Collaborative Consumption Archives — San Francisco Bay Guardian Archive 1966

Uber wants to be the Vegas of gay weddings, only even faster

Sasha Cuttler

June 26, 2014

Uber wants to be the Vegas of gay weddings, only even faster

In their frantic desire to be first with the next big thing and to grab market share by any means necessary, tech companies often act before really thinking through the implications of their ideas. And with its latest idea — facilitating on-the-spot weddings during Pride weekend — rideshare company Uber has finally jumped the shark.

“We’re thankful to be based in San Francisco, a city that recognizes love doesn’t have to look any certain way. In honor of Pride week, we’re celebrating the inclusive idea that love is love with something that lasts a lifetime,” Uber wrote on its blog today in announcing “on-demand weddings.”

That’s right, this Saturday between noon and 6pm, customers using its app can select “UberWEDDING,” the company will send a crew out to marry you and your sweetie on the spot, promising that you’ll be hitched within an hour — or well before your Pride buzz wears off and you regain your senses.

“When your UberWEDDING arrives, we’ll get started right away. You’ll first work with our on-site notary to obtain your marriage license. Once the license is official, the violinist will begin to play and the ceremony will commence!” the company wrote.

So in the name of playing catch-up with Lyft and other competitors — and desperately trying to curry favor with the same-sex marriage crowd in the most superficial and tone-deaf way possible — Uber is turning a big decision that “lasts a lifetime” into an act on par with ordering a pizza when you’re hungry.

Renting isn’t sharing

Michael Redmond

May 20, 2014

steve@sfbg.com

Last week’s two-day Share conference in San Francisco came at an auspicious moment for companies that define themselves as part of the new “sharing economy,” which ranges from peer-to-peer services and products brokered online to various cooperative ventures designed to minimize resource consumption.

Most of these growing companies are part of San Francisco’s technology industry, using web-based interfaces to conduct their economic transactions. And some have been making local enemies and headlines recently by disrupting key aspects of urban life, from Airbnb impacting the housing and hotel markets to Lyft and Uber upending the taxi industry.

In fact, the biggest battle brewing at City Hall these days is over widely watched legislation by Board of Supervisors President David Chiu to regulate and legalize the short-term rentals facilitated by Airbnb and similar companies. And state agencies based in San Francisco are now working on regulations that would affect Lyft and its ilk.

So we decided to listen in as disciples of the sharing economy talked among themselves about the challenges and opportunities facing what they call the “new economy,” one that is at an important crossroads that will determine whether the interests of communities or capital guide its evolution.

CHIU DECLARES WAR

When Chiu took the stage at the Share conference, he was joining a sharing economy community that, he said he would probably be a part of today if he hadn’t gone into public service, citing his own experience with tech startups before running for supervisor.

“I believe we are becoming the capital of the sharing economy,” Chiu said, citing examples of San Francisco’s “ethos of sharing” that include the Summer of Love, Burning Man, and the fact that “we are a community that wants to foster trust among strangers to build what I think is one of the most amazing cities in the entire world. But we’re also a city that is expensive. The rent is too damn high.”

Chiu spoke proudly of San Francisco’s environmentalism and his own legislative contributions to that legacy. And he said “we are a city of innovation,” lauding the technology industry. “We understand that keeping up with the Joneses may not be the way to go,” he said. “In fact, sharing with the Joneses, I think, is the better path.”

In Chiu’s formulation, the sharing economy is the synthesis of all of these values and goals. By using computers and smartphones to facilitate the sharing of goods and services, we use less stuff and consume fewer resources, in the process opening up economic opportunities for more people.

He sounded like the most enthusiastic of sharing economy true believers, but with a couple of caveats, acknowledging how those “pesky taxes” on most of these economic transactions go unpaid, and how Airbnb and similar companies have removed apartments from the housing market for local residents.

“Shareable housing has both helped and exacerbated our housing crisis,” Chiu said, describing how he spent more than a year working on legislation that would regulate and legalize short-term housing rentals in San Francisco, where they are now considered illegal “hotel conversions” (see “Into thin air,” 8/6/13, and dozens of other Guardian stories and blog posts on the issue).

Chiu’s legislation would require Airbnb hosts to register with the city, rent out only their primary residence, and occupy that space for at least 275 days per year (which Chiu has said limits Airbnb hosts to just 90 rental nights per year, although critics dispute that interpretation).

“I thought this was a reasonable solution, but two weeks later there was a major press conference attacking it,” Chiu told Share attendees, referring to the coalition of landlord, neighborhood, labor, and affordable housing groups that have come out against the legislation, calling it a blanket rezoning of residential property around the city, pledging an initiative campaign challenging it.

“In part, this is politics. I’m in the midst of a race for the state Assembly this year, my opponent has supporters who have been protesting the Twitter headquarters, throwing rocks at Google commuter shuttles, vomiting on Yahoo buses, referring to tech workers as not real San Franciscans,” Chiu said.

Then Chiu ramped up his rhetoric, equating progressive concerns about the tax breaks and special treatment that Chiu, Mayor Ed Lee, and others have extended to tech companies in San Francisco with a war on the sharing economy and the forced deportation of its workers.

“They are calling for war on you, even though they don’t realize that what you are doing is helping to make sure we’re addressing our income inequality, we’re empowering everyday people by building community and using technology,” Chiu said. “All of you need to get involved in the political debate. You’re busy trying to change the world, but status quo interests are actively trying to ship you to Menlo Park, Oakland, and San Jose.”

In the end, Chiu did urge those starting up companies to “think early about how your paradigm meshes with existing laws and regulations,” but that tepid call for civic responsibility and good corporate citizenship did little to dull his feeding of techie exceptionalism, fearmongering, or appeals to vaguely libertarian values.

AIRBNB’S BOOSTERS

The pep rally atmosphere of the session got pumped up even more by Airbnb’s Douglas Atkin and venture capitalist Ron Conway, both of whom had nothing but glowing praise for the burgeoning industry and its customers, offering none of the caveats put forth by Chiu or the speaker who followed him, White House staffer Greg Nelson, who talked about the challenging access, equity, and regulatory issues facing the industry.

“We at Airbnb and PEERS think the sharing economy is a jolly good thing,” Atkin said in a charming British accent, presenting the sharing economy as an unstoppable and uniformly positive force that is replacing “the old economy, the last economy.”

As an advertising executive in that old economy, “I was the devil,” Atkin said. Now playing the role of savior, he spoke with an evangelical flair as he flashed Airbnb slides and videos, telling the crowd “there’s been a decentralization of wealth, control, and power” because “you can’t do this new economy without creating community.”

It was easy to forget that Atkin represents a company that Wall Street analysts have valued at $10 billion, despite having a business model that is illegal in many cities, causing some hosts to be evicted and others to evict their tenants, while the company and its investors move quickly to cash out with an initial public stock offering.

Among those who would profit handsomely from that IPO is Conway, a billionaire who already got far richer late last year from being “an early investor in Twitter,” as he described himself to the crowd after being introduced as someone who “has really led the way of connecting the tech industry to the public sector.”

Indeed, Conway spoke proudly of funding the politicians who pushed the package of tax breaks for Twitter and other technology companies that followed it into the mid-Market area, most notably Mayor Ed Lee, the biggest beneficiary of Conway’s largesse among San Francisco politicians.

Conway speaks the language of the technology sector that he’s been sponsoring with angel investments since the early days of the last technology boom, making seemingly common sense appeals that hide his conservative ideology, just as he switched his political party registration from Republican to decline-to-state when he became active in San Francisco politics (see “The Plutocrat,” 11/27/12).

But for the careful listener familiar with San Francisco political history, there were some intriguing revelations in his address that were probably lost on the average techie in attendance that morning.

For example, Conway talked about his role following up his advocacy for the Twitter tax break with behind-the-scenes work helping to craft the business tax reform measure in 2012 — which the Controller’s Office analysis found just happened to give the technology companies that Conway was invested in a substantial tax cut.

“Now all the companies enjoy this,” Conway said in reference to Twitter’s tax break, “because Prop. B was passed a year and half ago.”

He also then admitted that Airbnb owes its phenomenal growth to the widespread economic desperation triggered by the financial collapse of 2008 and an economic recovery that still hasn’t reached the average citizen struggling to cover their housing costs.

“Airbnb, for example, would not be here today if there wasn’t an economic crisis and a recession in 2008 in New York, where people had to decide to rent out a room in their house or I get foreclosed on my mortgage. It was that basic. Airbnb wouldn’t be here today if people all over New York didn’t save their mortgages and start using this product. And then by word of mouth it spread around the world because it is so convenient and so practical,” Conway said.

Conway is conservative on financial issues, but more moderate on social issues, and he talked about his advocacy work on gun control and immigration reform. Yet even on those issues, where it is almost exclusively Republicans who are blocking the changes Conway says he wants, he turns the gridlock into an anti-government argument.

“We need term limits in Congress,” the former Republican said, citing a standard conservative trope that got a big applause from the Share conference crowd.

Finally, he elevated the current struggles in San Francisco over the sharing economy into key battles that will shape the future of the new economy.

“This [Airbnb] legislation that David Chiu has proposed, which in the next few months will go to the Board of Supervisors is crucial legislation the whole country will watch,” Conway said, calling for everyone in the crowd to get involved and lobby their supervisors. “David Chiu needs help. This would not pass if it went to a vote today, it wouldn’t come close to passing. So we have to change this. We want to do on the local level what we have to do on the national level: Organize and conquer!”

ACCESS AND EQUITY

After Conway came an intriguing panel discussion about equity and environmental issues with Nikki Silvestri of Green for All, Vien Truong with the Greenlining Institute, and Adam Werbach, the former Sierra Club executive director who started the stuff-sharing company Yertle.

It was moderated by GreenBiz.com editor Joel Makower, who cited information from the previous day’s sessions about how it’s mostly middle class white people who use the sharing economy. “The reality is it’s not that inclusive,” he said, and all his guests agreed and talked about the need to broaden its benefits.

“How do you marry the economy with people?” Truong said as she discussed that challenge. And it’s an urgent need, as Werbach said while answering a question about how the sharing economy could help bring about a new kind of environmentalism aimed at producing and consuming less stuff.

“What’s wrong with the old environmentalism is we’re not achieving our mission. Climate change is what’s wrong with the old environmentalism,” he said.

Werbach cited the goal of replacing about a quarter of the things we now buy with shared goods, even though Amazon and other companies have made it easier than ever to have new products shipped around the world: “It is cheaper, faster, and easier to get something new than to get something used from right next door.”

