How will the mainstream travel industry work with the sharing economy?

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I recently stumbled across an article in the Times of India, reporting that Thomas Cook India had entered into an agreement to work with Airbnb to supply accommodation to Indian outbound travellers.

 

Whilst Thomas Cook India no longer has any connection with its European counterpart – the business was sold off in 2012, at the time when all reporters automatically described the business as “beleaguered” or “embattled”, this article got me thinking about whether this agreement was the start of a changing relationship between the traditional travel players and the “disruptors”, and if so, what were the potential consequences.

 

I have previously written about my own experiences when taking a holiday with a sharing economy business (see “How will the sharing economy address safety requirements?), and I remain concerned that these type of business have a fundamental problem in trying to ensure that their customers are safe. I suspect that most providers in this marketplace take a commercial view that they are simply an introducer – bringing together willing buyers and interested sellers, and that they therefore have no obligations towards the buyer when it comes to safety. I am not sure that I agree with this view, as I personally believe that if you are making a product available, you have, at the very least, an obligation to warn potential buyers of any relevant risks. Saying that it is caveat emptor – let the buyer beware, is not to my mind enough when selling accommodation, particularly when the buyer has no opportunity to inspect or address any potential problems in advance of staying at that accommodation.

 

But when mainstream businesses start to work in this market, and consciously choose to offer these products, I wonder whether the obligations potentially go even further.

 

For many years, whenever I have considered or talked about tour operators’ obligations in relation to customer safety, I have emphasised that the “ostrich” approach, of sticking your head in the sand, praying that there are no problems, and trusting to common sense cannot be the sensible way of looking after customers.

 

Over the years, my reasoning behind this view has changed. I have always argued that there are a series of reasons why any travel provider needs to ensure the safety of their customers – whether that be to reduce to eliminate the risk, and therefore related costs of consumer claims; to avoid the likelihood of criminal liability falling on anyone in the company; or to protect the reputation of the business if something does go wrong. Whilst managing the legal risks remains important, the fundamental reason why I believe that any travel business needs to take customer safety seriously is that there is a massive reputational risk if something does go wrong. We live in a culture where in the event of any problem, the first question always asked is whose failing caused the problem – the concept of a simple accident appears no longer to exist – there’s always someone to blame.

 

As a result, I believe that travel businesses have a serious problem if something does go wrong, and they attempt to argue that they had no responsibility to do anything other than sell the travel product. Both the courts of law and the courts of public opinion seem to support my view on this issue.

 

I am therefore firmly of the view that a tour operator needs to have some sort of process in place – even if it may be at a very basic level, to make sure that their customers are safe whilst on holiday.

 

Where then will that leave the travel business, whether that is a tour operator or a travel agent, who decides to sell the products of a sharing economy provider, particularly when that travel business knows that no checks are being made?

 

I do wonder whether this may prevent any UK business copying the approach of Thomas Cook India, and contracting to make these products available.

 

Interestingly, in 2014, the UK government undertook an “Independent Review” into the sharing economy, led by Debbie Wosskow, the founder of the Sharing economy website “Love Home Swap”. That review produced a series of recommendations on the extent to which, if at all, this sector should be encouraged or regulated. Perhaps unsurprisingly, in view of the author of the review, recommendations were for government to encourage this sector to become accepted in the mainstream, without imposing excessive regulation on the sector.

 

The review resulted in the establishment in 2015 of an association, Sharing Economy UK (SEUK), chaired by Debbie Wosskow, which has put in place a code of conduct for its members. That code does specifically refer to safety standards, and clause 4.1 states:

4.1 – Members shall encourage their users to maintain a high level of safety for all products and services and will support the development of reasonable industry standards and safe practices.

 

The website is not particularly transparent about which companies are members of this association, but it does appear (if I have interpreted the member application page correctly) to include travel businesses. I wonder how any of the SEUK members have chosen in practice to implement clause 4.1 of their Code of Conduct, and whether that will give sufficient comfort and certainty to any traditional travel business that their brand will not be damaged by working with this sector if something does go wrong.

 

Whilst it is early days, it is clear that the disruptors are here to stay, and the travel industry will have to find ways of working in the same competitive marketplace, or even directly with those businesses. The big question is how that can best be achieved, and how the continuing safety of our customers can be assured.