By: Tes Welborn, HANC Board
In April's meeting, we learned that the “sharing economy” encompasses a wide range of non-profit, barter, cooperative and for profit structures. All are based on mobile networks and social networks, tech plus trust, and facilitated by the economic downturn. However, the for-profit sector is the one that is booming.
Many have criticized the for-profit sector of the sharing economy, writing that sharing economy businesses "extract" profits from their given sector by "successfully [making] an end run around the existing costs of doing business..." New York Magazine wrote that sharing economy innovations have made a difference, but that the for-profit sector of the sharing economy has succeeded in large part because the real economy has been struggling. "Lots of people are trying to fill holes in their income by monetizing their stuff and their labor in creative ways..." The magazine writes that "In almost every case, what compels people to open up their homes and cars to complete strangers is money, not trust...But what's getting them to the threshold in the first place is a damaged economy, and harmful public policy that has forced millions of people to look to odd jobs for sustenance."
If a business normally had, say, a 10% profit margin, And they could save 30% of labor costs by NOT having employees, and NOT having to build or buy buildings, or a fleet of cars, their profit margin could be 40% or more! Investors see the failure of government to aid us, our cities and our communities, and are eager to help us get by --But not by giving us JOBS !!
In May's meeting, we learned that while Short-Term Tourist Rentals are enjoyed by many, these Tourist Rentals are definitely reducing affordable, rent-controlled housing in both the Haight and San Francisco. Up to 30% of “available housing” is being used for full-time tourist rentals! Thousands of illegal STRs cannot be made legal under both current law and proposed law, and they supply most of Airbnb's and all of VRBO's income. Effective local regulation can only be achieved, HANC believes, by voting for Proposition F this November.
In our June meeting, we looked at part of the proliferation of Transportation Choices – it's not just taxis! There are car and scooter sharing companies, too. Ride-sharing companies like Uber may be making traffic worse.
Our series made the following critiques of the for-profit “Sharing Economy” :
- They displace employees and create so-called “Independent Contractors” and every “business” that uses “Independent Contractors”, is externalizing its costs onto us, the taxpayers!
- They seek to create a monopoly, to control a market...They are predatory entities that benefit a few investors, that try to avoid local laws and having ”employees,” and which externalize costs.
- Then Uber investors, Airbnb investors, etc. use their large, often untaxed profits, to influence and corrupt government. Then they influence we voters, with “dark money” election messages and negative campaign ads.
So, here we are...Our capitalist system lurches from crisis to crisis. And our government fails to propose economic and community development. Always money for war, but little for our needs and infrastructure.