> But here’s where the ECJ’s logic is harder to reject. Uber determines the price of the ride; Airbnb doesn’t set the rent. Uber sends an order to a specific driver; Airbnb merely provides a prospective guest with a list of properties. Uber, according to Thursday’s ruling, exercises “decisive influence” over the transaction. That’s not the case with Airbnb.
> That’s quite a powerful argument. Airbnb’s hands-off role — renters deal directly with hosts throughout the process — makes it less than a real estate agent. It actually has a good reason to define itself as an information provider rather than a deal facilitator.
> One can imagine what the Uber app would look like if the company operated like Airbnb. A rider would enter her location and destination and get a list of drivers with their fare bids and distances from the starting point. Then the rider would make her choice based on the combination of price and arrival speed. That would make Uber an information provider rather than a taxi service.
> One can imagine what the Uber app would look like if the company operated like Airbnb. A rider would enter her location and destination and get a list of drivers with their fare bids and distances from the starting point. Then the rider would make her choice based on the combination of price and arrival speed. That would make Uber an information provider rather than a taxi service.
Funny, that's precisely what Blablacar (https://www.blablacar.com/) is : a carpooling information provider. Though it is not supposed to be for professional drivers (but Airbnb was not supposed to be for hotel pro either)
> renters deal directly with hosts throughout the process
Hardly. You pay Airbnb, insurance is in theory done through Airbnb, disputes are done through Airbnb. It's quite possible to have almost zero interaction with a host (host just messages a code that unlocks building and apartment). With Uber you are dealing with the driver as much as you are with a Taxi.
Picking out that line in particular, sure you might be right, but there's more to it, from the first quote from the parent.
> Uber determines the price of the ride; Airbnb doesn’t set the rent. Uber sends an order to a specific driver; Airbnb merely provides a prospective guest with a list of properties. Uber, according to Thursday’s ruling, exercises “decisive influence” over the transaction. That’s not the case with Airbnb.
PayPal offer these services as well. Where would you draw the line? It seems like the ECJ drew the line with the ability of service providers being able to determine the primary cost and which entity ultimately pairs customers and providers.
It seems to me that all the factors they list come down to "size" of the transaction though: An airbnb rental is a pricier, longer, more complex and less urgent transaction than a taxi ride. It makes sense for people to spend >1hr looking at locations and prices and making decisions and they likely do that hours (months) in advance. Meanwhile when you're running late for work and need a cab, it makes no sense to spend hours comparing drivers' ratings, car types, closeness or price per mile.
To put it another way: Uber could change their app so that the "first choice" driver appeared at the top and you could just click "summon" BUT if you wanted you could go into another menu, scroll down and order drivers in terms of discount on Ubers standard rate / rating / closeness / CO2 per mile / inny or outie belly button etc. 99.9% of drivers would just hit summon and accept the price like they do today. That's their choice. But according to the court, that would fundamentally change their business model.
That doesn't make a lot of sense to me.
Starbucks serves coffee whether it just gives me the latte I ask for or whether it spends ages offering me complex combinations of organic, small farm, regional blends from my selection of 3 baristas in a variety of cups now or in 10 minutes time (all while everyone wastes time waiting).
That's what Sidecar was (ended operations Dec 2014), and as best I can tell, no one ever carefully distinguished Sidecar as a "good guy"; they were always lumped in with Uber and Lyft (among other four-letter words...).
This model wouldn't work well for Uber (or any other ride-sharing company).
Searching for an accomodation usually takes time; you compare location, facilities, size, and price, which is usually non-negligible and so makes you compare choices for longer (maybe hours or even days) to make sure you're getting more bang for your buck. This means that Airbnb's focus is on the aggregation, rather than the actual stay/experience.
Uber does the aggregation for you; it lets you choose the type of experience from a preset, but that's about it. Most riders don't plan their trips hours or days in advance, but immediately (imagine taking longer to go through the choices of all possible drivers than the actual trip you're going to take).
