AirBnB is a small factor. I suppose it drives up prices, but only because supply is so absurdly tight.
This happened even in areas where holiday home ownership and rental was common as a business.
The failure of government to grapple with the negative effects of Airbnb is a separate thing. Airbnb are, in fact, in control of their own morality.
The fact is you can go to travel websites, and the first 70k listings in some cities are for commercial hotel/share services running out of residential zoned homes.
Low-income people are easier to squeeze, and "with a computer" convenience doesn't make it an ethical securitization model. =3
Speaking as the son of an immigrant, married to an immigrant, for the people who can only think tribally, and must assume I am doing the same.
Uber has issues but honestly it's night and day compared to what taxis were like. And they decrease DUI's.
I think you'll find that zoning/planning permission is the real bad guy here. That and a failure to understand Adam Smith and implement the ideas of Henry George.
Do you believe Rebu could that have managed to draw the same level of venture-capitalist money and unicorn-ness and hype, even sharing the same core technologies, code, and product features?
I don't think it would, and I'm asserting that comes from business-plans, labor relations, legal challenges, government lobbying, investor marketing, etc., which in several cases have been, er, ethically-problematic.
Thanks for the unnecessary correction, when it's pretty clear that my comment you are replying to includes the words "even in areas where holiday home ownership and rental was common as a business".
I don't know why it did not happen before.
All I know is that the situation in coastal resort towns in Cornwall, Devon, and elsewhere in the UK changed utterly when Airbnb became a thing.
I could guess that barrier to entry was always an issue before then; the relative complexity and process involved in listing a property with e.g. Hoseasons, who were the dominant player in the 80s and 90s, and who inspected properties and had greater requirements.
But either way, Airbnb did unambiguously change things. Ask people who lived in Cornish towns whether they're even able to rent a room or a flat.
It's a defect at the intersection of capitalism, property ownership, and democracy.
- Tons and tons of users buying vehicles they can barely afford to drive for them
- Tons of restaurants already struggling to get by saddled with needing an iPad or two at their counter to intercept online orders, and needing to charge more and anger customers just to break even on the fees
- Huge amounts of sexual assaults because Uber didn't vet drivers
And lest we leave it merely implied: Uber is worth what Uber is worth because it's a taxi company that owns no Taxis and pays no taxi drivers a proper wage. That's why it's a billion dollar unicorn. Same as AirBNB is a hotel chain that owns no hotels, UberEats/Doordash are food delivery services that don't own restaurants, Instacart is a grocery chain that doesn't own grocery stores.
Honestly if you want to really be cynical about it, the true path to finding the next tech unicorn is figuring out how to be a $business that owns none of what a $business normally does, and hires no employees that $business usually does, and then wrap that up in an app, and convince poor people to do the work for you because they have no other options. Boom, unicorn.
The way taxi companies had languished in obsolescence was definitely a problem, but I struggle to consider if Uber was the best way to solve that on any front.
https://www.theguardian.com/news/2022/jul/10/uber-files-leak...
https://www.nytimes.com/2017/03/03/technology/uber-greyball-...
This is a level of deliberate, optional fraud that goes a step beyond, is it not? It's organised crime.
Nimbys are basically hukou advocates in disguise. After all, it's the only solution if you don't primarily place the blame on lack of construction.
As far as I can remember AirBnB didn't cause the 2008 financial disaster that really sealed the fate of homeownership in America for the next decade for a lot of Americans.
AirBnB has provided an avenue to generate income for small business owners in rural communities. Urban areas are struggling because they aren't building more.
BUILD MORE. How difficult is it to understand that?
Unless you were the very first person in the entire area to think to do so, then the existence of that very market for you to rent spare rooms on is actually driving up the prices of properties so you have to do so.
It's also driving up the prices of long term rental, because landlords make more money in the short-term rental market. The prices of long-term rental also affect the floor price of permanent ownership.
But much of that boom has been tearing down multifamily apartment complexes and replacing them with luxury townhouses and condos instead. Almost nobody is actually moving into those places. They're 90% being purchased by investors, mostly out of state investors, to be used as Airbnbs. There is a significant categorical difference between investment property today and investment property before Airbnb. Before Airbnb, you rented via long-term leases, or you bought hotels and apartments in really shitty neighborhoods to use as weekly or even daily rentals for homeless people with jobs. Now you can buy as little as a single unit and the infrastructure to rent it out daily as a hotel room to much wealthier travelers exists without you needing to do anything extra.
With predictable results. Even in neighorhoods with little to no zoning restrictions, with virtually nonstop construction of new housing, almost nobody lives here, the neighborhood is completely hollowed out, and all of these new luxury homes are mostly party houses used by rich college students and bachelorette parties.
That is fair, but also misses the point. The issue with AirBnB is not that they are evil company and must be regulated. It's that they operate in a system where housing is an investment vehicle due to artificially constrained supply and tax system that is riddled with well intentioned and widely abused property ownership cuts. At worst they have accelerated the issue rather than caused it.
> Airbnb are, in fact, in control of their own morality.
Not entirely, they are a publicly listed company and will get sued if they do anything that will hurt the stock price.
There are literal physical limits on this in many coastal villages and towns -- for example pick almost anywhere on the south west coast of the UK. Not only is the area on which houses can be built restrictive due to geography (and often geology), the transport infrastructure does not scale. New property building both has not caught up with, and probably cannot catch up with, short term demand.
As it happens, a collapse seems likely, because local sentiment is turning against them so fast and because of general economic weakness; the number of "thriving holiday let" properties that are on the market now suggests that Airbnb's own accelerating rental costs problem is going to cause a bit of a bust.
But that bust will not benefit most of the people in the areas affected where the price of a small house is twenty to thirty times the average salary of would-be-first-time-buyers. Those people are leaving, so there will instead be a ghost town. And the sheer number of residents who are temporary has destroyed the potential for long-term stable infrastructure businesses for residents.
