Hipsters, arbitrage and convention center bonds

My brother got married last week.  The wedding was great, and I performed my primary function in making sure my brother showed up on time, sober, and wearing pants.  Part of the experience was a massive exercise in regulatory arbitage.  My brother and his wife are not quite coastal hipsters (he works a job with a real title) but they were using AirBnB, Uber, Lyft and half a dozen other web enabled sharing services.

My old public finance training kicked in with fear.  Fundamentally these services are exploitation of regulatory arbitrage. AirBnB is effectively a hotel booking system where they are claiming they are not offering hotel like services.  My brother and his wife had rented a condo where the owner lives three time zones away and rents it out via AirBnB for forty eight weeks a year.  The owner has a system of services to clean the condo and maintain security on it.  It is effectively a hotel room for half the price of an equivilant room three blocks away.  A good portion of the price differential is because the AirBnB room is not paying for half a dozen significant hotel based taxes.  There was no convention center fee, there was no general county tax, there was no ball field bond sinking fund fee.

We used Uber for everything.  Again, Uber claims that they are merely a sharing service and not a taxi company.  This allows them to avoid buying medallions, avoid paying for football stadium construction, avoid paying for some types of insurance.

My public finance nerd came out as I know so many municipalities and counties have depended on levying significant taxation on hotels, taxis and rental cars in order to fund major regional infrastructure and “nice to have” projects such as stadiums.  Locally, there is a significant per-room hotel tax for the convention center, and the convention center bonds are limited obligation bonds for the county where there is no general revenue that the bond holders can claim.  What happens if Uber, AirBnB and other internet enabled services that exist as regulatory and taxation arbitrage  schemes proliferate nationally and take massive market share instead of being the domain of hipsters and quasi-hipsters like my brother?






223 replies
  1. 1
    Howard Beale IV says:

    Eventually these things will pass the duck test-then what?

  2. 2
    Richard Mayhew says:

    @Howard Beale IV: They already pass the duck test and taste damn fine with a rasberry glaze

  3. 3
    celcus says:

    There is a nice sized iceberg in the path of these ships called the Americans with Disabilities Act. By renting out space as a quasi hotel or car as a quasi taxi, they become places of public accommodation and will have to comply with the regulations for accessibility. They will get by for a while, but if the popularity grows it will become an significant issue. The ADA is a piece of civil rights legislation, not a code or regulation and their is are activists dedicated to seeing it enforced.

  4. 4
    Soprano2 says:

    I hate the use of “sharing”, it’s not sharing if you’re paying for it. Call it what it is, they’re running a hotel or taxi service, period. They’re trying to get around paying taxes and fees by claiming they’re only “sharing”. If they were really sharing they’d be bartering or trading services with people rather than taking money.

  5. 5

    From a public finance point of view, they are bad news, but they are also avoiding regulations meant to keep us safe. Taxi’s are regulated so people don’t rip you off and you have some confidence you are not climbing into a car with a wanted rapist.

    Want

  6. 6
    Betty Cracker says:

    As you point out, they’re hotels and taxi services without regulation and taxation, and certainly the hotel and taxi industry lobbyists are crying foul as these regulatory and taxation arbitrage schemes eat their lunch. I think the only question is, will the aforementioned lobbyists have enough juice to force politicians to level the playing field, when doing so would expose the politicians to the public’s irrational revulsion toward taxes and regulation? My guess is yes, they will. Usually the player with the deepest pockets wins.

  7. 7
    Richard Mayhew says:

    @celcus: Very good point. All the Uber cars that we used were no where close to ADA compliant

  8. 8
    sparrow says:

    I use Airbnb all the time. I’m a postdoc who is largely funded on my own federal grants, which are damned hard to get. For an upcoming conference, I can pay $200/night for the conference hotel, which I’m sure is nice. OR, I can save about $700-$800 of grant money (enough to finance another trip, to see collaborators, or even a 2/3-day workshop) by renting a room or couch on airbnb. Those usually run $30-$40/night, even in places like Boston which are expensive. But I am by no means getting the same deal: it is usually on the level of a couch in a college-student house, or at best, a spare bedroom in a retiree’s home. Personally, I’m not sure what the benefit of taxing those people to death is going to do, besides shut down affordable services like airbnb.

