Slovakia Better than the Czech Republic in Regulating Sharing Economy

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The sharing economy is currently facing hard times both in Slovakia and the Czech Republic. Nowadays, Uber and Airbnb are regarded as the main icons of the sharing economy across the world. By using the former of these services, you can travel cheaper than by taxi, while employing the latter gives you the advantage of low-cost, yet comfortable, accommodation. These services, by being the most popular, generate accordingly the sternest will of the state to regulate them.

This time Slovakia is successfully getting the best of its neighbor, the Czech Republic. However, if you are a Slovak regulator, you would much rather be in the position of your Czech colleagues. The municipality of Brno has decided to put a halt to the operations of Uber, and not only by following up on the protests of taxi drivers and furious regulators. The Regional court of Brno banned Uber’s activity with its decision bearing interim measures. However, as Uber is based in Amsterdam, the decision must be first translated into Dutch. It remains to be seen whether the court´s injunction will be legally enforceable, as Uber plans to appeal the judgment.

Also in the Czech Republic, new ideas concerning the regulation of the other service we mentioned, Airbnb, have been emerging for quite some time now. The mayor of Prague criticized using Airbnb, expressing concerns about the locals luring terrorists into the city. According to her, this distress is caused by the fact that providers of Airbnb accommodation are under no obligation to report suspicious individuals, while ordinary accommodation providers are required to do so. It seems like the mayor of Prague believes that a greedy owner of a house is willing to accommodate just anyone for the sake of some income. And, of course, at least in her view, if they see something suspicious, they will definitely not bother reporting it, nor dealing with it in any other way. The mayor also does not like the fact that Airbnb users do not pay taxes to the city, while guests utilizing ordinary accommodation services are obliged to do so.

Later, the mayor of Prague moderated her approach in response to a growing wave of criticism. She sought to cool stirred emotions by stating that she did not actually mean for her allegations to prompt such negative reactions and that her intentions were not to impose a complete ban on Airbnb, just to regulate the industry a little more, in a rather classical and old-fashioned way. Accordingly, Prague´s local development authority has initiated its work to resolve the matter and plans to expand the reach of the city tax.

Fortunately, this time, the Slovaks are actually doing something right. Despite all the protracted protests of taxi drivers, liberals from the ranks of the opposition decided to amend the Road Transport Act. The aim of this legislative endeavor is to address precisely the issues that were brought up at the inception of the backlash against Uber, namely the large-scale deregulation of taxi drivers, allowing them to do business at a lower cost. At least somebody finally, though belatedly, explained the matter to the beleaguered taxi drivers.

It is the state itself that causes all the rumble around Uber and taxi services, as taxi drivers are literally overregulated. Administrative burdens vary from the technical status of the vehicle to financial guarantees, through psycho tests to the requirement of a minimum age of 21 years. In practice, taxi drivers have not even lit their engines and they had already paid a substantial sum of money to the regulator. If the legislative proposal passes, taxi drivers will be required to have a taximeter and visible information about the tariff rate per kilometer in their cars. Meanwhile, Uber drivers set off with significantly lower charges. Nevertheless, the state can no longer argue that Uber drivers do not contribute to the state treasury as they pay taxes just like everyone else.

It is likely that this legislative amendment will not pass through the parliament´s legislative process, as the majority is expected to cast their vote for taxi zealots rather than Uber drivers and cheaper services for ordinary citizens. However, it does not matter at all, because contrary to our neighbor´s situation, we can still travel legally by cheaper transport while tourists can find accommodation without any major concerns.

Translated by Martin Labaj

Martin Lindak