> Nimbys are basically hukou advocates in disguise.
It's nothing to do with nimbyism, is it? Nimbys are property owners. The problem only affects people who do not have back yards. They can no longer afford the houses at the prices at which they will be built and the rates at which they can be.
Then you're a landlord who has purchased more of a scarce resource than they require (a house larger than you need) who has then turned around and rented access to the extra you have to people who can't afford a home of their own, and in so doing have driven the cost of homeowner-ship just slightly higher, which was the reason you couldn't afford it in the first place. Repeat that a few thousand times and that's a huge contributing factor to why housing is in such a dire state here.
You haven't solved anything. You just went from being an exploited person to being an exploiter instead, taking advantage of people you should have solidarity with and inflicting the harm the system was inflicting on you, onto them instead. The system will continue feasting on people who can't manage the same as you did, and you now posses wealth you did not earn.
"At scale, they would ruin communities, put restaurants out of business, destroy the dream of home ownership, and eventually undermine democracy itself."
Uh what now?
What I said was rather more specifically qualified than that.
Someone, generations ago, made a law saying people in your town could only solicit car rides if they paid a special tax, and now you're out here vigorously defending that dead model.
State-enforced monopolies are often legalized corruption. I care more about that than some corporation using their resources to break that corruption.
This is a bit of projection. But good for you, being open about your support for fraud :-)
Not OP, but I believe in the rule of law, and in a republic governed by elected officials.
It's not OK for powerful actors, especially companies, billionaires, and government officials, to willingly and knowingly break the law.
I do wonder if there is any smart solution to this issue.
So why would they bother to adopt "Rebu"? It's nothing but downsides: their taxi drivers have to work harder, have to be more polite and drive more safely, have to have cleaner cars, and have to be more accountable in general. Not to mention of course Rebu is going to take a cut of all rides booked on their platform.
There was no way to make regular taxi service better without structural and legal reform that the incumbents did not want. The only way to fix it was to go outside the system and do something sketchy. And it worked! For all their issues and controversies, the ride-hailing app experience is amazing, especially when compared to old-school taxi service. Some legacy taxi services have stepped up and improved a bunch since then, and others have just faded into obscurity.
I'm sure to get pushback here, but my suspicion is: most do not. Looking at companies like Facebook, Amazon, or Google, I'm kind of think they made it worse. Yeah, I know, some people benefited. But net-net, I preferred having more and better bookstores to Amazon. I don't like what google has become at all. And Facebook has never been good.
The taxi market, in the US at least, was a textbook case of regulatory capture to stifle competition. Google "taxi medallion prices nyc" for an example. Uber was clearly the 'good guy' in flouting those laws and later getting them repealed. The cartels that controlled the medallions had no interest in improving the technology until they had competition.
Bob Smith annoyed enough Uber drivers in Milwaukee that now he can't get a ride in Poughkeepsie. Maybe that's valid, maybe it's not. But it is pretty new, and I doubt it was in the slide deck when Uber hit up the VCs.
The social aspect of these sorts of things can't help but get entangled with the politics of social mores. Maybe Bob was giving the Uber drivers wet willies. A lot of people would think he caught that ban fairly. Maybe Bob was too politically incorrect for the Uber drivers. Not quite so sure he deserves to be sentenced to hoof it until the Sun burns out. How do we know the bans are of the fair former and not the latter? We don't. It's a private company, they can be as opaque about this as they want.
Good, bad, who knows, but it certainly makes for a completely different landscape.
The hotel experience of course was (and is) not universally bad, but I still prefer an Airbnb in most cases, for most trips I take. And when it comes to taxis... no thanks. Unless I have foreknowledge that taxis are significantly cheaper than Uber/Lyft in a place I'm visiting, I will take that Uber/Lyft every single time.
Airbnb is certainly more fraught, given the problems for communities that rampant short-term rentals can cause. And I won't claim that Uber/Lyft is fair to their drivers. But I don't really care if they had to break laws to get where they are. Sometimes laws are wrong. Sometimes laws are the result of corruption and lobbying that isn't in the interests of the actual constituents. "Social expectations" is a bit of a weird thing to bring up, since it's so amorphous and hard to pin down. I don't think I ever had any "social expectation" that people can't rent out their house or apartment for a few days or a week. I don't think I ever had any "social expectation" that the only way to hire a car was to call a number that often doesn't pick up, and then wait 30-60 minutes for a car that often doesn't ever arrive.
The legacy taxi services had this problem too, though, as you note, not on a global level. Pre-Uber, there was one taxi service that stopped taking my calls. I have no idea why. I had no way to appeal this, or to even get in touch with them to find out what was going on.
In the meantime, Bob still probably has public transit or local old-school taxi services to fall back on (which somehow still exist). Many areas even have local ride-hailing apps. Worst-case, Bob will have to rent a car when visiting other cities.
Laws aren't universally good. Some laws are bought and paid for by special interests. Some regulations are the result of regulatory capture. I am totally fine with people or companies skirting our outright breaking those laws in order to make things better for people.
But yes, Uber also did some bad things that I don't agree with. I still think Uber has been a new positive for my life, and I'm happy they exist.
NIMBYs are property owners who vote for restrictive housing development policy in order to prop up their own home values.
Eliminate the NIMBYs and you end up with a lot more people who can have their own backyard.
Even if that wasn't the case, I don't see a problem with buying slightly larger than is necessary, because (for example) perhaps they're planning to have a couple kids in the next few years, but will rent out the extra space until then. Moving is transactionally expensive, and expecting someone to move every few years as their space needs change is unreasonable.
Regardless, you seem a bit overly judgmental about this entire situation, and about someone you don't know at all.
Another is: civil disobedience with a profit motive.
But that's the key, really. In most places, banning short-term rentals will not move the needle on housing affordability.
