So far, Uber and Airbnb’s move into the Australian market has been marked by explosive growth. But a Labour
government call to regulate the ride-sharing service and accommodation marketplace by enforcing stricter tax codes is proof that the sharing economy, the business model that these disruptors have come to symbolise, is reaching maturity.

In January 2015, shadow assistant treasurer Andrew Leigh called for companies such as Airbnb and Uber – as well as the users profiting from their services – to start addressing the tax obligations from which they’ve been currently exempt. Leigh will also ask the Abbott government to work towards an agreement confirming the amount of tax that a multinational would pay to the nation in which it operates in a speech that will be delivered at Sydney’s McKell Institute, according to a January 2015 interview in The Sydney Morning Herald.

“I certainly don’t believe that the sharing economy should expand because it’s avoiding taxes. It ought to expand on offering a better product to Australians,” he says. “It is neither efficient nor equitable to let revenue fall into some dead zone between countries. One way to address this would be to establish international consensus on the corporate tax base, and then allow countries to compete on the rate.”

In August 2014, Airbnb appointed a country manager to oversee its fast-growing Australian and New Zealand business, which has seen listings double to more than 18,000 in the last year alone. But its success has also been dogged by backlash from hotel operators, who argue that properties rented through the site aren’t subject to taxes. In the same vein, Uber’s expansion into cities such as Sydney, Melbourne, Perth, Adelaide and Brisbane has sparked criticism from industry bodies such as the Victorian Taxi Commission, who issued a class action against 12 unaccredited Uber X drivers in December 2014. “I’d have to say, in their operations over the past 12 months they’ve not been gaming the regulators, they’ve just actually been thumbing their nose at them,” said Graeme Samuel, former chairman of the Australian Competition and Consumer Commission in an ABC News interview in December 2014.

But if there’s anything we can learn from this mixed reaction, it’s that rapid consumer adoption of companies like Uber and Airbnb proves that the sharing economy is here to stay. The fact that regulators are working to bridge the gap between present-day loopholes and future protocol suggests that collaborative consumption is no longer the domain of early adopters but a phenomenon that’s thoroughly mainstream.

 

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John Riccio

John is PwC’s Global Design & Deploy, Experience Consulting partner.

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