City mayors forging alliance over Airbnb and Uber

Uber Technologies Inc. and Airbnb Inc. have set their sights on global expansion. They are about to face a global response.

Mayors from New York to Paris and Seoul think they have found the trick to coping with so-called “sharing economy” apps — working together. Ten markets are jointly preparing a unified rule book in a bid to leverage their combined size to promote clearer ground rules.

These companies have been used to dealing with regulators, but they have done so mostly on a city-by-city basis.

That is about to change: Representatives for cities that also includes Athens, Barcelona and Toronto have started their first concerted effort to produce a common framework. While there is no white paper or policy drawn up yet, multiple city representatives met for the first time last month in Amsterdam to discuss it. Paris is calling for a first publication by October.

“Having the 20 or 30 biggest urban markets of the world all operating under entirely different rules doesn’t do much good for anyone,” said Wiley Norvell, spokesman for New York Mayor Bill de Blasio’s deputy for housing and economic development.

“We want consumers and tourists to have some consistency, city to city,” he said, to “leverage the size of markets, which together are enormous, so that the voice of cities will actually make an impact.”

Tokyo, which is facing a tourism boom and is gearing up for the 2020 Olympics, has not been part of the move.

While operators such as Airbnb are making rapid inroads into the Japan, the idea of renting private rooms for travelers is still new, and the central government is in the process of drawing up new guidelines before fully opening the market.

A Tokyo Metropolitan Government official said Tuesday it is too early for Tokyo or any other municipality in Japan to join a move for a unified rule book worldwide.

The official said that the discussions for new rules are currently underway at the national level, and all prefectural governments and municipalities will need to wait until proposals for the new laws are approved.

Regulation is one of the biggest hurdles for companies like Uber and Airbnb as they expand. They need to convince lawmakers to side with them amid backlash from well-established, more traditional competitors, and debate about the apps’ impact on cities. Both companies have separately argued that their applications have a positive influence on cities or create jobs and pledged to negotiate with officials to ensure their businesses fall on the right side of local laws.

“We’re all grappling with the same issues around safety, equity, economic opportunity and sustainability,” Norvell said about the world’s biggest markets for these apps.

Until now, responses from governments have been uneven.

In New York, challenges have ranged from a lawsuit that accuses Uber of running an antitrust scheme, to criticism over Airbnb becoming a platform for unregulated hotels. In France, Uber has faced everything from rioting amid taxi strikes to its executives being fined by a judge, although Airbnb has had a smoother ride there so far. Other places including Lisbon have taken steps to ease regulation.

New York’s de Blasio has discussed the pros and cons of sharing economy services with several mayors, including Paris chief Anne Hidalgo last year. Balancing local housing needs and new services for tourists is one aspect she is especially concerned with, said Ian Brossat, who is in charge of that issue for the French capital.

A spokesman for Uber declined to comment.

A spokesman for Airbnb said the company will “welcome any chance to educate more cities about the benefits of home sharing and look forward to continuing to work with officials around the world.”

“Airbnb has collected $85 million in taxes and helped thousands of people pay their bills and stay in their homes,” he said. “Every city is different, but we’ve seen how cities around the world are embracing Airbnb and we will continue to partner with individual cities to address their unique policy needs.”

Paris, Airbnb’s most popular destination, is also one of the places where it has managed to appease regulators by doing as hotels do and collect a tourist tax on behalf of the city — it announced this week the collection process will apply to 18 further cities in the country from August.

“Our agreement with Airbnb on collecting tourist tax is positive, but they can’t buy us,” Brossat said. “We can’t remain inactive or entire neighborhoods won’t have a single home left for locals to rent. This is another issue we have to sort out with Airbnb.”

Airbnb collected €4.7 million ($5.3 million) in tourist tax last year in Paris, according to Brossat. That has not stopped the French capital from pushing for new regulation at home seeking to address broader issues of taxes payable by individuals renting out their properties.

“It’s not about being anti-innovation,” Brossat said. “Regulation is necessary in this field and I think we’re at a tipping point — public opinion is starting to understand that. It’s the right time to make a change.”