But Silvestri said the limited participation in the sharing economy makes it difficult to see it as the solution yet, calling for the sharing economy to address access and equity issues, something that marginalized groups would respond to if it was based on true values of sharing.

“Coming from my own background, African Americans had to share because white people wasn’t giving us nothing,” she said. By that same measure, she also said that low-income people feel wary of being taken advantage of by sharing companies and customers: “When you’re in survival mode, you’re wary of people taking from you.”

That’s one reason why Silvestri said that black communities are slower to adopt sharing with strangers, whether it be their homes or cars, something that could be overcome with more personalized outreach: “If I look you in the eye, you might not come take my shit.”

She said that for all the talk at the conference about “community,” the community of strangers that makes up the sharing economy isn’t a true community, something that needs to change to realize the lofty goals that many espouse.

“The sharing economy is new enough that if we figure out this problem early then all of us can actually participate,” Silvestri said.

Werbach agreed, saying the sharing economy has great potential, but only if it makes the right moves now. “This is the beginning of a movement, but the people aren’t here yet,” he said. “We’re at the very beginning of this story.”

He defines the struggle of the moment as one between human and economic values, hoping the sharing economy’s customers will determine its values: “There is an interesting wild west movement now. We need people to do the recruiting so Wall Street doesn’t do the recruiting.”

STRAIGHT TALK

The closing plenary session at Share illustrated the divergent attitudes and goals that mark the sharing economy, in which some members feel a collective responsibility to meet important societal goals, while others seem more interested in just making money and mouthing the rhetoric of sharing.

New York University economics professor Arun Sandararajan, who runs the Collaborative Economy Project that studies and promotes the sharing economy, said it has the potential to develop in ways that will either exacerbate or reduce the income inequality that has become such a growing public policy concern.

Sandararajan expressed hopes that the sharing economy could increase the economic growth rate and lower the wealth gap by broadening access to capital and opportunities for entrepreneurship. But he also argued that the sharing economy has the potential to change the terms of the debate by giving more people access to goods and services than their incomes might otherwise allow.

“We have to go beyond measuring inequality in terms of income and wealth,” he said, offering a conception likely to appeal to the wealthy, but probably not those struggling to get by, even if they were able to get more hand-me-downs through Yerdle or odd jobs through TaskRabbit.

Others on the panel illustrated the dichotomy between do-gooders and profit-seekers more clearly, showing how broadly those in the sharing economy are trying to define it these days.

Jose Quinonez runs the nonprofit Mission Asset Fund, a nonprofit on Valencia Street that assists with peer-to-peer microlending, an amazing program that seemed to have little in common with the investor-backed companies that dominated the agenda. “I didn’t know I was part of the sharing economy until today,” he told the crowd.

In an earlier session, Quinonez called out the self-congratulatory tone by some boosters. “As we talk about the word inclusive it’s very easy to forget the people not invited to the party…We have to make sure we’re not making an exclusive sharing economy.”

Next came Denise Cheng, an academic who has been studying the sharing economy for the MIT Center for Civic Media, and she had perhaps the most poignant and insightful answer to the question the conference posed about what will best catalyze the sharing economy.

“Straight talk will catalyze the sharing economy,” Cheng said.

She discussed how the broad label of the sharing economy gets claimed by everyone from small idealists who truly want to promote the idea of sharing to self-interested corporations who use the label for political cover and really mean “renting.”

“When we say sharing economy, we actually mean a lot of things,” she said. “Companies that adopt the sharing economy label are not necessarily adopting the values of the sharing economy.”

Compounding that deception is the fact that companies like Lyft, Uber, and Airbnb are profiting from business models that are often illegal on the local level, but doing little to help drivers or hosts who get in trouble with local authorities: “When someone has to answer on the local level, it’s the providers who are on the front line.”

There was a very different tone and message that came from the subsequent guests to join the panel, who shamelessly promoted their companies and didn’t seem to take heed of Cheng’s call for straight talk.

“Sharing cars is how we can catalyze the sharing economy,” Jessica Scorpio, wearing a T-shirt of the car-sharing company she helped found, Getaround. She called car-sharing “a gateway drug to the sharing economy,” noting that car-sharing customers often go on to use other sharing economy products and services.

“Sharing cars is transforming the fundamentals of our transportation system,” Scorpio said, claiming that each shared car takes up to 32 cars off the road, a figure that doesn’t square with the body of peer-reviewed research on the subject, which places the actual number at nine to 13 cars.

Hyperbole and exaggeration are common among the biggest boosters of sharing economy companies, as are the sins of omission and misdirection — all of which are perhaps what prompted Chang’s “straight talk” prescription.

Sunil Paul, co-founder and CEO of the ridesharing company Sidecar, gave a long and detailed presentation on the supposedly ambiguous definition of “commercial transactions,” calling for what he called a “safe harbor” for sharing activities, without once mentioning the word that he was actually talking about and dancing around: taxes.

“There are certain activities that should be beyond the commercial reach of government,” Paul said, describing his clients who drive customers around the city like taxi drivers less than full time. “We need a safe harbor for sharing that protects these activities from being considered commercial.”

Paul said that Sidecar and other sharing economy companies have “blurred the line between what is personal and what is commercial,” comparing the activities his company facilitates to carpooling and arguing that people should be able to cover the annual cost of driving, say around $10,000, without it being considered a commercial activity (i.e. a taxable transaction).

“As long as you don’t make a profit from it, it’s not a commercial transaction,” Paul said, redefining the very concept of commercial.

And remember, this is a company that is already having a profound impact on the regulated taxi industry — of which Sandararajan said, “I think the taxi service as we know it will largely cease to exist in a few years” — just as other sharing economy companies steal market share from other industries, as Airbnb is doing to the hotel industry, also while avoiding taxes on those transactions.

FROM TALK TO ACTION

“One of the things we like to do in the sharing economy is talk about the sharing economy — a lot!” Jesse Biroscak, an Airbnb host and founder of BayShare, said during a session at Share entitled “Shareable Cities: From Concept to Action.”

It was the first thing I heard upon arriving at the conference, but I already knew it was true after covering this movement over the last couple years, a point that was emphasized strongly by the excited evangelism that I heard again and again over the next 24 hours.

But for all the talk that those in the so-called sharing economy do about the sharing economy, there is often a deliberate vagueness to it that tries to mask its many contradictions and paradoxes.

Its biggest proponents are anxious to go big — defined by a strange mix of idealism (for environmentalism, libertarianism, economic and social equity, and an odd and often contradictory assortment of other goals) and the desire to cash in on the new gold rush — before the opportunities slip away (thanks to competitors, government regulators, or an economic downturn).

“I’m tired of talking about it, I want to do things,” said Biroscak, a regular Airbnb host from San Francisco, without ever really defining the things he wants to do.

BayShare also seems to have a vagueness of purpose, defining itself on its slick website as “an organization whose mission is to make the Bay Area the best place on the planet for sharing. As this movement grows, BayShare will explore how city stakeholders and the sharing community can work together to help the Sharing Economy flourish in the Bay Area to benefit the city, businesses, and communities. The organization looks to be a resource for the Mayor’s Working Group on the Sharing Economy.”

But that working group, which Mayor Ed Lee announced when Treasurer Jose Cisneros was holding hearings two years ago to determine whether Airbnb and other companies should pay the city’s transient occupancy tax, never actually convened. It was simply a stall tactic that evaporated after Cisneros ruled that the tax was indeed owed.

Still, BayShare lists many of the biggest sharing economy companies among its “members,” including Airbnb, RelayRides, Lyft, Yerdle, Vayable, City Car Share, Suppershare, and Get My Boat. Biroscak described the advocacy work that he and BayShare do, work that he urged all of the attendees to get involved with, so that public agencies understand and support this growing economic sector.

“This is called lobbying, and that’s okay. Lobbying is not a dirty word,” Biroscak told the crowd.

Lobbying may not be a dirty word, but it is a regulated activity in San Francisco and other cities, and neither Biroscak nor BayShare are registered lobbyists with the San Francisco Ethics Commission, which they should be if they are indeed lobbying.

Biroscak even boasted of a partnership with the San Francisco Department of Emergency Management that BayShare secured last year on behalf of its member companies to provide their services to local residents in the event of an emergency.

“The sharing economy was born here, and partnering with BayShare, we are committed to ensuring that San Francisco supports this emerging sector’s success and nurturing even greater civic involvement,” Mayor Ed Lee said last June in a press release announcing the partnership, while Chiu said, “I’m confident that BayShare will improve the communication between this emerging sector and local government as ‘collaborative consumption’ evolves and grows in San Francisco.”

But when we reached Biroscak by phone, he said that BayShare doesn’t really have any agreements with the city, and that it doesn’t actually represent its “member” companies or get any money from them. And he said BayShare “definitely does not consider itself a lobbying organization,” instead defining it more vaguely as “a convener and facilitator.”

But as a self-styled spokesperson for the movement — “I try to speak for the San Francisco sharing economy as an industry,” he said at the conference — Biroscak issued a call to action to a crowd that mostly seemed to be puttering on their electronic devices and only half paying attention: “We need to stand up for what we want, but we want to do it in a coordinated way.”

Joe Fitzgerald Rodriguez contributed to this report.

Local journalists starting to catch onto Airbnb’s subversion of SF’s rental market

Sasha Cuttler

January 22, 2014

Local journalists starting to catch onto Airbnb’s subversion of SF’s rental market

Airbnb and other so-called “shared housing” sites allow hundreds of rent-controlled apartments in San Francisco to be essentially removed from the housing market, part of a concern that has caught populist fire recently with protesters and politicians pledging to do something about evictions and displacement.

Yet I’ve been one of the few local journalists to hound Airbnb over its illegal business model and refusal to pay nearly $2 million per year in transient occupancy taxes that it owes the city. But that may be beginning to change, as pair of mainstream local publications in the last week have cautiously waded into what outside journalists from Time magazine (which specifically mentioned my reporting on the issue) to German public television have already seen as a big and important issue.

The San Francisco Chronicle today has a story about a lawsuit from a tenant subjected to an owner-move-in eviction, with said owners then turning around to rent units in the building out through Airbnb. And San Francisco Magazine also mentioned Airbnb in its controversial article criticizing concerns over evictions.

