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

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.

Airbnb, 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.

“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.”

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.”