I.

INTRODUCTION

[INSERT HYPOTHETICAL SITUATION/ANECDOTE]

A. Background Of The Study

Just about ten years ago, the possibility of arriving in a city and using a smartphone to

organize accommodations in a strangers home was unthinkable. 1 Back then, guests and travelers

only search for registered hotels and other lodging operators, contact them and inquire regarding

the availability of rooms and rates. Before, people can only flag down taxis that pass by them.

Now, anyone can order taxi drivers to come to him, track the drivers location and provide a

feedback about the service.2 With the use of online platforms,3 home, condominium unit or

property owners are now able to offer their houses for short-term rentals and accommodations to

potential guests, mostly transients, who are in search of more affordable and more or less

satisfactory lodging services. The advent of the smartphones has revolutionized the dynamics of

traditional booking of accommodations and taxis. Technology has changed and commercialized

the context of home-sharing and ridesharing.4

Aside from accommodations and taxis, online platforms also paved the way for other

products and services to be offered in different markets in a more accessible and economical

manner. Products and services that only established corporations and brands have the privilege

of selling are now being offered as well by total strangers who apparently have gained the trust

of the public. The digitalized technology and the Internet have enabled consumers to quickly and

1 Lucy Henderson, Innovators or Rule Breakers? Regulating Uber, Airbnb & The Sharing Economy,
October 2016 at 5.
2 Lucy Henderson, Innovators or Rule Breakers? Regulating Uber, Airbnb & The Sharing Economy,
October 2016 at 5.
3 An Act Providing for the Recognition and Use of Electronic Commercial and Non-Commercial
Transactions and Documents, Penalties for Unlawful use thereof, and for other Purposes [ELECTRONIC
COMMERCE ACT OF 2000], Republic Act No. 8792, art. 5, 5, (j)(i). (2000).
4 https://www.nytimes.com/2017/03/13/travel/airbnb-alternative-home-share-rentals.html

1
conveniently acquire the products and services they need with a touch of a button. 5 These

changes have been possible through the concept of the sharing economy where asset owners

use online platforms to sell their assets and consumers rent products or services from their peers

rather than rent or buy from a company.6

1. Airbnb and the Sharing Economy

Sharing economy is not entirely new. In 1948, ridesharing was first launched in

Zurich, Switzerland run by community-based, non-profit cooperatives.7 High information costs

during the 1980s, however, hampered the development and commercialization of the sharing

economy. Nevertheless, with the rise of technology in the 21 st century, information and

coordination costs for sharing activities fell sharply, hence triggering the boom of companies

operating under such model. 8

Airbed and Breakfast (Airbnb) pioneered the commercialization of the sharing

economy for the past decade.9 In 2007, the concept of sharing economy regained its value when

Airbnb CEO Brian Chesky and his roommate Joe Gebbia thought of turning their rented house

into a bed and breakfast accommodation for the attendees of the Conference of Industrial

Designers Society of America in San Francisco, since there was a shortage of hotel rooms in the

town.10 Since then, Chesky has continued their lodging services until they made enough money

to pay for their rent, which has spawned his idea of expanding the business further.11 The
5 AIRBNB 4, Talia Loucks
6 Tomio Geron, Airbnb and the Unstoppable Rise of the Share Economy, FORBES (Jan. 23, 2013, 6:00
AM), http://www.forbes.com/sites/tomiogeron/2013/01/23/ airbnb -and-the -unstoppable-rise -of-the -share
-economy/.
7 AIRBNB 16, p. 4
8 AIRBNB 16, p. 4
9 https://www.nytimes.com/2017/03/13/travel/airbnb-alternative-home-share-rentals.html
10 Thomas Friedman, Welcome to the Sharing Economy, NY TIMES, July 20, 2013, available at
http://www.nytimes.com/2013/07/21/opinion/sunday/friedman-welcome-to-the-sharing- economy.html?
pagewanted=all&_r=1 (last accessed Jun. 24, 2017).
11 Thomas Friedman, Welcome to the Sharing Economy, NY TIMES, July 20, 2013, available at
http://www.nytimes.com/2013/07/21/opinion/sunday/friedman-welcome-to-the-sharing- economy.html?

