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The sharing-the-pain economy: The Uber and Airbnb ground war in cities

August 12th, 2015 · 68 Comments

I’m currently staying at an Airbnb-type apartment in the Mission district in San Francisco, ground zero (as I’ve discovered since I booked it) of current North American angst over the transformation of former working-class neighbourhoods into tourist parks. In June, I stayed in an Airbnb in Marais, another hot district, where one disgruntled resident had hung a banner outside his apartment: “Non au resto-toit.”

Do I feel guilty? Somewhat, although I try to allay it by not staying at places that appear to be run by agencies, only at real apartments where the owners are out of town temporarily. (Though I sometimes misjudge.)

I’m not a regular Über user. I did go down and experiment with it in Seattle for the purposes of the story I’m linking to here, but have been unsuccessful in getting anyone to pick me up here in San Francisco. I see the cars swarming around on the map, but they never stop for me. Perhaps, like Maureen Dowd of the New York Times, I’ve achieved a bad rating (maybe my article helped with that?) or maybe they just didn’t like the places I was going.

In spite of that, I am a part of this confused new alleged sharing economy, which is not the old tool libraries or communal farms of old, but more about monetizing the assets that middle-class people have and want to maintain, using the magic of a technology broker.

Intellectually, I recognize the problems. But as a traveller, I’m addicted to the way home-sharing agencies allow me to experience travel a different way. (And that all started before Airbnb. I began, as did so many people, with straight-up home exchanges through HomeLink 20 years ago. I moved on to renting apartments through all the little rental agencies that proliferated before Airbnb stomped onto the scene. Then it was VRBO. And now Airbnb, which I have come to like because the listings are quirkier and more often in real homes, not agency-furnished “vacation rentals.”)

A lot of us are in that boat. So are city governments, which are dealing with residents and businesses who love and hate Airbnb, love and hate Uber.

I got a chance to look at the whole issue in depth (thank you Matt O’Grady at BCBusiness for this great assignment), although it was a bit crazy-making as new information and new developments kept popping up every day. (Like Karen Sawatzky’s great initial study on Airbnb in Vancouver.)

Long after I’d filed my piece, I was heading for the airport in Paris, where my taxi driver told me he’d just been part of the strike over Uber the last four days. “L’economie sauvage,” he said with disgust, along with a lot of other explanations about why Uber was so bad for everyone. (The company withdrew from the Paris market shortly thereafter.) And I could see why he felt so strongly. Clearly the taxi business had done well by him. He talked about taking his family on ski trips in the Alps, to a resort in Valencia for the summer — his job was helping support a pretty middle-class life.

This is an evolving story. I keep waiting for the new chapters. In the meantime, here is where we were at in the summer of 2015.

 

 

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  • IanS

    I don’t think that article you quoted is correct.

    If we accept the assumptions (2500 units * $100) then the renters are paying $250,000 / day (+12%, discussed below).

    You say that AirBnB takes 12% from the renter (by which I assume you mean that they add 12% to the $100 / day rent) and 3% from the owner (by which I assume you mean they take 3% of the $100). If that is correct, AirBnB is really grossing 15% of the $250,000 / day (ie. $37,500).

    After deducting the cost of making that $37,500, you would, generally speaking, have the net income (if any) on which tax is, or may be, paid, depending on the particular jurisdiction and the manner in which AirBnB deals with that net income.

    Applying these same assumptions, the landlords are taking in $97 / day. Depending on the tax laws of the jurisdiction, they will likely be able to deduct the relevant costs and should be paying the applicable taxes on the net income.

    In the result, while there is no doubt tax to be paid on the income realized through AirBnB (just as there would be tax payable on hotel bills), that analysis you quote seems to be wrong.

  • Lysenko’s Nemesis

    If someone rents out space they have to tourists and this means that there is now less space available for locals to rent, this simply means that funding is brought into the local economy, cleaners may well be employed (most of the AirBnB places that I’ve stayed in have been professionally cleaned) and if there is a shortage of rental space for the locals then other locals will be employed and earn money to build it. This is the way the market works when allowed to operate freely.

    By restricting oneself from renting a property in the vain attempt to preserve that space for a perceived needy local to rent on a long term basis instead is presumptuous, and if practiced actually reduces employment in the building industry and reduces the housing stock overall.

    It’s a nice sentiment but you’re only really doing it to make yourself feel better. In the long run it’s actually going to backfire.

  • Lysenko’s Nemesis

    It certainly is interesting to read how so called ‘disruptive’ technologies are constantly being rejected in favour of the traditional methods, with licences, inspections and other government controls.

