The Real Sharing Economy
How to regulate Goliath when David is a fan.
What do we have here? it’s Airbnb again! Well biases aside, I’m a strong participant in the sharing economy and the advantages it offers to the users (me!), even though there are effects to the ease of life we gain from them (though we know of these effects, the sharing economy is too good to let go of). But the other side that loses deserves not just to be heard, but also to be acted in their rights, Ladies & Gentlemen we need a compromise here.
Airbnb with Brian Chesky as its CEO had a very slow start in 2008 before it really took off in and around 2012. You know what really took off around that time as well, Uber. And guess why they all arrived around the same time? your internet connected mobile phone. So based on this mini analysis we should cut it short and understand two things are here to stay: 1.the internet is awesome, 2.the sharing economy is fun and easy, so Airbnb is going nowhere.
What we have to understand here is that it’s really not the sharing economy but the internet itself that is changing everything. And the reason why regulation is behind is because it’s up against Moore’s Law (a computing law by, you guessed it, Moore, who predicted in 1965 that computer processors will double in speed while doubling down in physical size every single year). Moore’s law has come to be the truth today while we are continuously being held up by regulation that still stand from 1965 itself. So there’s a total mismatch in what regulation wants and what the internet provides.
The most important thing to understand here is not to spend time thinking about how to regulate Airbnb now, but rather how do you work with them for a foreseeable plan of the future. Yes, once again, the internet is going nowhere, so they’re here to stay. The reason being is that it’s next to impossible to replace unicorn internet businesses that have formed a stronghold with the whole world. Quick question, do we see Google or Facebook or Amazon losing internet real estate any time soon? it doesn’t seem likely. And that’s how Airbnb should also be looked at. Another key issue that we have to keep in mind is that people using sharing services like Airbnb really love them, I mean love them, so its hard to bring out strict regulation that would push them back at an instance. Mayor Bloomberg of New York wanted to bring a regulation to limit Uber pick ups to a minimum of 20 minute wait times, guess what Uber did, they opened ride version where NY citizens tried the 20 minute wait and they completely hated it and were complaining vehemently on Twitter to Mayor Bloomberg (yes Twitter is here to stay as well).
With all this love from people they must not be causing any disruption. Well…. Airbnb kind of is to a certain extent, unintentionally of course. So let me explain, the business model is simple, put up your spare room or house on the site for a random stranger on the internet to rent it for a couple days or forever if that’s the deal you cut. If we all owned one house with spare rooms that would be amazing, I mean gold at the bottom of the rainbow amazing, buuuuuut its not. Why not you ask? Because people always game the system, they find locations where people book plenty of Airbnbs and they buy plenty of apartments and homes there, yes they buy them all (sometimes). And what does buying up all the houses without you staying in them do? It kicks people out of their neighborhoods while also increasing rent fees, so people are forced to move (I hear the dreaded G-word calling again). Yes so, Airbnb is the cause of Gentrification, Gentrification solved, ….if only it was that easy. So Airbnb has been proven by a website ‘www.insideairbnb.com’ that scrapes data from the site and couples it with resident data to find that people are buying up houses to rent them out in high urban epicenters. This is where the complication arises, especially when Airbnb vouches to provide a living for those that have no other source of income like an old granny that can’t work anymore or people with disabilities, which is actually true by the way.
Now my recommendation to bringing a balance (no I did not use the word solution because in planning nothing is truly solved), based on the proliferation of the internet along with its future potentials, the love and dominance of Airbnb in the world, and globalization bringing freedom of movement and funds is:
The City Council, in Tandem with Airbnb should Create Tourist Centers in Cities:
- The highest users of Airbnb are tourists who travel for a few days to explore cities at affordable rates for lodging. This trend would not reduce and as such will keep Airbnb alive and growing. Economically this is very good for the city as it will provide more income to increase the living standard of its people. So for this reason, tourists should be the main focus of this recommendation as they are the economic frontrunners that are willing to bring more to the city. Again, focus on tourists.
- The tourists should be guided on where to stay in the city so that citizens can be able to retain their connected neighborhoods. This is where the City Council will work with Airbnb, on a long term plan, to design and build a tourist centre where short stay rentals will be encouraged extensively. This plan will also bring businesses that tourists will explore and enjoy the city. If you’ve been keeping up to date with Airbnb, you’ll see that they recently release a new service called ‘Experiences’ this is where locals around town can take you through a certain experience, be it shopping, cooking, or dancing. So the plan of the Tourist centre would be to merge Experiences with short stay living.
- The world has been global for over a century, we’ve been shipping goods and services for decades on a business to business level, but only now are individuals feeling the effect of globalization. And when you examine it you find that it’s just the beginning of the movement of people. We might not even need Visas in the coming decades, that’s how far we need to think for this plan to make sense. Its not for the present but rather for the future. And the scary thing that citizens will realize with this recommendation is that they have to share not only their apartment blocks with tourists, but now also their city, but at least they get to travel elsewhere and share other people’s cities, may be that’s the real sharing economy. (pun intended!!!!!)