2
objective was to provide a new means for people to make money out of their unutilized assets. 12

Chesky wanted to create a global network where anyone anywhere could rent a spare room in

their home to earn cash.13 Eventually, the business concept has transformed them into a billion-

dollar company more known today as the Airbnb the trendsetter of the sharing economy. 14

Sharing economy is generally defined as the the peer-to-peer-based activity of obtaining,

giving, or sharing the access to goods and services, coordinated through community-based online

services.15 Its modern dynamics generally involves three participants: (1) thepeerprovider

whoprovidesassetstorent,shareorborrow; 16(2)thepeeruserwhoconsumestheproducts

andservices;17 and(3) the platform, which provides the marketplace for the transactions to

take place.18 People engage in sharing because of the social benefits that it brings, some of which

are convenience, reliability, efficiency and affordability than what traditional business enterprises

provide.19 The business model, however, comes not without social costs.

For the past few years, business enterprises successfully growing under sharing economy

model, e.g., Airbnb and Uber, have been under the surveillance of both the private sector and

different governments where these businesses are operating, due to the disruption and

regulatory challenges that its nature brings to the stakeholders, particularly consumers,

pagewanted=all&_r=1 (last accessed Jun. 24, 2017).

12 INSERT CITATION
13 Thomas Friedman, Welcome to the Sharing Economy, NY TIMES, July 20, 2013, available at
http://www.nytimes.com/2013/07/21/opinion/sunday/friedman-welcome-to-the-sharing- economy.html?
pagewanted=all&_r=1 (last accessed Jun. 24, 2017).
14 Thomas Friedman, Welcome to the Sharing Economy, NY TIMES, July 20, 2013, available at
http://www.nytimes.com/2013/07/21/opinion/sunday/friedman-welcome-to-the-sharing- economy.html?
pagewanted=all&_r=1 (last accessed Jun. 24, 2017).
15 (Hamari et al., 2015, p.1)
16 RACHEL BOTSMAN & Roo ROGERS, WHAT'S MINE IS YOURS: THE RISE OF COLLABORATIVE
CONSUMPTION 63 (HarperCollins Publishers 2010).
17 RACHEL BOTSMAN & Roo ROGERS, WHAT'S MINE IS YOURS: THE RISE OF COLLABORATIVE
CONSUMPTION 63 (HarperCollins Publishers 2010).
18 AIRBNB 18, p. 3
19 INSERT

3
incumbent businesses, regulators and policy makers. 20 Current legal systems of different

jurisdictions do not have legislations or regulatory frameworks that specifically address the

dynamics of the sharing economy. The sharing economy does not fall under traditional legal

categories.21 Due to the gap in the laws, transactions operating under such model raise several

legal and policy concerns.

With that, there has been an ongoing debate regarding the regulation of the sharing

economy phenomenon. On one hand, proponents of the sharing economy argue that government

intervention would only disrupt its dynamics and growth, especially when barriers to entry and

additional operational costs are imposed. 22 On the other hand, opponents claim that regulation is

necessary for the protection of consumers, promotion of public safety, and achievement of other

legitimate government goals.23 This Thesis intends to present a middle ground that will balance

these competing considerations.24 Lawmakers and regulators ought to find a means to facilitate

the flourishing of businesses under sharing economy, without compromising consumer safety,

security and protection.

2. Home-sharing Industry

Airbnb, the pioneer in commercializing the concept of sharing economy, has been

engaged in the flourishing business of home-sharing worldwide since 2008. [DEFINE

HOMESHARING] Today Airbnb is valued aroung $30 billion,25 with 3 million listings. 26 The

positive reception of the public with the services that Airbnb offer has driven the growth of the

industry worldwide and the increase of other players in the home-sharing market operating under

20 Airbnb 17, p.4

21 INSERT
22 INSERT AIRBNB 18, p. 6
23
24 AIRBNB 18, p. 6
25 http://www.cnbc.com/2017/03/09/airbnb-closes-1-billion-round-31-billion-valuation-profitable.html
26 https://www.airbnb.com/about/about-us

4
similar online platforms. Some home-sharing companies prefer to operate in a way similar to

hotels, while others offer variations of home-sharing services, catering to particular demographic

niches in the market. There are also players that prefer to target specific regions.