It's like trying to optimize the thing that's causing 3% of the slowdown when things that are responsible for 40%, 30%, and 25% are right there, staring you in the face.
Landowners that have made improvements to the land and seek financial compensation for those improvements, in this case in the form of providing a service, is NOT rent seeking behavior.
That is NOT exploitation.
This is even basic economics from an extremely leftist POV, where those that have added labor value, that is improvements to the land, in this case providing a service and perhaps building a unit, managing them, etc. should be compensated for their labor.
Like this is extremely basic stuff.
Except -- if it took the combined might of Uber's VCs, and the disposable human battering ram that was Travis Kalanick, just to disrupt the puny little taxi industry, imagine what it would take to change housing. Ain't never gonna happen.
The thing that's "ruined communities and destroyed the dream of home ownership" is the incapacity of the community, "where they were brought up", to actually change and accommodate increasing demands.
In reality these individuals from these communities are using Left rhetoric to advocate an extremely conservative position. That is for the community to remain as is, in the exact way such people were "brought up", such that no progress, no change, no additional value is added to the communities.
What ends up happening because of this confused policy is that the individuals in these communities both lose out on their hometown, the community ends up changing, and it becomes impossibly expensive for everyone in the community. IE the worst of all options.
Instead. Build more. Build vertically. Build better infrastructure. Provide for local residents an opportunity to "buy-in".
This kind of cloaked conservatism, masquerading itself using leftist rhetoric ends up being confused from a policy POV.
In this particular example with Uber, I see "powerful actors" many decades ago breaking our social contract by using the force of the government to implement a monopoly for their own profit and everyone else's expense. Legal, yes, in the strictest sense of the word, but certainly against what I value about my particular republic (USA).
So Uber here is more "the enemy of my enemy is my friend" than a company I actually admire.
Are there any, at least somewhat credible, unicorns that have appeared over the last 5 years?
Put differently, a common business model in late 20th century and early 21st century US capitalism is to find a transaction that is already happening "at scale" and figure out how to insert your own company into the transaction and extract some percentage of the value.
The primary way of accomplishing this is to create a (new) story to tell about the value you claim you are adding to the transaction ("it's so easy", "we have an app for that", "so much quicker") even though in many cases nobody (or very few people) were asking for whatever you bring to it.
This does not mean that there is no value added. What these companies do not represent are new transactions: no new products, no new macro-scale services ("but you get a car with your phone now!" still boils down to "someone will drive you where you want to go").
Congratulations on a text book case of Chesterton's Fence [0]. You've mischaracterized the purpose and nature of the law.
1. we have cars, we have people willing to drive them around to take people places
2. we want some regulation of this new business/service, to make things safer for the riders
3. we want some regulation of this new business/service because otherwise competition will force the price so low that nobody can make a living offering to do this (and we consider the service valuable).
So, we introduce a scheme which says you have pay for a license in order to provide this service. This creates driver identity and "responsibility" which we want for riders. We limit the number of licenses so that we do not have too many drivers chasing too few riders, and thus offering a more reliable income to the drivers, ensuring that the service remains available.
[ time passes ]
Uber introduces a scheme in which there is almost no floor to what drivers might be paid, but manages to tell a story that convinces enough people that they could make a living or at least a significant amount of extra cash by driving without the required license. Uber also assures riders that even though there is no official license, their technology can provide the driver identity/responsibility that it offered.
Result: better ride hailing for riders, money for Uber, and a steady, constant turnover of drivers "just giving it a try because I heard you can do really well ..."
As usual, a mixture of pros and cons, which vary depending on which perspective you are taking and your moral/political philosophy.
No, I don't. Rent-seeking is derided behavior by basically everyone who isn't rent-seeking.
If you buy property, improve it, and sell it, there's your profit for providing that service. No ethical lapse whatsoever, unless you used that godawful gray laminate that every flipper uses. Then I'm mad at you still but that's a different reason.
If you own a thing that people need, and you gate access to it behind a paywall while maintaining ownership, and extract value from those people so they may use it but retain full ownership and control of it, that's rent-seeking and it sucks. You're the economic version of wind drag.
Yes, that includes the 98 year old lady who rents out a room to fill the gaps left by social security to the nice young man who's going to college in the area. Still value extraction. That young man is losing the value of his labor because he has to live somewhere and she has space he can live in. That's unethical.
"Technology and throw-caution-to-the-wind made life better for me as a consumer, and I openly don't care (much) about the negative impacts on communities and other individuals".
> Sometimes laws are wrong. Sometimes laws are the result of corruption and lobbying that isn't in the interests of the actual constituents.
Certainly. That's why we have a process to change them, rather than simply ignore them.
I wouldn't even say it's isolated to businesses anymore. This is the same economic forces that's prompting all the crypto nonsense from a few years back, bullshit businesses like drop-shipping, social media influencers, etc. There's just nothing left to build anymore it seems. Every industry is stagnating, year over year there's no crazy new innovations anymore, nothing to get excited about. Just dumber and thinner versions of things we already had.
The tech industry is currently bending backwards so far it's collective spine will snap any second now trying to convince people LLM's are the next big huge thing, and there's just nothing there. 150 billion dollars for fancy autocomplete.
There are rural/tourist-dependent communities that had an adequate supply of housing when the only visitor accomodation was licensed as a hotel/motel/inn/B&B/hostel. They didn't need a lot of extra, but some slack to accomodate tourist season workers, and occasional new arrivals.
Then AirBnB came along and converted not just the slack, but some residential property that would otherwise have been available for long term lease, into much more profitable short term rentals.
Income at licensed residential stays sometimes drops; short term and long term housing options either vanish or are reduced; problems begin to occur that were not present before.
None of this is in any way dependent on the failures caused by zoning, permitting and housing policy.
This story has been repeated at tourist locations across the world.
