The sharing economy relies on shared production or consumption of goods and services, in contrast to the mainstream systems of private ownership. It originated in early Web-based non-profit initiatives such as Wikipedia and Couchsurfing. The first large-scale bike-sharing system was established in Lyon, France in 2005. Taiwan’s own YouBike program was launched in Taipei City four years later.
With the ascension of the mobile internet and smartphones, the sharing economy grew exponentially in the wake of the 2008-09 global financial crisis. Ride-hailing app Uber, established in San Francisco in 2009, had become the world’s most valuable startup by 2015. The company is currently valued at US$68 billion. Home-sharing platform Airbnb is the world’s fourth most valuable startup, with a valuation of US$30 billion.
Globally, the disruptive power of the sharing economy has prompted fierce backlash from regulators. Critics of sharing-economy firms say they undercut their competition with low prices made possible by tax evasion and other misdeeds. Governments from Spain to South Korea have banned Uber in a bid to protect taxi drivers. New York City recently passed legislation making it illegal to rent out an empty apartment for less than 30 days, which will cut heavily into Airbnb’s business in its largest market.
To date, Taiwanese regulators have shown little enthusiasm for either Airbnb or Uber, the two largest foreign sharing-economy companies active in Taiwan. Airbnb sought to establish a working relationship with regulators early on, and has avoided confrontation with the authorities. Its short-term apartment rentals nonetheless remain illegal in Taiwan. Uber has taken a more confrontational approach and been fined repeatedly.
Given Taiwan’s economic travails – in particular, low levels of foreign direct investment – market observers are hopeful that regulators will ultimately take a more conciliatory approach. To do otherwise, they say, would send yet another signal to global investors that Taiwan is not open for business.