The booming of the home-sharing phenomenon has been viewed by some as a

disruptive innovation on the operations of the incumbent businesses, particularly by the

players in the hotel and accommodations industry.27 Hotel operators in different countries assert

that, Airbnb is operating a lodging industry, but it is not playing by the same rules, 28 primarily,

because Airbnb hosts do not pay taxes and are not subject to the same safety and security

regulations that hotel operators must follow.29 Some real estate brokers have also expressed their

concerns that Airbnb is possibly engaged in unlicensed real estate brokerage, since Airbnb

performs functions similar to brokers connecting property owners to clients.30

Aside from claims of infringement on the business of hotels and real estate brokers,

home-sharing has also created other legal and regulatory controversies. Primarily, governments

still do not comprehend the entire mechanism of home-sharing transactions. Legal systems are

not yet settled as to the legal nature of the services offered not only by the hosts (i.e. the home-

provider) to their guests (i.e. consumer) but also the legal relationship governing the online

platforms and the hosts. These gray areas in the legal relationships and whole dynamics of home-

sharing lead as well to the confusion as to the nature, scope and extent of the liabilities and legal

obligations of these online platforms and hosts to their guests.

Different jurisdictions have responded to the home-sharing phenomenon in varied ways.

Germany and some states in the U.S., e.g. New York City, prohibited short-term rentals with few

27 INSERT
28 https://www.nytimes.com/2017/04/16/technology/inside-the-hotel-industrys-plan-to-combat-airbnb.html
29 https://www.nytimes.com/2017/04/16/technology/inside-the-hotel-industrys-plan-to-combat-airbnb.html
30 http://nyrej.com/66975

5
exceptions.31 San Francisco, the home city of Airbnb, has recognized the legality of the

transaction but devised a regulatory framework for home-sharing, requiring registration of hosts,

provision of liability insurance and payment of local hotel taxes. 32 Japan and South Korea, on the

contrary, has been more receptive and welcoming to the growing industry, but regulators in these

Asian countries continue to study the dynamics of the industry in order to resolve the gray areas

that their current regulatory frameworks still fail to address.33

In this Thesis, the proponent will make us of Airbnb as the main subject of its analysis of

the home-sharing phenomenon in the Philippine context, given that Airbnb is the pioneer of the

home-sharing industry not only in the country but also globally.

3. Home-sharing in the Philippines [GET DATA]

For the past few years, Filipinos access and use of the Internet has been increasing.

According to research, 54 million out of 104 million Filipinos use the Internet, as of 2017. 34 It is

not surprising, then, that the country is considered as the fastest growing mobile app market in

Southeast Asia35 and the global lead when it comes to total amount of time spent in social media

sites.36 Moreover, the Filipino community has begun to open up to the dynamics of the sharing

economy, as successfully started by the platform-powered services of Uber, Grab and Airbnb.

31 INSERT
32 http://www.philhotelowners.org.ph/dot-looks-to-regulatory-legislation-to-address-airbnb-phenomenon/
citing San Franciscos Airbnb Law
33 INSERT https://www.forbes.com/sites/elaineramirez/2016/10/24/airbnb-could-wipe-out-70-of-its-south-
korea-listings-by-next-month/#49bd04797091l; http://fortune.com/2017/06/09/airbnb-legal-in-japan/
34 http://www.internetworldstats.com/asia.htm#ph
35 http://www.rappler.com/brandrap/profile-internet-users-ph, citing
http://www.applift.com/blog/philippines-app-market
36 http://technology.inquirer.net/58090/ph-worlds-no-1-terms-time-spent-social-media,
citing We Are Social Ltd report; http://www.rappler.com/technology/features/159720-ph-
spends-most-time-online-and-on-social-media-report

6
 Having one of the highest digital populations in the world, where Internet users growth

rate shows no sign of slowing down, Philippines is indeed a promising market for online home-

sharing platforms, as seen in Airbnbs flourishing business in the country. From 2014-2015

alone, the growth of Airbnb listings in the country was 300%. 37 Philippines is also one of the

fastest growing markets of Airbnb across Asia.38 In 2015, listings in the nations capital, Manila,

are more than a thousand, while Baguio and Tagaytay both have more than 200 listings.39

The same clamor of hoteliers against the unfair competition of Airbnb and other home-

sharing companies has been communicated to the Philippine government, appealing for

legislation to regulate the proliferation of non-hotel accommodations and arguing primarily

based on equity and fairness, public safety and consumer protection.40

To date, however, the Philippine legal system is still devoid of any policy, program or

legislation that recognizes the dynamics of home-sharing phenomenon. 41 Home-sharing remains

to be an unregulated activity in Philippines. This is not to say that home-sharing transactions are

illegal per se in Philippines, since no statute likewise explicitly prohibits such phenomenon.

