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Complexities and Challenges
in Regulating ‘Sharing Economy’
​Charles Mok
Legislative Councillor (IT)
2019-2-23 @ HKU MPA sharing

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Conceptualizing the
sharing economy
Peer-to-peer (P2P) based activity of acquiring, providing or
sharing access to goods and services that are facilitated
by a community based on-line platform that allows
individuals and groups to make money from underused
assets - physical assets are shared as services
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Conceptualizing the
sharing economy
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4 Source: PwC

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Evolution of
‘Sharing Economy'
Expanding to cover...
▰ Co-working Platforms
▰ Peer-to-Peer Lending Platforms
▰ P2P Fashion Platforms
▰ Freelancing Platforms
▰ B2B transactions
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Evolution of ‘Sharing
Economy'
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Evolution of
‘Sharing Economy'
Expanding to cover...
▰ Co-working Platforms
▰ Peer-to-Peer Lending Platforms
▰ Home Chef Platforms
▰ P2P Fashion Platforms
▰ Freelancing Platforms
▰ Pet Sitters Platform
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Upside
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Conflicting interests
Dissecting the impact of ‘sharing economy’ business models
▰ Consumers
▰ Companies
▰ Labour force associated with online platforms
▰ Competitive framework
▰ Society
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Consumers

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Legitimate concerns
of consumers
▰ Are my ride-hailing trips covered by insurance?
▰ Will I be safe in a short-term rental apartment?
▰ What if I got food poisoning from a meal with
amateur home chef?
▰ Who can I seek help from if things go south with
the driver/host?
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Examples:
Short-term
rental
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Examples:
Ride-sharing
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Lack of clarity and certainty
Who should be held responsible for problems that might
arise when entering into a transaction?
Responsibilities of each party involved in transactions are
not usually well defined

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Providers of
services/goods
Drivers, hosts, gig-economy workers get
extra income, but are they ‘employees’,
‘partners’ or ‘contractors’?

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Examples:
Ride-sharing
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Examples:
Short-term
rental
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The fight for labour rights
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Action of
online platforms
Lack of transparency, price-fixing,
ethical issues?

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Price
transparency
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Platforms
dodgy practices?
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Competition
landscape
Impact to existing industries

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Existing industry players face lost of
business, competition with
‘sharing economy’
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Unintended
consequences?

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Nuisance to neighbours,
drives up housing prices/rent?
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Impact to transport
and roads?
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“Current regulations are not
well-equipped and fully adapted
to handle issues from ‘Sharing
Economy’ business models.
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“
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HK: Closing in on
ride-hailing

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Under the current law, premises that offer sleeping accommodation for a fee for a period of
less than 28 days must be licensed.
Hotel and Guesthouse Accommodation (Amendment) Bill:
the Authority would be empowered to crack down on short-term home
rentals and unlicensed hotels and guest houses.
▰ Strict liability offence: owners of premises will be criminally liable if there was
evidence showing their flats were used for the illegal trade without a statutory
defence.
▰ Maximum fines for operating unlicensed guest houses would be increased from
HK$200,000 to HK$500,000 and imprisonment increased from two years to three
years.
▰ search warrant to allow officers to break into and raid flats suspected of being
unlicensed holiday rentals.
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HK: tougher law on
short-term accommodation

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“Innovation vs Disruption?
Besides banning ‘Sharing Economy’ …
what are the alternative approaches?
1. Studying its impacts, costs and benefits in more detail
2. Introduce compliance requirements and regulatory obligations
3. Level the playing field with existing industries
4. Engage the public to determine the way forward
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Will Hong Kong be able to
find the right balance?
To take a step towards smart regulations to protect consumers,
labour force, competition and the interest of society

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Thanks!
Follow me at
▰ Twitter @charles mok
▰ fb.com/charlesmokoffice
▰ www.charlesmok.hk
▰ charlesmok@charlesmok.hk
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