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Comment by msoad | Hacker News Reader

I wondering if we are living in a short era of cheap and semi-legal sharing economy and eventually all these sharing economy companies will get relegated and become too expensive to make sense. I'm saying this because from what I experienced using Uber and Airbnb, none of people who provided the service were "sharing" their own stuff. They were doing business. The Uber driver usually is a full time driver. The Airbnb landlord had multiple apartments to rent. So they are the same old taxi drivers and motel owners. We are just paying less because it's illegal.

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Another perspective is that it's cheaper because it lowered the barrier to entry so that the smallest of entrepreneurs could enter the market. Rather than purchase a hotel, you can rent out a studio apartment. You can start with one studio and then expand over time. You don't need much (if any) additional capital. Airbnb is your entire marketing department and you only pay them when they deliver a client. Handy cleans for you and fixes the shower if it breaks.

Brands are very lucrative assets. Maybe part of this shift is an Airbnb brand tax of 6% in place of a Hilton, Marriot, or SPG tax of 30%.

How much of the old model was there to protect monopolies and how much of it was there to provide for consumer safety? How do we incorporate the latter and eliminate the former? That's the real question in my mind.

Yeah, when it comes to small B&B operators, there's actually not much difference between what airbnb does and the services of a listing provider like wotif.com or booking.com. Both take payment from the customer upfront and charge a percentage on bookings. Airbnb doesn't require you to be a business though to sign up.

>How much of the old model was there to protect monopolies and how much of it was there to provide for consumer safety?

when medallion costs $200K-$600K is it to protect monopoly or to provide for consumer safety? Tough question :)

the medallions are distributed in auction, to align with the great american myth that those who can pay the most deserve it the most.

Granted, alternatives would probably involve taxi companies wining and dining to get preferred treatment.

Once we've decided on having some sort of system to limit the number of taxis, there's going to be some form of selection. Apparently people thought auction was the "least worst" way (compared to some other selection method).

>Apparently people thought auction was the "least worst" way

Auctions only confirmed the intrinsic value of medallion in that system - $2K/month rent pay for a medallion in SF before the auctions corresponds to something like $200K value of a rent-generating asset.

>Once we've decided on having some sort of system to limit the number of taxis

exactly, protecting monopoly as such a limit has nothing to do with consumer safety.

Edit: just googled - the medallion price in NY is $1M and in SF - $300K. Sorry for using obsolete data (holy macrel what a nice exponentially looking price ride of recent 3 years Uber has killed : http://www.aei-ideas.org/2014/06/chart-of-the-day-nyc-taxi-m... )

>exactly, protecting monopoly as such a limit has nothing to do with consumer safety.

There's other reasons to want that. Congestion control is one of them. No comment on the validity of such a fear, though

I believe that's historically what caused the first introduction of such a system, in London some centuries ago: residents complained there were too many hackney carriages driving around the streets, and wanted them limited to a fixed number. (They also wanted them better maintained and more safely driven, which led to additional rules.)

But funny enough, there is no fixed number of cabs in London now.

It's eBay all over again… first it was regular people, then it gets taken over by full-time professionals, changes focus, and divides into two completely distinct groups of business and customers instead of a social platform.

> So they are the same old taxi drivers and motel owners.

We are paying less precisely because they are new drivers and BNB owners on the market.

I think you're oversimplifying. Not all regulations have to inexorably converge on the taxi/hotel model. Cities could ban non-resident Airbnb rentals and there would still be enough supply to have a major impact on the market. They could impose safety & insurance regulations on Uber/Lyft but stop short of the medallion system, which is the main bottleneck on supply & pricing.

In fact that's exactly what they've done:

[1] http://www.businessinsider.com/san-francisco-makes-airbnb-le... [2] http://www.reuters.com/article/2014/09/18/us-california-lawm...

Absolutely disagree. Right now I am in a major german city, and I can get an Uber ride in exactly 6 minutes. Perfect service, everything is done through the app, I don't even need to speak german.

Last time I got a regular cab, I waited 30 minutes for a middle-eastern guy who did not speak a word in english and tried to rip me off since I'm a foreigner. It's even worse in my country - Poland - where taxi drivers can very well be considered gangs, fighting for territories and being involved in illegal activities.

They are absolutely not "same old taxi drivers and motel owners", is the point I am trying to make here.

I just spoke about price.

BTW mentioning ethnicity of the taxi driver wasn't necessary.

If he was Polish or Irish I would mention it also. Lay off me with the PC bullshit please, I was being descriptive.

No, you were being racist.

Would you then argue that if a specific racial group were statistically much more likely to offer poor taxi service in a particular country, this fact should not be disseminated as it would constitute racism? Or do you consider it racism because you believe he was making an unfounded generalisation, implying that all middle-eastern taxi drivers were unreliable when in fact he only had a sample size of one?