    I’m not seeing the moral force behind taxing the hell out of taxis and hotel rooms, honestly. Stadiums (i.e., the means by which part of bread&circus is distributed to the masses) should be paid for by the fans of those idiotic sports, or perhaps the public if they vote to do so. Anything else is shitty.

  9. 9
    sparrow says:

    I will also add, regarding ADA compliance, that there are really two levels of business going on with airbnb. Most of the people I stayed with were just renting one thing (a couch, a bedroom, etc). These people could also advertise on craigslist (but without the rather key ingredient of reviews/verification) and as far as I know they would not be required to be ADA compliant as long as they are not renting out more than a very few places to stay. Essentially, it is a short-term roommate deal.

    The people who are renting out several apartments/rooms, are in another category, and it would not be unreasonable to have a cutoff (like, more than 2 entries on airbnb or like services), at which point regulations kick in.

    But I reiterate that the taxes are just stupid.

  10. 10
    Drunken hausfrau says:

    OT, but Walgreens is staying in US. Go show them some love. I sent an email to the head honchos. Sure, there are some greedy investors squealing, but other people have to counter that by saying, well done. Good form. thank you.

  11. 11
    OzarkHillbilly says:

    @sparrow:

    I’m not seeing the moral force behind taxing the hell out of taxis and hotel rooms,

    Morality has nothing to do with it. The reason these 2 get taxed so heavily is that in general, local populations are getting a pass, by having the visitor pay for stuff. In other words, it’s a free lunch, just as Airbnb and Uber are.

  12. 12
    low-tech cyclist says:

    A number of localities are catching on to AirBnB, and requiring the units they rent in their jurisdiction to pay the appropriate taxes. When challenged, the localities seem to be winning in court. I don’t think this is going to be a hard push in areas where AirBnB does much business. As it should be.

    I’m more sympathetic to Uber and Lyft than AirBnB. In most cities, there’s not a whole lot standing in the way of new hotel construction: you buy land in a part of town with the right zoning, you do the planning, get the financing and permits, and you build. But the situation with taxis is quite different: many cities don’t just give taxi medallions (medallions?! what funny terminology!) to anyone meeting the requirements, but instead there are a fixed number of medallions. So Uber and its ilk can’t just say “we’re a cab company” because if they did, they’d be frozen out of the market by the incumbents.

    The ideal outcome IMHO is that in cities where Uber, etc. have a nontrivial presence, the cities realize that what they need to do to avoid losing revenue is lift the cap on medallions and require Uber, etc. to jump through the requisite hoops to qualify for them, and pay the appropriate taxes and fees.

  13. 13
    sparrow says:

    @OzarkHillbilly: Doesn’t change the fact that it’s shitty.

  14. 14
    big ole hound says:

    All these assholes want is to use the cities services but not contribute to their cost. How else is a city supposed to maintain a level of attractiveness that makes us want to go there. Just like using the bridge without paying the toll to maintain it or incorporating overseas while doing all your business here. It’s part of the “me first” culture that the corporate shareholders have instilled.

  15. 15
    Elizabelle says:

    Airbnb is leaving its hosts way too vulnerable, even with its “million dollar guarantee” to hosts who suffer damage.

    California state law considers a guest who has stayed at a property for more than 30 days a tenant — who knew? well, it was state law; Airbnb should have known — with renter’s protections.

    Which was news to a San Francisco woman who rented out her Palm Springs condo for a 44-day term to a shyster who paid for 30 days and is now squatting. He’s got a relative in there so the condo is never vacant. It will take thousands of dollars and months to evict him. Airbnb is (finally) assisting with the legal fees, but this did not have to happen.