AirBnB was fundamentally a message to anyone with residential property: you can make more money with it as a short term rental than via any other use. This is why in many locations we've seen new construction of residential property intended solely for short term rentals. Nobody wanted to build that stuff when it was only going to be LTR; AirBnB changed the game.
dude! godawful gray granite or go home :)
Well, it kinda is a fundamental problem, with regard to the original article's premise that scale is a problem. These services can't operate on VC's terms without scaling up to a national or global level. And this, by its nature, means your Uber problem in California follows you to Georgia, and possibly to Uzbekistan.
What if Uber shares its ban list with Toasttab? Or if Uber buys Toasttab?
Laws may be able to address this, but laws always lag. Sometimes by a lot.
But overall this was pretty bad investment for humanity. Let's just stipulate it's a lot easier to get a ride at a reasonable price and that's a good thing (not a given considering increased traffic and greenhouse gas emissions, plus decreased pressure for cities to move away from car-dependency). Was it worth multiple billions of dollars and software engineering hours? Like, assuredly not. It's a big "LOL" drawn in lipstick on a portrait of the efficient market hypothesis. It turns out the private sector is also great at just setting huge piles of cash on fire.
You have created a convoluted ex post facto defense of taxi laws which sound plausible but are likely wrong.
"Chesterton's fence" doesn't say that "the most socially positive explanation is correct".
The simpler explanation is one of "concentrated benefits, diffused costs". A group of taxi owners helped implement a state-enforced monopoly at the expense of the rest of society. Technology enabled a new group (Uber) to concentrate benefits further at the expense of the relatively diffused monopoly-holders. Society benefited in some ways (easier rides) while likely bearing costs in other ways (drivers subsidizing Uber).
Where we get into a problem is when, due to lack of competition, you start extracting almost all (or perhaps even somewhat more than all) of the value that you're adding. That leaves everyone else in the same boat they were in before the rental model showed up, except comparatively worse off because there's a ton of wealth in there that has been concentrated in the hands of a few.
This is the kind of thing that having more competition would help with.
Why is it convoluted? Watch the process that has happened with every other technological development in the last (say) 40 years? How is what I've described any different?
> A group of taxi owners helped implement a state-enforced monopoly at the expense of the rest of society.
You assume that the downsides of the "monopoly" (I'll ignore the twisting of the conventional meaning of words there) are larger than the upsides, and yet you seem to similarly assume that the downsides of Uber are smaller than the upsides.
Society got a new line of work that made a reasonable living, control over the drivers in the interest of safety and accountability. Those are not exactly like the discovery of fire or the dawn of agriculture, but they are not of zero worth.
I also note how your description of "A group of taxi owners helped implement" has an implicit negative tone, something alone the lines of regulatory capture. Yet we regularly hear calls for regulations to be created with the participation of those affected by it, so that legislatures and civil servants don't make stupid mistakes/decisions.
Look, I'm not really interesting in defending the medallion systems. Taxi service in many places sucked under it and conditions for many drivers weren't exactly what society might have been aiming for.
But tearing it down in favor of another mixed bag of pros & cons needs to be done with a subtle weighing for the relative pros & cons, not the reckless and giddy greed of a company like Uber.
> virtually nonstop construction of new housing, almost nobody lives here, the neighborhood is completely hollowed out, and all of these new luxury homes are mostly party houses used by rich college students and bachelorette parties.
If there is strong demand for housing, you might see bungalows turn into town homes or townhomes turn into mixed use 3 story flats... Which tend to be much more economically productive for the local gov anyways because the cost of infrastructure & services per person drops.
It got reasonable funding but couldn't get taxi companies to sign up.
Things got a bit better when it became clear that Uber was going to kill taxi companies but too little, too late.
In the US at least, there are two classifications for "car for hire."
One is street-hail - you wave down a car or get into one at a stand. That was heavily regulated and taxi companies had the relevant licenses.
The other is "town car". You call for a town-car and it shows up. town-car was very lightly regulated.
Yes, every taxi company offered town-car services, but there were lots of town car companies that didn't do street-hail.
Uber/lyft are town-car companies. Neither one does street-hail.
Impossible to assess. These things happened, but as a chemistry experiment. You'd need to be some sort of $Diety to track the individiual atoms in the solution and judge the alternatives.
Quit this fruitlessness while you're behind, say I.
Then zimride said “you can use that gps receiver you’ve got in your pocket to find people who need a ride near you and we’ll suggest how much gas money to split”. But pretty quickly people started just taking passengers even when not on their own trips, and lyft morphed in to…. Basically Uber.
Rent-seeking is something specific. If we can't get that right we're not going to get far into the discussion. Not all rents are the same.
Hotels rent rooms. But they are not the same as rent seeking.
If you're not creating new wealth/value add, and instead exploit rents by mere virtue of owning, then it is rent-seeking. If you're adding value, like providing a service or other additions, then no it's not rent seeking. The 98 year old lady? Probably rent seeking. The couple doing AirBnB? Probably not.
Why?
AirBnBs, like hotels, tend to provide a genuine service that adds value. The listings are in a competitive market, where people need to improve the living spaces in order for them to get rented out. This doesn't take into account the various hospitality businesses that have emerged in various rural communities because of AirBnB. It's an entire industry.
That is Hotels/Hospitality businesses are NOT rent seeking just because they rent out rooms or provide services on land they own.
Who is Rent-Seeking?
The people preventing new housing/infrastructure from being built are the ones rent-seeking. They artificially manipulate market conditions by restricting supply, driving up land value, and thereby generate unearned income. Income that isn't from productive improvements on land but from mere ownership of land. That unearned income on land is rent-seeking behavior.
What else is there?
- Boeing - Just need to invent a better commercial passenger airplane
- Lockheed - The day of 150 million dollar manned fighter jets is coming to an end.
- Electricity distribution - PG&E or Southern California Edison. Only way to crack this is with decentralized power distribution and batteries
- Waste Management - Trash collection, recycling, and processing
- DeBeers Diamonds - Diamonds can basically be synthesized in the lab at will now.