Aber jetzt sie können Deutsch übung!

Really, though, I know it's awesome that the world (mostly) speaks at least some English, but it's hard to knock somebody living in Germany for not speaking it.

Mein Deutsch ist nicht so gut, aber auch nicht so schlecht!

I am not knocking anyone. I was describing a rusty, not customer-friendly business model of the old cab companies compared to the service Uber gets me.

>The Airbnb landlord had multiple apartments to rent. So they are the same old taxi drivers and motel owners. We are just paying less because it's illegal.

I've never been to San Francisco but AIUI Uber's main innovation in its original market was in being a taxi service that would actually come if you booked them. This has come up multiple times, from multiple people; it's like Google not having customer service or Amazon having no non assholes in management, except maybe in AWS.

I'm always wondering whether the people that I stayed with when I used airbnb declared the rent I paid as additional income and paid the taxes. In Germany at least I guess they would have to get a tax number from the authorities and pay local and federal taxes. There is actually an article on taxes on airbnb (https://en.airbnb.com/help/article/481), but I guess most hosts conveniently forget that they have to pay taxes. Otherwise there would most likely be far less people offering rooms in their flats if they would have to handle all the red tape.

Many guesses, no numbers, unfortunately. I'd need some numbers to really make up my mind.

Well, there's still Couchsurfing and Zimride/Craigslist. My experience as a consumer and provider on these services has been that people are genuinely sharing what they have. Of course, it's not as polished an experience.

>So they are the same old taxi drivers and motel owners. We are just paying less because it's illegal.

No. We're paying because we need taxi service and a nice/convenient place to stay. The old system has been very strained and limited with regard to availability and service options - hour long waits for a cab and only very limited hotel/motel options with regard to the room/suite type/format and location.

frankly i hope so, 'sharing economy' startups are leeches even if their contractors do well in the short term. economic models should always be critically approached from the perspective of the exploited.

http://www.mrteacup.org/post/the-cult-of-sharing.html

> [...] economic models should always be critically approached from the perspective of the exploited.

Why? Also, who's getting exploited here?

Uber drivers are potentially getting exploited because they don't get the protections of regular worker.

You could say that they could just go over to another service, but there are only so many of these new-age taxi operators. Unless the number of drivers is extremely limited, the same thing will happen to them as to people in other industries (say, cleaning houses):

The customer wants lower prices, the business wants higher margins, so the business squeezes the (badly-positioned) workers.

There's already been protestation with Uber's "misleading" ( it was heavily subsidised at first, but stopped recently) wages given to the drivers.

This is just another example of why the labor market is really not an efficient free market.

Thanks. How high is the barrier to market exit for Uber drivers?

well, if you've been a taxi driver for a while, pretty high I imagine. You might have other marketable skills, but you might not.

When it comes to Airbnb - neighbours who now live next to a hotel room, communities that are now full of transitory people and tourists rather than stable long term residents, landlords who had no-subletting clauses in their contracts.

That last one is the thing that makes me most surprised that Airbnb has so many libertarian supporters. It's the biggest attack on basic property rights and contracts in quite a while. Personally I don't have much sympathy for landlords, but I do think that if we are going to regulate to no longer allow such clauses in contracts it has to be applied universally, not just for people using Airbnb.

Another way to look at it is that they're providing a better "user experience" via an app and website to businesses that were just lower profile or invisible before. For example, I believe many traditional B&Bs also operate in some legally grey areas, in terms of council approvals, business registration, tax & insurance.

coming from someone who's interested in trying it out, but have used neither product, why is it bad that it's cheaper?

Part of the reason it's cheaper is because many sharing-economy services don't pay the taxes or follow the regulations the established competition must.

Part of the reason it's cheaper is because regulations have set up stagnant non-competing businesses who have no incentive to innovate or compete.

Flaunting the law and making a large set of people make light of the rule of law is a bad thing, and nobody should celebrate the savings from this.

There are places where sharing-economy companies and regulating local governments have worked together to make them legal and open up competition stimulating innovation. New York and the Bay Area, despite their reputations as innovators, haven't managed to do these things.

> Part of the reason it's cheaper is because regulations have set up stagnant non-competing businesses who have no incentive to innovate or compete.

all those reasons are so obvious now, thanks! OTOH, it's interesting that from what I've seen a lot of people are "celebrating" the success of uber and lyft because of the lack of incentive to innovate or compete from the taxi/government side

>Flaunting the law and making a large set of people make light of the rule of law is a bad thing, and nobody should celebrate the savings from this.

This assumes the law is in some way just in the first place. Many here would for instance argue that marihuana-prohibition laws are unjust, and that ignoring and bringing ridicule to such laws is a good thing. The same applies to laws prohibiting gay marriage, and many others.

Acting morally is a good thing, but what's legal isn't necessarily what's moral.

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