretary of state for tourism, said his government had studied the response to Airbnb in places like Barcelona and Amsterdam and concluded that “in a digital world, this is an unstoppable movement.”Adolfo Mesquita Nunes, the Portuguese secretary of state for tourism, said his government had studied the response to Airbnb in places like Barcelona and Amsterdam and concluded that “in a digital world, this is an unstoppable movement.”
Airbnb allows people to list their room or home for rent for short periods of time. More than half of its business now comes from Europe, with Paris as its biggest listing city in the world, ahead of New York City.Airbnb allows people to list their room or home for rent for short periods of time. More than half of its business now comes from Europe, with Paris as its biggest listing city in the world, ahead of New York City.
In July, the house-sharing start-up received its first fine in Europe, of €30,000, or about $38,500, for violating a 2012 law introduced by the regional government of Catalonia, whose capital is Barcelona, that forbids renting individual rooms for tourism purposes. Airbnb is appealing the fine.In July, the house-sharing start-up received its first fine in Europe, of €30,000, or about $38,500, for violating a 2012 law introduced by the regional government of Catalonia, whose capital is Barcelona, that forbids renting individual rooms for tourism purposes. Airbnb is appealing the fine.
Mr. Mesquita Nunes, the Portuguese politician, said the authorities should focus on improving property tax collection from people using Airbnb. Governments, he said, should not just add rules that are difficult to enforce, even if that strategy upsets traditional hoteliers who are themselves subject to tough regulations.Mr. Mesquita Nunes, the Portuguese politician, said the authorities should focus on improving property tax collection from people using Airbnb. Governments, he said, should not just add rules that are difficult to enforce, even if that strategy upsets traditional hoteliers who are themselves subject to tough regulations.
Federico González Tejera, chief executive of the Madrid-based NH Hoteles, which operates about 360 hotels in Europe, said if regulators granted Airbnb and others unfettered market access, “perhaps they should also reduce the conditions put on us.”Federico González Tejera, chief executive of the Madrid-based NH Hoteles, which operates about 360 hotels in Europe, said if regulators granted Airbnb and others unfettered market access, “perhaps they should also reduce the conditions put on us.”
Portugal’s new law, which goes into effect in November, sets no limit on how many rooms or how long an apartment can be rented. It forces owners, however, to register their properties online with local municipalities as an apartment or a hostel if it has more than nine rooms.Portugal’s new law, which goes into effect in November, sets no limit on how many rooms or how long an apartment can be rented. It forces owners, however, to register their properties online with local municipalities as an apartment or a hostel if it has more than nine rooms.
Hotel operators pushed unsuccessfully for more stringent rules, like forcing apartment owners to offer a bathroom with each room, according to Adília Lisboa, the president of the Confederation of Portuguese Tourism. Still, she said, the new law is an improvement if “it gets people into the system who are now renting their apartments and competing with established hotels but not even paying any taxes.”Hotel operators pushed unsuccessfully for more stringent rules, like forcing apartment owners to offer a bathroom with each room, according to Adília Lisboa, the president of the Confederation of Portuguese Tourism. Still, she said, the new law is an improvement if “it gets people into the system who are now renting their apartments and competing with established hotels but not even paying any taxes.”
Airbnb argues that it has simply magnified issues that policy makers previously chose not to confront. “Until services like Airbnb came along, many people weren’t paying any taxes if they rented out rooms to travelers,” said David Hantman, head of global public policy for Airbnb. “We’re helping to increase transparency.”Airbnb argues that it has simply magnified issues that policy makers previously chose not to confront. “Until services like Airbnb came along, many people weren’t paying any taxes if they rented out rooms to travelers,” said David Hantman, head of global public policy for Airbnb. “We’re helping to increase transparency.”
Even with the changes, greater tax revenues for Portugal are not a foregone conclusion.Even with the changes, greater tax revenues for Portugal are not a foregone conclusion.
