Created and Presented by: Christopher S. Hill of Kirton McConkie At our Santa Monica breakout session, we were introduced to several legal issues that have been impacted by the rapid growth of sharing economy businesses. Uber’s legal challenges provide a template for many of these sharing economy legal issues, from unfair competition to employment and agency. Courts are ruling that traditional analytical models and precedent do not translate and apply well to sharing economy circumstances. This session will provide a more in-depth report on several legal issues facing Uber and other sharing economy businesses such as Airbnb, and conclude with a roundtable-style discussion of experiences in these markets faced by the attendees.

1. Spring International Conference | May 2-4, 2016
LISBON

2. 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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3
What is Uber?
• Founded in 2009 in San Francisco as “UberCab,” going
live in San Francisco in July 2010
• Uber connects riders to drivers through an app on
smart devices
• Uber ramps up national expansion in May 2011,
expanding to New York City, and expanding into a
new city each month, including Chicago and
Washington DC.
• In December, 2011, Paris is the Lirst city outside of the
U.S. where Uber’s service began operating

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What is Uber?
• As of February 1, the service is
available in 68 countries and 400
cities worldwide.
• 2015 estimated worth: $50 Billion
• 2015 estimated revenue: $10
Billion

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• Smartphone App
• Tech Company
• Rideshare Facilitator
• Joint Venture with Transportation Providers
• Transportation Company
• Employer of Transportation Services
What is Uber?

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What is Uber?

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The sharing economy . . . allows
individuals to share products and
services like offering homes and
apartments for rent, or driving
passengers to destinations. The
small tasks often are brokered
through mobile smartphone apps,
and the platforms connect
freelancers with available short-
term gigs.
Sometimes called:
• Peer-to-peer networks
• Collaborative economy
• Access economy
• On-demand economy
• Gig economy
Describes a type of business
built on the sharing of
resources—allowing
customers to access goods
when needed.
What is the
Sharing Economy?

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SnapGoods
High-end household items,
e.g., cameras, kitchenware,
musical instruments
Airbnb
Private rooms or homes/
apartments
DogVacay
Pet Boarding
RelayRides
Car Rental – Borrow cars from
neighbors
TaskRabbit
Hire people for jobs and tasks,
including handymen, delivery,
and ofLice help
Getaround
Peer-to-peer car sharing
Liquid (Spinlister)
Bike, surf, and snow gear rental
Zaarly
Peer-to-peer marketplace for people
to provide services for others, e.g.,
iPhone repair, home repair,
homemade cooking
Other Share Economy Companies

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Lyft
Uber competitor –
ride sharing
Blablacar
Another ride sharing
company
WeWork
Shared ofLice spaces –
on demand workspaces
Instacart
Grocery services
Lending Club
Peer-to-peer lending and investing
Fon
Wi-Li network sharing
Poshmark
Clothing and fashion
Neighborgoods
Sharing household items, like lawn
mowers, ladders, etc.
SideCar
Ride Sharing
Other Share Economy Companies

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Legal and Business Concerns
Raised Regarding Uber
• Unregulated
– Unfair competition for taxis and others that are heavily regulated
– Uber counter – industry-controlled regulators impede Uber
• Slicing prices to corner the market
– Unfair competition for taxis and competitors
• Labor/Employment Law
– Employees or Independent Contractors
– Out of pocket expenses for drivers, tips go to Uber, etc.
• Public safety
• Health, safety, fraud, unskilled service providers
• Americans with Disabilities Act

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Labor Issues

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O’Connor et al v. Uber Technologies, Inc.
C.A. No. 13-03826-EMC (N.D. Cal.)
Labor Issues

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Labor Issues

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Labor Issues
O’Connor et al v. Uber Technologies, Inc.
C.A. No. 13-03826-EMC (N.D. Cal.)
Jury Trial Scheduled June 20, 2016
Class CerJficaJon Appeal pending in June

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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
• Winning the Battle vs. Losing the War
• Impact of Driverless Cars
• What does that do to the Uber Model?

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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
Meyer v. Kalanick
USDC SDNY 15 Civ. 9796

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Antitrust Issues
Missouri Lawsuit Allegations By Uber:
1. St. Louis Metropolitan Taxicab Commission requires excessive
licensing requirements
2. MTC is controlled by market participants
3. MTC colludes to stiLle competition
Wallen v. St. Louis Metropolitan Taxicab Commission
Case: 4:15-cv-01432 (E.D. Mo.) (9/18/15), Motions to dismiss briefed; Rulings pending

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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

29. Law No. 2014-1104 of October 1, 2014
• (1) prohibition against chauffeured vehicles other than taxis charging a
per-kilometer fee;
• (2) prohibition on “electronic roaming” by chauffeured vehicles, i.e.,
the use of a smartphone application that shows the location of nearby
available vehicles to potential customers in real-time; and
• (3) after each ride, chauffeured vehicles return to their home base or
stop in a place where they are authorized to park.
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Thévenoud Law
FRANCE

30. • Uber France and Uber BV sued by the Union Nationale des Taxis, a taxi
trade association, and three traditional professional chauffeur services.
• Uber requested that constitutional challenges to three major
provisions of the Thévenoud Law be referred to the Conseil
constitutionnel (Constitutional Council), the French body tasked with
verifying the constitutionality of laws.
• The Cour de cassation, which acts as a gatekeeper for this type of
constitutional challenges, accepted, in two separate decisions, the
referral of Uber’s challenges to the Conseil constitutionnel.
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Thévenoud Law
FRANCE

