NSW Government looks to fully legalise sharing economy

IF YOU were thinking of renting out your spare room to backpackers but were worried about falling foul of the law, things could be about to change.

THE NSW Government has given its clearest indication yet that it intends to give the green light to sharing economy businesses such as Airbnb and Uber, which will be good news for people hoping to rent out their spare room to travellers and not fall foul of the authorities.

But the peak body for hotels has warned that short-term accommodation sites are pushing up rental prices in popular suburbs and leaving guests at risk of assaults, theft and even death due to a lack of regulation.

This morning, the NSW Government announced it would create a framework for regulating the sharing economy, which most obviously manifests itself in websites and apps that bypass traditional industries, such as hotels and transport services, and instead directly connect consumers and service providers.

Also known as the collaborative economy, it’s estimated the industry brings more than $500 million into the state every year.

Airbnb is one of the biggest players in the sharing economy.

The move comes just over a month after the NSW Government legalised ride-sharing service UberX, which has enabled drivers who use their own cars to pick up passengers to operate within the law. Previously their licences had been suspended. In return for being legalised, UberX drivers have to pay a registration fee and pass a series of safety checks, while traditional cabs have had a reduction in their licensing requirements.

NSW was the second jurisdiction to give ride-sharing services the thumps up, following the ACT.

Speaking today, NSW Innovation Minister Victor Dominello said where governments had embraced new technologies they had provided a significant boost for start-ups and entrepreneurs.

“Digital innovation is transforming the way people do business in every city and every country around the world. The reality is the collaborative economy is here to stay,” he said.

“We are living in the information age and it is vital that government policies embrace new technologies and enable businesses to operate with certainty.”

A Deloitte Access Economics report estimated that more than 50 per cent of NSW consumers had used services such as Uber and Airbnb, while 45,000 people earned income from the collaborative economy.

While the government seems intent on allowing the sharing services, the discussion paper states all businesses should be “treated fairly and appropriate levels of consumer protection and public safety [should] be in place”. This means people who rent out their sofa to backpackers may be faced with extra regulations and safety hurdles.

This would probably be welcomed by the Winklers, who had their stay at an Airbnb rental on the Gold Coast ruined when the police raided the home, The Daily Telegraph reported. The family, who were held for questioning for five hours, had been told by the owners not to enter one room of the house as it was undergoing renovations. When the door to the room was opened it was found to contain a sophisticated hydroponic set up for growing cannabis.

Dieter Winkler and Jacquie Young and their five kids rented a holiday home from Airbnb in Burleigh Heads and one day into their holiday cops raided the property to find a hydroponic cannabis setup in the back room.

The chief executive officer of Tourism Accommodation Australia, the peak body for hotels, Carol Giuseppi, said premises rented out on Airbnb didn’t have to go through the same safety checks that established hotels and motels had to.

“In the past few months we have seen the results of the ‘no care, no responsibility’ attitude towards unregulated short-term accommodation with reports of assaults, property damage and a terrifying drug raid. Overseas, there have also been reports of deaths,” she said.

“The reality for many people involved in the so-called collaborative economy is that they take rather than give. They contribute virtually nothing to employment; whereas hotels and other legitimate operators employ 21,000 people in NSW [and] they avoid paying appropriate taxes and community charges.”

Ms Giuseppi said the growth in apartments being turned from long-term to short-term rentals may make money for the owners but it pushed rents up. People who rented out their homes through sharing apps and websites should be registered before they could operate, she continued.

However Airbnb welcomed the government’s proposal. Airbnb Australia country manager Sam McDonagh said they were looking forward to working with the minister to grow tourism in the state.

“This is great news for NSW and the everyday people — mums and dads and working families — who list their homes on Airbnb,” he said.

“We’re proud of the economic benefits Airbnb provides to families, communities and local businesses that otherwise wouldn’t benefit from the tourist dollar. Overwhelmingly, these hosts are renting out their home occasionally, earning a little extra to help supplement their income.”

Originally published as NSW Government looks to fully legalise sharing economy