Are online marketplaces set to boom?
Are online marketplaces set to boom? The impact of covid19 on our share economy.
By Lianne Tan, Lawyer, The Remote Expert
Have you called an Uber instead of a taxi? How about that accommodation you booked on Airbnb? Uber and Airbnb are examples of an online marketplace, which is a website or app connecting sellers of goods or services with buyers.
eBay, Airtasker and Camplify are other examples of very successful online marketplaces.
Recently we have been helping more and more entrepreneurs set up online marketplaces at The Remote Expert as our economy changes as a result of the prolonged pandemic. But the establishment of an online marketplace is not issue free. One of the key issues the owner of an online marketplace has is knowing when and how to limit their liability if things between the buyer and the seller go bad. It is important that the owner of the marketplace ensures the platform users (both buyers and sellers) understand that the marketplace provides connection of the buyer and the seller only. Beyond that introduction, a contract is formed between the buyer and the seller directly and the Host likely has no liability.
When it comes to online marketplaces that connect hosts for personal services, such as short term rentals, it can become more complex with health and public safety order issues that are raised by the COVID-19 pandemic. COVID-19 can spread easily through shared spaces and rentals. What happens if a guest who stays at a short term rental through an online marketplace becomes infected with COVID-19? Who is at fault? And what happens when there is a lockdown and the guest cannot reach the property they hired?
With the ever-shifting landscape of public health orders in Australia, and New South Wales in particular, we take a look at the responsibilities and liabilities you may have as the owner of an online marketplace.
Public Health Orders
If you run an online marketplace for short term rentals or some other item people use physically (like a caravan or camper), it is not generally your responsibility if a guest who books through your marketplace catches COVID-19 or infects others with it during their stay. However, public health orders may create new responsibilities for you, hosts or guests at any time. For example, as at the date of this article, public health orders exist which direct that a host of a short term rental or holiday home must not allow more than 5 persons to stay as guests, unless all of those persons are from the same household. Visitors to a premises being used as a short term rental must also not exceed 5. For these orders, the obligation to ensure that not more than 5 persons stay as guests is on the host, and the obligation of not more than 5 visitors is on the guest.
As the owner of an online marketplace, the public health orders do not impose any additional obligations on you. However, you may face pressure to take liability for any breaches of public health orders or any outbreak of COVID-19 which occurs through the facilitation of a short term rental on your marketplace. It is particularly important in this instance to ensure that you have appropriate terms and conditions in place as well as policies and guidelines for your hosts and guests so that you can limit your liability.
Online Marketplace Terms
As an online marketplace, your key function is the connection of two third parties – in this instance, hosts and guests. The contract that then arises between the host and the guest should be separate from you, and that contract should include its own terms and conditions specific to the host’s and guest’s circumstances.
Online marketplace terms and conditions should also clearly define the limits of your liability and set out disclaimers with regards to any issues that may arise, including infections of COVID-19, so that if a guest is infected with COVID-19 or infects others during their stay, you are not responsible.
Marketplace Policies and Guidelines
To ensure that you are covered in terms of liability and to also provide clarity and comfort to any hosts and guests on your online marketplace, implementing clear policies and guidelines are also a good strategy. For example, after the outbreak of COVID-19, Airbnb set out their own policies, guidelines and standards with regards to COVID-19 and health and safety. Their policy includes hosts carrying out enhanced cleaning processes between guest stays and both hosts and guests are required to follow local laws on masks and social distancing in common areas and shared spaces. Failure to follow these requirements means the host may prevent the guest from staying at the rental and the guest may not be eligible for a refund. Guests also should not check into a listing if they are infected with COVID-19 or have tested positive, suspect they have been infected, showing symptoms or have had close contact with someone suspected to be infected.
The benefit of setting out clear policies and guidelines is that you can require a host or a guest to comply with any policies that you create as part of their obligations in signing up for an account with your online marketplace. A breach of this obligation may provide you with a right to terminate their account to prevent any future issues.
Key Takeaways
To ensure that you are protected and to limit your liability, if you are an owner of an online marketplace, we recommend that keep up with any public health orders being made to ensure you are aware if any obligations have been imposed on you, and that you also set up clear online marketplace terms and conditions and draft policies that are required to be complied with. If you’re not sure on how to start, please reach out and book a call here to discuss with one of our lawyers.