“Isn’t it far more likely that more units are being lost [from the rental market] through Airbnb?” the magazine quoted a UC Berkeley professor as saying, comparing Airbnb to Ellis Act evictions. Hey, SF Mag, don’t you think that’s a good question that might be worth exploring?

Janan New, executive director of the San Francisco Apartment Association, told me this week that she found 1,100 rent-controlled San Francisco apartments listed on Airbnb — almost all of it in violation of local tenant and zoning laws — a fact that she personally conveyed to Mayor Ed Lee, who supports Airbnb, shares a funding source with the company (venture capitalist Ron Conway), and has been dismissive of the issue.

“They need to enforce the law like they do in New York City,” New told us, referring to a city that has cracked down on Airbnb’s subversion of its rent control laws. She’s lobbied City Hall, documented the problem, and threatened to sue the city: “I’ve done everything I can possibly think of.”

Meanwhile, Board of Supervisors President David Chiu has been negotiating with Airbnb for almost a year on legislation that would attempt to legalize and regulate its activities here in San Francisco, telling us “it has been difficult to corral the different stakeholders to get on the same page” and no longer offering any predictions when it might be complete.

I was already working on a story about Airbnb (which still won’t respond to my inquiries) for our next issue [UPDATE: It looks like I’ll hold that story for our Feb. 5 issue], so I’ll have more to say about this then. And in the meantime, here’s my latest message to the Mayor’s Office of Communications trying to get some kind of response to this issue, which it has ignored for the last 24 hours:

“I’m about to write about the rampant illegal behavior by Airbnb customers again, which seems increasingly relevant to the “affordability agenda” that Mayor Lee is touting, so I wanted to check in to see whether the mayor is still offering his unqualified support to this company, despite its violations of local housing, zoning, and planning laws and refusal to collect and pay the transient occupancy tax.

“Janan New with the SF Apartment Association says she’s raised this directly with Mayor Lee, including informing him recently that more than 1,100 rent-controlled apartments in San Francisco are listed on Airbnb, all in violation of local law, and she’s frustrated that he’s unwilling to enforce the law, as New York City has been doing. Meanwhile, the Airbnb legislation that David Chiu has been working on for the last year is hopelessly stalled, at least partly because Airbnb has the mayor’s support and is unwilling to compromise while it’s making some much profits off of its illegal behavior in San Francisco.

“A recent San Francisco Magazine article (http://www.modernluxury.com/san-francisco/story/the-eviction-crisis-wasnt) even quotes a UC Berkeley professor saying that Airbnb is likely taking more rent-controlled units off the market than the Ellis Act. Considering the mayor is pursuing Ellis Act reform, why does he continue to ignore the impact that Airbnb is having on the city?”

Into thin air

Sasha Cuttler

August 6, 2013

By Steven T. Jones and Parker Yesko

Airbnb is an audacious corporation, particularly in San Francisco, the city where it’s headquartered and where its business model works best. This city is tech-savvy and popular with tourists, but hotels here are expensive, while rent-controlled apartments are still affordable, creating a strong incentive to rent those rooms at a profit through Airbnb.

The problem is that its business model is basically illegal. Its users violate five different sections of laws in San Francisco, from planning codes to tax laws to rent control. Disrupting complex regulatory systems developed over decades, Airbnb has managed to unite traditional adversaries against it: both the Hotel Council of San Francisco and the hotel workers of UNITE-HERE Local 2, both the landlords from the San Francisco Apartment Association and the renters from the San Francisco Tenants Union.

But Airbnb and its young founders just don’t seem to give a fuck about any of that. Sure, most of its hosts in San Francisco are violating their leases and land use laws, and a string of them have gotten evicted as a result. But Airbnb is rolling in cash, with Forbes now valuing the company in the billions, with a B, thanks to the double-digit percentage it takes from every transaction, low overheard costs, and venture capitalists who can’t seem to throw enough money at the company.

When the San Francisco Tax Collector’s Office last year held hearings on whether Airbnb and similar companies must collect the city’s transient occupancy tax (TOT), the surcharge of up to 16 percent that hotels charge to guests, the company rallied dozens of its local hosts to oppose the taxation and even enlisted the support of Mayor Ed Lee, who shares a financial benefactor with Airbnb: venture capitalist Ron Conway.

It wasn’t enough to overcome the clarity of city tax laws and the equity arguments made by the hotels, and the city ruled that Airbnb and/or its hosts are responsible for collecting the TOT. So what did the company do? Nothing. It just kept making money and stiffing the city, and when the Guardian wrote about how it appears to be shirking that annual tax bill of nearly $2 million (see “Airbnb isn’t sharing,” 3/19/13), the company and its consultants simply refused to answer our calls or questions — then and now, for months.

As this story was going to press, the company did finally send us a prepared statement that was more self-promotional than responsive to our questions, but it included the line, “Airbnb is committed to working with the City on policies that make San Francisco stronger, promote innovation, and ensure the sharing economy continues to grow.”

Really, you almost have to admire these guys’ chutzpah. Except for the fact that Airbnb and similar companies — VRBO, Roomorama, HomeAway, countless new upstarts, as well the DIY option of Craigslist — are exacerbating the city’s housing crisis by taking thousands of apartments off the rental market, driving up rents, and causing evictions in the process.

Board of Supervisors President David Chiu stepped in to mediate this mess early this year, trying to create legislation that would legalize and regulate the activities of Airbnb and other so-called “shareable housing” companies. But hopes of introducing something in the spring turned into a goal of midsummer, then by the August recess, and now sometime this fall, hopefully.

In the meantime, the money keeps rolling into Airbnb, complaints against it mount (here and in other big cities), its tax bill goes unpaid, and the landlords and tenants, the hoteliers and the workers, are all left to wonder why the city can’t or won’t enforce its own laws.

CHIU’S CHALLENGE

Chiu may have met his match with Airbnb. He has forged compromises on some of the toughest legislative challenges that City Hall has wrestled with this year — including condo conversions, CEQA reform, and the CPMC hospital deal — each time finding the acceptable middle ground between the progressive and moderate supervisors and constituencies.

His approach to this one sounds similarly centrist, with Chiu supporting the concept of shareable housing but understanding the myriad problems that Airbnb is presenting in complex cities. He neither sounds Lee’s unqualified boosterism of Airbnb nor does he fret about its impact on the housing market as much as its critics.

“I do not think shareable housing is either the cause or the solution to the housing crisis,” Chiu told us.

He’s striving for something between New York City’s total ban on tenants renting out their apartments while they’re away and the laissez faire approach of other big tourist cities. He sees some merit in Chicago’s requirement that Airbnb hosts register with the city to regulate it, but that’s not quite what he wants to do either.

“It’s a much less materialistic way to live and that’s a good thing,” Chiu said of the basic shareable economy concept of making more efficient use of existing resources, whether it be housing, cars, or consumer goods.

But he’s equally clear in identifying the problems and overhyped claims, acknowledging that “it takes away housing from permanent residents, driving up the cost of housing.”

While he says it’s good to spread visiting tourists and their money around the city — a regular claim of Airbnb and its advocates — that also creates problems when apartments become virtual hotel rooms, disturbing neighbors and upsetting the dynamics of landlord-tenant relations.

“Shareable housing is used and abused in ways that displace permanent San Francisco residents,” Chiu said. “Those are the excesses that need to be reined in, in a serious way.”

So he’s trying to create legislation that will set fair and clear standards, ensure compliance with city laws, improve the city’s enforcement of those laws, and generate “tax revenues to cover the city’s expenses in hosting hundreds of thousands, if not millions, of visitors every year.”

But Airbnb has only complicated Chiu’s goals and his reputation as the legislator who solves tough problems, largely because knowledgeable sources tell us the company has been unwilling to really compromise — perhaps emboldened by support from the Mayor’s Office and the city’s apparent impotence to enforce its own rulings — and is dragging out the negotiations.

Chiu wouldn’t comment on that, but he did acknowledge that these negotiations have been difficult. How can you allow renters to make a little extra money while recognizing the rights and concerns of their landlords and neighbors? How can you protect rent control and still allow tenants to profit from their units? Can you prevent landlords from using Airbnb or VRBO to bypass rent control? If you create a registry to ensure only permanent residents are playing host, what’s to stop landlords from using that list to evict those on it?

“We want to carve out a reasonable opportunity for people to do this,” Chiu said. “This is tough partly because of these complexities, and the laws are on the books for a reason….The more we pull these strings, the more this unravels.”

LANDLORDS AND TENANTS TOGETHER

San Francisco Tenants Union Executive Director Ted Gullicksen has been involved with the Chiu-Airbnb negotiations — from which he hopes to strengthen enforcement of rent control and apartment conversion laws while still allowing limited use of shareable housing sites by tenants — and he told us, “It turned out to be a very slow process.”

“Airbnb has just been balking and wanting more and more,” Gullicksen told us. “This process has been frustrating, but Chiu has hung in there.”

Gullicksen said the goal has been to limit short-term hosting to fewer than 90 days in a 12-month period, with only permanent city residents allowed to host, but Airbnb wants people to be able to rent out their apartments for eight months. And Gullicksen said he wants to see tenant laws and the rental stock protected from conversion to vacation rentals.

“We’re most concerned about the impact on the housing stock and evictions, because there’s so many of these…We have entire buildings that have been on the tourist market for years,” Gullicksen said. “It added a huge new way to remove units from the rental market.”

Gullicksen said that conversions of apartments became an even bigger problem than conversions to condos when the financial crisis hit in 2008, and that could become an even bigger problem now that the condo conversion lottery has been suspended for 10 years under legislation approved earlier this year (“Supervisors approve condo legislation,” Politics blog, 6/11/13).

In fact, he said that there has been a rash of unusual Ellis Act evictions in recent months, with buildings that have six or more units being cleared of tenants even though they are ineligible for condo conversions, raising suspicions that they’re being used for vacation rentals.

Hotel Council Executive Director Kevin Carroll told us Airbnb and similar companies should be paying the TOT, as the city ruled, and he doesn’t understand how they’ve gotten away with it for so long.

“A visitor to San Francisco, whether they are staying with Airbnb or a hotel, they’re using city services,” he told the Guardian, dismissing the arguments that shareable housing companies should be treated differently. “They do compete with hotels.”

Janan New, executive director of the San Francisco Apartment Association, expressed frustration that city officials have let this situation drag on as long as it has.

“I don’t know why [Tax Collector Jose] Cisneros isn’t collecting the tax. I don’t understand it,” New told us. “They certainly have the money.”

