A ques­tion of an­swers

China Daily (Canada) - - HONG KONG - By OSWALD CHAN in Hong Kong oswald@chi­nadai­lyhk.com

Though shar­ing ac­tiv­i­ties are be­com­ing more vi­able in the global eco­nomic scene, they do bring with them some prac­ti­cal ques­tions.

A shar­ing econ­omy pro­vides a mu­tu­ally ben­e­fi­cial plat­form to the own­ers of phys­i­cal items and their po­ten­tial users, but this plat­form is based on one im­por­tant fac­tor — mu­tual trust.

“For the shar­ing econ­omy to con­tinue to ex­pand, the play­ers within it will need to find ways to au­then­ti­cate the iden­tity of con­sumers,” Price­wa­ter­house­Coop­ers (PwC) said in its shar­ing econ­omy re­port. “Iden­ti­fy­ing and up­hold­ing qual­ity and trust met­rics will be crit­i­cal to suc­cess in this evolv­ing model.”

Sec­ond, shar­ing econ­omy mo­bile app op­er­a­tors have to be fa­mil­iar with the reg­u­la­tory, le­gal and tax frame­works in each mar­ket or risk land­ing in hot wa­ter. Uber’s ex­pe­ri­ence is a case in point. The car-hir­ing app has been dogged by con­tro­ver­sies and law­suits in var­i­ous Euro­pean and Asian coun­tries in­volv­ing its mode of op­er­a­tion vis-à-vis lo­cal laws reg­u­lat­ing the trans­port in­dus­try.

Hong Kong po­lice in early Au­gust raided Uber of­fices in the city and ar­rested three Uber staff and five driver part­ners. The five ar­rested driv­ers were ac­cused of il­le­gally us­ing ve­hi­cles for hire as well as lack­ing the re­quired car per­mits or third-party in­sur­ance.

And it has been re­ported that ac­com­mo­da­tion-shar­ing app Airbnb may breach Hong Kong’s Ho­tel and Guest­house Ac­com­mo­da­tion Or­di­nance (HGAO), which stip­u­lates that any ho­tel or guest­house that wish­ing to launch oper­a­tions must first ob­tain the rel­e­vant li­censes. Airbnb is es­ti­mated to cover 3,000 places to stay in Hong Kong.

The va­ca­tion rentals app works hard in ev­ery ju­ris­dic­tion to ob­tain le­gal per­mis­sion for its ser­vices. In the Nether­lands, Airbnb worked with the Am­s­ter­dam lo­cal coun­cil to pass an “Airbnb-friendly law” in Fe­bru­ary 2014 that al­lows res­i­dents to rent out their homes for up to 60 days, pro­vided the own­ers pay the rel­e­vant taxes.

Third, shar­ing ac­tiv­i­ties may not be cov­ered by tra­di­tional busi­ness in­sur­ance poli­cies, as the case of Carshare.hk shows. It may be ad­vis­able for shar­ing econ­omy firms to pool re­sources to jointly ne­go­ti­ate in­sur­ance cov­er­age. They could also con­sider set­ting up a trade body to set out in­dus­try stan­dards on is­sues such as user data pri­vacy, dis­pute res­o­lu­tion, in­sur­ance cov­er­age and im­par­tial in­for­ma­tion ex­change, as well as en­sure that online re­views and rat­ings are un­bi­ased.

Uber’s ex­pe­ri­ence with con­tro­ver­sies and law­suits in var­i­ous mar­kets high­lights the need for le­gal and reg­u­la­tory savvy among shar­ing apps.

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