The displacement of renters by large-scale operators who turn apartment buildings into de facto hotels has hit urban areas like Greater Los Angeles hard.
This week Capital & Main launches an ongoing project focusing on the broken economics of what is, according to one recent MIT analysis, America’s most expensive state.
Co-published by The American Prospect
Uber? That’s so 2015. A new report finds that we don’t know as much about the sharing economy as we think we do.
Co-published by Fast Company
It’s not easy being nobody, especially when you used to be somebody. But times are tough; jobs are scarce. When you’re falling straight down the financial cliff face, you reach out to grab hold of anything available to stop your descent and there, just before you land in a homeless shelter or move in with your sister, is Uber.
Juan and Manuel Salvador Orozco Cadena, a pair of fishermen from Baja California, Mexico, pushed off from Punta Lobos on the morning of November 4, 2015. Earlier, the Orozcos had repaired the transmission of their outboard motor, but then it broke down again. As night closed in, the brothers floated helplessly in their open panga 30 miles off the Pacific Coast, making intermittent contact by cellphone, before being rescued by the Mexican coast guard.
At the same moment the Orozcos had first pushed off into the sea, Airbnb executives 1,200 miles away were celebrating the defeat of a San Francisco ballot initiative aimed at regulating the short-stay rental titan. What could possibly be the connection between two Mexican fishermen adrift in the ocean and a company valued by Wall Street estimates at $25.5 billion?
The answer is Chip Conley, a good-looking, 55 year-old fit guy with a shaved head and a charismatic smile whose official full-time job is Head of Global Hospitality for Airbnb.
» Read more about: Ambassador Recalled: Airbnb’s Chip Conley’s Mexican Misadventure »
Twenty-six-year-old Takele Gobena is part of the “on-demand” economy, working full-time as a driver for Uber and part time for Lyft. The Ethiopian immigrant quit his job at the Seattle-Tacoma International Airport and purchased a new car to drive for the ride-hailing firms, believing it would make him a better provider for his one-year-old daughter. Instead, Gobena now finds himself in debt and, after expenses, making well below minimum wage. But because Uber and Lyft drivers are classified as independent contractors, Gobena is not protected by minimum wage laws.
Gobena’s plight is an increasingly familiar one. A new report from the National Employment Law Project, “Rights on Demand: Ensuring Workplace Standards and Worker Security In the On-Demand Economy,” highlights the problems so many on-demand workers face: “Characterizing workers as non-employees has serious negative consequences for them: non-employees have no statutory right to minimum wage, overtime pay,
It was 2008 and presidential hopeful Barack Obama was inspiring millions of people with his promise to disrupt politics as usual – and a new startup called Airbnb was turning that enthusiasm for change into millions of dollars. Denver, the site of that year’s Democratic National Convention, was expecting 80,000 people to come watch the senator from Illinois accept his party’s nomination. The city had space for less than half.
“Obama supporters can host other Obama supporters,” is what CEO Brian Chesky recalls thinking to himself. In a profile of the company, the Huffington Post notes how that idea was turned into cash. “Airbnb, which lets users rent out part or all of their homes, blasted bloggers in Denver with company information.” It “sold ‘Obama O’s’ cereal around town,” garnering news coverage as “an innovative solution to the city’s lodging crisis.”
Founded in 2007, Airbnb is today valued at more than $25 billion and the for-profit sharing economy it helped usher in is no longer so new.
» Read more about: The Sharing Economy's Liberal Lobbyists »
Like a charismatic politician whose flaws have yet to be exposed, the so-called sharing economy enjoyed a meteoric rise to fame and success. Uber, Lyft, Airbnb — these companies emerged seemingly from nowhere to become economic and cultural powerhouses, and to challenge the prevailing structure of their respective industries.
But 2015 has not been as kind to Uber and its brethren, as the fascination with a new business model has given way to serious concerns over everything from public safety to worker exploitation to unfair market monopolization. In some ways this is not surprising — the honeymoon for startups can be notoriously brief.
But something larger is at play here. In the age of rampant income inequality, the overhyped promises of the sharing economy are running headlong into a growing desire by Americans for a caring economy.
There’s a reason why even Republican presidential candidates,
» Read more about: Uber and Airbnb: A 'Sharing' Economy for Whom? »
For some people, renting a house or apartment in San Francisco is easy. If your gross pay adds up to $200,000 a year, for example, you might feel fine about sinking a third of this year’s salary into a bright, one-bedroom South Beach loft, or a two-bedroom loft with a view in the Castro District . On less money – say, around $100,000 in take-home pay – you could reasonably afford a Union Square studio, or a 550-square-foot studio for $2,800 in Pacific Heights. Even if you invest no more than a third of your income in rent (the traditionally recommended ceiling), you could live in a one-bedroom apartment in Ingleside, near the San Francisco State University campus. You would have options.
But say you actually work on campus — as a teacher, librarian or groundskeeper. Say you want to go to school there, and not have to commute more than a dozen miles in the morning.
» Read more about: San Francisco Professors and Students Face Staggering Rents »
Pity the poor, beleaguered Malibu homeowner. Median income over $135,000 is about two-and-a-half times the County average, and the average home’s value is so far past the County average that the Census Department literally doesn’t count that high. Good for them. But they’re also the NIMBY champs, they don’t like sharing funding with poor schools, and in their free time, folks in the ‘Bu go around erecting illegal signs to cheat you and me out of our right to access the public beach. They have it rough and, as the front page of the L.A. Times explained, Airbnb is making it worse.
Malibu homeowners have some reasonable points: “party houses” that disturb neighbors and probably violate zoning ordinances, and millions of dollars of lost city revenue. At the same time, it’s hard to get too worked up over the poor,
» Read more about: The Enemy of My Enemy Is Still a Jackass »
There has been no shortage of ink spilled on the so-called “sharing economy”. To cut through the rhetoric, LAANE’s Jon Zerolnick spoke with Tom Slee, an Ontario-based writer whose work on the intersection of technology, politics, and economics has appeared in The Literary Review of Canada, The New Inquiry, The Guardian, and Jacobin.
Let’s start with some definitions. What is the sharing economy?
The sharing economy is internet platforms, and more-or-less independent people exchanging real-world goods and services through those platforms. This doesn’t necessarily have anything to do with sharing, but that is the name now.
Some of these platforms started off non-commercial. I’m thinking of things like Couch Surfing, where individuals host each other in their own homes, with no money exchanged; it was a non-profit and provided a coordination service.
» Read more about: Couch Surfers and Billionaires: On the Sharing Economy »