Cisneros told us that his office has the power to audit companies, “and we can bring taxpayers into courts of law,” but because of taxpayer privacy laws, he can’t discuss what’s happening with Airbnb.

“I cannot confirm or deny or discuss what is or isn’t being done,” Cisneros said, even refusing to offer an off-the-record assurance that something is being done to back up his ruling last year and address the perception that companies are free to flout his authority with impunity.

Attorney James Parrinello, representing SFAA and Coalition for Better Housing, sent a letter to top city officials on Jan. 14 “to discuss the fast-growing practice of illegal short-term/transient rentals for profit and request the City take immediate action to address the problem.”

New said they never got a response, although she tells us, “We did have a candid dialogue with [Chiu] six months ago.”

“All of these tenants in San Francisco are using their units as pieds-a-terre for out-of-town tourists and they’re doing it in ways that jeopardize their rent control status and the safety of their neighbors,” New said.

She told stories of visitors being loud, disrespectful, even committing an assault. She said one tenant placed a lockbox on his door to facilitate a rotating series of guests, while another rented out a second apartment in his building exclusively for Airbnb guests.

And she confirmed that her association has worked with landlords to search Airbnb and other sites to identify tenants who are illegally renting out their apartments and to serve them with three-day “notice to quit” warnings, otherwise they would be evicted.

“Under rent control, some tenants are making more money than they pay in rent,” New said, noting that landlords are essentially underwriting the rentals. “It’s stealing.”

Gullicksen expressed concerns that landlords are doing that kind of research to try to evict tenants, but he said the Tenants Union is doing similar research to ferret out landlords who are using these services to illegally turn apartments where evictions have taken place into vacation rentals and de facto hotels, focused mostly on VRBO because “they have a greater landlord emphasis.”

“The homes that we’re talking about are owned by the person that’s renting them out. It’s not people that are basically subletting their homes,” VRBO spokesperson Victor Wang told us, refusing to comment on local apartment conversion laws or other issues specific to San Francisco.

Chiu told us he takes the rent control issues seriously: “Our rent control laws are in place for very important reasons and we need to make sure it stays affordable.”

DISAPPEARING APARTMENTS

In a city experiencing what politicians and activists of all stripes have called a “housing crisis,” it might come as a surprise that US Census numbers indicate 8.3 percent of San Francisco’s rental stock was vacant in 2010 — about 31,000 units — up from 4.9 percent a decade earlier.

Scott James, homeowner and small-time landlord advocate, would have us believe that rent control is to blame, arguing in a recent New York Times op-ed (“King of My Castle? Yeah, Right,” 6/11/13) that “San Francisco’s anti-landlord housing laws and political climate make [renting] untenable.”

Faced with a bad tenant at his home in the Castro, James said he “joined the ranks of thousands of other small-time landlords here who will never rent again, adding to the city’s housing shortage.”

Yet the San Francisco Rent Ordinance confers broad authority to evict tenants for a plethora of “just causes,” including late payments, breach of lease (such as, ahem, illegal subletting), nuisance or damage to property, and owner move-in. Since the law dates back to 1979, it probably doesn’t explain the steep rise in vacancies. And with evictions now hitting an 11-year high, it’s hard to paint landlords as helpless victims.

San Francisco Rent Board Executive Director Delene Wolf told us the eviction rate has actually mimicked bullishness in the real estate market rather than beefier tenant regulations. She said it “really spiked around the dot-com years, for obvious reasons went way down during the recession, and it’s back up now because the market heated up.”

Some embittered landlords may indeed live atop empty units for decades but, given a median rental price of $2,764 per month for a one-bedroom unit, there’s an enormous opportunity cost to being disgruntled.

But perhaps that’s what “shareable housing” is really about: getting around the rules to make some money. Short-term rentals have become so lucrative that it’s financially possible, and easier than ever, for a homeowner to exit the long-term rental market for good.

Airbnb is so unregulated that even a homeowner who has used the Ellis Act to supposedly get out of the rental business could easily and anonymously monetize an officially vacant space for higher profit margins and with less oversight as a “vacation” rental.

Annette Fajardo has made clients out of people like James. She started her business, SF Holiday Rentals, just after the first dot-com boom, when she began managing short-term rentals in the homes of her friends. When she had nine properties in her roster, the business became a full-time job.

Over the last decade, demand for her management services has increased so much that she says she’s now “very picky about who she works with.”

Fajardo currently manages more than 40 furnished units that guests can book on her own website, as well as Airbnb, Roomorama, VRBO, HomeAway, Trip Advisor, and Craigslist. Her clients are all owners offering full homes or apartments and all the units she manages have been permanently withdrawn from the long-term rental market.

Quite often, her guests stay for a month or longer. Some are international tourists, but the majority are new corporate transplants to San Francisco. The demand for units like hers keeps growing: She gets 100 inquiries on her properties each day, about half from Airbnb.

“There’s always been corporate furnished rentals,” Fajardo told us in the dining room of a Castro flat that she lists for $350 per night on Airbnb. “That market has always been there. It’s just that there’s so much more business now. We got Google, Apple — you’ve got the busses running here all the time. I get Google people all the time and they spend big bucks.”

And she’s been through it all — battles with the tax collector in three municipalities, catastrophic fires in two properties, fraudulent guests, drunk guests, pornographers, and, worst of all, meddlesome neighbors.

“Your neighbors are a problem,” Fajardo emphasized. “In the Castro, you have to do a 30 night minimum cause the neighbors fink on you.” And when they do, the Planning Department can step in. They “send a letter stating the residential code and to cease and desist. If you don’t stop less than 30 night rentals, then they can fine you.”

COMPLEX LAWS, SIMPLE SITE

City tax and zoning laws ban apartment rentals of less than 30 days, labeling it “illegal hotelling.” Dwellings in residential areas repurposed as tourist housing have, in the eyes of the Planning Department, essentially been commercialized without proper permitting or payment of the TOT.

Rentals for more than 30 days aren’t regulated as commercial properties, but the tenants in those homes have rights under the 1979 rent ordinance, which protects any tenant who, according to Rent Board spokesperson Robert Collins, “pays rent and inhabits a unit for two days. You don’t have to sign a lease to be a tenant — you just have to pay rent and occupy the unit.”

This presents a number of challenges to both tenant- and owner-hosts. Tenants who gouge tourists on nightly rates are often in violation of a rent ordinance ban on “charging upon additional occupancy more than the rent that the tenant pays to the owner,” explained Collins.

Tenants who rent out their apartment for a few days can even lose their rights to reclaim their homes. Collins cited multiple cases where subletters refused to leave and returning tenants had little legal recourse because “they would not have a just cause to evict the subtenant because, if they’ve rented the entire unit, they aren’t themselves a resident in the unit.”

Owners who offer their units on Airbnb assume the same risk of unwanted, long-term guests. But they hedge against it by charging exorbitant nightly, weekly, and even monthly rates. On the off chance that a guest does demand a lasting lease, Fajardo reasons, “if I’m getting $5,500 a month for a two-bedroom, you can stay for the next 10 years.”

Fajardo knows where laws limit her opportunity for gain and to remain within their bounds. But most hosts, the ones Airbnb advertises as offering “unused space to pay your bills or fund your next vacation,” aren’t running a sophisticated business. And Airbnb offers them little help or support.

Airbnb just lists the rentals then mediates the payments. And the company collects revenue at both ends of transactions, charging guests a 6-12 percent service fee upon booking then taking another 3 percent before remitting payment to hosts.

Anyone can create a guest or host profile and Airbnb conducts no user verification, although both can leave online reviews. “We do not attempt to confirm, and do not confirm, any Member’s purported identity,” Airbnb states in its terms of service. “You are responsible for determining the identity and suitability of others.”

The company advertises a $1 million “Host Guarantee” backed by Lloyd’s of London, but warns that it “should not be considered as a replacement or stand-in for homeowners or renters insurance. The Host Guarantee does not cover: cash and securities, collectibles, rare artwork, jewelry, pets, personal liability.”

The site also does not vet the content of property listings for legality. Hosts can set their rates and even add on a cleaning fee or refundable security deposit, but it offers no functionality for hosts to itemize and collect the TOT, now more than a year after San Francisco required that it be collected.

Tax issues are only vaguely addressed in an FAQ section for hosts, noting that “some hosts are required by their locality to charge a tax.” Hosts ambitious enough to attempt compliance must essentially become amateur tax specialists. Few, however, have the experience to decipher the code correctly and even fewer are likely to seek it out in the first place.

A search for the word “tax” across the site’s roughly 4,750 San Francisco listings yielded a mere 174 hits and myriad approaches to the issue. Several hosts mentioned collecting the TOT in cash on arrival or required credit card information in advance — a clear incursion into the secure nature of the transaction. A host named Jesse with 85 listings told the Guardian that he just rolls the TOT up into his daily rates, despite the city’s requirement that it be listed separately.

Fajardo isn’t alone in creating a full-time business of short-term apartment rentals. Casa Buena Vista Rental lists 76 properties on its website, many of which overlap with Jesse’s 85 Airbnb listings. A host named Bernat has 48 listings that also appear on Come2SF.com. Gaylord Suites, a Tenderloin apartment complex, markets at least seven different apartments in the same building on the site.

Fajardo said she’s pushed Airbnb for a dedicated TOT field “until [she’s] been blue in the face,” but she feels strongly that the company should not be held responsible for the collection of tax itself. “It’s not their burden,” Fajardo argues in defense of Airbnb. “They’re a booking agent. They funnel the money and they expect you to do the taxes.”

OTHERS CAN DO IT

The New York- and Singapore-based Roomorama was founded in 2009 and has a nearly identical payment model to Airbnb’s. But it has a formal host verification process and a higher price point that CEO Jia En Teo told us helps to filter out bad guests.

“Our host verification is very tight,” explained Teo. “When a host is listed on our site, they don’t go live immediately. They go through a quality control and validation process. We have a team that will call the host and ask for utility bills and ID. We do due diligence.”

Teo said a TOT field has been included in Roomorama’s price template from the beginning since the vast majority of the site’s listings are “professionally managed properties, people that are actually licensed to run short-term rentals. They’d already been paying and collecting these taxes….One of the first things that was requested was a way to collect.”

Teo also said that if Roomorama, as an operator, was deemed responsible for collection and remittance of taxes, it wouldn’t be “difficult from a logistical standpoint. It would add more work to our load but, to be honest, most of it is automated anyway. Once we put in the mandatory tax field, it would simply be paid the same way a consumer pays when they eat at a restaurant.”