Nevertheless, as a response to the hotel industrys lobbying of its concerns, the Department of

Tourism (DOT) of the Philippines said that it is currently on the process of consulting and

studying whether there is a necessity to regulate the home-sharing industry in the country.42

While the Philippine legal system is unsettled as to the legal nature of home-sharing

companies in its jurisdiction, Airbnb defines itself as an online marketplace for people to list,

37 http://www.bworldonline.com/content.php?section=Economy&title=airbnb-sees-phl-listings-rising-by-
300%-this-year&id=117786
38 http://www.bworldonline.com/content.php?section=Economy&title=airbnb-sees-phl-listings-rising-by-
300%-this-year&id=117786
39 http://kickerdaily.com/posts/2015/07/airbnb-hails-philippines-as-the-fastest-growing-market-in-
southeast-asia/
40 http://www.philhotelowners.org.ph/dot-looks-to-regulatory-legislation-to-address-airbnb-phenomenon/
41 http://www.philhotelowners.org.ph/dot-looks-to-regulatory-legislation-to-address-airbnb-phenomenon/
42 http://www.philhotelowners.org.ph/dot-looks-to-regulatory-legislation-to-address-airbnb-phenomenon/

7
discover, and book unique accommodations around the world online or from a mobile phone

or tablet.43 Airbnb earns by charging both the hosts 44 and the guests45 service fees for the

services that it provides to both participants based on the bookings and the reservations,

respectively.46 However, under Airbnbs Terms of Service, which constitutes as a legally

binding (Agreement) between Airbnb and the member, 47 Airbnb is neither an agent, real

estate broker, insurer, nor in any way a party or participant to the contract between the hosts and

the guests.48 Furthermore, the same Agreement provides that a Host is only treated as

independent or third-party contractor, not an employee, agent, co-venturer or partner of Airbnb.49

It is clear from these contractual provisions that Airbnb is not a party to the agreement

between the hosts and the guests. It only serves as a booking platform or provider of the means

for the hosts and the guests to communicate and transact directly with each other. 50 Airbnb was

careful in including these provisions in the Agreement to avoid possible liabilities that come with

being an agent, real estate broker, insurer, co-venturer or partner of either the hosts or the guests,

especially in case injuries, damages, breach of contract and warranties result from the services

provided by the hosts to the guests or vice versa. In case injuries arise either on the part of the

hosts or the guests, these contractual provisions will limit the remedies of the hosts and the

guests between each other only, excluding any claims against the Airbnb.

43 https://www.airbnb.com/about/about-us
44 3-5% depending on the cancellation policy chosen by the host and based on the booking subtotal
(before fees and taxes) and 20% for Experiences available at
https://www.airbnb.com/help/article/1857/what-are-airbnb-service-fees
45 5-15% of the reservation total, depending on Guest service fees are calculated using a variety of
factors including, but not limited to, the reservation subtotal, the length of the reservation, and
characteristics of the listing available at https://www.airbnb.com/help/article/1857/what-are-airbnb-service-
fees
46 https://www.airbnb.com/help/article/1857/what-are-airbnb-service-fees
47 includes both Hosts and Guests https://www.airbnb.com/terms, 1.1.
48 https://www.airbnb.com/terms, 1.1.
49 https://www.airbnb.com/terms, 1.4.
50 https://www.airbnb.com/terms

8
B. Definition of Terms

1. Airbnb refers to a trusted community marketplace for people to list, discover, and book

unique accommodations around the world online or from a mobile phone or tablet.51
2. Airbnb Platform refers to the collective term for the Site, Application and Airbnb

