Spring International Conference | May 2-4, 2016

LISBON

THE LEGAL IMPLICATIONS OF SHARING ECONOMY MODELS:

3 May 2016 Christopher S. Hill

A deeper look into Uber’s impact on competition and other legal issues

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What is Uber?

•  Foundedin2009inSanFranciscoas“UberCab,”goingliveinSanFranciscoinJuly2010

•  Uberconnectsriderstodriversthroughanapponsmartdevices

•  UberrampsupnationalexpansioninMay2011,expandingtoNewYorkCity,andexpandingintoanewcityeachmonth,includingChicagoandWashingtonDC.

•  InDecember,2011,ParisistheLirstcityoutsideoftheU.S.whereUber’sservicebeganoperating

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WhatisUber?

•  AsofFebruary1,theserviceisavailablein68countriesand400citiesworldwide.

•  2015estimatedworth:$50Billion

•  2015estimatedrevenue:$10Billion

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•  SmartphoneApp

•  TechCompany

•  RideshareFacilitator

•  JointVenturewithTransportationProviders

•  TransportationCompany•  EmployerofTransportationServices

WhatisUber?

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What is Uber?

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Thesharingeconomy...allowsindividualstoshareproductsandserviceslikeofferinghomesandapartmentsforrent,ordrivingpassengerstodestinations.Thesmalltasksoftenarebrokeredthroughmobilesmartphoneapps,andtheplatformsconnectfreelancerswithavailableshort-termgigs.

Sometimescalled:•  Peer-to-peernetworks•  Collaborativeeconomy•  Accesseconomy•  On-demandeconomy•  Gigeconomy

Describesatypeofbusinessbuiltonthesharingofresources—allowingcustomerstoaccessgoodswhenneeded.

What is the Sharing Economy?

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SnapGoodsHigh-endhouseholditems,e.g.,cameras,kitchenware,musicalinstrumentsAirbnbPrivateroomsorhomes/apartmentsDogVacay

PetBoardingRelayRidesCarRental–Borrowcarsfromneighbors

TaskRabbitHirepeopleforjobsandtasks,includinghandymen,delivery,andofLicehelp

GetaroundPeer-to-peercarsharing

Liquid(Spinlister)Bike,surf,andsnowgearrental

ZaarlyPeer-to-peermarketplaceforpeopletoprovideservicesforothers,e.g.,iPhonerepair,homerepair,homemadecooking

Other Share Economy Companies

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LyftUbercompetitor–ridesharing

BlablacarAnotherridesharingcompany

WeWorkSharedofLicespaces–ondemandworkspaces

InstacartGroceryservices

LendingClubPeer-to-peerlendingandinvesting

FonWi-Linetworksharing

PoshmarkClothingandfashion

NeighborgoodsSharinghouseholditems,likelawnmowers,ladders,etc.

SideCarRideSharing

Other Share Economy Companies

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Legal and Business Concerns Raised Regarding Uber

•  Unregulated–  Unfaircompetitionfortaxisandothersthatareheavilyregulated–  Ubercounter–industry-controlledregulatorsimpedeUber

•  Slicingpricestocornerthemarket–  Unfaircompetitionfortaxisandcompetitors

•  Labor/EmploymentLaw–  EmployeesorIndependentContractors–  Outofpocketexpensesfordrivers,tipsgotoUber,etc.

•  Publicsafety•  Health,safety,fraud,unskilledserviceproviders•  AmericanswithDisabilitiesAct

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Labor Issues

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O’Connoretalv.UberTechnologies,Inc.

C.A.No.13-03826-EMC(N.D.Cal.)

LaborIssues

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Labor Issues

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Labor Issues

O’Connoretalv.UberTechnologies,Inc.C.A.No.13-03826-EMC(N.D.Cal.)

JuryTrialScheduledJune20,2016

ClassCerJficaJonAppealpendinginJune

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O’Connor et al v. Uber Technologies, Inc. Class Cert Order I (9/1/15)

Labor Issues

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Labor Issues

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Labor Issues

•  WinningtheBattlevs.LosingtheWar

•  ImpactofDriverlessCars

•  WhatdoesthatdototheUberModel?