She’s unsure why Airbnb has been so reluctant to address the tax issue head on, but “if I could venture a guess,” she said. “I’m guessing it’s because they work more with the occasional host, and that makes their value proposition a little bit less appealing.”

Other industry competitors include Craigslist and VRBO, both founded in 1996, and VRBO’s parent company, HomeAway. All three share a similar business model and one that’s considerably different from Airbnb’s — they are not financial gatekeepers in the transaction between guest and host. At their essence, these sites are little more than digital classified ads.

No competitor comes close to the market share that Airbnb has captured in San Francisco and globally. In New York, Roomorama has 2,688 listings compared with Airbnb’s 25,724, despite its questionable legality there. In San Francisco, Roomorama hosts 303 properties and VRBO features 1,123 — and Airbnb has about 4,750 throughout the city.

Airbnb’s statement to us touted that financial impact: “We are proud of the $56 million that Airbnb’s users generated for the San Francisco economy last year. The vast majority of Airbnb hosts share the home where they live, and more than half directly use their Airbnb income to pay their rent or mortgage.”

THE CITY’S SHARE

When the San Francisco Tax Collector’s Office discussed the matter last year and issued “Tax Collector Regulation 2012-1: Tax on Transient Occupancy — Multiple Party Transactions; Occupancy of Private Residences,” it made clear Airbnb should be collecting the tax as it processes the transactions.

“A website company, or any other person acting as merchant of record who receives rent in connection with an occupancy transaction, is an ‘operator’ who is responsible for collecting the TOT owed by the occupant and for remitting the TOT to the City. Any person receiving such rent shall provide a receipt to the occupant. Such receipt shall include a separate line item specifically identifying the TOT,” reads the regulation.

While it’s also true that the city tax codes make Airbnb and its hosts jointly liable for the tax debt — which the company’s apologists have used to accuse the Guardian of unfairly picking on the company in an avalanche of online comments —it would be a regulatory nightmare for the city to go after thousands of individual hosts, most of them small-time tenants who don’t even have business licenses.

Fajardo is diligent about compliance, but she can afford to be. She works with a team that includes assistants and an accountant and she does it full-time. She is not the casual homeowner supplementing her income (and it’s unlikely many of her clients are either) — she is an entrepreneur. And even she admits to having found the TOT difficult to interpret.

Fajardo contacted the Guardian in June in response to our coverage of Airbnb, citing the city’s complicated tax system and the difficulty that small users have in paying the TOT, which has varying fees tacked onto the base rate of 14 percent. (Although she also wrote, “We collect and pay sometimes as much as $10,000-20,000 per quarter.”)

“Don’t blame Airbnb, blame the SF Tax Collector for a shoddy website, incompetent workers, and their inability or lack of desire to chase individual lessors. It is not the responsibility of Airbnb to collect taxes; it is the responsibility of the lessor to collect the taxes, just like a hotel,” Fajardo wrote.

It’s certainly true that TOT rates aren’t simple — the 14 percent base rate gets another 1.5-2 percent tacked on it, depending on where the host is located, to fund the Tourism Improvement District proposed by hotels and approved by the city. (That fee just went up again July 1 to fund an expansion of the Moscone Convention Center.) The TOT also isn’t simple for Airbnb hosts to collect and pay.

We forwarded Fajardo’s criticisms and concerns to Greg Kato, the policy and legislative director for the Tax Collector’s Office. He acknowledged that the system is complicated — particularly for Airbnb hosts who aren’t legally allowed to operate as a hotel — but he said they try to simplify it as much as possible.

To pay taxes, a business first needs to register with the city by paying a $26 fee and filling out an application, which includes a line indicating whether transient occupancy is part of the business. “There are few, if any, barriers to initially register as a business,” Kato said.

The problems come when that business applies to the city for its “certificate of authority” to collect the taxes, and applicants are asked whether they have the relevant licenses and proper zoning to conduct that kind of business. And most Airbnb hosts don’t have that because they are actually violating a variety of city codes.

“In a residentially zoned area, this type of use is at least a conditional use [which requires a permit obtained after giving neighbors notice and going through a public hearing] if not a banned use,” Kato told us. “Those land use issues are what Sup. Chiu is trying to address with his legislation.”

Although Kato said such legislation is beyond the scope of his office, those issues can interfere with a host’s ability to receive a certificate of authority to collect the taxes.

“There are a lot of other parties interested in this issue that might have other issues that would break that authority,” Kato said, citing landlords, homeowners associations, and neighbors as parties that might object to someone essentially turning his or her apartment into a hotel room, which was banned decades ago by the Apartment Conversion Ordinance.

It’s pretty easy to see on the Airbnb website that it isn’t charging the TOT or making it easy for its hosts to do so (see “Airbnb isn’t sharing,” 3/19/13). Using Airbnb’s own stated figure that its San Francisco hosts collect about $12.7 million in rents each year, that would amount to nearly $2 million annually that the city should be collecting on these transactions.

When Airbnb’s 31-year-old founder and CEO Brian Chesky spoke at a hospitality conference organized by USF in April, he didn’t acknowledge any complexities or downsides to his business model, instead casting his company as saving the world.

“It’s like the United Nations at every kitchen table. It’s very powerful,” Chesky said of the social benefits of his company. “I think we’re in the midst of a revolution.” He wasn’t talking about revolution in the sense of challenging the authority or legitimacy of San Francisco, its laws, or its elected leaders, although that seems to be implicitly what he’s doing. And he certainly didn’t seem to be taking into account his evicted hosts, their upset neighbors and landlords, or the city’s disappearing apartments and rising rents when he said, “For us to win, no one has to lose.”

The hype, reality, and accountability of collaborative consumption

Sasha Cuttler

April 24, 2013

The hype, reality, and accountability of collaborative consumption

Collaborative consumption, aka the shareable economy – the labels given to a new generation of Internet-based companies that facilitate peer-to-peer exchanges of goods and services – certainly has some positive attributes. But does it really live up to the overhyped claims of its biggest boosters, who evangelize it as a “revolution” that forever alters the economy in only positive ways? Have they really figured out a way to create something from nothing, or are there hidden costs, impacts, and complications?

I was hoping to hear that kind of balanced discussion today at a symposium hosted by the University of San Francisco’s Department of Hospitality Management, featuring What’s Mine is Yours author Rachel Botsman and Airbnb CEO Brian Chesky giving the keynote luncheon address: “The Rising of the Sharing Economy: How is it expanding the Global Hospitality Industry.”

Moderated by the department’s administrative director, Dr. David Jones, I thought I’d hear a little academic skepticism, particularly given the hotel industry’s concerns about unfair competition from Airbnb. And I wanted to ask Chesky directly why his company isn’t paying the $1.8 million per year in Transient Occupancy Taxes that it owes to the city, as well as how his business model relies on hosts who are violating their leases and tenant protection laws here, in New York City, and other cities.

Instead, all I heard was uncritical boosterism, grandiose claims, creepy futurism, and the unfettered hubris of a 31-year-old CEO who claims to be altruistically saving the world while getting filthy rich in the process and refusing to even pay the local taxes that a fair public process concluded that Airbnb and its hosts owe. And after Dr. Jones failed to ask the questions I had submitted and cut off the Q&A early, Chesky turned and darted out a back door before I could ask him myself (his company’s spokespeople also still haven’t responded to my inquiries from last month).

Everyone just seems so enamored of what Botsman called “the wonderful world of collaborative consumption,” with its focus on economic “disruption,” that tech-lovers label she used over and over, without really stopping to think about the impacts of disrupting established economic and regulatory systems.

“This isn’t a threat to the hospitality industry, it’s a massive opportunity to innovate,” she enthused, claiming it would only make the economic pie bigger, with no downsides.

Chesky then told the story about how he and a buddy slapped together the Airbnb website in three days to advertise the flophouse they turned their San Francisco apartment into using air mattresses in advance of a design conference, an idea that has now blossomed into a multi-million-dollar business that places about 100,000 guests each night around the world.

“It’s like the United Nations at every kitchen table. It’s very powerful,” Chesky said of the social benefits of his company. “I think we’re in the midst of a revolution and not a lot of people are talking about it.”

Actually, it seems that everyone is talking about collaborative consumption these days, which is why Chesky was recently on the cover of Forbes and The Economist. But not a lot of people seem to be asking tough questions or challenging assertions that Chesky and his young bretheren are making, such as, “For us to win, no one has to lose.”

That would have been a good time for Dr. Jones to ask, “If that’s true, why are you refusing to pay the $2 million in TOT you owe the city, money that helps pay for Muni, street maintenance, the police, and other city services that visitors use?” Because the more Airbnb wins business from traditional hotels that do pay the TOT, the more the rest of us lose.

Similarly, in big, expensive cities that have developed complex systems regulating landlord-tenant relations – an essential system that determines who gets to live in these cities and how diverse and inclusive they remain – Airbnb offers a mechanism for circumventing those rules, a system it barely even acknowledges.

I’ve used Airbnb, and I understand that it can be a cool way to avoid expensive hotels and meet locals while traveling. That’s great. But it’s just not that simple, and it’s simplistic to focus simply on its benefits, divorced from the larger economic and environmental systems in which is operates.

“This is not a niche phenomenon. This could have enormous historic precedence,” Chesky said, later adding, “This is like a Golden Age we’re going to be entering.”

It is an age when anyone can become an entrepreneur and get rich, when the system of mass production itself will be replaced by the myriad ideas of people like Chesky in unforeseeable ways. “I think it will change dramatically the hotel and restaurant industry,” Chesky said. “Hotels themselves are going to be much more local and personal.”

He envisions the next generation of hotels creating rooms that cater to the individual tastes and preferences, from the music piped into the room to what’s in the mini-bar, all discerned from Facebook and other online mechanisms that create what Bostman called our “digital exhaust.”

“Consumers aren’t strangers, they all have profiles and you can know everything about a person,” Chesky said, sending the chill of dystopian futurism down my spine.

And we’re all going to travel freely around the world, owning little, sharing everything, and elevating Airbnb and its allies into the “trillion-dollar-industry” he’s pushing toward.

“We’re wired to be nomads,” Chesky said. “We’re going to be moving all over the world much more.”

