Hed: Tread Lightly on Regulating the Sharing Economy
Dek: When calls for consumer protection come from competitors, policymakers should be cautious.
Feeling threatened by online businesses like Homeaway, Airbnb, Uber, and Lyft that allow people rent underused assets to peers, the taxi and hotel industries have called on local regulators to impose more health and safety rules on micro-entrepreneurs who participate in the “sharing economy” (http://blogs.wsj.com/accelerators/2014/04/29/sunil-paul-who-should-decide-the-future-of-sharing/). Policymakers shouldn’t respond. The hotel and taxi industries are using “consumer protection” as a guise to keep more efficient competitors from cutting their profits.
The Internet has sparked the growth of the “sharing economy.” While people have always rented their stuff to others, the Internet allows them to reach more potential customers faster than ever before. Renting out a spare bedroom in Des Moines to a vacationing German couple or driving someone from downtown Brooklyn to midtown Manhattan for a meeting is a lot easier now than when the classified section of the newspaper was the bleeding edge technology.
Companies like Airbnb and Uber allow owners to use their assets more efficiently, to the benefit of all. Just like it is more efficient for two steel companies with excess capacity to step up production than it is to add a new steel plant to the mix, it is more efficient to use a town’s vacant bedrooms for visitors than to build
The sharing economy has its perks however also its inconveniences. Mary Dejevsky is the writer of “Uber and the “sharing economy” are leaps into the past, not the future”, and in the text she speaks on the downside of the sharing economy. “There are questions, too, about quality of life and fairness. What recourse do you have if you are a tenant or home-owner disturbed by anti-social short-stayers? If you are a neighbor woken by driveway customers slamming their doors at 6am? If pollution is increased by the many more cars plying for hire? If wages are further depressed by casualization?”, Dejevsky lists various of problems that people face or could face now that sharing economy is becoming a global thing. All the things she mentions are pretty
Second, Airbnb’s business reduces the aggregate supply of housing. Property owners tend to rent their units
In text 2 “Learning the wonders of the sharing economy in trip to Denver” (2014) by Catharine Hamm, Hamm talks about, how the sharing economy has made her whole experience to Denver, and how impressed she is by the fact that the business is build on trust, as she says “And I didn’t get ripped off - or worse - by anyone. Which may be the most surprising
Property owners of apartment buildings in the major cities like New York, San Francisco, and Austin are making money off of renting out empty apartment units. This takes out prime real estate for permanent renters thus making the scarcity of apartment units higher. While making the price for the average apartment rise due to the increase the need for permanent housing. One thing that this renting platform does that helps the property owners is allocating resources to be used elsewhere where it can be used to its highest potential. But in most of the owner’s minds, they end up trying to make the properties as empty as possible to make sure that they get the tourist dollars.
According to city economist Ted Egan, every time a city loses a permanent apartment house for short-term rent, it has a net negative economic effect of $ 250,000 to $ 300,000. It easily adds more than about $ 1 million a month to taxes that Airbnb transfers to the city. And every time a city wants to build a new building of affordable housing to replace one that is lost as a result of eviction without guilt, it needs to work out several hundred thousand dollars of subsidies from other countries. This reinforces the current paralysis of the city for building the right mix of subsidized and market housing."Technology challenges the decision makers and the government, as these products help to quickly scale up fairly old ideas, such as couchsurfing or subletting into practical methods, with which virtually anyone can easily participate," said City Manager in an Airbnb poll.
The online marketing today has become an integral part of people’s lives. There people can buy digital products or services from a seller through companies such as Uber, Lyft, Amazon, E-bay, or Airbnb, This development in the online environment calls for new laws to regulate them. The laws reflect the needs, represent solutions to problems that people have noticed in their daily activities, and influence the society. They created within a society will work to develop it, to bring order in it, and to protect its citizens. Along with Uber and Lyft , Airbnb activities were the target of complaints by Chicago residents. In the article “Chicago May Regulate Airbnb,” by John Byrne, the author presents a huge debate about Airbnb regulation. John Byrne
Then acquiring new hosts in some countries, Airbnb learned that they can’t rely on online tactics alone. Sometimes, people need to talk, face-to-face, with a human being. And those needs can vary from culture to culture.In so doing to set a model for the lower LSM 1 – 4 area.