    I’ve read that hotels catering to the down and out frequently make them move from their room before the 30th day — and maybe just for a day or two, and then back in — so that they cannot be considered tenants.

    How did Airbnb not warn its California hosts better? Were I a host, I would never allow a rental longer than 25-28 days, successively, and I or my agent would be physically on the property at the beginning and end of the rental.

    Airbnb sounds like a pretty good deal for guests, if one’s expectations are low and one feels safe.

    Although it’s totally a scheme to avoid hotel taxes and regulation, and I can see neighboring apartment and condo owners’ concerns about someone running a B&B out of their home.

    Squatters don’t sit well with Airbnb hosts

  16. 16
    Craigo says:

    @sparrow: Yes, we’re all heartbroken that you don’t get to waltz into a city and take advantage of its services without paying local taxes. We need a new Shakespeare to capture a tragedy of this magnitude.

  17. 17
    SiubhanDuinne says:

    @Drunken hausfrau:

    That’s so good to know! Thank you. I’ve been dreading having to change my various Rx to another drugstore, and now I won’t have to. Very good news.

  18. 18
    Schlemizel says:

    We should expect a flurry of new laws passed to cover these sorts of gimmicks. Pushed by the more powerful established businesses they will pass easily with bipartisan support in sate after state.

  19. 19
    PurpleGirl says:

    NYC and Lyft recently negotiated a deal for them to start services in all the boroughs. It seemed to mainly involve insurance matters but I didn’t follow the story too closely.

  20. 20
    Elizabelle says:

    From MarketWatch: and isn’t it unsettling that Airbnb at projected $10 billion valuation is valued higher than Hyatt Hotels ($9 billion): can you say “bubble”?:

    Airbnb squatters expose sharing economy hype

    … In a regulatory filing on Friday, San Francisco-based Airbnb said it received an additional $475 million in venture funding. The Wall Street Journal reported that the company now has a potential valuation of $10 billion.

    It’s a bit mind-boggling that Airbnb, fraught as it is with legal issues, is valued so highly, although admiteddly $10 billion is the new $1 billion valuation for hot startups in the current over-heated tech boom. For example, ride-sharing service, Uber Technologies Inc., received additional funding in June at a valuation of $18.2 billion,

    Uber too is facing regulatory fights in some cities, which are banning ride sharing companies. Its insurance and liability coverage limits are now under scrutiny, after one of its drivers hit and killed a six-year-old girl in San Francisco last New Year’s Eve. The California Public Utilities Commission last year mandated that ride-sharing companies have insurance policies of $1 million per incident. Uber is saying it was not liable in the San Francisco case, as the driver was not carrying an Uber fare.

    … “Airbnb’s business is not a simple app like Twitter, Instagram or WhatsApp, where the service is entirely virtual,” said Sam Hamadeh, founder and chief executive of PrivCo, which analyzes private companies, in an email. “Most of Airbnb’s business is inherently unlawful, violating a combination of short-term hotel regulations and taxation, tenant leases relating to subletting, and condominium and co-op bylaws requiring board approval for any sublets.”

    It’s feasible that these regulatory issues will eventually be worked out, but for now, sharing-economy companies appear to have plenty of risk and seem to be overvalued as privately held companies. As the Wall Street Journal recently noted, Airbnb’s $10 billion valuation is more than Hyatt Hotels Corp. … with a current market capitalization of about $9 billion.

    Hamadeh added, “The Airbnb squatting debacle is simply underscoring the constant risks and liability exposure to Airbnb that makes it — and many other sharing economy startups — overvalued on a risk-adjusted basis.”

  21. 21
    J. says:

    Reading this post reminded me of a line my father, a registered Republican and Wall Street guy, used to always say: If we all paid our fair share of taxes, we wouldn’t have to pay so much tax. So true.

  22. 22
    Randy P says:

    It’s similar to the situation with the “Chinatown buses” here in Philly that run the Philly to New York route at ridiculously low prices, operated by Chinese-speaking owners and originally targeting Chinese customers. They keep their prices down by saving on frills such as maintenance or licensed drivers. There are now Bolt and Megabus competing in the cheap bus market. A little higher cost, a little better performance.