So says the young, entitled CEO who doesn’t even have a home, flitting around the world to stay with various Airbnb hosts. But for most of us, air travel is still expensive and our vacation time is limited. And from the perspective of climate change, nothing could be worse for the environment than substantially increasing air travel to facilitate this expanded globe-trotting lifestyle that Chesky envisions.

The environmental claims of collaborative consumption companies have always struck me as the most overblown. That’s why I also cornered Adam Werbach – who went from heading Sierra Club to working for WalMart on its sustainability programs to launching Yertle, a stuff-sharing website – at an event promoting the new company on Monday, aka Earth Day.

“There’s nothing that’s green,” Werbach said when I asked whether Yertle was. “I’ve never used the term green.”

But he does make the argument that facilitating sharing allows less stuff to be produced overall, which is good for the planet.

“Is sharing a greener alternative than buying new?” he asked, citing examples such as pasta- or bread-makers as products that people may want to try without buying. “Can you find a way to sample or test those things without buying a new one?”

That’s true, but as I perused the pages and pages of stuff available on Yertle – which is sort of a high-tech version of a garage sale or thrift store, except that everything is free – I couldn’t help but be struck by its promotion of materialism and accumulation. Can we really tackle big environmental challenges and still keep all our toys?

Werbach, who graciously indulged my questions, admits that the shareable economy can’t adequately address big problems like climate change, which will require a major cultural and economic shift. It’s more like tinkering on the margins, and making some positive incremental changes, as he felt he was able to do at WalMart. “I do think we made them somewhat better. But, has it been adequate? No,” he said.

His Yertle co-founder Andy Reuben was someone Werbach met and worked with at WalMart. Reuben seemed even more hopefully that the younger generation will use collaborative consumption to create a lighter footprint on the planet.

“One thing we’re seeing is it will be an asset-light generation that can just get it and pass it on,” Reuben said, describing Yertle as “based on better utilizing the stuff what we have.”

That’s a goal that most of us probably share, and one that the shareable economy can certainly help us address. But its big boosters – from venture capitalist Ron Conway down to the random techie true believer – have to be willing to engage in an honest discussion with the rest of us, rather than just bulling their way forward, heedless of their impacts and dismissive of our concerns.

Maybe Lyft and Uber have a role to play in augmenting San Francisco’s taxi system, but we shouldn’t destroy that taxi system in the progress. Yes, City Care Share and Zipcar enable people to sell their cars, but how do they actually impact the number of cars on the roads? Airbnb is certainly a popular site with both hosts and guests, but that doesn’t mean it should be exempt from taxes and regulations.

After today’s event, I spoke with Dr. Jones – a longtime Bay Area tourism booster with a fairly libertarian outlook – about why he didn’t ask tough questions or express more skepticism. “I’m really not [skeptical]” he said, although he did note the dearth of academic research on collaborative consumption and the validity of some of my questions.

“There’s a massive value shift and there’s no way we’re going back,” Botsman said of the rapid rise of the shareable economy and its disruption of traditional economic models. That may be true, or that may be self-serving hype, but either way, it’s worth talking about in an open and collaborative way that involves more than just the insular tech world.

Last year, Mayor Ed Lee and Board President David Chiu announced the creation of a shareable economy task force, which was supposed to be reporting back some recommendations about now. I asked the Mayor’s Office of Communications for an update on its status three days ago, and I’m still waiting to hear back.

Meanwhile, Chiu’s office is still negotiating complicated legislation that would govern Airbnb’s operations in San Francisco, so there will likely be hearings on that company and the issues it raises this summer. That’s important for a city like San Francisco that is so diverse and engaged.

If San Francisco wants to help lead this collaborative consumption revolution that we keep hearing about from Lee and other boosters, hopefully we’ll also take a clear-eyed and precautionary view of what this brave new world looks like, how it’s regulated, what its byproducts may be, and whose interests it serves.

What’s ours?

May 3, 2012

The term “collaborative consumption” was coined way back in 1978, but the 2010 book What’s Mine is Yours: The Rise of Collaborative Consumption by Rachel Botsman and Ron Rogers is credited with popularizing the idea, mostly in a tech industry context. The book raises some interesting questions — Botsman’s insights into how exposing more of ourselves online actually builds trust rather than depletes it are especially revelatory, and the library-like digital tracking system set up to trace the book itself as it’s lent, borrowed, or swapped is pretty rad. Yet it takes a strongly market-oriented approach to the subject, perhaps giddy more at the prospect of entrepreneurship opportunities than the idea of pitching in to create an alternative social safety net during these rocky times via “sharing economies.”

As the collaborative notion broadens — now encompassing everything from multi-billion-dollar social networks based in Silicon Valley to a revival of artisanal handlebar mustaches in Brooklyn — I wanted to go to the source to get some SF-specific clarifications about the Australian authors’ views. The book has expanded, as books will these days, into a “movement hub” at www.collaborativeconsumption.com, and I was directed to Lauren Anderson, “Innovation Director of Collaborative Lab,” the book’s consultancy wing. (Because who could make any money just writing something nowadays?) Anderson’s pitch-perfect market-speak responses may limn the borders of sharing in our hardscrabble moment.

SFBG If you had to define the concept of collaborative consumption in a few words, what would you say? I’m having a devil of a time telling some of my friends about it without slipping into descriptions of classical anarchy, spiritual communes, and early homesteading techniques.

Lauren Anderson Collaborative consumption describes the resurgence of old-market behaviors like swapping, trading, renting, and sharing, which have been reinvented through realtime technologies and peer-to-peer networks to make sharing anything from cars to clothes to space to food to skills more efficient and affordable than buying new things directly. As we enter an age where we are valuing access over ownership, we are looking for more convenient ways to get the things we need rather than amassing a mountain of possessions that we use infrequently if at all!

SFBG It’s been frustrating in the Bay Area because we’re home to many of the major “sharing” websites and businesses — and we’re the home of some wonderful collaborative ideas both successful, like Two Degrees food sharing, and not, like Jumo social engagement — yet we seem painfully behind in terms of general collaborative on-the-ground projects that are already firmly established elsewhere. Despite being a center of bike activism, we’re only just finally getting our first official bike share program next month, and we have woefully few community gardens. Do you find that collaborative consumption takes off more profoundly in certain communities or civic environments rather than others?

LA San Francisco is certainly a global leader in collaborative consumption, and we have definitely seen many cities show leadership in embracing collaborative consumption businesses and projects. However, there is no definitive list of what is needed to make a city a “collaborative” one, and it really does depend on the needs and interests of the city. Bikesharing may be right for some cities where the landscape is conducive to getting around by bike, but may not be as practical in other cities.

What really makes a city collaborative is its appetite to try new things, and embrace new ways of thinking about how they go about daily life. Also a desire for openness and connection among neighbors and strangers. Leading collaborative consumption cities place a high value on a sense of community (specifically European cities like Berlin, Amsterdam, etc.).

SFBG As the idea of collaborative consumption matures, we’re starting to see some interesting contradictions arise. For instance, right now in SF there’s a lot of debate around Airbnb. Some think that because Airbnb operates outside of current tax laws and government regulations, it’s robbing the city of needed infrastructure revenue even as it’s allowing more people to visit the city, and in some cases could lead to tricky lawsuits due to its unregulated nature. There’s also now some debate going on about ZipCar — some people are discovering that people actually drive more now that cars are more available, and fear for both the environment and the diversity and resources of public transportation. Can you share your thoughts on such cases?

LA As collaborative consumption companies garner mainstream attention, it is expected that traditional industries will be challenged by these disruptors. We have actually noticed two polarized approaches to dealing with collaborative consumption — the first, as you describe, is where industry and government tries to introduce heavy legislation that make it hard to continue the activity in its current form, as in the case of Airbnb.

The second is where incumbents see the vast opportunities offered by collaborative consumption business models and look to diversify their revenue streams or in fact explore new models entirely. We have really seen auto manufacturers come to the table in this way, with partnerships with existing carsharing platforms (Ford+Zipcar, GM+RelayRides) as well as establishing their own (Daimler, BMW, Volkswagen).

This second approach is certainly more positive than the first, but as collaborative consumption companies mature, it’s reasonable to expect that they have a responsibility to make a contribution back to the cities they operate in the same way that businesses have done for many years.

Bank your time

May 2, 2012

yael@sfbg.com

The economy had collapsed. Mira Luna became ill with Lyme disease, lost her job, and then gotten buried under a mountain of medical bills. She went into bankruptcy. But it wasn’t more money she longed for — it was community.

That’s how Luna got into the time business.

She’s co-founder of Bay Area Community Exchange (BACE, www.sfbace.org), which offers a time bank, which uses work-hours as currency. Members offer goods and services, and other users “buy” them. For each hour I spend, say, teaching you French, you transfer one of your hours to me. Then I have hours with which to buy things from others.

Founded in 2009, the time bank has grown steadily, and now has 1400 members across the Bay Area.

“I had always wanted to start an alternative currency,” Luna told us, “but people weren’t too interested until the economy collapsed.”

When Luna helped start the BACE project, it was a meeting of different groups working on alternative currencies in the Bay Area.

http://www.youtube.com/watch?v=CRo0vPaBj9M

“Some of them have spun off, like Bernal Bucks,” Luna said. Bernal Bucks is another successful alternative currency program, in which residents of Bernal Heights can get a debit card through a local bank and receive rewards when they spend money at local businesses.

Luna was interested in taking the concept one step further and she liked the egalitarian nature of the time unit. But she says most people who use the time bank haven’t replaced US currency with time—they just used both.

Initially, she thought the time unit just “seemed like the easiest currency to get started.” But she and other co-founders, including Ricardo Simon, have become intrigued by different dimensions and possibilities of this alternative to alternative currency.

“Not all currencies are alike. Many of them are tied to the dollar, where ours isn’t at all. Ours isn’t really a currency actually. Everyone’s hours have the same value,” Simon said.

http://www.youtube.com/watch?v=brdEAdvvdEI

“Everybody’s hour is equal on the timebank,” explained Luna. “It’s worth the same whether you’ve gone to college for seven years or you haven’t gone to college, whether you’ve done a lot of manual labor or not…This is a system for people who are undervalued in that traditional marketplace.”

Someone living paycheck to paycheck, then, can use the timebank to get an hour-long massage.

As the timebank’s website says, “Timebanks also help enrich our lives with things we may not normally be able to afford, like language lessons or massage. Spending time dollars instead of cash can help you save money for expenses like rent, medicine, and food.”

But what if that massage sucks? Or, when you meet the person who offered it to you, you decide you don’t want them touching you after all?

