Last week New York imposed a regulation on Airbnb to disclose hosts’ information and transaction data to the authority. Under the new law Airbnb will have to report hosts’ information such as names and addresses through electronic reports. The regulation aims to combat against illegal short-term rentals and will go into effect in 180 days. Non-compliance will result in heavy fines.
Launched in 2008, Airbnb is a home-rental company rising from the new sharing economy. Like most businesses in the new economy to traditional industries, Airbnb has brought disruptions to the hotel industry. The new New York law aims to clamp down on unlicensed guesthouses and the rising housing stock resulted from short-term rentals. However the law may also infringe on hosts’ privacy.
The New York law was not the first authoritative attempt to regulate Airbnb businesses. Early this year Japan passed a stringent home-sharing regulation to ask hosts to register their listing and limit home-sharing in Japan to 180 days a year. Local governments in Japan are enforcing even stricter regulations in their areas. For example in Yokohama, Tokyo’s Shinjuku, Nerima, Bunkyo, etc home-sharing is banned on weekdays. The stringent law led to Airbnb dropping almost 80% of its Japanese listings.
As the new sharing economy emerged and thrived, new business models such as the Airbnb home-sharing developed ahead of regulations. While the new model injects dynamic energy into the business through introducing unique traveller experience, there are problems beyond regulation such as hosts avoiding lodging taxes, safety issues, blows to housing markets, etc. The new law will be able to tackle illegal rentals by keeping an eye on hosts to combat hosts that rent apartments that forbid short-term rentals, commercial operators that run unlicensed listings, etc. By curbing illegal rentals, more housing can be released back to the market. The regulation also secured the service with a regulated list of hosts. Despite all the advantages expected to come with the law, the law will almost ruin the original idea of sharing spare home space to people with a charge and strangle the model of creating values out of available resources.
The tension between the hotel industry and the new sharing economy has been an issue that needs to be resolved. More similar regulatory attempts are expected to come in future. The public should pay attention to the development.