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Antitrust Issues Uber’s Operation SLOG: Recruiting Strategies

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Antitrust Issues Surge Pricing: Pricing Strategies

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Antitrust Issues Meyerv.KalanickUSDCSDNY15Civ.9796

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Antitrust Issues

Missouri Lawsuit Allegations By Uber:

1. St.LouisMetropolitanTaxicabCommissionrequiresexcessive licensingrequirements

2. MTCiscontrolledbymarketparticipants

3. MTCcolludestostiLlecompetition

Wallenv.St.LouisMetropolitanTaxicabCommissionCase:4:15-cv-01432(E.D.Mo.)(9/18/15),Motionstodismissbriefed;Rulingspending

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INDIA

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INDIA

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New York Issues

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European Collaborative Economy Industry Open letter to The Netherlands Presidency of the Council of the European Union

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European Collaborative Economy Industry Open letter to The Netherlands Presidency of the Council of the European Union

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EC

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FRANCE

Paris Uber Protests: It's Government vs the Consumer and not Just in France

LawNo.2014-1104ofOctober1,2014•  (1)prohibitionagainstchauffeuredvehiclesotherthantaxischarginga

per-kilometerfee;•  (2)prohibitionon“electronicroaming”bychauffeuredvehicles,i.e.,

theuseofasmartphoneapplicationthatshowsthelocationofnearbyavailablevehiclestopotentialcustomersinreal-time;and

•  (3)aftereachride,chauffeuredvehiclesreturntotheirhomebaseorstopinaplacewheretheyareauthorizedtopark.

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Thévenoud Law

FRANCE

•  UberFranceandUberBVsuedbytheUnionNationaledesTaxis,ataxitradeassociation,andthreetraditionalprofessionalchauffeurservices.

•  UberrequestedthatconstitutionalchallengestothreemajorprovisionsoftheThévenoudLawbereferredtotheConseilconstitutionnel(ConstitutionalCouncil),theFrenchbodytaskedwithverifyingtheconstitutionalityoflaws.

•  TheCourdecassation,whichactsasagatekeeperforthistypeofconstitutionalchallenges,accepted,intwoseparatedecisions,thereferralofUber’schallengestotheConseilconstitutionnel.

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Thévenoud Law

FRANCE

Conseilcons8tu8onneldecision:May22,2015

FRANCE

Thévenoud Law

Conseilconstitutionneldecision:May22,2015(1) prohibitionagainstchauffeuredvehiclesotherthantaxischarginga

per-kilometerfee;

•  prohibitingchauffeuredvehiclesfromchargingcustomersonthebasisofdistancewhileauthorizinglicensedtaxistodoso,unjustiLiablyviolatedfreedomofenterprise,whichtheConseilconstitutionnelderivesfromaclauseofthe1789DeclarationoftheRightsofManstatingthat“[l]ibertyconsistsinbeingabletodoanythingthatdoesnotharmothers.”

FRANCE

Conseilconstitutionneldecision:May22,2015(2)prohibitionon“electronicroaming”bychauffeuredvehicles,i.e.,theuseofasmartphoneapplicationthatshowsthelocationofnearbyavailablevehiclestopotentialcustomersinreal-time;and(3)aftereachride,chauffeuredvehiclesreturntotheirhomebaseorstopinaplacewheretheyareauthorizedtopark.

•  TheConseilconstitutionnelfoundtheothertwoprovisionstobeconstitutional,however,deemingthemtobejustiLiedbythegovernmentalinterestinpreservingpublicorder,particularlywithregardtotheuseofpublicroadwaysandparkingplaces.

FRANCE

digitalserviceprovider,calledan“informationsocietyservice”intheapplicableEUdirective•  regulatedbytheEUandbeneLitfromthefreedomofestablishmentforserviceproviders

andthefreemovementofservicesasprovidedforintheServicesDirective2006/123/ECandtheTFEU

•  “Informationsocietyservices”aredeLinedas“anyservicesnormallyprovidedforremuneration,atadistance,bymeansofelectronicequipmentfortheprocessing(includingdigitalcompression)andstorageofdata,andattheindividualrequestofarecipientofaservice.”(Id.art.2(a).)

transportoperator•  transportoperationisregulatedbytheEUMemberStates.(ServicesDirective,recital

21.)

