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Comment by blfr | Hacker News Reader

If it's not profitable then why should Airbnb be the one to subsidize it? Why not the government? Or some charity? Or you?

We don't expect anyone who meets a homeless person to offer them a place on their couch. That would be unfair. And an additional incentive to avoid homeless people. We have (well, not everywhere but at least we aim for) a systemic solution. There are homeless shelters for example, sometimes run as charities, sometimes tax-supported (ie. everyone is required to chip in).

It's weird when we try to offload these problems on the first person who touches them.

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Why should anyone have to support them at all? It comes down to they and their supporters convinced society we should care about them and we decided those profiting off the majority to be the ones bearing the cost of the minority.

Why do I have to bake a cake for a gay wedding if I do such for straight weddings? Because the people who want that requirement have won the level of support needed to have legal support.

Circular reasoning.

Isn't it the way society works?

Why would that argument not apply to "It's 1960, and I don't want to seat black customers at my fancy restaurant because it's statistically likely to be less profitable than seating white customers"?

I've never worked in the restaurant industry, but, I've heard from people who have that it's STILL extremely common for black customers to be considered undesirable. I.e. a server will get upset at a host(ess) if they get "too many" black customers assigned to their tables.

Why? Servers claim that black customers - on average - tip less.

I don't know how prevalent this belief on the part of servers is. And I don't know how much of a numerically accurate basis in reality it has.

But, as a thought experiment, imagine for a moment that there exists an identifiable group [black people, star trek fans, old people, dentists, ...] that are likely to lead a server to go home with less money at the end of the night.

There can be a really fine line between statistics/machine learning and "bias"/"racism".

Where it gets even more complicated is that there might be variables which are not expressed as "is the customer black" which ultimately predict/are highly correlated with the question "is the customer black" - but are also predictive of the question "is the customer profitable".

I don't think there's a line between machine learning and bias. In the example I gave (black Americans in the 1960s), I'm pretty confident that any working machine-learning algorithm would conclude that this population is economically disadvantaged and therefore a less-profitable target market. Such a conclusion would also reinforce structural racism.

And that's the way we treated this in the 1960s. The government didn't ask Woolworth whether they had legitimate economic reason to refuse to seat those black college students, or whether their objection was based on them being college students, or because they only ordered coffee and not a meal, or anything else. As long as the effect of your policy was that you were discriminating on race, it became illegal. It doesn't matter whether you had valid reasoning based on race and economic status being correlated, or you were a card-carrying Klansman. A good-faith policy that discriminated on race is still illegal.

It seemed to work pretty well, and I don't think many of us regret the loss of ability of restaurateurs to make these particular economic decisions. The fact that we can now offload these decisions to algorithms (which aren't likely to be "racist" in the conventional sense) instead of humans shouldn't change things.

> I don't think many of us regret the loss of ability of restaurateurs to make these particular economic decisions

It's probably worth pointing out that the restaurateurs didn't have the ability to make those decisions; that was the point of the Jim Crow legal regime. Left to themselves, they kept wanting to serve blacks.

Hm. At least for the Woolworth sit-in, my impression was that this was store policy, and I'm not finding any source saying that Woolworth was in violation of any law when they gave into the boycott and dropped their policy. But you're right that Jim Crow laws involved mandatory segregation, and that the sit-in was a protest against those laws. Good point, I'm not entirely sure what happened there!

> There can be a really fine line between statistics/machine learning and "bias"/"racism".

There's no line. Learning and bias are the same thing.

The question is whether the bias is actually justified by experience.

Should it be legal to discriminate against a race if you have data indicating that they're economically disadvantaged?

Society's answer to that is a resounding "sometimes".

Because black customers pay the same prices and do not require additional accommodations. It would apply if the restaurateur was required to maintain separate dining rooms for whites and blacks or additional water fountains.

Everyone pays the same prices for what they order, but they can choose to order more or less expensive foods, more or less expensive wines (or none at all), etc., and they can tip differently.

