1. Murdy & McAllister Barristers & Solicitors Uber and Airbnb: Local Government Regulation of the Share Economy James Yardley jgy@murdymcallister.com

2. Uber and Airbnb: Local Government Regulation of the Share Economy Q:What is the Share Economy? A:According to the Harvard Business Review, "share economy" is a misnomer and the correct term is "access economy"; consumers are paying to access someone else's goods and services According to Wikipedia, it is a hybrid market model involving peer-to-peer based sharing of access to goods and services (coordinated through community- based online services) Murdy & McAllister Barristers & Solicitors

3. The Share Economy Q:Why is it developing? A:According to Wikipedia (again), there are three main reasons: 1.customer behaviour for many goods and services changes from ownership to sharing 2.online social networks and electronic markets more easily link consumers 3.mobile devices and electronic services make the use of shared goods and services more convenient Murdy & McAllister Barristers & Solicitors

4. Q: How does the share economy work(1)? A:Using the example of Uber (from Edmonton v. Uber, 2015 ABQB 214): Uber grants riders a limited use license to use the rider App A separate Dutch-based company, Raiser Operations B.V. ("Raiser"), grants to drivers a limited license to access its driver App, and enters into a transportation provider agreement with them. Uber is not a party to either agreement involving Raiser. A rider sends a request by smartphone to data servers located in California. The request is then sent electronically to the driver nearest the pickup location. If the driver accepts the request, information about the driver and vehicle is sent to the rider. When the driver arrives at the pickup location, the driver's smartphone sends a message to the California server that notifies the rider. The trip begins when the rider enters the vehicle and the driver presses a button on the driver App. When the driver arrives at the destination, the driver presses another button on the App. Payment is made electronically by a third party payment company that stores the rider's credit card information, pays the driver, and provides a fee to Raiser for the use of the driver's App. Murdy & McAllister Barristers & Solicitors

5. Q: How does the share economy work (2)? A: “Online marketplace” (e.g., Airbnb) Airbnb headquartered in San Francisco, office in Toronto Hosts and guests register with Airbnb (email, phone no., ID) and create online profile Profiles created of user reviews/recommendations, shared social connections Hosts display details of price, amenities, house rules Price determined by host Guests message the host through Airbnb Host has 24 hrs to accept or decline request Murdy & McAllister Barristers & Solicitors

6. Q: Why should local government care about the share economy? A:Various concerns related to: insurance Zoning and (in)compatibility of land use (e.g., commercial/home-based business) Licensing (or lack thereof) Taxation (or lack thereof) Impacts on established businesses (e.g., Uber) Safety/quality (“Mealsurfers”) Wider community impacts (Airbnb and housing stock) lack of level playing field compared to others (no/low start-up costs) Murdy & McAllister Barristers & Solicitors

7. Enforcement Litigation In Canada Involving the Share Economy (1) Airbnb no reported enforcement decisions Uber Edmonton v. Uber, 2015 ABQB 214 Injunction sought against Uber under Vehicle for Hire Bylaw to not operate without business license and to deactivate driver accounts Court held Uber did not receive fee for rides and did not own servers Uber was not “causing” or “permitting” acts prohibited in bylaw because of lack of proximity to offending action To extent Uber trained drivers, that was “providing information” Murdy & McAllister Barristers & Solicitors

8. Enforcement Litigation In Canada Involving the Share Economy (2) City of Toronto v. Uber Canada Inc., et al, 2015 ONCS City sought injunction requiring Uber to apply for license to operate as taxi broker or limousine service City's case focussed on a regulatory framework in which "a person who accepts requests" for taxis or "calls" for limousines is subject to regulation Court held that Uber was not involved in those communications. Instead, the activity under challenge was the activation of previously downloaded software, with the owner of the software not even being a party to the litigation Court specifically rejected arguments by the City that common law definitions or other interpretations of "taxi" or "limousine" should be applied to Uber drivers Murdy & McAllister Barristers & Solicitors

9. Enforcement Litigation In Canada Involving the Share Economy (3) City of Calgary v. Gold et al, 2015 ABQB Calgary took different approach from Edmonton and Toronto; sought injunction under Livery Transport Bylaw against drivers rather than Uber City introduced evidence that the respondents had charged fees to carry passengers or offered to do so. Court granted injunction that, among other things, prevented the drivers from offering their vehicles for hire, charging a fare or fee to carry passengers, or offering to do the same. Murdy & McAllister Barristers & Solicitors

10. Regulating the Share Economy; “There’s No There There” (1) Judicial commentary about the situation local governments face when regulating the share economy: From Edmonton case: "it is not surprising... that legislation drafted to accommodate a more static, paper and people driven environment, sometimes lags behind the technological response to individual preferences and demands". From Toronto case: the City was "caught between the Scylla of the existing regulatory system... and the Charybdis of thousands of consumer/voters who do not wish to see the competition genie forced back into the bottle now that they have acquired a taste for it." Murdy & McAllister Barristers & Solicitors

11. Regulating the Share Economy; “There’s No There There” (2) “Cautionary words” noted in Edmonton case from Club Resorts Ltd. v. Van Breda 2012 SCC (not enforcement case): "Active advertising in the jurisdiction or, for example, the fact that a Web site can be accessed from the jurisdiction would not suffice to establish that the defendant is carrying on business there. " Murdy & McAllister Barristers & Solicitors

12. The Situation in BC (1) Uber Uber says not operating in BC, and will wait until Province determines regulatory approach Uber limited by ICBC insurance requirements, Passenger Transport Bd, some local bylaws Motor Vehicle Act s. 36 regulation of chauffeurs Province seeking input before determining position Airbnb Is operating “in” BC No specific regulation directed at it, but presumably subject to Hotel Guest Registration Act and hotel tax Murdy & McAllister Barristers & Solicitors

13. The Situation in BC (2) Municipalities have regulatory powers under Community Charter s. 8(6) in relation to “business”, but is subject to limitation in s. 11 to “boundaries of municipality” Q: where does the share economy do business? A: Note potential inconsistency in case law Equustek Solutions Inc. v. Google (2014 BCCA) Injunction against Google from displaying website in worldwide searches (appeal to SCC granted) Douez v. Facebook (2015 BCCA) Stay of proceeding against Facebook where activity occurred in California Murdy & McAllister Barristers & Solicitors

14. Lessons to Date Litigation involving Uber suggests caution in targeting provider Instead, greater success in targeting individual operators However, Equustek case suggests may be basis for enforcement Full scope of enforcement options available if have supporting evidence injunction prosecution ticketing Murdy & McAllister Barristers & Solicitors

15. Challenges with Enforcement Check potential tools E.g., confirm bylaw actually addresses the activity at issue (compare RDOS v. Leach, 2012 BCSC 63 with Whistler v. Miller 2001 BCSC 100) Potential challenges in assembling evidence However, Calgary case shows can be done Be mindful to limits when collecting evidence Entry into dwellings (Community Charter s. 16) Privacy issues Murdy & McAllister Barristers & Solicitors