“I haven’t gotten that kind of complaint,” Luna said. “I think because it’s not just about the service, it’s about the relationship.”

Users can read notes on the people they are accepting services from before they make their decision. Luna says trust mechanisms like user profiles with comments from other members and tallies of how many transactions a person has done work well for the timebank—as they have been working well for websites like Yelp, Wikipedia, and Kiva.

Speaking at last weekend’s Creative Currency conference, Katherine Woo, vice president of product at Kiva, said the company was mocked when it first started. Critics said that micro-loan recipients would never pay back their lenders—now, the company sees a 98 percent payback rate.

“If you build the right trust mechanisms into the system, people believe,” Woo said.

Luna made a presentation about the timebank at the conference. The idea was to pack the room with people from social media companies, websites that facilitate financial transactions, community groups, and local government representatives — and then have them work all weekend on a few agreed upon projects.

Improving the time bank was one of them, and, now that the weekend’s out, it has shiny new Short Message Service (SMS) capabilities.

“I didn’t appreciate the SMS until you actually get to play with it,” said Tom Brown, who has volunteered to help develop much of the software that BACE uses. “While we were testing SMS stuff, a request was sent off as a test, for help with some art. It got a response within a minute.”

Incidentally, Brown uses the timebank, too, “mostly for trips to the airport, or my car is broken down and I need a ride. Usually it’s transportation.”

Others, however, have used the timebank to launch careers, including Zach Cohen, who founded Berkeley’s Biketopia repair shop. Cohen, used hours gained from the time bank — and the community surrounding him — to help start his business. He was earning hours through volunteering at San Francisco’s Bike Kitchen, a co-op where volunteers fix bikes or pay a fee, and can in turn bring in their bikes for help. He wanted to start a similar venture in Berkeley.

“I’d earned the hours volunteering personally, and I used it to recruit board members,” Cohen told me. He also got graphic design and marketing services in exchange for timebank hours. With much less capitol than this kind of thing generally requires, he was able to start the business.

“I used money as well, but I supplemented it with the timebank,” said Cohen, who now holds youth bike repair workshops at Biketopia.

The timebank has also inspired other groups in San Francisco. When some members of People Organizing to Demand Environmental and Economic Rights (PODER) SF met with timebank organizers, they knew they wanted to start something similar to serve residents of the Mission and the Excelsior.

“In our community we have people with so many talents, from gardening, to fixing up bikes, to lawyer skills, you name it. And we felt we weren’t doing enough with those skills in these rough economic times,” said Oscar Grande, a community organizer with PODER. “We fell in love with the concept, with the ideals around it.”

But the form — the online-based exchange platform — didn’t seem right.

“We wanted a space where young people and elders can come together, and the only way to really do that is face to face. The digital divide is very real in our community, especially with immigrants, with the elderly and younger folks,” he said.

They also didn’t like the “bank” concept.

“We didn’t want to have that negative connotation going into this. Folks are like, banks aren’t doing right by us. The first thing people think is debt, oh my god how much am I going to be in the hole,” Grande said. “So we call it what it is, a community cooperative.”

The community cooperative meets at regular convivios—gatherings that are all about “coming together, breaking bread, a social atmosphere,” Grande said. “It’s basically serving as our marketplace or barter market where people are coming to exchange. What people need from home repair stuff, broken doors, want to learn how to drive, want to learn how to put together a resume, then people who are offering stuff like, I know Word. I fix cars. I paint houses, I can help you paint your house.”

According to Grande, member of the cooperative are “loving that they have a place to go and share their skills with someone else, and a place to go to for help, be it material support or moral and social support. A big issue in our community is isolation, especially if you can’t navigate the language, the system, or you’re a recent immigrant and you’re family is back in El Salvador, in Nicargaua.” As Luna understood when she was ill, this isolation and economic disempowerment are intrinsically connected. The economy might recover, but people don’t seem likely to lose interest in the timebank’s alternative currency — and the possibilities it brings with it — anytime soon.

The problem with the sharing economy

May 1, 2012

steve@sfbg.com

Catbird turned me onto Airbnb almost two years ago, long before I’d ever heard of the “sharing economy” or “collaborative consumption,” terms the tech industry is now using for companies that facilitate peer-to-peer rentals or otherwise take transactions once done through Craigslist to a glitzy new commercial level.

We were working together to build the Temple of Flux for Burning Man 2010 and chatting in the shop one evening. I mentioned wanting to find someone to sublet my apartment for the nearly three weeks that I was to spend on the playa that year, and she sang the praises of Airbnb, which she had recently started using to make some extra cash by renting out a room in the house she owns on Potrero Hill.

“The reason I decided to do it instead of a full-time roommate is it fits my lifestyle better,” Catbird, aka Cathryn Blum, told me recently as we discussed her beloved Airbnb in light of recent controversies over whether such rentals should pay the city’s 14 percent hotel tax. Catbird loves to meet visitors from around the world and help show them sides of San Francisco hidden from downtown hotel dwellers, as well as being able to keep her guest room vacant for visiting friends or family.

“Airbnb has been a godsend, and it’s invigorated a lot of the neighborhoods that tourists might not come and visit,” she said. “We’re not competing with the hotels, the hotels don’t provide that kind of experience.”

That’s what she and other Airbnb customers argued last month at a San Francisco Tax Collector’s Office hearing on the issue, which resulted in the hotel tax [aka Transient Occupancy Tax] being applied to Airbnb and similar companies.

Airbnb was a godsend for me as well, a simple easing of my economic woes. At the time, I was just getting serious with a new girlfriend and spending most nights at her place. So we moved some of my stuff over there to clear space and protect my valuables, took some photos of my small studio apartment in the Mission, and created an Airbnb listing.

We initially listed my place for $75 per night, which more than covered my rent but was cheaper than most hotels, the sweet spot that would create enough demand that I could pick and choose guests to meet my needs. And it worked perfectly. Not only did I find tenants to fill most of my Burning Man vacancy, but I kept it up periodically throughout the fall, moving in with my girlfriend for days or weeks at a stretch and splitting the proceeds with her.

It seemed too good to be true. And as I began to learn, perhaps it was.

LAW AND TAXES

Something Airbnb doesn’t tell you when you sign up is that you may be breaking the law and/or your lease (its spokesperson says that warning is in its terms of service, but I never saw it). Frankly, I knew that my lease didn’t allow subletters, but my building is big, I really needed the money, and I figured that I wouldn’t get caught, a calculation that many thousands of customers of Airbnb and other companies regularly make as well.

Later, well into by first foray as a landlord, thanks to Airbnb, I began to learn about some other complications that this business model creates in big, popular cities like San Francisco and New York that have complicated laws regulating landlord-tenant relations. For example, it’s illegal in San Francisco to sublet your apartment out for more than you pay in rent.

I felt a little guilty about that one. In a city where almost two-thirds of residents are renters, yet where property owners wield tremendous economic and political power, there are good reasons for rent control, limits on converting apartments into condominiums, eviction protections, and the whole slew of complicated laws and regulations that govern the often-contentious relationship between landlords and tenants.

But nobody seemed to be getting hurt and this was easy money, thanks to an elegantly simple dot-com idea. Sure, there were risks, both from the powers-that-be and from the strangers moving into my home. A good friend of mine in San Francisco who used Airbnb kept his valuables in a locked closet, which his temporary tenants — who had used fake identities and fraudulent credit cards — broke into, stealing thousands of dollars worth of equipment and getting away with it.

By the end of the year, it began to dawn on me that this business model wasn’t as simple as it initially seemed, triggered partially when the company sent me a 1099 federal tax form for the thousands of dollars I earned in 2010. Oh yeah, taxes, shit. So I paid my state and federal taxes on what had once seemed like free money, and I began to wonder what this “godsend” really meant for San Francisco, just as various advocacy groups were beginning to explore the issue.

“We began working on this issue a few years ago when we saw a big number of tourist conversions,” said Ted Gullicksen, executive director of the San Francisco Tenants Union. He discovered thousands of apartments — sometimes even entire buildings, usually those covered by rent control laws — were being taken off the rental market for use by tourists, sometimes after evictions to clear them of tenants. If I could use these sites to make money, unscrupulous landlords could as well.

“It shouldn’t even get to a tax issue because much of this is illegal,” Gullicksen said, noting that landlords opposed legislation a few years ago to give tenants more rights to sublet their apartments or add additional roommates. “This talk of shared economy strikes me as the wealthy asking the less wealthy to sacrifice.”

Advocates of the sharing economy argue that it’s just the opposite, making environmentalist and even socialist arguments that it’s a smart way of using fewer resources that empowers working class people.

“This idea of supplementing the formal economy with an economy based on sharing and bartering is very powerful. If you supplement a formal economy with an economy based on sharing you will have a lighter economic footprint and you would rely on relationships with people and actually, with less income, have a higher standard of living,” progressive activist Van Jones — whose new book The Green Collar Economy, discusses collaborative consumption — told us last month.

But it doesn’t usually feel quite so populist. Ron Conway, the billionaire angel investor who helped funnel hundreds of thousands of dollars in tech money to groups supporting Mayor Ed Lee’s election campaign last year, has significant investments in Airbnb and other “shareable” companies that Lee opposes taxing, as The New York Times reported last month.

Around that same time, I, along with many other local journalists, was invited to a fancy round-table dinner hosted by SparkPR to facilitate schmoozing with a half-dozen collaborative consumption start-ups, an event that felt more like the decadent peak of the last dot-com bubble than the launching of a people-powered economic revolution.

WINED AND DINED

Over fine wine and a seated gourmet dinner in a private room in Perbacco Ristorante + Bar, journalists representing the New York Times, San Francisco Examiner, Bloomberg, TechCrunch, and other media outlets chatted with representatives from Love Home Swap, Getaround, Zimride, Event Up, and DogVacay.

This was the latest event in the public relations blitz by advocates of “The Sharing Economy,” which was the title of an event at the San Francisco Planning and Urban Research Association two weeks earlier, which featured representatives from Airbnb, TaskRabbit, Shareable, Vayable, and Getaround (representatives of this car-sharing company do indeed seem to get around).

Our dinner began with introductions, and Love Swap Home founder Debbie Wosskow said she had come all the way from London for this dinner and some related meetings, on the ground just 36 hours. “I thought I could learn a lot from you guys out here,” she said in her charming British accent, later calling San Francisco the world hub for this new economic approach.

