Tuesday, 31 January 2017

The sharing economy >>> Upstarts disrupting communities

Where is the 'sharing economy' going?
Futures Forum: Ride-sharing with BlaBlaCar
Futures Forum: Imagining, designing and implementing a new economy, a new future
Futures Forum: The gig economy is 'exciting' and has 'huge potential'... or maybe not...
Futures Forum: Uber and local government collaborating to give elderly rural residents a ride

According to Tom Slee, it isn't going anywhere:
What’s Yours is Mine: Against the Sharing Economy – Tom Slee
What’s Yours Is Mine: Against the Sharing Economy by Tom Slee review – the problem with Airbnb and Uber | Books | The Guardian

As featured on this blog:
Futures Forum: The sharing economy >>> "What's yours is mine"

On the other hand, the 'sharing economy' is supposed to be all about 'disrupting' tired old models:
Futures Forum: The promises of technological innovation >>> "The Fourth Industrial Revolution" and the future of work

But there are questions:
Futures Forum: Airbnb and irresponsible tourism
Futures Forum: Is Uber really part of the 'sharing economy'? >>> "The whole point of a genuine p2p and sharing economy is empowerment for those directly participating in it."
Futures Forum: The sharing economy >>> “This on-demand, or so-called gig, economy is creating exciting economies and unleashing innovation. But it is also raising hard questions about workplace protections and what a good job will look like in the future."

The Inside Airbnb site asks a few more questions:

How is Airbnb really being used in and affecting the neighbourhoods of your city?

Airbnb claims to be part of the "sharing economy" and disrupting the hotel industry. However, data shows that the majority of Airbnb listings in most cities are entire homes, many of which are rented all year round - disrupting housing and communities.

Inside Airbnb. Adding Data to the Debate.

Again: the majority of Airbnb listings in most cities are entire homes

For example:

TEN bedrooms - sleeps 20 -Townhouse - Townhouses for Rent in Manchester

But that's not really the point: the problem is that complete homes are being rented out long-term, as reported back in 2015:

InsideAirbnb reports that as of Nov. 1, 57.4 percent of the San Francisco listings on the site were entire houses or apartments. More than 75 percent of them had “high availability,” meaning more than 90 nights a year. That strongly suggests that a majority of the units listed this week on Airbnb violate the city’s existing law – which, the evidence shows, clearly can’t be enforced...

Most Airbnb listings are entire houses - 48 hills

A piece from last year corroborates this:

Is Airbnb worsening the housing crisis in major cities around the world?

Kimberley Mok April 6, 2016

An increasing number of people are using vacation rental and accommodation sharing sites to find unique and relatively affordable places to stay. Sites like Airbnb and Flipkey style themselves as pioneers of the new sharing economy, allowing homeowners to earn a bit of extra income by renting out their spare room or cottage. But recent reports are suggesting a very different story: in cities like Vancouver, London and New York, sites like Airbnb are actually contributing to a growing housing crisis by diverting rental stock that could have been rented to local, long-term tenants instead.

One recent study done by Simon Fraser University grad student Karen Sawatzky found that more than two-thirds of Vancouver Airbnb listings were actually entire homes. With an extremely low rental vacancy rate hovering around 0.5 percent and an expensive real estate market, it is notoriously difficult to find an affordable rental apartment in Vancouver.

Even more troubling was that Sawatzky's study found that many of these listings were being rented out for more than 90 days -- thus operating illegally according to city bylaws. The study also found that there are many hosts with multiple listings, leading The Globe and Mail's Kerry Gold to point out that it may be feeding a vicious cycle of housing unaffordability:

It’s a significant finding, because it means that if the majority of Vancouver Airbnb hosts have entire apartments or houses to spare, then they’re not renting them out to full-time tenants. A significant chunk of the rental stock is lost. It means Airbnb’s popularity could be contributing to the critically low vacancy rate, which is, in turn, driving up rents.

Some long-time tenants are finding themselves evicted as landlords transform apartments into (illegal) full-time Airbnb rentals, a much more lucrative option.

Is Airbnb worsening the housing crisis in major cities around the world? : TreeHugger

Last month, London made a move:

Airbnb concedes to housing activists in two cities, limiting number of days entire homes can be rented

BY MONICA NICKELSBURG on December 1, 2016

Airbnb and affordable housing advocates are fighting a battle in cities around the world. Today, Airbnb made a big concession that could herald a truce between the two sides.

The company announced it will limit the number of days hosts in London can rent out homes they don’t live in and help Amsterdam officials enforce an existing, similar law. To operate what Airbnb calls “entire home listings” for more than 90 days in London, hosts will need to acquire a special permit. In 2014, Amsterdam and Airbnb agreed to a rule that would limit entire home listings to 60 days, and today Airbnb is implementing new automated tools to help both cities enforce these rules.

Airbnb is facing pressure from cities around the world to crack down on hosts who operate listings like hotels. Policymakers and affordable housing advocates say these commercial short-term rental operators take much-needed housing inventory off the market.

In Seattle, the City Council is considering regulations that would effectively ban entire-home listings. Last month, Airbnb sued the city of New York over a law that enforces the city’s ban on entire-home short-term rentals. New Yorkers can still rent out spare bedrooms in primary residences. The motion follows similar lawsuits in Airbnb’s hometown, San Francisco and Santa Monica, Calif.

Airbnb’s agreements with Amsterdam and London are part of the company’s “Community Compact,” a public pledge to work with cities and housing advocates to find compromises. The company seems to be softening its stance on entire home listings, in the face of outright bans like New York’s...

