More rules can't fix issues inherent in Airbnb's business model

I disagree with Opinion editor Chua Mui Hoong's suggestion that Singapore should ultimately allow short-term rentals in private apartments ("To Airbnb or not to Airbnb..."; May 22).

This is not to say that we should not accommodate disruptive technologies and business models, such as Grab and Uber, that bring about improved service and other major benefits for consumers.

There are a number of substantial differences between private car-hiring services and the service that Airbnb provides, which justifies legalising the former while barring the latter.

First, there is the problem of externalities. Although ride sharing does not pose as much of an issue, since business dealings involving one vehicle have no impact on the other vehicles around it, this is not so for private subletting.

Transient tenants can and sometimes do create problems for neighbours, such as excessive noise.

Transient tenants can and sometimes do create problems for neighbours, such as excessive noise. This is especially pertinent for densely populated Singaporean housing estates. Moreover, it might well be a security risk to allow prospective boarders entry into private estates.

This is especially pertinent for densely populated Singaporean housing estates.

Moreover, it might well be a security risk to allow prospective boarders entry into private estates.

These individuals are, after all, strangers, if not for very limited and unreliable online communication beforehand.

These issues are inherent to Airbnb's business model, and cannot be readily resolved or mitigated simply by adding on more regulations and guidelines, which can be difficult to disseminate and easy to flout.

Second, there is the question of enforceability.

Whereas Grab and Uber screen applicants, and have technological systems in place to monitor vehicles and transactions, Airbnb relies heavily on tenuous trust between the landlord and the tenant.

As the case studies in Ms Chua's commentary attest, there is already an uphill battle for the company itself to exercise oversight.

Asking the Urban Redevelopment Authority to implement a new slate of regulations governing private subletting only exacerbates the problem of how to enforce these rules on so many private properties.

In summation, unlike the other disruptive businesses, it would seem that opening the door to Airbnb would benefit only those who stand to profit from rentals, while bringing detriment to the rest of the community.

Permitting and regulating such a practice is not advisable at all.

Paul Chan Poh Hoi

A version of this article appeared in the print edition of The Sunday Times on June 05, 2016, with the headline 'More rules can't fix issues inherent in Airbnb's business model'. Print Edition | Subscribe