    The question, and I don’t know the answer, is how much are we willing to let the user to be able to take a known risk (of being abandoned at a NJ rest stop for instance, which once happened to me) in exchange for paying rock bottom prices? I guess part of the trade off is whether or not those companies are driving the better ones out of the market. Greyhound IMO provides excellent value and drivers I trust. But can they survive?

    Aren’t there some products where a good chunk of the consumers are willing to pay for quality and reliability?

    This came up in ACA when we found out about the existence of junk insurance. Did people have the right to gamble with their own health or health-related bankruptcy? The problem there is that the backup system is the rest of us, when these people use emergency rooms for their primary care.

  23. 23
    GregB says:

    OT.

    An excellent article about how our dear friends the Saudi’s have created a Frankenstein monster akin to a religiously inspired Khmer Rouge.

    Link.

    Good times ahead.

  24. 24
    aimai says:

    @big ole hound: I don’t know why anyone makes this argument about AirBnB–the owners of the property pay property taxes, just like anyone. And people who use airBnB pay for the stuff they use in the city, just like anyone.

    The various hotel taxes and convention fees are, indeed, nice for cities to have but tehy are really levied on visitors in order to keep taxes on inhabitants low–they are a form of rip off passed on to transient visitors precisely because they can’t complain.

    I’ve got nothing against taxes, or hotel taxes. I use airBnB all the time now while traveling with my family because Hotels are prohibitive for four people and don’t give me what I want which is 1) a clear idea of what I’m getting for the money I’m spending, 2) a kitchen, 3) interesting properties.

    Using AirBnB–which for me is just a more convenient way of renting a short term apartment–has enabled me to stay in a 13th century canal house in Bruges, a 17th century canal house in Amsterdam, a converted 19th century library in the UK. If I were travelling alone, like Sparrow is going to conferences, or if I were travelling with just one kid I’d happilly use the “share home” feature in which you are staying in someone’s house. And I’d happilly also pay a tax of one or two dollars if it were levied on me. That one or two dollars is not the difference in price between a hotel and airbnb–by the way.

  25. 25

    Just to note, the NFL is considered non-profit, so that stadium? Yup.

    and in NYC (where I live) the Knicks at Madison Square Garden similarly avoid a lot of the same taxes because rich people piss and it’s supposedly great when the urine trickles down, etc etc.

    Not arguing with your main point, I’m actually in agreement… just noting that these ideas re Uber are not new… too many very wealthy corporations are doing the same, and others less rich are trying to get in on that weasel.

    be good to change it all.

  26. 26
    HumboldtBlue says:

    @sparrow: What’s shitty is assholes like you who believe that you are some special form of snowflake who shouldn’t have to pay the same rates, the same taxes and abide by the very real public safety concerns that come with running businesses.

    This nonsense that hotel and motel room taxes only pay for one thing such as a sports complex is absurd as your fucking teenage Randian angst about how totally unfair it is that you pay a tax in a city that you are visiting.

    Like the Silicon valley snowflakes who are all one power outage away from complete and utter irrelevance, it’s assholes like you that are generating a backlash I don’t think you have a clue is coming.

  27. 27
    OzarkHillbilly says:

    @sparrow: I hear that a lot every year around April 15.

  28. 28
    Elizabelle says:

    @Randy P:

    I guess part of the trade off is whether or not those companies are driving the better ones out of the market. Greyhound IMO provides excellent value and drivers I trust. But can they survive?

    Bingo. The “sharing” economy could turn out to be very expensive, societally.

    @sparrow: You’ve made some good points. I might try Airbnb myself, for a night or two, next trip.

    It sounds like Airbnb might be a pricing point between hotels (nicer, private, can be expensive) and hostels (can be cool, but not much privacy and differs greatly) …

    And I can see Airbnb’s appeal in large cities, where hotels are so much more expensive …

    ETA: but I am a fan of regulated safety and the locality receiving some tax compensation, because visitors are there using public services.