Services together. 52
3. Collaborative Consumption is defined by the European Commission as a complex

ecosystem of on-demand services and temporary use of assets based on exchanges via

online platforms.53
4. Consumer means a natural person who is a purchaser, lessee, recipient or prospective

purchaser, lessor or recipient of consumer products, services or credit.54

5. Guest refers to Airbnb Members that are seeking to book the home-sharing services

offered by hosts.55
6. Home-sharing, in the context of Airbnb hosting, is defined as a limited license to enter

and use the properties offered by the hosts for the duration of the confirmed booking.56
7. Host refers to Airbnb Members and third parties who offer home-sharing services.57
8. Host Services are the home-sharing services that hosts offer, including Accommodations,

Experiences, Events and other travel and non-travel related services.58

a. Accommodations refer to offering of vacation or other properties for use. 59
b. Experiences refer to offering of single or multi-day activities in various

categories.60
c. Events refers to access to unique events and locations.61

51 https://www.airbnb.com/about/about-us
52 https://www.airbnb.com/terms
53 Communication from the Commission to the European Parliament, the Council, the European
Economic and Social Committee and the Committee of the Regions, Upgrading the Single Market: More
Opportunities for People and Businesses, COM(2015), 28.10.2015.; (European Commission, 2015a, p.
3).
54 art. 4, (n)
55 https://www.airbnb.com/terms
56 October 27, 2016 Terms and Conditions https://www.airbnb.com/terms
57 https://www.airbnb.com/terms
58 https://www.airbnb.com/terms
59 October 27, 2016 https://www.airbnb.com/terms
60 https://www.airbnb.com/terms
61 https://www.airbnb.com/terms

9
 9. Internet Intermediary, according to OECD, brings together or facilitates transactions

between third parties on the Internet. They give access to, host, transmit and index

content, products and services originated by third parties on the Internet or provide

Internet-based services to third parties.62

10. Listings refer to the publication of Hosts Services on the Airbnb Platform.63
11. Members refers to both the registered users and certain third parties who offer home-

sharing services and those who seek to book the home-sharing services offered in

Airbnb.64
12. Online intermediary is a third party that offers intermediation services between two

trading parties. The intermediary acts as a conduit for goods or services offered by a

supplier to a consumer, and receives commission therefor. In this case, the relationship

between the intermediary and the merchant shall be that of a principal-agent relationship

which shall be governed by their agreement including but not limited to the amount of

commission, manner of transmitting the same, etc. However, in the following instances

the intermediary service provider shall be considered the merchandiser/retailer itself

a. when consumers buy goods or services from an intermediary service provider

who controls such collection of buyers payments, and thereafter receives

commission from the merchant/retailer

b. when the intermediary markets multiple products for its own account

(considered retailer or merchandiser as to the said products).65

13. Online platforms66

14. Service Provider refers to a provider of online services or network access or the

operator of facilities therefor, including entities offering the transmission, routing, or

62 OI, OECD, p. 9
63 https://www.airbnb.com/terms
64 https://www.airbnb.com/terms
65 https://www.bir.gov.ph/images/bir_files/old_files/pdf/73941RMC%20No%2055-2013.pdf
66 Airbnb 21 p. 9

10
 providing of connections for online communications, digital or otherwise, between or

among points specified by a user, of electronic documents of the user's choosing.67

15. Sharing Economy is an economic system in which assets or services are shared

between private individuals, either for free or for a fee, typically by means of the

Internet.68 It is interchangeably used with the terms sharing economy, collaborative

consumption, access-based consumption, collaborative economy.69

16. Torts or Quasi-Delict

C. Statement Of The Problem

The rise of technology and the emergence of the concept of sharing economy have led to

legal implications that former and incumbent legislators and regulators have not contemplated in

the past. Current legal systems fail to address the unclassified and undetermined legal

relationships created through innovations in technology, such as the home-sharing phenomenon.

1. Classification of Airbnb and Other Online Home-sharing Platforms

In Philippines, the legal classification of online platforms that provide home-sharing

services, like Airbnb, remain to be unsettled under the existing laws, rules and regulations. The

self-definition of Airbnb as a mere online platform provider and its disclaimer under its Terms

and Conditions that it is not an agent, real estate broker, insurer, joint venture nor a partner of

the hosts and the guests cause the ambiguous categorization of Airbnb under the current laws.

