As daily housing rentals have become increasingly popular among backpackers and traveling students as a convenient and cheaper alternative to conventional modes of accommodation, letting online short-term rental platforms, such as Airbnb, operate legally in Taiwan has become a topic of debate.
Airbnbnb cofounder Nathan Blecharczyk reportedly visited Taipei on Friday to meet with government officials to discuss local housing laws and regulations for homestay facilities. The California-based company is reportedly ready to pay taxes in Taiwan and proposing insurance programs that cover both homeowners and tenants, in exchange for being allowed to operate in this nation. Naturally, there is strong opposition to Airbnb from hotels and travel agencies, while government agencies are concerned about safety and regulatory issues.
However, the so-called “sharing economy” seems to be getting ever more pervasive, as evidenced by the rapidly increasing popularity of Airbnb or ride-sharing services like Uber.
During an economic downturn, it is important to consider the benefits of promoting sharing-economy businesses. For people who have unused belongings sitting idle in storage facilities, renting them out would generate extra income and, most importantly, help them avoid taxes. At the same time, sharing-economy businesses can offer jobs to independent operators and encourage entrepreneurship.
For value-seeking consumers, such businesses provide an alternative to taxi services via the Uber app, or help them avoid expensive hotels through Airbnb. The rise of shared-economy businesses could mean the injection of much-needed competition to Taiwan’s traditional service businesses; competition that might compel the latter to step up their game.
The disruptive innovations with new business models might bring sweeping changes to people’s values and consumption behavior, especially in places like Taiwan, where the penetration rate of mobile devices is high. Such firms’ self-regulating systems and peer-to-peer networks could also reshape service sectors ranging from transport to finance and from education to healthcare. A sharing economy seems to be the way of the future, although critics insist that new business models would require regulation if they are to flourish.
However, like other governments, Taiwan’s government has been slow to react and it has been sluggish in drawing up regulations that would accommodate the new business model, let alone developing better management in which public servants are capable of working with both new digital companies and the pre-existing ones.
As sharing-economy businesses boom, an issue emerges regarding the government’s attitude toward industrial development — whether it is willing to embrace the new digital economy and encourage innovations, without being afraid to break from traditional patterns of thinking, while avoiding protectionist policies. If it is, then what measures has the government taken to ensure market fairness for all businesses and provide protection for consumers? Perhaps only limited progress has been made.
In the past few years, China’s efforts to cultivate a domestic supply chain for its technology sector has dealt a blow to Taiwanese companies, causing exports to record double-digit declines for several months, pushing the economy closer to a downturn.
The public demands that local businesses focus on online services and digital content as part of an economic transformation, rather than sticking to industrial manufacturing. Unfortunately, Taiwan falls far behind China in this regard, with one of the key factors being that the government has tended to succumb to pressure from existing companies and has not taken proactive measures to encourage innovation. It is time to make a change.
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