The problem isn’t the fact that thousands of illegal hotels that have sprung up thanks to Airbnb and its rivals. But sinces the city is in such a huge housing crisis, a few thousand units off the market makes a significant problem. According to the SF Chronicle both Airbnb and its San Francisco critics are correct. That most of the booming vacation-rental company’s local listings are only occasionally rented to travelers, as Airbnb says. However at the very least 350 listings on Airbnb and hundreds of more houses listed on other sites are full time vacation rentals. Since these houses are allowed to exist it pushes locals to be gentrified from their homes. Since “short-term rentals are so lucrative that greedy landlords and tenants illegally divert precious housing stock to the practice” (Said). Many locals are driven out of their homes by their landlords, so they can rebuild the homes and sell it to richer folks. And these people use the homes as a shared house which drives more and more locals out of the San Francisco area. “Erin McElroy, director of the Anti-Eviction Mapping Project, (said that those living in the) Mason Street apartments tenants were evicted before being listed on vacation rental website VRBO” (Said). Over the past year Airbnb house listing has grew over 13.8% now the amount of listing on Airbnb is 5,459, even though
In recent times, Airbnb has faced some challenges that threatened their competitive edge. First, there was the increase in stiff competition from other similar business models, and there was the problem of regulatory hurdles. Proposition F, a San Francisco ballot measure, would limit the ability of residents to rent out rooms in their houses to travelers. Through intensive advertising and assurance to the authorities that the hosts would pay taxes as required, the company was able to overcome this hurdle.
Since the creation of the the internet over 20 years ago a lot of stuff has changed. Some things are for the better and others for the worse. My entire life I have seen the progression of the internet and what is possible with the it, I remember back to the first purchase I made on ebay and the first time I sold something to someone I didn’t know and would never meet face to face. Shopping on the internet then and now is an exhilarating experiences that is accompanied by a wait and rewarded the gratification of finally receiving a package that you waited almost two whole days for if you forked over the extra money for express shipping. If I had the opportunity to create a business using the internet as leverage I would take full advantage
The United States has serious labor market challenges as a result of rising wage inequality between people and the slow middle class wage growth. The need to provide individuals with variety of goods, service and information raise specific economic phenomena called “sharing economy”. This model of economy includes different types of industry categories: sharing information (YouTube), property (Airbnb), transportation (Uber) and more. The sharing economy works in the same way as a traditional market, where individuals exchange different goods and service. The central concept of sharing economy (collaborative consumption) is the access to the goods. The application of regulation is the major issue with this type of innovated economy. The sharing economy is a nontraditional, because the workers’ luck of benefits and the type of economical market system that creates an income and job opportunity. On the other hand this type of market provides a different type of benefits as: flexible schedule and employment; saving energy and less waste; self regulation; lower costs of the product. The context is of a great interest since participation in sharing communities and services is characterized by obligation to do good for other people and for the environment, such as sharing, and engaging in sustainable behavior (Prothero et al, 2011). The challenge of any market includes and market of sharing economy is to ensure the supply and demand. Specifically for the sharing market is the way
For big cities like London, there is certainly a need to regulate the market for rentals to prevent worsening shortage in rental housing. However, regulating Airbnb more strictly may not improve rental housing prospects as expected. There are other causes to this issue, least of which is Airbnb’s share economy methodology. Below I will outline the context surrounding the core issue of rental housing shortage, the role of Airbnb, and present my inference that regulating Airbnb more strictly will not solve the core issue. Alternate solutions that tackle basic income, property rights, and regulation of land and construction may be more suitable.
Forbes estimates that revenue generated by the sharing economy directly into people’s wallets will exceed $3.5 billion in 2013, with more than 25% growth (Geron, 2013). At the same time, investors sees the new trend as an opportunity to invest big time, hundreds of millions are capitalised into correlated start-ups. Furthermore, the rise of this new trend is predicted to have a big impact on society, such as the policy makers in e-commerce which will have substantial impact on online transactions. Despite of the incredible growth of the practice itself, there has not been many studies conducted on the factors which affects the consumers’ behaviours towards the sharing economy. One might say that it is basically driven by the intention of doing good for others, to share and help (Prothero et al, 2011; Sacks, 2011). Nonetheless, sharing economy may also give benefits such as saving money, giving access to possessions, and free-riding, that would represent personal reasons to participate.
The sharing economy is a developing, remarkably flexible economic network that allows people to borrow or rent assets, such as machinery, services, and skills, with one another. The sharing economy is utilized most often when the price of the resource in question is exceptionally high due to the fact that these resources will be shared at a significantly lower cost than retail arrangements. And although humans have shared the use of resources with one another for thousands of years, the growth of the Internet and services that utilize the Internet has made it easier for the owners of assets and those seeking out those assets to find each other. This sharing economy as allowed individuals to make a profit from their underused assets. Now,
We live in a consumer driven society where we constantly want the latest product. Because of this huge demands for product production can go into overhaul this in turn is making the product cheaper. In a capitalist society it is all about supply and demand and as the supply increases the product becomes cheaper. Shapcott write in 1995 (Reference) that, "The Internet isn 't free. It just has an economy that makes no sense to capitalism". This essay will outline and explore the effect the modern internet is having on the Capitalist structure when in today’s society we are all about sharing and the idea of free.