Because of this unclassified nature of home-sharing online platforms under the Philippine legal

system, consumer protection and public safety are compromised. Since no law or rule squarely

applies to home-sharing transactions, the participants, third parties and the public, are not

67 An Act Providing for the Recognition and Use of Electronic Commercial and Non-Commercial
Transactions and Documents, Penalties for Unlawful use thereof, and for other Purposes [ELECTRONIC
COMMERCE ACT OF 2000], Republic Act No. 8792, art. 5, 5, (j)(i). (2000).
68 Oxford Dictionaries, http://www.oxforddictionaries.com [sharing economy] (last accessed on
February 9, 2016).
69 Airbnb 16, p. 5

11
guaranteed of their rights, security or remedies, in case damages, injuries, loss, etc. occur to

them. The government is unable to regulate the perils and risks that come with these dealings.

2. Airbnb-Host and Airbnb-Guest Relationships

The lack of legal classification of home-sharing online platforms also creates a legal

question as to the character of the relationships of Airbnb both with its hosts and its guests.

Some characterizes Airbnb as hotels, due to its role in facilitating short-term accommodation, 70

where the hosts serve either as Airbnbs employees, agents, co-venturers or partners. However,

Airbnb provides in its Terms and Conditions that hosts are treated only as independent or third-

party contractors, and that these hosts directly enter into contract with the guests, without making

Airbnb a party to such agreement. If Airbnbs self-classification as online marketplace or

platform provider falls under none of the foregoing mentioned legal categories in the Airbnb

Terms and Conditions, i.e. agent, broker, insurer, etc., then confusion results as to the legal

implications attached to online platform providers, particularly in terms of the corresponding

warranties and tort liabilities of Airbnb to the hosts and guests. The undefined relationship

between the participants makes the nature, scope and extent of Airbnbs legal obligations towards

both the hosts and the guests, and vice versa, undetermined.

In terms of its tort liabilities, it is not settled whether these online platform providers may

be held liable for damages incurred by the guests due to Airbnbs own negligence, as well as

whether Airbnb may be held solidarily or vicariously liable for the damages caused by the hosts

to the guests. It is also unknown whether Airbnb can be held liable for breach of its own and its

hosts warranties. Likewise, the rights and duties of the hosts towards Airbnb are unknown.

Through these contractual provisions, Airbnb insulates itself from liabilities and other legal

70 Airbnb 3, p.141, citing FN 106

12
implications that attach to the relationships governing agents, real estate broker, insurer, joint

venturers and partners, at the expense of the hosts and the guests involved in home-sharing.

3. Host-Guest Relationships

Home-sharing transactions also raise questions regarding the nature of the legal

relationship governing the Airbnb hosts and its guests. On one hand, some aspects of host-guest

relationships resemble lessor-lessee relationships, since the hosts rent out their homes,

condominium units or other properties to guests, most likely transients, who are looking for

lodging services. On the other hand, relationship between hotels/innkeepers and their guests may

also be likened to Airbnb hosts-guests relationship. The undefined status between hosts and

guests also makes the nature, scope and extent of their legal obligations and liabilities towards

each other unknown.

The degree of diligence that the hosts must exercise to ensure the safety and security of

their guests and third parties is also not clear-cut. It is also questionable whether hosts may be

held liable for breach of warranties for the false or misleading information they post in Airbnb

regarding their home-sharing services. There is also a question whether hosts may be held

solidarily answerable for damages caused by guests to third parties due to the home-sharing

services that the hosts provided. On another note, the applicable legal remedies of hosts against

damages, losses and injuries caused by the guests to them are also not determined.

D. Thesis Statement

Home-sharing in a modern context is a growing phenomenon where home or property

owners rent out their homes to guests who are searching for accommodation services through the

facilitation of online home-sharing platforms (e.g. Airbnb). To date, the legal nature of online

home-sharing platforms and the dynamics of home-sharing transactions remain to be unclassified

13
under Philippine law. Although the economics of home-sharing brings convenience, efficient

income and cost benefits to all the participants therein, the corresponding risks that come with

these transactions remain to be unregulated without any specific legislation or regulation

governing this growing phenomenon, hence prejudicial to the safety of the consumers and the

public in general. The rights, protection and remedies of consumers who avail of home-sharing

services are neither defined nor guaranteed, whereas the legal duties, obligations and liabilities of

online home-sharing platforms and the hosts are likewise unclear.