I wouldn't say nothing there, and that something is something. Translation, rephrasing and a lot of management tasks like summarizing what happened are way easier and better than any previous models I've seen.
Creating images and logos is usually very constrained by what you can describe without describing what's not there, it's impressive nonetheless.
Autopilot code autocomplete is pretty good, but not replaces all engineers good, rather increased efficiency good.
The problem is they all lie about it being the thing that will replace all knowledge work. CEOs are buying it up and salivating.
It could replace a lot of middle management at my company. But those are the people that are staying.
The complicating factor (which they miss) for a tourist region is that if your "product" is (in part) Small Town Charm, or Rural Character, then you can't build, baby, build without destroying the economic underpinning of the entire community. I wish my hometown had allowed for more hotels (like, decades ago - they were horribly regulator-captured for ages), and had the wisdom to restrict STR before it became such a thing.
For anywhere with a non-tourism based economy, however, I think they are correct: increasing supply is the only possible solution.
It only occurs to me upon writing this that areas without any existing tourist infrastructure are becoming tourist-dependent on the basis of STR, which might be the worst of both worlds. Those places need to allow hotels and (actual) B&Bs, before they ruin their communities through STR-tourist dependence.
And the outcome was bad for people living in these targets for mass tourism. Unless they were a YIMBY of course and wanted a hostel in their backyard.
'NIMBY' is like 'Karen' or 'boomer'. Some sort of convenient scapegoat, deserving or not.
I prefer ordinary hotels nowadays. Especially when travelling with children.
Maybe you are right for the US, but here in Germany at least, and I could be wildly wrong about numbers:
- Uber: not a game changer, popular with a certain demographic, but taxis were mostly fine anyway
- airbnb: ok, huge
- doordash/etc: maybe executing a bit better, but delivery has existed just fine
- instacart et al: now we get to the real thing. groceries delivery had only been done by a couple of chains, and sometimes only for a couple years, then abandoned again already. so you never really got whatever you wanted, from where ver you wanted. Paired with our sometimes very limited shop opening times (6-20 at most, in recent years more, but just in some states) this was different, e.g worth it even if it is not your weekly haul and/or alcohol for a party.
Stop projecting, you two.
Just because you want to take take take from others doesn't mean everyone else is.
Realistically people were making these kinds of points back in 2015, and now a large percentage of the lists of unicorns were from somewhere around 2015. It just takes time for most of these companies to become well-known unicorns. The last five years is always the worst five years, until you wait another five years and in hindsight consider it a golden era.
Edit: although I do think that the couple years of high interest rates will slow the growth of startups from this era, since it has a meaningful impact on how much cash VCs can spend. The AI boom at the tail end of high interest rates will probably cover a bit of that though; OpenAI is the first runaway success but I'm pretty sure it's not going to be the last.
(Black cabs don't have to be black, but usually are. As to why they're called "Hackney carriages" - the last person to know the reason probably died in 1863.)
I think it's kinda true, but govt regulations should have prevented it, which is not happening anytime soon because politicians act like startups and lobbies act like incubators.
Even the canonical example of lobbyists can make some ambiguously defensible position that they add some value; e.g., "We make sure constituents have a conduit to their representative"
Self driving is the only way uber or a taxi can be a large business. The cost of labor is just too high and so most people are forced to learn to drive.
Even with the above I question if self driving is really worth it. If you own a car and have it parked nearby it is ready to go when you want to leave, and better yet you can store your stuff in it. Combine that with rush hour - most people are traveling at about the same time every day, and some people wanting nicer cars than others and it is hard to see how it can work out. (unless you live in density such that parking is hard - but then transit must be your answer not individual cars since self driving cannot solve traffic)
Maybe I'm just unlucky but the last several times I've traveled, staying at an AirBnB simply made no financial sense. Sometimes I feel like I'm crazy, hearing people talk about "cheaper".
https://medium.com/chamber-of-progress/new-nyc-data-shows-th...
The observation is that the "take take take" behavior arises out of a sort of survival-of-the-fittest mechanism. Both preceding comments seem to lament this, rather than relate to it.
I have thought a lot about antitrust recently and realized that it’s an overlapping problem with the VC unicorn problem. People get so hung up with being bigger/biggest, faster/fastest, that they minimize or ignore pathological side effects.
What if we have a progressive tax structure on business based on scale? Partly on size, partly on market power?
For example, what if corporate income tax were tied to the logarithm of the number of employees+contractors? What if the corporate income tax increased with the market share in markets served?
These kind of ideas have very low impact at small scales, but after a certain scale they start to have such a huge effect on bottom line that they disincentive growth for its own sake.
And they’re self-regulating and largely objective, unlike our current antitrust laws in the US.
I think there's arguments for both sides, but personally I land on the net-evil side for all 3 of the listed companies.
In fact you could easily see car manufacturers offering such services - something like Zipcar but more convenient as the cars can self redistribute.
I find it hard to believe Uber will ever break even ( not on the day to day costs - recouping all that upfront investment ).
Having said that, the likes of Uber have changed the world - so the money wasn't entirely wasted.
The classic example of an economic rent is a feudal lord putting a chain across a river and charging a toll. This is economically unproductive because it's just putting a price on something that was free (and, you have to assume for the example, non-rivalrous). This is why the sibling comment points out that the rent-seekers in the housing market are more like the people seeking to constrain supply via zoning and regulation.
And who knows, your view might be right.
Unemployment would increase.
>What if the corporate income tax increased with the market share in markets served?
More companies would register in Panama or some other tax haven.
I would be wary of the Law of Unintended Consequences.
Now if it was instead a website, sure, much easier. No need to create accounts etc, just visit "chicagotaxi.com", perhaps shown on a sign at the airport/station/etc, then book and pay with applepay/googlepay.
But installing some application, signing up, having my data stolen, all to be told "no taxis available", is the reality of a local app.