Why would it not work? Some customers can set the option, choose the cheapest car within 10 min of me. Others can set the option, choose the highest rated car within 5 min of me. Or option of closest car for me. Or whatever other criteria they want. It is not going to be that difficult from a UX point of view.
I would probably pick the closest car option in the mornings, highest rated car when heading out for evening entertainment, and cheapest car when going on some long-distance errand.
airbnb affect rent prices and neighborhoods, I find it dangerous, it can degrade peoples life. More than Uber (even though I don't like their business motive)
Though 'price setting' is a differentiating aspect of these two companies - it's not hugely material in the determination that 'one is tech one is not'.
Nobody in the world would have been thinking in these terms. There's no chance Uber/AirBnB lawyers were sitting around thinking 'well, if we cross that threshold, we might be considered a taxi service'.
If the laws are remotely clear, or subject to even soft interpretation, it'd be possible to at least predict outcomes - but in this case, as with many others - they are totally making it up as they go along.
This is a bad ruling, and it probably should not be 'determined' by the EU courts at all - rather, the EU should 'make up their minds' and clarify as objectively as they can.
AirBnB is absolutely a hotel company and Uber is absolutely a Taxi company - they just operate a little different than the classical ones and so they probably need some kind of thoughtful regulation.
Does this mean they can shirk any and all liability for any claims like their competitor vrbo? If so, that is a terrible decision, leaving millions of people with little to no recourse when things go bad. Governments need to start addressing issues of liability and access to these giant monopolistic services. The article is disingenuous in claiming that the guest and host can find each other in other ways. That's highly unlikely. I can also randomly run into an uber driver and have him drive me somewhere but that just isn't going to happen realistically. Why should these companies hold such a monopolistic position, yet be free from most liabilities? That's not in the interest of the public anywhere.
I'm not sure what was to be expected here. I do really like how they point out the fact that it makes it plain as day too that the property owners are not employees in any way of AirBnB however its quite hard for Uber to claim the same about their drivers.
In both cases the regulation is far more relaxed than many EU citizens would like it to be. It merely tries to minimally protect society from the overall race to the bottom in terms of employee rights and in terms of zoning and safety regulation.
I posted an answer to this question below. I can understand your point of view, I just think that this makes it very hard for European companies to compete. I completely understand the need to regulate when it is needed to protect people's rights, but I think sometimes Europe goes a bit too far, and it makes it hard for European companies to compete at the same level as US companies.
EDIT: Also, my post was not meant specifically for sharing-economy platforms. In those cases I can see the need for some specific regulation (and even then I think Europe goes too far), but just tech companies in general.
First of all I do not agree that regulation hinders European companies in any way to compete. You could even make a case that being embedded in more diverse regulatory regimes protects European companies from being overrun by more extremely unregulated regime native companies.
Second EU regulation is not just applicable to US companies. It does not make a difference where the company is headquartered. A EU based Uber clone would be subjected to the same regulation as an US Uber. Given the fluid transnationality of those enterprises any differentiation would be completely useless.
Third, regulation is not just needed to protect the people from the inherent private appropriation of benefits and the externalization of negatives that a market economy presents. It is also an essential component of long term stability of the system itself precisely because the market mechanism is so good at discovering self reinforcing appropriation regardless of the impacts.
> First of all I do not agree that regulation hinders European companies in any way to compete. You could even make a case that being embedded in more diverse regulatory regimes protects European companies from being overrun by more extremely unregulated regime native companies.
I just started a company myself in Spain. The amount of bureaucracy I had to go through was unbelievable. Furthermore, I have to pay over $300 a month in taxes, even though I am currently not making any revenue. How am I supposed to compete with a U.S company like this? I know this is going on a tangent because my original argument was about overregulation of tech companies specifically. In that sense: U.S companies are allowed to compete in Europe, which means that European companies are at a disadvantage de facto since it is easier to operate in the US. I think that providing the same level of freedom to European companies is what would make it easier to compete at the same level. Trying to level the playing field by over regulating US tech companies is not the way to go.