If you have more customers trying to make reservations than tables to seat them, it is economically rational to seat the customers most likely to buy your more expensive items. We decided (correctly, IMO) that it is more important for society to fight entrenched racism than to enable business owners to make that particular locally-rational economic decision.

It would apply just as well, hence the "Why not the government?". You probably don't want to be the first/only fancy restaurant to fight racism.

>If it's not profitable then why should Airbnb be the one to subsidize it?

Because they're massive rent extractors.

Rent extractors should subsidize most things.

AirBnB is a rent extractor? That's a tendentious claim; the reason all the 'sharing economy' stuff works is that it's improving capital utilization and damaging cartels. I'd expect that real rent extractors are hotel owners in big cities with limited hotel zoning, who lobby for anti-AirBnB regulation to keep competition low and prices high. Or the politician/business alliances who build the local convention center by forcing a $N/night tax on local hotels.

The reason all that "sharing economy" stuff works is that you can afford to have worse capital utilization if you ignore existing regulations. For example, there's a big difference between what people can afford to pay for hotel stays and what they can afford to pay to live somewhere which means that dedicated AirBNB apartments can stay empty a large chunk of the time if you ignore zoning regulations intended to block this. Similarly, Uber cars can operate at much lower hours and mileage because there aren't the same restrictions on the number cluttering the streets or the same vetting of new staff.

> there's a big difference between what people can afford to pay for hotel stays and what they can afford to pay to live somewhere

... which means that the capital associated with "people living somewhere" is poorly allocated, and would be more profitable utilized as a nice hotel space. Capital utilization isn't just about the raw duty cycle of someone using that capital. You don't markedly improve your organization's capital utilization by running SETI@Home on idle computers, because SETI@Home is a worthless waste of cycles of little or no benefit to you or society at large.

> Uber cars can operate at much lower hours and mileage

Uber's more of the damage-cartels case, admittedly.

Only if you assume that the best utilization of scarce resources is the most profitable one. Filling the same number of people's needs about as well at about the same price using several times the real estate, meaning that other people can't find anywhere to live, is less efficient for any definition of efficiency other than "what capitalism decides". People actually having homes is not the equivalent of running SETI@Home on idle computers, nor does it become a worthless waste of little or no benefit to you or society at large just because it's more profitable to keep those units empty and use them as hotels for a few months of the year.

> Only if you assume that the best utilization of scarce resources is the most profitable one

Well, the best utilization is the one with the highest utility. In an efficient market that's the same as the most profitable, by definition. The usual caveats apply: no two individuals can ever agree how to measure utility, a free market won't be efficient unless there are no barriers to entry (city zoning may be a barrier to entry), transaction costs are low (the cost of moving from one apartment to another in the rental market is high), and property rights exist and are enforced (including both the obvious property rights and the ones that would apply to all the externalities like neighborhood character but don't exist and won't be enforced for a variety of good reasons)

So yes, caveats. Obviously. There's a moral character to some of these things. One can argue that people living in houses in a big city is morally superior to people vacationing in those houses. (Is that a thing you'd like to argue? Please do explain why, if it is.)

But to the point before: is AirBnB a rent extractor? Pointing out that caveat apply to the measuring of capital utilization in the abstract is not a strong argument in and of itself. Do they apply here? If they apply, would you care to quantify the impact in dollar figures for a typical city? (I recognize this can be hard for moral injuries, but it's not always clear when the injury ceases to be financial and becomes moral.) And even if these caveats apply, how do they apply to making the case that AirBnB actually extracts economic rents? The main thing it seems to be doing is lowering transaction costs associated with doing a short-term rental, and they do have competitors (HomeAway, Wimdu, Tansler, FlipKey, just plain Craigslist, etc, not to mention that the homeowners face competition from substitutes in the form of hotels) so it's not quite obvious that they're the ones collecting on this economic rent.

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