Amazon inspired us to think we needed more cheap crap in order to inspire us to buy cheap crap that we didn't need. We aren't any happier than we were before we had the ability to buy cheap crap on a whim, but we sure do have a lot more cheap crap than before. That wasn't worth it.
Facebook is essentially as good at helping people keep in touch as any instant messenger that preceded it. But unlike those instant messengers, it's supported by invasive targeted ads, and consult the first paragraph for why this is a negative.
This has all been a waste. Society isn't any better as a result of these companies existing.
I suspect the real reason owning is cheap is not that it's inherently better, but because everything is cheaper when you have lots of money.
Has DoorDash put some restaurants out of business, probably. Have they put restaurants out of business, absolutely not.
Has Airbnb raised home prices, yes by around ~1%. Have they destroyed the dream of home ownership, lol no. We're talking about ~$5k on the loan which isn't making or breaking anyone. And claims on destroying communities are dubious because they're just not that dense in places where people actually live.
Has Facebook increased political polarization and sent people down the right-wing pipeline, yep. Would this have happened anyway with a constellation of smaller social media sites, it already has.
Doordash/Instacart/Uber Eats/etc are just market solutions to the problem of everyone being worked too fucking hard and not having the time to exist as people anymore. And while in principle the idea of "hiring someone who has nothing to do and having them do your grocery trip" is perfectly fine, even innovative, in practice what it amounts to is someone making less than minimum wage while putting mileage on their vehicle and burning fuel while a startup in the bay area collects the lions share of the fees from the customer. My gripe isn't with the business itself, the concept is fine. My gripe is that Instacart takes the money that should be going far more to the person actually doing the work. They should of course collect some: what they are doing is not devoid of value, for certain: but they should collect significantly less.
Incidentally that's the same problem I have with Uber. Matching people who want to work with people who have tasks they need to do is not inherently evil. What's evil is doing that, paying the people working peanuts, and charging out the ass for the service anyway so you can pocket more profits for being a middle man.
"Value extraction" almost implies non-ownership, and represents more of a contractual arrangement whereby you provide X to a set of transactions that would happen without you, and in return you receive Y. Obviously if Y is universally of less or equal value to X, nobody is harmed. But if Y is of significantly more value to a given demographic or particular circumstances, then it is not clear that this is a win for society overall.
Where they overlap is if you have managed to create sufficiently high barriers to entry in the field of "providing X". This is tantamount to ownership of a resource that people want, and you're the only provider (or one of just a few).
Maybe the natural limit to scale should be state sovereignty (i.e. protectionism). I actually believe that consumers benefit if countries ban or tax the likes of Uber and promote a homegrown alternative. (Imagine if each country had its own Google customized to the local language and culture, it might actually be a better experience for everyone). I’ve heard that Baidu and Yandex are better than Google for local content.
Too bad the EU didn’t catch on with this. Europe could’ve outcompeted the US by playing a different game on quality and boutique charm instead of scale. Instead of pathetically trying to become a large homogeneous market like the US (and then failing badly and then regulating “privacy” out of spite), the EU should’ve actually been protectionist in favor of its members and it would’ve been interesting to see what marvels could originate.
Generally shared cars only make sense when someone drives very little anyway. Cars are expensive and so shared cars are either too expensive to be used often, or very hard to get at. Renting a car for a weekend is about half the cost of a monthly payment on the same car, but if you buy the car you have it the rest of the month (and if you buy a car you have used options or keeping the car after it is paid for to bring the total cost down - you will have to pay maintenance costs but those tend to be much less).
That just sounds like "crime" as well. If there's a profit motive, it's not civil disobedience. I think the way Uber was run internally is more than enough evidence that the initially dubious claim of some sort of crusade to right wrongs in society can be completely dismissed.
This is said rather matter-of-factly, but how do you propose doing that in a society with democratic values (ie people get a voice in their governance) and also where 70% of most household wealth is in their property?
Is there a reason for choosing those rather than the simpler alternative of the corporate income tax rate increasing progressively with revenue (as it does for individuals)?
This is the actual issue. When ZIRP was introduced (and then RE-introduced, sigh), it makes money appear to be worth almost nothing. Which means everything looks valuable.
Consequently it is always likely that one might want at least one more room than is needed by the family. It additionally provides buffer overflow should the pitter-patter of tiny drains on one's resources appear.
In such circumstances renting out a spare room on a longish licence should necessarily reduce rents since now there is an option which is likely to be cheaper. Renting out a spare room for other people visiting ones city should similarly have had a depressive impact on the price of hotels or an improvement in their offering.
Given the inconvenience and reduced amenity one gains from living in a house under multiple occupation there is further no specific reason why it should be the case that this does not more than offset the cash remuneration meaning there is no in principle reason why the capital cost of such a property should increase.
Homeownership rates are almost 66% now in 2024 [1], which is the highest it's been since 2011 [2].
[1] https://www.bankrate.com/homeownership/home-ownership-statis...
[2] https://en.wikipedia.org/wiki/Homeownership_in_the_United_St...
Corporate accountants are sophisticated enough to deal with formulae, and small businesses would be unaffected as the function changes very slowly at small numbers so even an error would likely not materially affect your return.
Calculation of market share would be more problematic.
And of course if you don’t like logarithms then choose your favorite exponential function.
At the companies that would be affected, they would simply divest. Shareholders would not tolerate the destruction of value so new companies would be created, spinning off parts of the original company (products and employees) into new companies.
In fact employment might increase as these new companies would need administrative functions that were previously shared in the larger original company (HR, accounting, etc)
Government can then immediately start "mis"-managing the company to make it less profitable (while theoretical profit stays the same)
You would get for example a government google search and a government adsense department.