> Second EU regulation is not just applicable to US companies. It does not make a difference where the company is headquartered. A EU based Uber clone would be subjected to the same regulation as an US Uber. Given the fluid transnationality of those enterprises any differentiation would be completely useless.
Have you heard about the Google Tax law? It is specifically addressed at tech companies making more than $X in revenue per year. Funny how the only companies that fall under that umbrella are US corporations.
> It is also an essential component of long term stability of the system itself precisely because the market mechanism is so good at discovering self reinforcing appropriation regardless of the impacts.
This is a fair point, but I think it hinders innovation in the name of long term stability, at the expense of consumers. (Uber vs Taxis)
> I just started a company myself in Spain. The amount of bureaucracy I had to go through was unbelievable. Furthermore, I have to pay over $300 a month in taxes
This is one of those things that continental Europe (as opposed to English law derived systems) handles very badly: compliance costs and scaling down. In the UK system you can start a company for almost nothing from a single webform, and if you're not trading much there's almost no fees.
There is an excellent book, "The Other Path", about bureaucracy reduction in South America as a path towards the rule of law, where by making it possible for people to come into "the system" there were beneficial effects on crime and even terrorism.
I suspect there would be a lot fewer anti-EU small businessmen if most of the EU commercial law had exemptions for "fewer than five employees and less than €100k turnover".
In all of this we need to keep the reasons close to the rules. "Regulation" and "freedom" can't be assessed without asking what's being regulated and what the impacts are on the regulated and the public, and whether the regulations are necessary and effective.
It's absolutely fantastic. One of the big insights is that people want to be inside the regulatory system if it can be made easy enough - because having a legal business on legal land gives you protection. Whereas the de facto unregulated anarchy was also reliant only on community protection. Also making the commonsense but controversial argument that the solution to huge numbers of people who have lived on squatted land for years, built houses etc is to ... give them title to the land.
(You should probably read something else about Peru in the same time period as a counterbalance, especially given that this took place in the time of Fujimori, but the ILD work on title and registration is extremely solid and should be above left-right factionalism and is not in conflict with human rights)
There is no such thing as a "Google Tax law" that is only applicable to Google. There are many laws and regulation trying to curb 'Multinational Tax Avoidance', some of which have been inspired by the elaborate schemes companies such a Google and others employ to avoid paying any contributions to the public that makes it possible for them to do business in the first place (Goolge 'Double Irish Dutch Sandwich' for an example).
Your complaint of bureaucracy is valid. You should not be arbitrarily held back by irrelevant protocol. While Spain (and other southern European countries) seems to be very traditional in their adherence to formalism and procedure, nevertheless this seems to be advancing into a more agile direction.
There is a difference between arguing for a level playing field, which I support, and arguing for abolishing all financial contribution to the public domain, which I oppose completely.
As a last point you might want to look up why the taxi regulations were introduced in the first place, and how, while the 'mechanism' might be new (apps), the model has resurfaced every time there was an overproduction in the car industry coupled with an economic downturn.
> Furthermore, I have to pay over $300 a month in taxes, even though I am currently not making any revenue. How am I supposed to compete with a U.S company like this?
Why dont you move the company elsewhere? e.g. ireland...
How on earth can regulating American companies in Europe make it hard for European companies to compete 'at the same level as US companies'.
Either way, surely citizen rights trump companies rights to compete every time, especially since Europe doesn't have the legal fiction of citizens united style 'corporate citizenship'.
There are to points here: on one hand, overregulation in general, which is what my point about not being able to compete was about. Specifically, how many European tech companies do you know that operate at the same level (in terms of users and / or revenue) as US tech companies?
Then come the specific regulation of US companies in Europe. Have you heard of the so called Google Tax? It is essentially a tax on tech companies that make more than $X in revenue, which only happens to affect US companies at the moment.