Airbnb concedes to housing activists in two cities, limiting number of days entire homes can be rented - GeekWire

A new book just out looks at where we are now:
The Upstarts, How Uber, Airbnb and the Killer Companies of the New Silicon Valley Are Changing the World by Brad Stone

Brad Stone: ‘We should watch Uber and Airbnb closely’

The author of new book The Upstarts on how the new breed of tech startups changed the rules of the game

• Read an extract from The Upstarts

Interview by Ian Tucker Sunday 29 January 2017

At the start of the book you note that the dictionary definition of an upstart is either “a newly successful person” or “someone who does not show proper respect to the established way of doing things”…
I wanted to frame the defining question of the book for the reader. Are these brilliant entrepreneurs who have built tremendous businesses through sheer creativity and ingenuity? Or are they renegades that grew in large part through contempt for the status quo? There’s an ambivalence that surrounds companies like Uber and Airbnb, and I think this question over their identity – and the dual meanings of the word “upstart” – gets to the heart of it. My own squishy answer, of course, is that they are a little bit of both.
You’ve written about Silicon Valley for more than 20 years… have we reached peak Valley yet?
In terms of the business impact, I don’t think so. There’s a new set of transformative technologies such as machine learning, AI and virtual reality that will spawn another set of big tech franchises. But in terms of cultural impact, perhaps we are at peak Valley. For decades, technology entrepreneurship has been revered, and people like Steve Jobs and Elon Musk were heroes. Now we have to contend with lost jobs due to automation, the effects of digital addiction and simple fatigue with all this constant change. So perhaps our feelings toward Silicon Valley are about to get a lot more complicated.
You met some of the individuals who had similar startup ideas to Uber and Airbnb but didn’t become billionaires. Have these people been able to move on and were they reluctant to be featured?
I call these companies the non-starters. They had the same ideas but were too early, or too nice, or too idealistic. They all shared a strain of wistful regret; it is difficult to see someone else execute the same idea and win unimaginable success and riches. The best story was the founder of a company called Seamless Wheels – a pre-Uber limo service – who abandoned the business after getting a death threat on his voice mail, probably from a limo fleet owner.
What’s the best call Travis Kalanick has ever made?
Surrendering in China in an expensive battle with local rival, Didi Chuxing. Last year Uber lost $2bn trying to win that market; Kalanick couldn’t bring himself to sacrifice his dream of building a truly global network. But the rules of competition in China will always favour the local champion and Didi, it turned out, had the same access to capital as Uber. By stepping away from the fight, Uber not only saved its balance sheet from more destruction but negotiated an impressive 17% stake in its rival.
And the best call Brian Chesky has made?
Branding the Airbnb user base as a “community”. For years before Airbnb, people posted their homes and spare rooms on the internet (via sites like Craigslist and Couchsurfing.com). Chesky and his colleagues drummed up an evangelical spirit to their endeavour and held meet-ups and, in later years, global conferences of hosts. It got Airbnb users to feel part of something larger and strengthened their ties to the company, even when it meant that they were violating provincial laws.
In most territories these firms operate outside of laws and regulations around minimum wages, health and safety, and tax collection… has exploiting these loopholes been key to their success?
Absolutely – just as Amazon’s navigation of its sales tax obligations was key to its success over its first decade. With tough interpretation of taxi and zoning regulations, neither Uber nor Airbnb would have gotten started. By the time many cities recognized their existence, both were fairly large and had the political support of their customers.
After publication of your book about Jeff Bezos and Amazon, Bezos’s wife gave the book a one-star review on Amazon… Were you surprised?
I can still remember the moment I saw it – my coffee cup froze midair in my hand, my mouth configured itself into an expression conveying shock and confusion. Jeff’s wife had never made such a public statement before related to the depiction of Amazon. And she was alleging serious mistakes in the book yet listed only one relatively trivial one. I think it might be the most prominent product review in the grand history of Amazon! Of course in the long run, perversely, it did nothing but boost the book’s prominence and turbo-charge sales.
Did you witness much sharing in the sharing economy?
Certainly some hosts on Airbnb are opening up their spare bedrooms to meet new people; and some drivers use Uber to carpool with strangers for the companionship. But the most productive members of each community are professional operators, making available their homes or cars as a way to earn or supplement a living. It’s not the sharing economy at all, though that phrase has been useful for the companies to bolster their image.
Which sectors have been able to embrace upstarts’ disruption with any success?
The auto industry. Upstarts like Tesla have achieved enormous success but haven’t slowed down the car companies – 2015 was their best year ever. The auto giants are all researching autonomous vehicles alongside the likes of Google and Uber and they could conceivably get there first. The real estate market has also remained fairly impervious to disruption, as well as (to everyone’s consternation) the airline industry. Perhaps an industry’s immunity is related to the size of each individual transaction.
You state that the founders of Airbnb and Uber are very different from Bill Gates, Larry Page and Mark Zuckerberg… How?
For all their strengths, Gates, Page and Zuckerberg are not charismatic communicators or storytellers. They generally avoided the press and focused their attentions inward. Chesky and Kalanick couldn’t get away with that. Early on, they faced regulatory fights that their predecessors never encountered until much later. This took skills like mustering political coalitions, enlisting the support of customers and testifying publicly. They had to be politicians, as well as innovators and managers.
Are the fortunes and efficiencies created by these companies worth the price paid by the disrupted?
I think so – as long as they follow on their promises. Uber has pledged to reduce or eliminate traffic in major cities within five years and to treat drivers more equitably. Airbnb thinks it can create a new industry where people are paid to provide authentic travel experiences. It has also set out to eradicate racial bias from its platform. Let’s watch these companies closely and make sure they achieve their goals, instead of replacing one set of distant, dominant companies with another.
Brad Stone: ‘We should watch Uber and Airbnb closely’ | Books | The Guardian

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