Pet-Sitting Services Might Be the Next Tech Battleground After Municipal Clashes With Uber and Airbnb

July 21, 2017, 12:36 PM UTC

Titans of the so-called “sharing” and “on-demand” economies such as Uber and Airbnb have faced countless municipal and courtroom battles worldwide, but a new potential battleground has tongues wagging.

The New York City Health Department appears to be cracking down on pet-sitting and dog-walking services, citing a little-known regulation prohibiting anyone from accepting payment for caring for animals without a license. Article 161 of the NYC Health Code outlines animal care regulations in detail, but the case here specifically concerns “boarding,” which the Department defines:

Boarding kennel business or establishment means a facility other than an animal shelter where animals not owned by the proprietor are sheltered, harbored, maintained, groomed, exercised, fed, or watered in return for a fee.

According to the New York Daily News, the Health Department is already moving forward on this, albeit a bit slowly given that only a few fines were issued last winter to—well before it merged with Rover this spring. The newspaper also reports that Rover is lobbying to have the law overturned.

John Lapham, Rover’s general counsel and senior vice president for business and legal affairs, provided the following statement to Fortune:

People have been watching their neighbor’s pets since pets came to be, and unfortunately the regulations in New York City are not in touch with how people find pet care. In New York, you can watch two children in your home for compensation without a license, but not a single dog or cat. Rover was successful in supporting legislation in both Colorado and California that cleared the way for allowing in-home pet sitting without a license, just as you can for children, and we’re confident there is a sensible solution for the millions of pet owners in New York City who need to secure safe, local and affordable pet care in order to own a pet.

After acquiring Santa Monica-based DogVacay in March, Rover is self-touted as the nation’s largest network of pet-sitters and dog-walkers. The Seattle-headquartered startup has seemingly only grown bigger since launching in 2011, raising another $65 million in venture capital in an investment round announced earlier this month.

With DogVacay’s resources integrated into the fold, Rover said earlier in July it expects a 200% increase in net revenue in 2017 as it now tops more than 140,000 sitters across North America, seeing bookings for various services at a rate of one every four seconds.

But a municipal battle in one of the country’s most populous markets (and one of the most dog-friendly cities) could halt Rover in its tracks.

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While New York’s tech scene has produced a number of success stories—some of which could be hitting the public markets soon—the city government has been keeping a tighter leash. Airbnb, for example, has faced criticism from city and state officials over the legality of short-term rentals and the threat posed for the hotel industry. (A 2015 report by the Hotel Association of New York City found local hotels suffered a $451 million revenue loss, attributing those losses to Airbnb.)

Uber might be the most infamous target, lambasted by the taxi industry and its own drivers alike. More recently in June, Uber drivers in New York said the San Francisco-based company still owed them millions of dollars despite a reimbursement promised to them in May after Uber admitted to miscalculating commission fees on rides for years. Just this week, Uber was sued by disability rights groups, alleging the ride-sharing company violates New York City human rights laws by failing to make more vehicles accessible to disabled people.

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