How is this Google tax different from other "sin" taxes like the ones placed on alcohol and tobacco? Considering the tech companies' products are likewise harmful to society, the only thing that doesn't make sense is why the US isn't imposing extra taxes on these companies that are wreaking havoc on our society. I hope the EU taxes them even more because whatever they are taxed at, it's not enough to make up for the damage to our society.
It is just my point of view that there is overregulation in the EU and not under regulation in the US. There are arguments to be made on both sides. I am expressing my point of view and trying to provide reasonable arguments, understanding that you might disagree.
Tech company or not, we desperately need new regulation/legislation for platform economies. Entire markets are being captured inside a platform run by a single company, with rules that are made up by that company. I'd rather have my market regulated by the government, thank you.
I am European myself, but I tend to have more libertarian tendencies when it comes to this.
Funny how right after posting this, I just read the news that France fined Google (again) [1] for arbitrarily banning a company from Google Ads and promoting its own services (unrelated to the other company). This is the kind of thing that doesn't fly in the US: If I own a platform, I get to decide who can use it or not, and it is not the governments place to fine for me if I decide to promote my products in my platform (as long as there is no discrimination taking place).
I think this kind of bureaucracy and "overregulation" (inference in private business affairs) is part of what makes it impossible for European tech companies to be among the top in the world.
> I just read the news that France fined Google (again) [1] for arbitrarily banning a company from Google Ads and promoting its own services (unrelated to the other company). This is the kind of thing that doesn't fly in the US: If I own a platform, I get to decide who can use it or not, and it is not the governments place to fine for me if I decide to promote my products in my platform (as long as there is no discrimination taking place).
US too has anti-trust laws much like the ones which France used here.
It’s not libertarian to value corporate rights above those of the individual citizen.
Hell, when companies become more powerful than actual governments, the least libertarian thing you could possible do, is to give their kingdoms free reign.
There's a vocal group of "libertarians", the ones that veer towards anarcho-capitalism, whose stance is basically that state power is bad but economic power is just fine. Those folks may not explicitly say that they want corporate rights to be above those of individual citizens, but the practical consequence of their worldview is that they will be (to an even greater extent than they already are today), because corporations have much greater economic power than individuals.
"Libertarian" used to be a concept that was purely about individual freedom, but it has been twisted to a large extent into something that is quite opposed to individual freedom in practice.
Fair enough, let me clarify: When an individual engages freely in a business transaction or relationship with a corporation, I think that government intervention should be minimal. A clear example of this is employment-at-will. This doctrine only exists in the US. Everywhere else, governments step in and determine that you can not fire someone without cause. Competition is what makes this point of view OK, without it, it does become a monopoly and problematic.
I would say an individual never engages freely in a working relationship unless that individual is already so rich that he doesn't need to work. Otherwise it's by necessity that people have to get jobs as we do not have the ability to reject the social contract and live off the land or anything like that (legally or practically). At will employment is a misnomer. There's nothing at will about most employment regardless of what we call it.
It is not one above the other. I can understand if my point of views are not common or if you disagree. But in order to have a healthier debate, perhaps you could specifically address my points?
The US does not (usually) interfere as much as Europe into business affairs. I don't think that automatically translate into "valuing corporate rights above those of individual citizens"
US (and not only US) tech companies are heavily underregulated in comparison to the rest of economic actors in EU economies. That's an unfair advantage and probably will be diminished, but not completely lost, in the future, with new and updated regulations and rulings such as this one.
> That’s quite a powerful argument. Airbnb’s hands-off role — renters deal directly with hosts throughout the process — makes it less than a real estate agent. It actually has a good reason to define itself as an information provider rather than a deal facilitator.
> One can imagine what the Uber app would look like if the company operated like Airbnb. A rider would enter her location and destination and get a list of drivers with their fare bids and distances from the starting point. Then the rider would make her choice based on the combination of price and arrival speed. That would make Uber an information provider rather than a taxi service.
I mean, yeah. I agree 100% with this.