The Sharing Economy – profits or problems?

May 2, 2023

As we start into May and the hope of a great summer in 2023, we have a question that you may want to ponder. Do you see the sharing economy affecting your business now or in the future? And if so, does it bring profits or problems?

For those who own an asset that they may not be using right now; can that asset be earning them profits, or does it bring problems? 

Lots of families who own a vacation property, are willing to rent it out when they are not using it. Cottage owners used to advertise their property in the newspaper and often, prospective renters would have to meet the owner in person and convince them that they would be considerate of both the property and the neighbours. Lakeside summer cottages for example, have often been rented out for a month or so, to cover taxes or maintenance costs. I’ve seen this my whole life. It’s nothing new and people have sometimes included the use of a boat in the deal.

What has changed is that a business can be launched for a very small investment in a transactional “app” that matches assets with people who want to rent the asset, be it a cottage, a chalet, downtown condo, or even a boat.

So, the party controlling the transaction through the app, has little or no role to play beyond the financial exchange where they get their cut. From there, the deal is between the party who owns the asset and the party (or parties) who rent the asset. Computer apps have made this very easy and the old tradition of renting a cottage for half of the summer has evolved to short-term rentals of a weekend, or even overnight stays. The more short-term rentals, the greater the profit can be, but there can be a corresponding rise in property damage, noise complaints and worse.

A more complicated transaction is where a privately-owned boat is rented because PCOC cards are needed, there are safety equipment requirements, insurance for pleasure craft almost certainly excludes commercial use and if the boat is kept in a marina, the slip rental contract probably forbids commercial uses like rentals.

Our thoughts here are intended to raise awareness among our readers, that all parties involved in sharing economy transactions should adhere to local laws and the terms of insurance coverage.

If your marine business could be affected by commercial sharing economy activity, you may want to take a proactive approach with your clients. One step in risk management would be to use a professionally developed contract like the one available through your marine trade association; it likely forbids commercial uses. Check your business insurance policy too. This is the time to head off problems before they get started.

Andy Adams – Editor