I have always wondered how that would apply to software companies though. If you make something that works really well and everyone wants to buy it, you could grow fairly large financially without needing a ton of people if you just focus on that one program that makes you successful. I imagine it's hard to not feel a need to scale up dramatically when you have millions of users/customers asking for new features.
it has absolutely done so in the same way that a bunch of motels springing up in your neighborhood would completely change it and not necessarily for the better
it also greatly constrained the availability of housing for locals, therefore pushing up prices, so that people not living in the city could visit for cheaper; probably ok if you're in the tourism business, otherwise not
What, have a profitable, efficient business with happy customers and workers? Well, we NEED to see growth, so better find a way to cut the operating costs - no matter how much worse it makes the product, how unhappy the workers are, etc. Better try to capture more of the market even if it makes 0 sense in context and will end up being a massive waste of resources.
It may run the business into the ground, but as long as there's a quarter of growth they can't see anything else.
The vast majority of AirBNBs are the entire house or some separate guest cottage. Many are owned and managed by larger companies. Or by people who own multiple houses.
The individual home owner renting out a room so they can cover their mortgage has become more of an outlier.
Americas are a lot bigger than the USA, and the unicorns had a disruptive effect wider still.
I think Uber is probably a net good thing but I also think Uber should be accountable for the laws they broke. Also, Uber, Lyft, Airbnb also did exactly what was expected and increased prices to a ridiculous degree once they became the default standard and went public.
If we, as a society, took this into account we would make it easier to build more housing.
The fact that we don't is the moral, ethical, and economic tragedy of our age.
Though, that’s less often true recently, now that they can’t expense software engineering salaries the same year.
That doesn't mean we shouldn't try, but these are very difficult issues to address.
Before the launch of UberX, the Uber app positioned itself as a convenient way to call a black car/limo and, for drivers, to get some extra business between their "regular" calls. It was a semi-luxury though it only cost a bit more than a yellow cab (I only ever used Uber pre-UberX to get to/from the airport).
Really, other than surge pricing, I don't think Uber innovated very much on the tech side. Their success in disrupting cabs was rather down to flooding the market with supply, oftentimes in ways that flouted the law.
It's an indictment of the VC model where essentially you build a company that hogs all the value for investors. If you think this is a good model, i.e. that investors make better decisions than governments, labor, and the market, then I think you have to reckon with the utter wastefulness that is Uber. A better thing here would have been to just build a ride hailing app for existing cab companies.
i like that phrase. Like black holes' hyper-gravity bending the fabric of space-time..
the article also reminds me of that book "The Limits to Growth" (from the 70ies?)..
But big airports have a taxi line. You stand in it, and you get a taxi.
I flew into Washington DC last week, and it was faster to stand in the taxi line than to call an Uber and wait for it to arrive. On the other hand, it was faster to get an Uber back to the airport when I left than it was to catch a taxi.
And of course, certain cities have decent transit systems. Both Chicago and DC (and hundred of other cities) have transit fare cards you can put in the wallet app on your phone. Some, like DC don't even need an account or download. Just add money with the payment card already stored in your phone and go. The experience is better than Uber - assuming the transit system is any good.
Absolutely nothing would change except for an increase in paperwork and a few more lawyers.
The only downside for buyers of the past? It was a poor neighborhood. All of those multifamily apartment complexes being torn down were full of poor people, mostly dark-skinned, many of them non-English speaking. Now that their landlords spent the past 15 years doing zero maintenance until they could get the buildings condemned and force all of the tenants out without needing to have grounds for eviction, they can sell the land, and it doesn't make any difference if the experience of actually living here gets shitty because of all the parties and not having any neighbors. The buyers don't care because the buyers don't actually live here. The single-night renters don't care because they don't live here, either.
Yes, it's a failure of government policy, but I don't think it's hyperbole to say that AirBnB and its ilk destroyed that community. That is, assuming you define "community" as a group of people and not a group of buildings.
Being private didn't prevent it turning into a monopsony, ironically for the discussion, maybe because its competitors were mostly public companies (and so didn't care enough to do a good job) ?
They are not immune to walled garden issues though (SteamWorks), but maybe their private structure helped enshittification to proceed much slower ?
Not all laws are good. Using the taxi licencing system as a way of extracting tax income is one example of a "not good" law that somehow wormed it way into many societies.
It might never have changed unless an Uber had some along. The taxi licencing scheme has the unfortunate characteristics of being inefficient but not egregiously so, and had put golden handcuffs on a group of people making a valued contribution to society. Those handcuffs were the taxi licences, which became the taxi drivers retirement fund. The taxi drivers always fought any threat to the value of those licences long and hard. Those two characteristics ensured a politician would spend have to spend a immense amount political capital to fix something that had only a modest benefit. It looked like we were doomed to suffer from this tax parasite forever.
But then a seismic shift in technologies came along, and it was not so easy enforce the laws that protected the parasite. The way I remember it the taxi drivers screamed blue murder as their net worth went rapidly to 0, but the reaction from law enforcement was ... muted. I'm sure with a concerted effort the politicians could have made life so difficult for Uber the parasite could have survived. The taxi drivers certainly thought so. But it looked to me like my republics elected officials chose not to spend political capital on doing that. It was almost like they were glad to have an excuse to rid themselves of a parasite.
Now the carnage of the taxi drivers net worth going to zero is over. That aside, most things have got better. With the monopoly broken there are more taxi companies than there were before, taxi availability has become better since you don't need an expensive licence to put one on the road, and prices have dropped.
Sometimes the ends doesn't justify the means, sometimes it does. This looks like the latter to me.
Airbnb demonstrates that there was clearly substantial demand for "house style" hotel rooms but hotels chose not to provide them. In most hotels where a room is $400 a suite with a space to work, watch tv and cook, might be $10,000. The hotel market optimised for the business man travelling alone to conferences and paid a price for it. Even my favourite hotel on earth does not provide an "ordinary menu" for the nights where you just want to curl up with your loved one and watch a film - it's Michelin star dining or bust.