31. Conseil cons8tu8onnel decision: May 22, 2015
FRANCE
Thévenoud Law

32. Conseil constitutionnel decision: May 22, 2015
(1) prohibition against chauffeured vehicles other than taxis charging a
per-kilometer fee;
• prohibiting chauffeured vehicles from charging customers on the basis of
distance while authorizing licensed taxis to do so, unjustiLiably violated
freedom of enterprise, which the Conseil constitutionnel derives from a
clause of the 1789 Declaration of the Rights of Man stating that “[l]iberty
consists in being able to do anything that does not harm others.”
FRANCE

33. Conseil constitutionnel decision: May 22, 2015
(2) prohibition on “electronic roaming” by chauffeured vehicles, i.e., the
use of a smartphone application that shows the location of nearby
available vehicles to potential customers in real-time; and
(3) after each ride, chauffeured vehicles return to their home base or stop
in a place where they are authorized to park.
• The Conseil constitutionnel found the other two provisions to be
constitutional, however, deeming them to be justiLied by the governmental
interest in preserving public order, particularly with regard to the use of
public roadways and parking places.
FRANCE

34. digital service provider, called an “information society service” in the
applicable EU directive
• regulated by the EU and beneLit from the freedom of establishment for service providers
and the free movement of services as provided for in the Services Directive 2006/123/
EC and the TFEU
• “Information society services” are deLined as “any services normally provided for
remuneration, at a distance, by means of electronic equipment for the processing
(including digital compression) and storage of data, and at the individual request of a
recipient of a service.” (Id. art. 2(a).)
transport operator
• transport operation is regulated by the EU Member States. (Services Directive, recital
21.)
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EU Classifications:
SPAIN

35. • European Union (EU) is less clear. The service can either be qualiLied as a
digital service provider, called an “information society service” in the
applicable EU directive, or as a transport operator. Information society
services are regulated by the EU and beneLit from the freedom of
establishment for service providers and the free movement of services as
provided for in the Services Directive 2006/123/EC and the TFEU, whereas
transport operation is regulated by the EU Member States. (Services Directive,
recital 21.) “Information society services” are deLined as “any services
normally provided for remuneration, at a distance, by means of electronic
equipment for the processing (including digital compression) and storage of
data, and at the individual request of a recipient of a service.” (Id. art. 2(a).)
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EU Classifications:
SPAIN

36. 1. If the services Uber provides can be qualiLied as merely a transport service or if it must
be considered to be an electronic intermediary service or an information society service?
2. If Uber’s services can be qualiLied as “information society services,” should it beneLit
from the freedom to provide services guaranteed by Article 56 TFEU and the Services
Directive 2006/123/EC and the E-Commerce Directive 2000/31/EC?
3. Is Uber’s alleged breach of Spain’s unfair competition law contrary to Article 9 of the
Services Directive, which governs “authorization schemes” and which states that an
authorization, licensing or permits regime cannot be restrictive or disproportionate, and
cannot unreasonably hinder the principle of freedom of establishment?
4. If Uber is to be considered as an information society service, are the restrictions Spain is
currently imposing on Uber allowed, taking into account the freedom to provide
information society services expressed by Article 3 of the E-Commerce Directive?
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Certified Questions
SPAIN

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"If Parisians want to rent out their home
when they go on holiday, that is not really a
problem. What concerns us is when
someone purchases one or more properties
with the aim to turn them into tourist
rentals. We don't have enough properties to
house Parisians.“
Ian Brossat, Paris' deputy mayor in charge
of housing.
France
AIRBNB

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In France, homeowners are free to rent out
their primary residence for up to four
months per year.
But under a Parisian law enacted in 2011,
people who want to rent out an investment
property must own an equivalent property
with a long-term tenant.
Fines for breaking the rule can exceed
$28,000.
France
AIRBNB

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"Around 83% of our listings in Paris are
main residences, so this crackdown does
not really concern us"
Airbnb France spokeswoman Philippine Nouveau.
France
AIRBNB

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• Law passed in 2014 requiring all short-term
vacation rentals to be registered with
authorities, with one-time fees to register the
property that can run higher than $250.
• Berlin government says the rule doesn't
restrict the sharing economy and affects only
people who rent out investment properties.
• "The aim of the law is to turn holiday
apartments into regular housing to alleviate
the housing shortage, especially in popular
districts."
Torsten Kuehne, district councilor for Prenzlauer Berg
Berlin
AIRBNB

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Over-regulating room sharing doesn't
address the underlying problem — a
shortage of housing — that has prompted
criticism of the industry. If cities like Berlin
would build more housing, people would be
less inclined to criticize Airbnb and other
room-sharing services.
Airbnb spokesman Peter Huntingford
Berlin
AIRBNB

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Berlin inspectors regularly check room-
sharing sites to make sure no one is
violating the rule. Residents are eager to
help. In the Lirst seven months after the
ban's introduction, neighbors notiLied
authorities of about 700 potentially illegal
rentals, Kuehne said.
Enforcement
AIRBNB

43. 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