Things all users should consider when booking Airbnb and similar shared lodging, as well as using Uber and Lyft.
In the last ten years, we have seen a rise in online for-profit social activity that is commonly referred to as the “Sharing Economy.” This trend grew out of peer-to-peer sharing of goods and services based on open-source technology and includes websites such as Airbnb and Vacation Rental By Owner (VRBO), and the rideshare services Uber and Lyft.
As with all developing technologies, issues have surfaced with the sharing economy model. Some have been addressed either legally or technologically, but there are still many that should be of concern to both the user and the provider, including safety and insurance concerns, employment categorization, and the loss of traditional services. Below we take a closer look at some of these issues and how to best protect yourself if you participate in the sharing economy.
When it comes to lodging, hotels and motels had always been the most affordable option for travelers. While offering a wide range of quality and pricing, hotels were often still out of reach for those on a limited budget. They also lacked a more personal feel and local flair that some travelers were desiring. Enter the new sharing economy.
Airbnb was founded by friends looking for a way to supplement their income, as they couldn’t afford their apartment. They decided to rent out an air mattress in their living room to travelers unable to either find or afford a hotel room. The idea took off and Airbnb has become one of the most popular lodging websites in the world, especially among those on a budget. But everything comes at a price.
Before you secure lodging through a sharing economy service, be sure to take into account the following considerations:
Does the host have insurance? Hotels have insurance for many reasons, including the chance that a guest could slip and fall. However, that is not as likely for hosts on sharing economy-based platforms. While some might carry insurance, it is highly likely that either it will be inadequate coverage or that their insurance doesn’t cover commercial use. Many services are beginning to offer insurance to cover both hosts and lodgers, but it is a good idea to do a little research before booking a room.
Is it safe? While hotels, motels, and typical bed and breakfasts must all comply with fire safety inspections, an Airbnb might not. You are at the mercy of a host who is not necessarily the owner of the property, so it’s anyone’s guess as to whether or not they’ve followed the same regulations.
Is it even legal? Some cities require hospitality providers to pay special taxes and heed specific regulations. However, an Airbnb host may not be registered as a provider with the city, and therefore isn’t paying taxes or following local laws. While cities are slowly making progress on regulating this new business type, keep in mind that if you find yourself engaged in a lawsuit with a host regarding a shared service, this vagueness could impact the outcome of your case.
Taxicabs and other regulated driving services had always been the only options for hiring a trip-based car and driver, but in the last five years the sharing economy has begun to take over with the wildly successful rideshare applications, Uber and Lyft. This has opened up new avenues of income for many individuals of all walks of life, but it has also brought about many ambiguities that had not been an issue with traditional taxicab services.
Some important questions you should ask before hiring a driver from any rideshare service:
What type of insurance does the driver carry? Regulated transportation services must carry specific insurance coverage with limits set by either state or local governments. When rideshare services first appeared on the scene, insurance was a huge gray area. Currently Uber and Lyft do carry insurance to cover some accidents, but you might be at either your driver’s or your own insurance company’s mercy if you find yourself in an accident.
Is it safe? Regulated transportation services generally have hiring guidelines that are strictly enforced. With rideshare services promoting quick access to income, drivers are often not vetted as thoroughly and an important consideration like a criminal offense or a bad driving history could be easily overlooked.
Can there be unexpected fees? While you typically can see the estimated total before submitting a request to a rideshare service, there are occasions when extra fees can be accrued. Since rideshare drivers are required to use their personal vehicles, there are parameters in place to protect their property. This can allow the driver or the rideshare service to charge outside of the trip amount, such as cleaning and damage fees or surge pricing.
The sharing economy will most likely continue to evolve towards a point that is mutually beneficial for user, provider, and service alike. Some states are requiring that Airbnb hosts pay taxes and follow the same regulations as hotels and motels, and several companies are exploring ways to counter the decline of taxicab users due to Uber and Lyft, such as with the new app-based taxicab service Curb. Although it will be some time before these and similar measures take root in all cities, by educating yourself about any service you decide to use and asking some of the above questions, you can help ensure that you and your family remain safe and happy in the new sharing economy.