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Labor & Economy

The Enemy of My Enemy Is Still a Jackass




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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, unfortunate millionaires who dot the 27 miles of scenic beauty.

There are many, many things that suck about the sharing economy [sic], as I’ve noted.  But there are at least two things that suck about writing about the sharing economy [sic].  First is the crazily credulous way the boosters treat economic principles, as though “the economy,” rather than a series of choices we make, is something external to us with its own goals and desires – moving ever towards “freedom” and “efficiency.”  Criticizing the sharing economy [sic] – pointing out that it has winners and losers, costs and benefits – is thus meddling with the primal forces of nature.  Critics aren’t just painted as comical figures hawking horses and buggies, but we’re trying to make water flow uphill.

The second thing that sucks about being a nay-sayer is finding a whole bunch of assholes on the same side as you.

An even starker example than homeowners irked by Airbnb is the taxicab industry, the primary foe of Uber and Lyft.  This is a hard industry to champion, for its abusive conditions.  Taxi drivers are often misclassified as independent contractors: they must pay the cab company for the privilege of working, they work up to 80 hours a week, often take home sub-minimum wage pay, and generally get no health care or benefits, all while doing one of the most dangerous jobs around.  Drivers are making real improvements not through apps, but through the harder-to-monetize old school tools of democracy and action.  (Also, it really says something about Uber when it is dragging down an already abysmally low wage standard.)

So please understand, when I lob bombs at these “sharing” billionaires, it is not to defend either beach-hoarding Malibu homeowners or exploitative taxi companies.  (It is a slightly different case with Airbnb’s other adversary the hotel industry, which in cities like Los Angeles often does provide many good jobs, and which will soon be held to a standard of $15 an hour.)

As Dean Baker reminded us in The Guardian last week, “many [sharing economy] boosters have overlooked the reality that this new business model is largely based on evading regulations and breaking the law.”  To point that out is not to offer an apologia for either Malibu millionaires or taxi companies; it is merely to state a fact.

Insofar as Airbnb is allowing people to evade taxes and regulations, the company is not a net plus to the economy and society – it is simply facilitating a bunch of rip-offs. Others in the economy will lose by bearing an additional tax burden or being forced to live next to an apartment unit with a never-ending parade of noisy visitors, just to cite two examples.

The same story may apply with Uber. Uber is currently in disputes with regulators over whether its cars meet the safety and insurance requirements imposed on standard taxis. Also, many cities impose some restrictions on the number of cabs in the hopes of ensuring a minimum level of earnings for drivers, but if Uber and related services (like Lyft) flood the market, they could harm all drivers’ ability to earn even minimum wage.

Boosters reply that these sorts of “old economy” regulations stand in the way of history, and that “Consumers don’t need protection from a good deal.”  But scrapping regulations would be to throw out the baby with the bathwater.  Baker continues:

Many existing regulations should be changed, as they were originally designed to serve narrow interests and/or have outlived their usefulness. But it doesn’t make sense to essentially exempt entire classes of business from safety regulations or taxes just because they provide their services over the Internet.

Going forward, we need to ensure that the regulatory structure allows for real innovation, but doesn’t make scam-facilitators into billionaires.  For example, rooms rented under Airbnb should be subject to the same taxes as hotels and motels pay. Uber drivers and cars should have to meet the same standards and carry the same level of insurance as commercial taxi fleets.

If these services are still viable when operating on a level playing field they will be providing real value to the economy. As it stands, they are hugely rewarding a small number of people for finding a creative way to cheat the system.

In the meantime, if you want to find a satisfying way to stick it to the Malibu millionaires that doesn’t involve renting a mansion for $2,000 a night, may I suggest invading their neighborhood beaches?  A new smart phone app – “Our Malibu Beaches” – is now available for both Android and iPhone, and will also be released in Spanish in a few weeks.  The app helps users separate the fake parking signs from the real and navigate past false “no trespassing” signs blocking the way to public sand.  The sharing [sic] billionaires like to talk about using technology to be disruptive, but “Our Malibu Beaches” is the sort of disruptiveness we should all get behind.

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