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Disrupting the disruptors Singapore rattles sharing economy with rule cha...

Singapore, a keen early adopter of the sharing economy, has fired a warning shot across the bow of Airbnb and Uber with tighter rules that could shake up their business models and growth ambitions in Asia. The rules, some say, are a sign that even governments sympathetic to companies that allow citizens to rent out their expertise or property have a hard time striking the right balance between encouraging disruptive technologies and keeping them in line."I know a lot of people will give back their keys, that's for sure," said Lionel Ong, 33, an Uber driver, who wants to look for a less demanding part time job. As its traditional manufacturing industry has hollowed out in the past decade or so, the affluent city-state has been quick to embrace opportunities in the digital economy, hosting the Asian headquarters of Airbnb and Uber, inviting its executives to conferences and investing in Uber's regional rival Grab through a unit of its investment arm for Temasek. It’s too early to say what impact the new rules would have on Uber and Airbnb, but they highlight increasing scrutiny by regulators globally and growth challenges facing these new economy businesses. April Rinne, an expert on the sharing economy who has advised companies and governments, including Singapore, says the city state's case mirrors other early adopter countries like Denmark, where legislators are mulling laws which would require taxis to have seat sensors, video surveillance and taxi meters. "It’s a watershed that should also sound warning bells," Rinne said. Singapore's new rules, passed this month, will be implemented in stages from the second half of this year. They allow officials to suspend a ride-sharing company for up to a month after three or more instances of their drivers getting caught without a proper license or insurance. The drivers themselves face fines and jail.

In the case of Airbnb,  officials will have the right to force their way into homes to check whether residents were renting them out illegally, adding teeth to a rarely enforced law which bans the renting out of private property for less than six months.          HIGH GROWTH MARKET, HURDLES The sharing economy business is billed for explosive growth, estimated by PricewaterhouseCoopers to reach $335 billion by 2025, from around $15 billion in 2016.

So there’s a lot at stake for companies. And the worry, says Adrian Lee, who runs a car-sharing service called Tribecar in Singapore, is that other markets might ape the city state's stance.“I'm afraid other legislators may take a leaf from our play book without allowing these services to get to critical mass." Singapore had been one of the few bright spots in Asia for Uber, which has been facing legal scrutiny in many markets across the region. Uber has suspended its service in Taiwan and has withdrawn from China after selling its business there. And in South Korea and Japan, authorities have limited its operations. Jean Chia, a Singapore-based academic who studies the sharing economy, says since short-term renters "were previously operating in a gray area", the tighter regulations raise some immediate questions around the business model of Airbnb.

Airbnb's director of public policy in Asia Pacific, Mike Orgill, echoed those concerns, saying there are “thousands of people earning supplemental income … so the lack of clarity is of concern for hosts."   Drivers of Uber and Grab said a requirement for all drivers to obtain a vocational license would force out a lot of part-time drivers, while the threat of fines and even jail would deter others. There is no comparable measure in "the more than 450 cities we operate in," Uber's Singapore general manager Warren Tseng said of the rule change, warning it would affect tens of thousands of drivers and "hundreds of thousands of commuters." Uber's strong regional rival Grab, which is planning to invest $700 million in Indonesia, one of Asia's biggest markets, is more sanguine about the new laws. Grab's country head Kell Jay Lim said though the company expects some drop-off after the regulations kick in, the rules showed that Singapore was now absorbing the sharing economy into the mainstream."It's a stamp of approval of what we're trying to do.”

Oil edges up as bullish bets on rising prices hit record high

Oil prices edged higher on Monday as investors showed record confidence that prices would rise further, though gains were capped by the prospect of faster growth in U.S. oil production. On its second to last day as the front-month contract, Brent futures for April delivery were up 16 cents, or 0.3 percent, at $56.15 a barrel by 11:24 a.m. EST (1624 GMT). U.S. West Texas Intermediate crude (WTI), meanwhile, was up 21 cents, or 0.4 percent, to $54.20 per barrel. Traders said futures pared gains from earlier on Monday after a report from energy data provider Genscape showed a build of more than 800,000 barrels of crude at the Cushing storage hub in Oklahoma, where WTI is priced. Investors raised their bets on rising Brent crude oil prices to a new high last week, data from the InterContinental Exchange showed on Monday, breaking the 500,000-lot mark for the first time on record. [O/ICE]Money managers also raised their bullish U.S. crude futures and options positions in the week to Feb. 21 to the highest on record, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday. Investors now hold 951,312 lots' worth of U.S. and Brent crude futures and options, equivalent to nearly 1 billion barrels of oil valued at more than $52 billion, based on current Brent and WTI benchmark prices.

"With speculators increasing their bullish bets on U.S. crude to an all-time high, the risk of disappointment and subsequent downward spiral in prices has never been greater," oil brokerage PVM's Stephen Brennock said. Among the risks is the level of compliance to the deal between the Organization of the Petroleum Exporting Countries (OPEC) and other producers to bring down oil output by about 1.8 million barrels per day (bpd). OPEC's record compliance with the deal has surprised the market, and the biggest laggards, the United Arab Emirates and Iraq, have pledged to catch up with their targets.

The International Energy Agency put OPEC's average compliance at a record 90 percent in January. Based on a Reuters average of production surveys, compliance stands at 88 percent. A Reuters survey of OPEC production later this week will show compliance for February."It would appear OPEC has done a commendable job of stabilizing the market. But we are also of the opinion that their intended stability is likely attached to a $60 price handle rather than $50," Jim Ritterbusch, president of Chicago-based energy advisory firm Ritterbusch & Associates, said in a note.

"The longer that values stay below prices needed to drive budget improvement amongst the membership, the greater the likelihood of cheating that could force an eventual unraveling of the OPEC agreement," Ritterbusch said. Also looming over the success of the OPEC deal is the reaction of U.S. shale producers to rising prices and their ability to increase output. U.S. drillers added five oil rigs in the week to Feb. 24 to a total of 602, the most since October 2015, energy services firm Baker Hughes Inc said on Friday.