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Uber and Airbnb continue to attract controversy as Australia debates where and how they fit into the existing legal framework. Their rapidly growing popularity highlights the law’s shortcomings in regulating these sharing platforms. But these disrupters and other innovative entrepreneurs won’t wait for urgently needed reform.

Below, we answer whether sharing platforms are legal before turning to look at some of the requirements you should consider before creating your own.

Is the Sharing Platform Legal?

The sharing platform site is not illegal in itself. When your future users or ‘listers’ begin using your sharing platform, you then run the risk of falling foul of the law. For example, before the Baird Government legalised ride-sharing services in NSW, the Uber app was legal, but uberX drivers would be guilty of operating a hire car without proper accreditation.

Essentially, the problem surrounding these sharing platforms is that they operate in lawless areas or, where the law is outdated and fails to reflect the current state of sharing economies. Consequently, this creates much regulatory uncertainty.

Accommodation Industry

Airbnb, Home and Away and Stayz are attractive options for backpackers and families travelling interstate or abroad. These alternative accommodations are predicted to overtake traditional hotel stays in the near future. Unfortunately, many people including the hosts of such accommodation, don’t understand the significant legal barriers they first must pass before they are legally allowed to rent out their homes.

Council’s oversee the zones within their land, and depending on the location of your property, both in reference to the council and the zone, hosts will be subjected to different rules. If a property falls within an area requiring the council’s consent, then you need first to obtain this before publishing any accommodation online. Many councils around NSW, including Randwick, Waverley and the City of Sydney, have actively sought to ban and penalise unauthorised short-term rental accommodation. For more information, you can read our article discussing the legalities of hosting on Airbnb.

Ride-sharing Industry

Australia remains divided when deciding whether ridesharing services are legal with only the ACT, NSW and WA legalising Uber and other ride-sharing services. Most recently, Victoria’s Magistrate Court found Uber driver Nathan Brenner guilty of driving a hire car without a commercial licence or registration and fined him $900. Although there are signs that the remaining states and territories are warming to Uber, it is prudent first to consult with a startup lawyer if you are thinking of creating a ride-sharing platform.

Takeaways for Startup Sharing Platform Hopefuls

The sharing economy encourages savvy entrepreneurs to disrupt established industries, and we expect to see more players like Uber and Airbnb on the field. But before rushing off to hire an app developer, take some time to understand what laws can affect creating your sharing platform.

Questions? Get in touch on 1300 544 755.

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