Uber, Airbnb get dragged into Scandinavian welfare economics

Denmark wants to bring the so-called sharing economy into its legal codex so that companies like Uber and Airbnb can be absorbed into the Scandinavian welfare model. 

The Danish government sees little point in resisting the changes these companies represent. Instead, it’s putting forward a number of measures designed to fold the business concept into its tax and labour laws. 

“If you want people to understand the prospects, in terms of new jobs and new technology, then it also has to contribute to the financing of the welfare society we live in,” Business Minister Brian Mikkelsen said in an interview in Copenhagen on Monday. The ministry estimates that about one-fifth of Danes have either offered or consumed the kinds of services provided by Uber and Airbnb, a proportion Mikkelsen says is bound to increase. 

Denmark’s manifesto on how to handle the sharing economy comes as other governments consider bans on key parts of it. UberPop, a version of Uber that lets people to give rides without holding a license, has been suspended in France, the Netherlands, Finland, Sweden and Hungary. In Norway, the government is looking into ways to come up with new regulations to deal with the app. Meanwhile, transport authorities in London have revoked Uber’s license and threatened to ban the service. 

In Scandinavia, where citizens prize the regulations that protect their welfare state, representatives of the sharing economy had been on a collision course with the rules that ensure workers’ rights and tax collection. 

Uber left Denmark this year, and a number of its drivers have been fined for breaking local taxi laws. That followed new licensing rules, as well as requirements for seat sensors and meters. Uber has since told public broadcaster Danmarks Radio it hasn’t given up on doing business in the country. 

“The lesson we learned from Uber was that our legislation wasn’t designed in an appropriate way” to deal with such newcomers, Mikkelsen said. “We need to make sure that our laws are more agile and better prepared for the future.” 

Airbnb, a service that lets private citizens rent out their homes, has also been under scrutiny amid concerns people are essentially working as commercial landlords without any of the tax ramifications such a profession entails. 

Denmark said on Monday that homeowners will be free to let their properties for at least 90 days a year. A voluntary tax program will be introduced, and the deductible base raised. Danish Tax Minister Karsten Lauritzen talks on the new legislation included meetings with Airbnb. 

The Danish government estimates the domestic market for shared services in housing and transport was worth as much as US$100mil (RM422.34mil) in 2015, compared with more than US$30bil (RM126.71bil) in the European Union. 

Far from being an economic model to curtail, Mikkelsen says the sharing economy “can be expanded to all kinds of services, like renting bikes and tools, not just cars and apartments.” “The potential is enormous,” he said. — Bloomberg