These legal implications arising from the home-sharing phenomenon call for an

examination and determination of the place of online home-sharing platforms and home-sharing

services under the Philippine legal system. The current self-regulation of Airbnb and other online

home-sharing platforms is inadequate for purposes of the regulation that the industry calls for.

Therefore, this Thesis explores the legal nature of online home-sharing platforms, the

relationships that govern all the participants and the scope and extent of their corresponding

rights, obligations and liabilities. Ultimately, the Thesis provides a legal framework or regulatory

structure, where this emerging home-sharing industry may continue to flourish and the interests

of all the participants and stakeholders protected.

In attaining its objectives for this Thesis, the proponent will use the Airbnb company as

the main example in examining the home-sharing phenomenon in Philippines.

E. Objectives Of The Study

This Thesis intends:

1. To determine the legal relationship governing between online home-sharing platforms

and the hosts;

2. To identify whether the legal relationship governing the hosts and the guests are akin to

hotel-guest relationship or lessor-lessee relationship;

14
 3. To determine the warranties, liabilities and extent of diligence required of online home-

sharing platforms and the hosts;

4. To evaluate the possible liabilities of online home-sharing platforms for their own

negligence and for the breach of contract, warranties and tort liabilities of its hosts;
5. To establish that the current phenomenon of home-sharing services in Philippines violates

the rights of consumers to protection;

6. To propose the creation of a specific legal framework or regulatory structure for Airbnb

hosting operating under sharing economy.

F. Significance Of The Study

Due to the advantages that online home-sharing platforms, such as Airbnb, brings to the

Philippine society, an outright ban of the services offered by sharing economy participants

would be neither efficient nor an effective course of action; there are however, very serious

short-term risks if this sphere is left to flourish without any form of regulatory intervention.71

Therefore, this Thesis will find a middle ground where home-sharing companies can

operate fairly

https://travelfreak.net/airbnb-alternative/

G. Organization Of The Thesis

This Thesis is divided into eight (8) chapters. Chapter I provides an overview of the

Thesis, including a background on the current status of regulation, or the lack thereof, of Airbnb

operations under sharing economy model, both in Philippines and in foreign jurisdictions. The

chapter will lay the foundation and significance of the Thesis through illustrating the

undetermined nature of the legal relationships among Airbnb, its hosts and guests, the extent of

diligence required of Airbnb and its hosts and their corresponding tort liabilities. The chapter also

71 Henderson, supra note 1 at 9, citing Nayeem Syed Regulating Uberfication 2016 22(1) C T L R 14 at
14.

15
contains the Thesis objectives, scope and limitations, significance of the study, organization and

methodology used in accomplishing the Thesis.

Chapter II outlines the basic principles and rules on Torts or Quasi-Delicts provided

under different statutes and case law, but only as to matters relevant for the purposes of this

Thesis. Chapter III delves into the review of the legal implications of landlord-tenant

relationships under lease contracts. Chapter IV deals on the laws and principles governing

hotel/innkeeper-guest relationship under the Civil Code. Likewise, the chapter reserves a portion

for the discussion of the relevant Law on Deposits in hotels or inns. The same chapter contains a

brief overview of a property owners right to lease his property in the context of condominium

unit ownership. Chapter V expounds on the nature of a sharing economy business model under

the current Philippine legal system. It provides a background on the dynamics of the sharing

economy model, using Uber and Airbnb as examples. The chapter points out the lack or

inadequacy of regulation governing these kinds of businesses.

Chapter VI analyzes the intersection among the policies of Airbnb, the laws on landlord-

tenant relationship and hotel-guest relationships. Chapter VII determines the obligations required

of Airbnb and its hosts, together with the corresponding extent or level of diligence required of

them. In addition to that, the chapter explores the different possible tort liabilities of Airbnb and

its hosts. Chapter VIII delivers the conclusion of the Thesis and specifies the proponents

recommendation to create a regulatory framework for the operations of Airbnb in the Philippines.