“Our business model is very simple: it’s like online dating for homes,” she said, explaining how the company registers people with cool homes that they can vacation-swap with others they meet through the site. Contrasting it with Airbnb, she said, “We’re swapping purists…I was less interested in turning my home into a money-making machine than moving my home to places around the world.”

The company caters mostly to those with higher-than-average incomes, while others at the table seem to be giving more structure to underground transactions pursued by the average Craigslist or Yelp user. “We have a platform of trusted folks who watch your dogs in their own homes,” was how Dog Vacay owner Aaron Hirschhorn described the business he started with his wife, which attracted $1 million in venture capital financing and now has 10 employees.

“I want to be the premiere national pet services company,” Hirschhorn said. “That’s the long-term play, but in the near-term we’re solving an immediate problem. And we’re giving people a chance to make money.”

As dinner was served, SparkPR’s Jamie Walker played hostess and encouraged us to chat about our common issues, so I offered an apparently impertinent topic for guests to address: “How do you all feel about taxes?”

An uncomfortable silence chilled the room, but I asked them to humor me because it was Tax Day and I was curious how they all felt about being required to pay taxes on the economic transactions they were facilitating. Again, silence, before someone finally ventured an answer.

“There are other societal benefits to this collaborative consumption industry,” was how Getaround’s Avery Lewis answered my question, talking about the many economic and environmental benefits of people being able to share their cars or avoid having to own a car for only occasional use.

And that may be true, but it doesn’t really answer the question: Why should these economic transactions be exempt from the taxes charged on most other economic transactions?

SOME THINGS DON’T CHANGE

Airbnb spokesperson Kimberly Rubey and Airbnb customers who testified at the tax hearing also speak of the wide variety of social and economic benefits of the service, and they make a compelling case that this company — with 100 employees here and 300 around the world facilitating 5 million nights booked in four years, up from just 1 million a year ago — is a boon to San Francisco.

But when you push them on the tax issue, they don’t know quite what to say. Rubey abruptly ended two short phone interviews when I pressed for an answer, both times saying she was late for meetings and would get back to me. The third time, she had this statement prepared: “We do not shy away from tax obligations, nor do we believe that all types of private residential rentals should be excluded from transient occupancy tax in all situations. That said, we do think that staying in someone’s spare bedroom or in someone’s home while they are away is different in a variety of ways than staying in a hotel.”

Yet that distinction isn’t one made in the city’s Transient Occupancy Tax law, says Greg Kato, the policy and legislative manager for the Tax Collector’s Office. “When we talk about a guest room under the law, that does include private residences,” he told us. “We want to make sure we’re taxing everyone properly.”

It was a broad and fairly unusual coalition of groups that pushed the city to begin regulating and taxing Airbnb and similar companies — from the Tenants Union and labor unions on the left to Hotel Council and Building Owners and Management Association on the other end the spectrum — making the prospects of a successful legislative challenge to the tax law interpretation unlikely.

Gullicksen said Airbnb may be one of the biggest companies affected by the ruling, but it isn’t the worst. He said Vacation Rental By Owner (www.vrbo.com) converts entire blocks of apartments into tourist hotels. By contrast, he said many renters use Airbnb to occasionally supplement their incomes.

“It depends on how often it’s used and to what scope it’s used,” he said.

Mayor Lee and some members of the Board of Supervisors recently created a Sharing Economy Working Group to hammer out those distinctions and make policy recommendations, but it has yet to be constituted or begin meeting. And Board President David Chiu has introduced legislation developed by the Tenants Union to ban the worst “hotelization” of rental units by corporations.

I’ll be curious to see how these issues play out, even though I no longer use Airbnb. Advocates for collaborative consumption seem to think they’ve invented something new under the sun and the rest of us just need to catch on. “When new business models emerge, you’re going to constantly be in ongoing discussions with policymakers to educate them about the difference with traditional models,” Rubey said.

Clearly, they’ve convinced Mayor Lee, who unsuccessfully sought a delay in the Tax Collector’s ruling, following the tax breaks he extended last year to Twitter, Zynga, and other tech companies. But I’m less convinced. Airbnb once seemed like a simple and harmless way to make extra money, but in San Francisco — where landlords and tenants often battle over the very soul and essence of the city — life here and the policies that govern it are endlessly complicated. And that’s nothing new.

We and Mr. Jones

April 3, 2012

caitlin@sfbg.com

THE GREEN ISSUE No one can accuse Van Jones of being a one trick pony. In the early days of his activist career he monitored police violence in the Bay Area, and from there gradually widened the frame of his activist efforts. Jones formed the Ella Baker Center for Human Rights in Oakland in 1996, then became a green jobs pioneer, promoting environmentally-friendly work in low income communities — a revolutionary tactic that eventually landed him a short-lived adviser position within President Obama’s Council on Environmental Quality.

In his new book Rebuild the Dream (Nation Books, 278pp, $25.99) Jones has expanded his talking points to include the ways in which the financial sector has let us down, how Obama only did what we forced him to do (we gotta yell louder, Jones says), and how we can help fix the economy by focusing on “collaborative consumption.” Call it holistic activism. He’s launched a national junket to talk Rebuild that will bring him to the Commonwealth Club on April 16.

It is perhaps this kind of nuanced approach that scared the bejeezus out of the conservative demagogues whose smear campaign convinced Jones to resign from his White House post in 2009. Leave it to Glenn Beck to shame someone for saying he wanted “a whole new system” (as Jones proclaimed in a speech at a youth climate change conference.) The conservative media accused Jones of a communist past — which was accurate enough — and of signing a 9/11 truther petition that said that George Bush had prior knowledge of the World Trade Center attacks. He was innocent of this last point, the organization in question admitted months later, to a deafening media silence.

But Jones hasn’t retracted his call for a new system. In fact, in the pages of Rebuild the Dream he seems to step into a post-resignation hybrid role, in which he is no longer an outsider activist, but still has no formal role in Washington, D.C. Accordingly, he seems less fired up by the actions of national politicians as the agenda-pushing energy of the Tea Party and Occupy movements, which his new book spends entire chapters analyzing and critiquing. Even certain innovative businesses get a shout-out.

“You have Kiva, Kickstarter, Airbnb, and Zip Car already beginning to point to a future economy where more people are sharing fewer things,” Jones told the Guardian in a phone interview last week. “That’s good for people and the planet. You are also are saving money and you’re relying on people and relationships rather than dollars, you’re refinancing your social capital.”

He calls this economic ethos “collaborative consumption,” and it’s a heady idea for proponents of self-sustaining communities. Building a new economy on this business model, however, will take some tweaking that’s not covered in Rebuild — the city-level debate on whether SF Airbnb users should be subject to the city’s 14 percent hotel tax is one current-day example of how things can get complicated.

Rebuild offers a fairly honest critique of Obama’s successes and failures during the president’s first year in office. Nonetheless, the timing of the book, with it’s underlying message that we need to stay engaged in the political system to achieve real change, seems somewhat cagily timed. Is Rebuild the Dream part of Obama’s re-election campaign?

“The answer is no,” Jones is quick to reply. “We’re a non-partisan organization, we don’t endorse political candidates.”

But the election year publication is no coincidence: he wants all candidates to start talking about fixing the institutional reasons behind inequality.

“The two factors once used to pull people out of poverty were home ownership and education,” he says. “Those have now become the two factors by which people are being pulled into poverty because of the underwater mortgage problem and the fact that kids are coming away from college with massive debt and no ability to get a job. We think that these are issues that the politicians need to be forced to respond to and rethink.”

VAN JONES

April 17, 7pm, $20

Commonwealth Club

595 Market, second floor, SF.

(415) 597-6700

www.commonwealthclub.org

Sharing economy and the city’s share

Sasha Cuttler

March 30, 2012

San Franciscans love to share: our homes and workspaces, our cars and bikes, our tools and the road, and sometimes even our lovers. But in these tight economic times, we often want a little something for our efforts – a bit of cash to use the guestroom or car – and that tradeoff has now ballooned into something its advocates grandly label the “shareable economy.”

But with everyone feeling the pinch, there’s begun to be some push-back from those not getting in on the action, and that includes the Tax Collector’s Office, which held a contentious hearing at City Hall this week on its proposal to start charging private residents who temporarily rent out a room the city’s 14 percent hotel tax.

AirBnB, a website that facilitates these room rentals, seems to be the main target of the new rule, and the company turned out plenty of its customers to blast the proposal as something that would hurt low-income residents and travelers and hinder the connections they’re making with each other. AirBnB acts as the financial middle man for the transactions and would be responsible for paying the tax.

“You are part of a movement about how resources are used, how hospitality is exchanged, how residents are empowered, and how economic opportunities are opened to diverse neighborhoods. These values are at the heart of who we are as San Franciscans,” the company wrote in a message to the customers it urged to turn out for the hearing.

The day before that hearing, there were a couple of related proposals launched at the Board of Supervisors meeting by Board President David Chiu and others. He introduced legislation banning the “hotelization” of apartments by corporations that let a rotating cast of employees use them, banning stays of less than 30 days in buildings with four or more units.

As an example of the problem, Chiu cited the Golden Gateway apartment complex in his district, where he estimated that 46 of the 341 units are rented by corporations, drawing the ire of other residents. “Hotelization reduces the already limited housing available to San Franciscans and creates quality of life issues for our residents,” Chiu said, touting support for the measure by the San Francisco Tenants Union. “We have to do more to protect rental housing in San Francisco.”

So, individuals renting out their apartments is good, corporations renting out their apartments is bad, right? Clearly, these are complicated issues with lots of competing constituencies at play. So Chiu also joined Mayor Ed Lee and Sups. Mark Farrell, Scott Wiener, and Jane Kim in creating a new Sharing Economy Working Group to examine the policy issues surrounding what they label “collaborative consumption.”

“The growing ‘sharing economy’ is leveraging technology and innovation to generate new jobs and income for San Franciscans in every neighborhood and at every income level,” Lee said in a press release. “As the birthplace of this new, more sustainable ‘sharing economy,’ San Francisco must be at the forefront of nurturing its growth, modernizing our laws, and confronting emerging policy issues and concerns.”

He also plugged a forum on The Sharing Economy that SPUR is hosting this Tuesday, featuring representatives from local companies involved in the economy: AirBnb, TaskRabbit, Getaround, Vayable, and Shareable. It’s all very hip and new and tech-focused, well beyond the days I can still remember when “sharing” was a word not often connected to “economy.” Sorry, that’s just something I had to share.