Everything New Is Old and Unprofitable

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Image: Uber circa 1802

By Jessy Nations

With the advent of the smartphone, people have gained unfettered access to technology and services previous generations never could have imagined. With a few taps on your touchscreen, you can have someone pick you up and drive you anywhere in the city. Going on a trip? You can find lodging nearly anywhere at an ostensibly reasonable price. Hungry? Through the miracle of technology, you can have groceries or meals from your favorite restaurant delivered right to your doorstep. It’s all thanks to the wonders of the exciting new “sharing economy.”

Of course, none of this is actually new. Uber is a taxi service that forces its drivers to provide their own cars. Airbnb allows you to rent a hotel room in some stranger’s house. There is an entire field of law that is older than the United States that regulates common carriers, such as taxis, and another field regulating hotels called hospitality law. But Uber isn’t considered a common carrier; it’s “ride sharing.” Airbnb isn’t a hotel service; it’s a “home sharing” platform.

The distinction is relevant for a number of reasons. For instance, hospitality law imposes a duty on the host. As one example, the host must ensure a guest’s room remains private and doesn’t have devices like hidden cameras in it. And the Civil Rights Act explicitly prohibits hotels from discriminating against customers based on their race.

Additionally, your rent controlled apartment probably shouldn’t be converted into a motel, but that’s just what happened to two tenants in Los Angeles. They filed their lawsuit against Airbnb (as well as their former landlord) last week. As for common carriers, taxis must make reasonable accommodations for the blind,; including allowing service animals in cabs. And let’s not forget Uber’s surge pricing. To make matters more complicated, Uber has been declared a common carrier in some states, but not all.

These inconveniences would have been avoided if Uber and Airbnb would have been classified as common carriers or hospitable establishments subject to regulations from the start. Take, let’s say common carrier laws in Washington State and how they could apply to ride sharing apps like Uber.  Under Washington statute, common carriers have a duty to “provide, safe, adequate, and sufficient service facilities and equipment to enable it to … safely, and properly … transport, and deliver all persons or property offered to or received by it for transportation, and to promote the safety, health, comfort, and convenience of its patrons, employees, and the public.” If Uber were regulated under this statute, maybe they wouldn’t have had to settle for $10 million when California alleged they weren’t conducting adequate background checks. This settlement came two months after an Uber driver killed six people in Michigan. And there’s more litigation on the horizon.

And as to the service animal issue, RCW 81.28.190 states that common carriers are prohibited from subjecting passengers to “any undue or unreasonable prejudice or disadvantage in any respect whatsoever.” That’s another $225,000 settlementthat could have been avoided. But of course Uber isn’t considered a common carrier in most states. Instead, they’re a new and exciting “ride sharing platform.”

As for hospitality law, Aribnb is no stranger to litigation. In fact, they’ve been all but outlawed in San Francisco and Santa Monica. You can even be evicted for hosting Airbnb guests out of your apartment. “There are cities and there are apartments, and never the two shall meet,” the city says. Of course, if your Airbnb guest stays more than 30 days you might have to evict them yourself if they refuse to leave. All that litigation could also be avoided if Airbnb services were classified as a hotel, at least under Washington law, because why? But of course, Airbnb is not a hotel service. It’s a new and exciting platform that allows people to temporarily rent out space on their travels.

Is it just me or is this new “sharing economy” strangely familiar and shockingly litigious? It is my humble opinion that we stop referring to these services as something new and buzzworthy and realize what they are: hotels and taxi services. Once they are put firmly back into the regulatory framework intended to protect people from these exact problems, we’ll save ourselves from quite the headache.

Image Source: Wikipedia


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