Sunday, May 01, 2016

From The Same Folks

We've been told that the "Sharing Economy" is the way of the future. But a new book by Tom Slee questions that proposition. Tom Walkom writes:

But as Tom Slee writes in his authoritative new book What’s Yours is Mine, the original idea, however laudable, has turned into something far darker.
Or as he puts it: “The sharing economy is extending a harsh and deregulated free market into previously protected areas of our lives. The leading companies are now corporate juggernauts themselves.”

Slee holds a PhD in theoretical chemistry and works for a Waterloo software company. He knows something about innovation. But he believes that companies like Uber and Airbnb are innovations which do more harm than good:

Uber enthusiasts, he writes, attribute its success to technology. But the real reason Uber thrives is that it avoids paying many of the costs borne by regulated taxi services, including insurance and mechanical fitness tests.

More important, and again unlike regulated taxi firms, it is not required to provide services to everyone, such as those using wheelchairs.
When Uber enters a city, Slee writes, it usually offers bonuses to its drivers and discounts to its customers.
Over time, as it captures more of the market, these incentives are scaled back. In the end, Uber ends up raking in as much revenue as regulated taxi fleet owners, yet faces lower costs.

Airbnb also thrives because it doesn't have to play by the rules that govern other property owners:

Accommodation sharing, too, is not always what it purports to be. Airbnb claims to connect those needing hotel space with ordinary people willing to rent out an apartment or extra room.

The reality is that in some cities almost half of Airbnb’s hosts have multiple listings — that is, they are in the landlord business.

Yet unlike regular bed-and-breakfast operations, Airbnb landlords are not required to adhere to government health and safety rules.
Nor, to the dismay of some neighbours, are they subject to zoning bylaws.

It's more of the same -- from the same folks who brought you Neo-liberalism.



Steve said...

Before Uber and Airnub there way Amway. Same thnking. Just the medium is differant and the product is your own property.

Owen Gray said...

And it's a Ponzi scheme, Steve.

Toby said...

Owen, I'm a little puzzled that elected officials anywhere would even consider allowing Uber and/or its clones to operate. Are they getting bought off somehow? Municipalities have rules; enforce them.

In BC a taxi driver needs a Class 4 driver's licence. Why aren't Uber drivers charged for failure to have a proper licence?

Owen Gray said...

Excellent question, Toby. There should be a level playing field.

Dana said...

The playing field is level. We're all entitled to the same crappy service and theft.

Owen Gray said...

Except some folks can ignore rules that others can't, Dana.

Anonymous said...

Regulation is definitely necessary. The City of Ottawa has begun that process pretty seriously. Needless to say the taxi companies flipped but the public wasn't really on their side as taxi service in Ottawa has been on a downslide for decades: after giving your destination, the first thing an Ottawa cabbie generally says is "where is that?".

If nothing else one positive uber gave rise to is that some taxi companies now have apps . . .

Owen Gray said...

Apps are fine, Anon. They could improve service. But the rules should apply to everyone. The central problem behind Neo-liberalism is the proposition that some people are entitled to play by a different set of rules.

Anonymous said...

I get the Neo-liberalism fear. I’m simply saying that there are ways of dealing with these types of things other than throwing in the towel and hauling out the “isms”.

Yes, we now have more vampire corporations capitalizing on more activities, but these activites were already going on, completely unregulated: sections of Kijiji, Craigslist (and how many others?) were devoted to ride shares, local and long distance. So you could look at the glass as half-full - Uber has forced the issue into the open.

We need a total re-think on transportation issues. Hopefully we don’t just stop at Uber and taxis . . .

Owen Gray said...

I agree, Anon. An economy is dynamic and it changes. We have to develop policies which keep up with the changes.