Major cities such as San Francisco and New York have faced the unusual tax and the regulatory conundrums posed by the sharing economy companies like Lyft, Uber, and Airbnb for years. Now it’s Grand Rapids’ turn.
As ride-sharing services like Uber and Lyft grow rapidly around the world, and short-term rental operations like airbnb grow to the point of being real competitors to hotels, local authorities are unsure what think about it – and the knee-jerk reaction of regulators is often on the side of the traditional businesses that these sharing economy services intend to disrupt.
It hasn’t helped that sharing economy companies have been featured in a series of ugly incidents lately. There was the Orgy “XXX Freak Fest” it happened when an unsuspecting tenant rented out his New York apartment on airbnb last month. Then there was a Uber driver charged with assault in Oklahoma City, and another Uber driver in San Francisco who was charged with punching a passenger and was convicted of drug trafficking and assault, although he was subject to Uber’s background check.
Additionally, no less than 14 states have issued warnings– rather vague warnings, sometimes misleading, but always frightening – about the insurance risks associated with driving or being a passenger in carpooling operations. Companies whose business models are threatened by the collaborative economy are also mobilizing: Vegas, for example, a local taxi company issued a memo warning that it would terminate any “driver who picks up a passenger using an Uber, Lyft or Sidecar app” in a taxi or limousine from ‘business. And even cities that seem more open to ride-sharing companies sometimes aren’t entirely on board with how these tech companies operate. the Timetable-Picayune reported that the New Orleans City Council is discussing new regulations that would allow Uber’s ride-sharing service, but maintain some taxi rules — such as $25 minimums for luxury sedan rides — that challenge ” Uber’s insistence on free market pricing”.
As for individual cities in the United States and Europe that are stepping up their efforts to restrict or outright ban sharing economy companies, here are seven hotspots:
Albuquerque, New Mexico
In late May, the New Mexico Public Regulatory Commission voted unanimously to order the Ridesharing service Lyft ceases operations in the state. Why? The same reason often given against ride-sharing companies: they are accused of being commercial taxi services whose drivers do not have the appropriate licenses and certificates and who have not paid the same fees as taxis. The commission warned Lyft and its drivers that each violation is subject to a fine of up to $10,000.
Barcelona, Spain
After being pressured by taxi companies and hotels, among others, Barcelona officials are trying to crack down on Uber and airbnb and other sharing economy businesses, with stiff fines for unlicensed drivers and a temporary license freeze for landlords who want to rent apartments as tourist accommodation.
Brussels, Belgium
Uber was launched in Brussels in February, and in April authorities banned the service in the city, threatening to strike drivers with a fine of €10,000 to pick up a passenger via the app.
Buffalo, New York
A month after Lyft launched its ride-sharing service in Buffalo in late April, the city’s director of permits and inspections recommended that police issue summonses to Lyft drivers, which he determined to be the equivalent of unlicensed livery taxi drivers. He also threatened that cars used in ride-sharing operations could be confiscated.
Grand Rapids, Michigan
Strict new regulations are offered to landlords who want to rent rooms through airbnb or other short-term services. If accepted, a landlord would need to pay $291 for a license, the home must be owner-occupied in order to advertise room rentals (i.e., no vacation rentals), and a single house room can be rented at a time. Additionally, the city would grant no more than 200 licenses and landlords would have to notify all neighbors within 300 feet of the property of the rental status. As strict as these rules may seem, they could have been worse: a year ago, Grand Rapids suggested that landlords should pay $2,000 for a license to advertise and rent through airbnb.
Kansas City, Missouri
Police began issuing tickets to Lyft drivers in Kansas City shortly after the service launched in late April. City officials had ruled that the ride-sharing service was illegal because the drivers had not completed the training and certification required for taxi drivers. After some legal maneuvering, Lyft is still in action in the city, and a long legal battle is expected before the situation is resolved.
Malibu, California
The Malibu City Council recently voted to issue subpoenas to more than 60 short-term housing rental websites, including airbnb, according to the Los Angeles Times. There are hundreds of short-term vacation rental listings in Malibu, but only about 50 are officially registered with the city and pay the same 12% tax that hotels pay. Officials want to make sure the city doesn’t miss hundreds of thousands of dollars in taxes from other rentals. They also hope to crack down on the “party house” atmosphere in neighborhoods that have become popular for vacation rentals.
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