WEHOville

Airbnb, Uber, Lyft, VRBO: ‘Peer-to-Peer’ Businesses Take Root in WeHo

Tue, Feb 18, 2014   By Staff    6 Comments
A Lyft car, with its iconic pink mustache

A Lyft car, with its iconic pink mustache

Airbnb, Lyft, Uber, RelayRides, VRBO, TaskRabbit. Increasingly West Hollywood, like cities across the country, is participating in the so-called “shared economy” populated with businesses like these.

airbnbAirbnb, for example, on a recent day listed 18 apartments or rooms for rent to travelers at rates ranging from $133 to $44 a night. VRBO (Vacation Rentals by Owner) offered 149 listings in the West Hollywood area at rates as high as $5,000 a night.

Then there are the ubiquitous Uber and Lyft, which are offering major competition to taxi and limo companies with their much cheaper rates. And there’s RelayRides, with dozens of listings by West Hollywood residents willing to rent their cars out for the day. TaskRabbit allows people to offer their services, for a price, to carry out a variety of tasks and allows those seeking help to find them.

Given the impact of such “peer-to-peer” businesses, and the fact that existing regulations prohibit some of the services these shared economy businesses offer, West Hollywood Mayor Abbe Land and City Councilmember John Heilman are proposing that the council establish a task force to study the impact of such businesses in West Hollywood.

“These types of entities serve multiple purposes in any community. They may in some cases serve as extra sources of revenue for individual households, while also providing efficient and affordable services to those that use them,” the Land and Heilman proposal says. However it says that these peer-to-peer businesses also pose some problems and violate some city laws.

Uber mobile phone app for ridesharing.

Uber, the mobile phone app

“Short-term vacation rentals are prohibited in the City of West Hollywood,” the proposal notes. “Currently, the City’s Code Compliance Division has three active cases involving noise complaints with properties confirmed as short-term rentals …. In addition, Code Compliance is working with the Legal Services and Prosecution Division to enforce the prohibition against operating these and other short-term rentals in residential zones. Legal Services has issued 15 cease and desist letters to property owners suspected of violating the City ordinance by operating a short-term rental.

“Code Compliance is also receiving an increasing number of complaints about entities like Uber as vehicles are taking up valet parking spots or designated taxicab areas.”

Airbnb rental by West Hollywood property owner for $153/night.

Airbnb rental by West Hollywood property owner for $153/night.

Supporters of these peer-to-peer businesses argue that they allow owners or renters of apartments or cars to make money from underused assets. The Economist reports that Airbnb hosts in San Francisco rent out their homes for an average of 58 nights a year, making $9,300. Car owners using RelayRides make an average of $250 a month.

And generally those products or services — whether a room for a night or a car for a day or a ride to the airport — are much cheaper than if bought from an established and licensed merchant.

But therein lies the rub. Airbnb and VRBO rentals compete with West Hollywood’s hotels, which pay a room tax that is a major source of city revenue. Lyft and Uber compete with city-licensed taxi companies. None of these peer-to-peer services is easily subject to city standards and review.

Mayor Land said it makes sense for the city to get ahead of the trend in peer-to-peer businesses now by studying the phenomenon. “It’s not a matter of what’s right or wrong,” she said. “It’s what’s the appropriate balance.”

The Land / Heilman proposal notes that some cities are embracing the shared economy. San Francisco, for example, formed a Sharing Economy Working Group in 2012, which brought together city departments, community stakeholders and sharing economy companies to explore San Francisco’ s laws that had an impact on peer-to-peer services and how to address conflicts. In addition to apartment, car rentals and taxi rides, SF is considering bike and scooter sharing and sharing of tools and commercial spaces.

On the other hand, the City of Los Angeles has issued cease and desist orders to Uber, Sidecar and Lyft for operating an unlicensed commercial transportation service within city limits. New York’s Attorney General has declared that renting of apartments on Airbnb is illegal because the rented units are operated as unlicensed illegal hotels. The report notes “the California Public Utilities Commission is proposing rules that would legalize ride and car sharing companies, but would institute stringent safety requirements.”

Tagged , , , ,

You might also like:

6 Comments

  1. GetMyBoat (@GetMyBoat)Wed, Feb 19, 2014 at 3:39 pm

    The sharing economy is definitely making some waves. While it draws a lot of controversy, laws and regulations are being changed and insurance companies are making adjustments to accommodate these companies. Sharing is certainly nothing new, now there are more opportunities for everyone to experience items and conveniences they never had the chance to experience before. It’s the only way into the future both economically and environmentally. Boat sharing is next!

  2. STEWART RESMER (@STEWARTRESMER)Tue, Feb 18, 2014 at 6:46 pm

    Would’nt it be nice if we didn’t get run over today?

  3. STEWART RESMER (@STEWARTRESMER)Tue, Feb 18, 2014 at 6:41 pm

    You’re not fooling us, Uber! 8 reasons why the “sharing economy” is all about corporate greed
    Or, how to make money for Silicon Valley venture capitalists while pretending to espouse progressive ideals

    http://www.salon.com/2014/02/17/youre_not_fooling_us_uber_8_reasons_why_the_sharing_economy_is_all_about_corporate_greed/

  4. RomanoffTue, Feb 18, 2014 at 2:13 pm

    I’m focusing only on the apartment rental aspect. West Hollywood’s antiquated and discriminatory rent stabilization laws create the incentive for people to join in this growing trend.
    I personally know someone who used one of these services to help pay for a much needed remodeling of a rental unit.

  5. Rudolf MartinTue, Feb 18, 2014 at 11:12 am

    Peer to peer has been happening for a few years now. It’s a little late to “get ahead of the trend”.

  6. wehoenthusiastTue, Feb 18, 2014 at 9:20 am

    Its a unique situation all the way around. I can’t decide, but have to say I love UBER, but then it is taking away from cab companies and their overhead for maintaining safe completely insured / bonded/ clean vehicles that ultimately probably don’t make a huge profit.

    UBER though, esp X version I feel like hey I’m helping someone out that is needing to make money on the side. I wouldn’t want to be in an accident because in the privately owned vehicles it still seems to be that its possible its not really legal. But then I don’t know. It’s very inexpensive and a great way to go out, so I’m just one of many people not on the road after going out which is good for all of us.

    I would not rent out my apartment (major lease violation), nor participate in Lyfte or UBER because I would be afraid of insurance issues, a commercial license etc.

    However people that do it and I’m still talking about private vehicles seem to be providing a great service that people can afford, and otherwise one might be driving privately (with a few drinks at night) and be yet another danger on the road. I’ve never seen or heard of a drunk driver operating as a lyfte or UBER driver so the less people on the road after going out is great.

    Just to clarify , why i’m saying UBER X, is because the other ones I believe has licenses to operate in the same capacity as a livery service. Limousine, SUV etc.

    Just my opinion.

Leave a Comment (300-400 words maximum please)

Let WEHOville Email the News to You