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EU Classifications:

SPAIN

•  EuropeanUnion(EU)islessclear.TheservicecaneitherbequaliLiedasadigitalserviceprovider,calledan“informationsocietyservice”intheapplicableEUdirective,orasatransportoperator.InformationsocietyservicesareregulatedbytheEUandbeneLitfromthefreedomofestablishmentforserviceprovidersandthefreemovementofservicesasprovidedforintheServicesDirective2006/123/ECandtheTFEU,whereastransportoperationisregulatedbytheEUMemberStates.(ServicesDirective,recital21.)“Informationsocietyservices”aredeLinedas“anyservicesnormallyprovidedforremuneration,atadistance,bymeansofelectronicequipmentfortheprocessing(includingdigitalcompression)andstorageofdata,andattheindividualrequestofarecipientofaservice.”(Id.art.2(a).)

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EU Classifications:

SPAIN

1.  IftheservicesUberprovidescanbequaliLiedasmerelyatransportserviceorifitmustbeconsideredtobeanelectronicintermediaryserviceoraninformationsocietyservice?

2.  IfUber’sservicescanbequaliLiedas“informationsocietyservices,”shoulditbeneLitfromthefreedomtoprovideservicesguaranteedbyArticle56TFEUandtheServicesDirective2006/123/ECandtheE-CommerceDirective2000/31/EC?

3.  IsUber’sallegedbreachofSpain’sunfaircompetitionlawcontrarytoArticle9oftheServicesDirective,whichgoverns“authorizationschemes”andwhichstatesthatanauthorization,licensingorpermitsregimecannotberestrictiveordisproportionate,andcannotunreasonablyhindertheprincipleoffreedomofestablishment?

4.  IfUberistobeconsideredasaninformationsocietyservice,aretherestrictionsSpainiscurrentlyimposingonUberallowed,takingintoaccountthefreedomtoprovideinformationsocietyservicesexpressedbyArticle3oftheE-CommerceDirective?

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Certified Questions

SPAIN

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"IfParisianswanttorentouttheirhomewhentheygoonholiday,thatisnotreallyaproblem.Whatconcernsusiswhensomeonepurchasesoneormorepropertieswiththeaimtoturnthemintotouristrentals.Wedon'thaveenoughpropertiestohouseParisians.“IanBrossat,Paris'deputymayorinchargeofhousing.

France

AIRBNB

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InFrance,homeownersarefreetorentouttheirprimaryresidenceforuptofourmonthsperyear.ButunderaParisianlawenactedin2011,peoplewhowanttorentoutaninvestmentpropertymustownanequivalentpropertywithalong-termtenant.Finesforbreakingtherulecanexceed$28,000.

France

AIRBNB

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"Around83%ofourlistingsinParisaremainresidences,sothiscrackdowndoesnotreallyconcernus"

AirbnbFrancespokeswomanPhilippineNouveau.

France

AIRBNB

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•  Lawpassedin2014requiringallshort-termvacationrentalstoberegisteredwithauthorities,withone-timefeestoregisterthepropertythatcanrunhigherthan$250.

•  Berlingovernmentsaystheruledoesn'trestrictthesharingeconomyandaffectsonlypeoplewhorentoutinvestmentproperties.

•  "Theaimofthelawistoturnholidayapartmentsintoregularhousingtoalleviatethehousingshortage,especiallyinpopulardistricts."

TorstenKuehne,districtcouncilorforPrenzlauerBerg

Berlin

AIRBNB

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Over-regulatingroomsharingdoesn'taddresstheunderlyingproblem—ashortageofhousing—thathaspromptedcriticismoftheindustry.IfcitieslikeBerlinwouldbuildmorehousing,peoplewouldbelessinclinedtocriticizeAirbnbandotherroom-sharingservices.

AirbnbspokesmanPeterHuntingford

Berlin

AIRBNB

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Berlininspectorsregularlycheckroom-sharingsitestomakesurenooneisviolatingtherule.Residentsareeagertohelp.IntheLirstsevenmonthsaftertheban'sintroduction,neighborsnotiLiedauthoritiesofabout700potentiallyillegalrentals,Kuehnesaid.

Enforcement

AIRBNB

THE LEGAL IMPLICATIONS OF SHARING ECONOMY MODELS:

3 May 2016 Christopher S. Hill

A deeper look into Uber’s impact on competition and other legal issues