André Penin, 32, started renting out a one-bedroom Lisbon apartment last June for €45 a night, or about $58, but said he would now study whether the law made it “still profitable or better to shut down.”André Penin, 32, started renting out a one-bedroom Lisbon apartment last June for €45 a night, or about $58, but said he would now study whether the law made it “still profitable or better to shut down.”
“It has been an incredibly successful and crazy summer” of renting, Mr. Penin said.“It has been an incredibly successful and crazy summer” of renting, Mr. Penin said.
Some European politicians warn that weaker oversight raises safety risks and other concerns for customers.Some European politicians warn that weaker oversight raises safety risks and other concerns for customers.
“All the risks are currently delegated to people who are the most at risk in the labor market,” said Mei Li Vos, a left-leaning Dutch politician who wants start-ups to hold more legal responsibility for the way people use their services.“All the risks are currently delegated to people who are the most at risk in the labor market,” said Mei Li Vos, a left-leaning Dutch politician who wants start-ups to hold more legal responsibility for the way people use their services.
Vocal opposition by some of Europe’s hoteliers has been somewhat muted by record tourism revenues in countries including Spain and Portugal.Vocal opposition by some of Europe’s hoteliers has been somewhat muted by record tourism revenues in countries including Spain and Portugal.
Some hotel owners have even welcomed competition from the likes of Airbnb. My Story Hotels, which opened its first establishment in downtown Lisbon this year, plans to have five hotels in the area within 18 months.Some hotel owners have even welcomed competition from the likes of Airbnb. My Story Hotels, which opened its first establishment in downtown Lisbon this year, plans to have five hotels in the area within 18 months.
Alfredo Tavares, its operations manager, said the government needed to oversee the safety and tax compliance of rental apartments, but should not outlaw them.Alfredo Tavares, its operations manager, said the government needed to oversee the safety and tax compliance of rental apartments, but should not outlaw them.
“With more offers available, Lisbon will have more visibility,” he said.“With more offers available, Lisbon will have more visibility,” he said.
The stance toward Airbnb is different, however, in a city like Berlin, where the population is increasing by almost 50,000 people each year.The stance toward Airbnb is different, however, in a city like Berlin, where the population is increasing by almost 50,000 people each year.
To allow residents to lease apartments that might otherwise be set aside for short-term rentals, the German capital has introduced rules that ban short-term renting without approval from local authorities. Airbnb has faced similar problems in New York, where politicians say the service has led to a reduction in available apartments.To allow residents to lease apartments that might otherwise be set aside for short-term rentals, the German capital has introduced rules that ban short-term renting without approval from local authorities. Airbnb has faced similar problems in New York, where politicians say the service has led to a reduction in available apartments.
In contrast, cities like Paris have passed rules specifically meant to allow people to rent out their homes through companies like Airbnb as long as they fulfill certain safety checks. But even in these cities, companies have outsourced the collection of local tourist taxes — often applicable to local hotels — to the homeowners that rent out apartments through the start-ups’ websites.In contrast, cities like Paris have passed rules specifically meant to allow people to rent out their homes through companies like Airbnb as long as they fulfill certain safety checks. But even in these cities, companies have outsourced the collection of local tourist taxes — often applicable to local hotels — to the homeowners that rent out apartments through the start-ups’ websites.
Yet to build trust with local authorities, Airbnb has recently started collecting taxes on behalf of some city governments in the United States, first in Portland, Ore., and starting next month in San Francisco.Yet to build trust with local authorities, Airbnb has recently started collecting taxes on behalf of some city governments in the United States, first in Portland, Ore., and starting next month in San Francisco.
Mr. Hantman of Airbnb said the Portland trial had gone well, though he added that the company still needed “to figure out what each city thinks about who should pay each tax,” before it can consider extending the Portland plan to more of the 34,000 cities where it operates.Mr. Hantman of Airbnb said the Portland trial had gone well, though he added that the company still needed “to figure out what each city thinks about who should pay each tax,” before it can consider extending the Portland plan to more of the 34,000 cities where it operates.