    If it were elderly people saying that I wouldn’t be surprised but it’s not. Are these opposed to these developments similarly opposed to on-line travel bookings? Are we going back to travel agents on the high streets?

    I don’t think so. Guerrilla tactics will be employed, as they are already. People visiting Vancouver can easily find short term apartment rentals without using AirBnB. Drivers with cars to hire are also available.

  • A Taxpayer

    We put all sorts of restrictions on what landlords can do with their own property, including rent controls, and then we wonder why people are not interested in supplying rental housing.

  • Norman12

    There’s a place on the CRA website where you can turn him in. The same goes for owners of illegal suites.

  • Chris Keam

    At what point will you exhibit the same concern for intellectual rigour regarding your own baseless speculations? I’ll check back again in a couple of weeks to see if such an occurrence is possible.

  • A Taxpayer

    I thought your absence signaled you were conducting your own parking survey but if you did, I guess you didn’t get to 30%. You do realize that you need a parked car to replicate Shoup’s methodology, a parked bicycle is just not going to do the trick. Maybe you could try asking people stopped at traffic lights if they are looking for parking. Take a squeegee with you and you can make a few bucks so your time won’t be totally wasted however your survey turns out.

  • Miteymiss

    Would you be kind enough to share the link? Thanks.

  • Norman12
  • Chris Keam

    When you are done insulting those of us who provide data to back up suppositions, you should come over to the dark side and start providing some credible information to support your bizarre claims, aka acting in the same manner you expect from others.

  • A Taxpayer

    Providing crap data, which you regularly do, is worse than providing no data at all because to the casual reader it gives your supposition more credibility than it deserves. Just because you find a headline on the internet to support your position doesn’t mean it is true. Go behind the headline and think for yourself (OK, big assumption there).

    Oh, and that generous offer from that man in Nigeria? Don’t respond to it.

  • Chris Keam

    You haven’t disproven the data. The only link you provided supports it. Your bizarre claims get weirder every time you post. How long before you start using astrologers?

  • A Taxpayer

    10 surveys over 88 years to support your sweeping statement that “fully 30% of urban traffic may be attributed to people looking for parking” is crap data. In fact, the author himself limits the applicability of this small sample because “The studies are selective because researchers study cruising where they expect to find it “.

    So you referenced a study that did not support your statement (“fully 30% of urban traffic”) and the study itself has limited value because of the small sample size over a wide geographic area and time frame.

  • Chris Keam

    Never mind me old chap. I’m clearly a fool. Now provide some realistic examples of your claim that traffic will remain the same with autonomous cars. Because that’s exactly what you demand of others but repeatedly fail to provide. A single piece of research or data to support your contention would begin your rehabilitation away from purveyor of nonsense.. Just one.

  • A Taxpayer

    “I’m clearly a fool.”

    I knew that there had to be something we could agree on.

    Early on I made the point that any prediction about the impact of driverless cars is speculation given the very early stage of the technology (and I was not predicting only suggesting a possibility. I also accept less utilization of the roads as a possibility). It is the reason I didn’t research the issue because no one knows.

    However, again after spending minutes in extensive research I discovered this reference:

    “How likely is it that self-driving vehicles would cause car ownership rates to drop by nearly half, as projected? No one really knows. The authors of the UMTRI study acknowledge another potential scenario in which “individuals who are currently unable, unwilling, or prohibited from operating a vehicle become users of self-driving vehicles, [possibly bringing about] increased demand for vehicles and increased traffic volumes.””

    http://webcache.googleusercontent.com/search?q=cache:61gU0cGxHwcJ:time.com/tag/self-driving-cars/page/2/+&cd=34&hl=en&ct=clnk&gl=ca

    There are other references (including the UMTRI study itself) but it doesn’t change the fact it is all speculation at this point whether or not somebody has run some computer simulations.

  • Chris Keam

    Perhaps you need a dictionary to understand the difference between a prediction or projection and speculation. Please provide some real data to support your contention. Countering my links with ones that are even more data-less is hardly leading by example.

  • A Taxpayer

    If you believe that offering up the Shoup study is hard data in any meaningful way on this subject, then your self assessment is appropriate and it is pointless to continue this discussion.

  • Chris Keam

    A variety of sources have been provided to you, outlining potential traffic scenarios we can expect with autonomous vehicles. You have provided nothing in the form of a realistic and believable theory that traffic congestion won’t be reduced with fewer cars in play. You are correct. It is pointless to expect you to show up with good data and reputable sources. We’ve seen it repeatedly on climate change issues and now with this topic.