In most hotels the only amenity that a hotel offers that is "better" than the home experience is a swimming pool and daily housekeeping.
Who, but the richest amongst us, has their bed linen changed _every day_?
If hotels had been built as apartments with no zoning restrictions arbitrarily placed upon them there would have been an option for the hotels to adapt by offering their rooms up on a long lease.
1) Guarantee of payment by card
2) Guarantee of receipt
3) Guarantee of going to the right destination
The week before I landed at Dulles and got an Uber. The queue for the taxis was very long, but the wait for Uber was hardly quick either. Last time I took a taxi in DC they refused to take card. That was pre-covid, but why would I take the chance again.
Taxi companies did it to themselves.
I think it will be like Amazons coming doom, death by a thousand cuts. You can have this horrible model that can't handle edge cases and until you burn too many people, it seems to work. But once you have sold fakes, or ruined (or added thousands in expense) vacations to enough people I know, your business is dead to me.
The gp made something up, the second comment affirmed it
I'm calling bs
Because I am human and they are lying on my humanity
Y'all are welcome to disagree with me on it
Look at your local suburban school district's bond: you'll probably see some age-based exemption on paying to get support because old people are by far the most engaged. Is that democratic? In the sense that its based on votes of a voluntary electorate, yes. Is it the representative will? Clearly not! You want to cluster elections around high turnout to maximize representation.
Where do you think the AirBNBs came from? Some people decided to move out, and the people that moved in decided that others would get better use experiencing the property part-time as reflected in market prices. Would you ban them from making this choice? Would you screen every buyer not based on their own assessed price but on ever so shifting "intent"? Would you make the intent they declare at the start binding?
EDIT: I'll bet you $100 to your charity of choice that physical constraints aren't binding in the case you're thinking of (this could be shown by, despite a lax / encouraging planning environment, no one building anything).
Zoning laws are, for the most part, a mistake. Any solution to housing prices that isn't a boost in supply either leads to scarcity or hideous Danwei-style planning that reaches into peoples life plans and the ability to afford a future.
I'm skeptical that national zoning is feasible if for no other reason than the diversity of land and land uses.
"People just submitted it. I don't know why. They 'trust me'. Dumb fucks."
- Mark Zuckerberg (when asked about how he obtained the information for his newly launched social network.)It's a very bad thing for people to invest in a fundamentally depreciating asset and expect a return, there's literally no other way to get a return then besides inflation.
And sure, returns have been low, but that's because the real interest rate in Japan for the last 30 years has been negative! You can't get a return if the fundamental balance of loanable funds leads to a negative real interest rate, you need stimulus instead, which they've been trying for over thirty years! And shocker, now that we're seeing Japanese interest rates rise, Japanese stocks are shooting up!
I have to say this is one of the silliest takes I have ever seen on HN.
You only need to look at the way Gandhi broke the law, the methodology of his disobedience, to see that you cannot possibly make a comparison with Uber that shows them in a good light. It's absurd to draw this comparison.
>Japan does this just fine
You seem to be implying Japan's scenario adequately mirrors the U.S. In other words, they have a high proportion of their net worth tied up in real estate, which is what I am pointing to as a driver of NIMBY-ism. If that analogy doesn't hold, then I would argue it's not an apt analogy and probably doesn't offer much in terms of policy insight.
Also, in the US, I don't think you can argue that real estate in general is a "fundamentally depreciating" asset. I don't think the recent history is illustrative, but over the long term real estate tends to be positive.
Of course in the US there's been huge capital appreciation: housing and shelter went from 10% of CPI in the 60s to 40% of CPI today! Are you going to keep drawing the line and say "yeah, it's totally reasonable for us to continue it to have capital appreciation out-of-line of actual yields when supply and demand are balanced" - like how far is enough for you? 50% of CPI? 60? You're never going to be able to get the real appreciation that we've had over the last 40 years because that'd take us to 160% of CPI!!!
Regardless, all of that is a digression from the original question: does Japan have a similar dynamic where the bulk of household net worth is tied up in real estate? That's central to my claim that people are more protective of the assets tied to their wealth. In other words, we need to be careful about thinking Japan provides an example if there is a different wealth dynamic. It seems like you are trying to have a different conversation.
I agree that it's an easy tax to collect, and I think that's very important.
I fundamentally disagree with the grandparent that holds that we should tax flow rather than holding. That's a handbrake on activity. But I suspect we won't reach agreement as it's a question of personal values. If you think that billionaires are great and we need more of them, then I can see how you'd be in favour of vat.
To be generous so as not to think you just have a problem conceding a point, you seem hung up on the moral argument. I’m not making a moral argument. I’m explaining the how it is, and not making a claim about how it ought to be. FWIW I think it’s stupid that people have 70% of their wealth tied up in a non-liquid asset, but that’s the scenario we’re dealing with. People are incentivized to keep their wealth high, and especially home wealth because it gives them equity to borrow against. Likewise governments like having high property values because it gives them a larger tax base.
So there’s two salient aspects to the point: 1) people have a say in how they are governed in a democracy and 2) people/govts have economic incentives to protect their wealth/tax base. NIMBYism is the convergence of both. So which do you disagree with?
I agree that, insofar as local governments go, NIMBYism is the inevitable convergence of both, and if the story stops there, there's not too many scalable solutions. I guess my point is that NIMBYism need not be the convergence of both in the general case. In CA at least, forming a YIMBY coalition is (obviously) democratic and is formed in response to housing being 40% of CPI (so trying to increase aggregate wealth). The reforms need not cause nominal declines in housing prices! Merely stopping growth is enough to cause real declines.
Regarding "Facemash":
> Zuckerberg faced expulsion and was charged with breaching security, violating copyrights and violating individual privacy. Ultimately the charges were dropped.
Possibly. However you could also see the Uber type market as reducing the need for people to buy cars - threatening their core business, as well as reducing the number of their potential customers and again shifting the power away from them.