B.C. Chamber of Commerce urges policies for ‘sharing economy’

Theglobeandmail.com
June 8, 2016
By Justine Hunter

The British Columbia government needs to grasp control of services such as Uber and Airbnb that are considered part of the largely unregulated “sharing economy” and ensure a level playing field for existing businesses, the B.C. Chamber of Commerce says.

“The sharing economy is a new business model and there is an opportunity; we want to see that sector succeed,” Dan Baxter, the chamber’s director of policy development, said Wednesday.

“We want to see new models that make sure the playing field is level for those businesses that are competing.”

The business organization is formally recommending policies to tax online housing rentals – primarily Airbnb – and to regulate ride-sharing services such as Uber and Lyft.

The policies would fill a regulatory vacuum as the province and local governments consider how to manage the emerging sectors of online vacation rentals and ride-hailing apps.

The chamber, representing 36,000 businesses in British Columbia, is calling for taxes on short-term accommodation to be applied equally by hotels and Airbnb alike.

Currently, any short-term accommodation business in British Columbia with four or more units on the market is required to pay tax - 8 per cent in PST and up to 3 per cent for regional “destination” marketing - but the government doesn’t specifically track Airbnb operators. The chamber wants to see Airbnb collect taxes at the point of purchase on behalf of its clients to ensure the money is remitted to the province.

Concern that the burgeoning Airbnb industry is squeezing out rental accommodation in cities where the vacancy rate is close to nil has prompted some municipalities to look at their own power to regulate. The City of Vancouver is looking at collecting more information about the size and impact on the city of its estimated 5,000 Airbnb rentals.

As well, the chamber wants British Columbia to open the door to giving consumers the option to use ride-hailing services such as Uber, while easing the regulatory burden on the taxi industry. The proposal calls for provincewide regulations of ride-sharing services to ensure safety and consumer protection.

Peter Fassbender, the cabinet minister leading the province’s consultation on the sharing economy, said he expects to have a public discussion paper out by the fall. He would not say if there will be legislation ready by the next spring session, but he said by the time the May, 2017, provincial election is held, voters will know what the B.C. Liberal government’s plans for the sharing economy would be.

“There is a fair bit of work left to do,” Mr. Fassbender said in an interview. He said he has been talking to taxi companies, municipalities, business groups and consumers. But, he added, he is chiefly concerned with the ride-sharing issue and is content to leave regulation of Airbnb rentals to local governments.

“There are very few countries or states or provinces that have stepped into the whole issue around short-term rentals,” he said. He said the tax proposal from the chamber of commerce won’t be dismissed out of hand, however. “We’ll look at that resolution, and determine whether that might be an appropriate approach ... But the regulations - that’s really a local-government issue.”

Uber says British Columbia is the largest jurisdiction in North America without a ride-sharing option, and it has lobbied aggressively to win entrance to the market despite opposition from the taxi industry.

Uber spokesperson Susie Heath, in a written statement, welcomed the chamber’s recommendation on ride sharing.

“It’s great to see the B.C. Chamber of Commerce joining together with groups from across the province calling on the provincial government to establish distinct rules for ride sharing that are reflective of the ride-sharing business model and endorse the greater choice, reliability and flexibility that ride sharing can bring to British Columbia. It’s time that Premier [Christy] Clark and the provincial government ‘get to yes’ as soon as possible so that British Columbians are able to experience the benefits of ride sharing.”

A spokesperson with Airbnb wasn’t available to comment on the chamber’s proposal.