H. Scope And Limitations

The scope of this Thesis only deals with the determination of the tort liabilities and other

legal obligations of Airbnb, as the main subject matter of the study, and other similar online

platforms offering home-sharing services within the Philippine context. In doing so, the

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classification of Airbnb as an entity and its services under the existing laws of the Philippines has

to be determined first. In relation to the categorization of Airbnb, there will be an examination of

the legal nature of the corresponding relationships governing the interrelated transactions among

Airbnb, the hosts and the guests.

Initially, the proponent will explore the concepts of online intermediaries and Internet

Service Providers (ISPs) and see whether online platforms like Airbnb can be classified as such.

Thereafter, the Thesis will consider following concepts to see if the nature of the relationship

between Airbnb and the hosts qualify under any of these: agency, real estate brokerage,

employment, joint venture, insurer and partnership. The character of the relationship between the

hosts and the guests is also within the scope of the Thesis analysis.

With respect to the hosts, the discussion of the Thesis, however, will only cover those

transactions involving hosts that are renting out their properties located in the Philippines,

regardless if the hosts are residents or not in this country. The Thesis excludes the analysis of

issues involving the renting of properties located abroad, even if the guests who booked the

accommodations and even if the hosts who own those properties located abroad are citizens or

residents of the Philippines. In other words, only those transactions involving properties located

in the Philippines will be examined in this Study. With respect to the guests, the Thesis makes no

distinction whether they are Filipino citizens or foreigner, and regardless if they are residents or

non-residents of the country. The Thesis will also focus on the point-of-view of consumers and

their protection. The applicable legal remedies of hosts against damages, losses and injuries

caused by the guests to them will not be discussed here.

Each business enterprise operating under the sharing economy model faces different

challenges with reference to law,72 this Thesis, however, will focus its analysis on online home-

72 Airbnb 20,

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sharing platforms, particularly the operations of Airbnb as the pioneer in the alternative

accommodation industry. Other online sharing economy platforms related to other industries, i.e.,

Uber, are beyond the Thesis coverage. In addition, the issue on Airbnbs payment of taxes

analogous to that of the hotel industry is excluded in the discussion. The proponent also deems

that issues on Airbnbs possible violations of unfair competition and other competition law

policies may be proper subjects of further theses on home-sharing or sharing economy, in

general. And for purposes of the analysis in this Thesis, the proponent will use the Terms and

Conditions of Airbnb as of June 19, 2017 and any changes to its provisions to the effect that the

contractual provisions cited in this Thesis no longer exists are beyond the scope of the Thesis.

I. Methodology

Primarily, the proponent will utilize the secondary approach in gathering and collecting

existing data regarding the operations of Airbnb both in Philippines and in abroad. These data

will be used in analyzing the legal relationships governing Airbnb, its hosts and its guests under

sharing economy model. There will also be a research on related literature and compilation of

local laws and jurisprudence on torts, landlord-tenant relationship and hotel-guest relationship,

which shall be reflected in Chapters II, III and IV, respectively.

In addition to local statutes and jurisprudence, there will also be a survey of relevant

laws and doctrinal cases in different jurisdictions such as United States, which settled some of

the issues of Airbnb and its hosts liabilities. The proponent will likewise look into the rationale

behind the regulation of Airbnb in foreign jurisdictions to support my proposition to come up

with a regulatory framework for the operations of Airbnb. Law journals having related discourse

on the legal relationships and liabilities of Airbnb and other businesses operating under sharing

economy model will also be reviewed to further enrich the arguments and discussion of this

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Thesis. Articles explaining the dynamics of sharing economy model will be examined too.

Integration of these materials shall be developed in Chapter IV of the Thesis.

Using the secondary approach, the Thesis will synthesize in Chapter V the intersection

among the existing Airbnb policies and laws governing landlord-tenant relationships and hotel-

guest relationships. For further analysis, the proponent deems it proper to utilize the inductive

method in Chapters VI and VII to argue that, the operations of Airbnb under sharing economy

model is not addressed by the current set of laws, and therefore it becomes necessary to fill in the

gap. Using the gathered materials, the proponent will be able to come up with a solid basis to

argue that the operations of Airbnb shall likewise be regulated in a manner similar or analogous

to the hotels and accommodation industry. The inductive approach will effectively illustrate the

lack of any regulation of Airbnb operations. The final chapter will reflect the results of the

methodologies used in attaining the objectives of the Thesis through the conclusion, formulation

of the legal framework and recommendation.

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