    No free lunch.

  29. 29
    Cervantes says:

    @Randy P:

    Greyhound IMO provides excellent value and drivers I trust. But can they survive?

    Greyhound owns Bolt.

  30. 30
    aimai says:

    @Elizabelle: The same thing happens to people all the time though, even absent airBnB. I’m not saying this to excuse them–they should absolutely have been warning their membership about this. But this happens all the time when people let relatives or friends stay for lengthy periods. Anyone can get scammed. And its not always obvious who is going to do you in–it can be a relative or a close friend who decides to refuse to leave just as easily as a renter.

  31. 31
    Flyter says:

    Richard – hotel taxes, rental car taxes, taxi taxes are themselves a form of regulatory arbitrage.

    They are set up explicitly as sneaky devices and crafty schemes to tax out-of-towners, tourists, and assorted visitors so that the locals don’t have to pay those taxes. Get the rich furrners to pay for stadiums, conventions centres, or schools – that’s a tax every mayor in the country can support.

    The norm in Europe and Australia is for no special taxes on hotels, rental cars, etc. They even have desks at the airport to refund sales taxes to tourists on their way home. Weird, huh?

  32. 32
    HumboldtBlue says:

    Using AirBnB–which for me is just a more convenient way of renting a short term apartment–has enabled me to stay in a 13th century canal house in Bruges, a 17th century canal house in Amsterdam, a converted 19th century library in the UK.

    Isn’t that lovely, now you can also travel to San Fransisco and stay in an apartment that was rent controlled and was home to someone for years until they were recently evicted because using AirBnB means they can make a quick buck.

    An apartment that has now been turned into a de facto hotel by investors who want to avoid the public health, ADA and public safety standards that protect us all, but hey, you got a goddamned kitchen in the deal so that’s a win.

  33. 33
    Cervantes says:

    @Elizabelle:

    ETA: but I am a fan of regulated safety and the locality receiving some tax compensation, because visitors are there using public services.

    Subsidized public services — sometimes I wonder if they still exist.

  34. 34
    aimai says:

    @HumboldtBlue: I don’t get why Sparrow is coming in for all this hate. When did massive chain hotels, with their abusive labor practices, become the shining beacon of the city and the only form of taxation that supports the city? Do visitors not pay sales tax on what they buy? Pay meal tax on the meals they eat? Pay for transportation or the buses/taxis that they use? It would be a trivial matter to levy a hotel style tax on airbnb if that is the issue. It would still be a better deal for the visitor and a good deal for the owner of the property. Hotel tax avoidance is not why people choose airbnb.

  35. 35
    different-church-lady says:

    …I performed my primary function in making sure my brother showed up on time, sober, and wearing pants.

    You and Cole are brothers? Who knew?

  36. 36
    aimai says:

    @HumboldtBlue: That is an excellent point and its one reason why, after I found out about the evictions, I did not consider using AirBnB in any place where that was happening. But San Francisco or New York are not the kind of place I’m talking about and their housing woes are not identical to the housing situation all over the world.

  37. 37
    Cervantes says:

    @aimai:

    The various hotel taxes and convention fees are, indeed, nice for cities to have but tehy are really levied on visitors in order to keep taxes on inhabitants low–they are a form of rip off passed on to transient visitors precisely because they can’t complain.

    So there is the argument that (1) visitors use subsidized public services, and (2) taxes levied on visitors are a way for localities to make sure that visitors pay their share of the subsidies. This argument does not work for you?

  38. 38
    sparrow says:

    @Craigo: I didn’t say pay *no* taxes, it’s just not clear to me why, when I need to visit Boston for my work, I need to pay for the baseball stadium.

  39. 39
    Cervantes says:

    @aimai:

    I don’t get why Sparrow is coming in for all this hate.

    Or utter lack of understanding, never mind sympathy.

    Me, neither — but them’s the breaks, I guess.

  40. 40
    HumboldtBlue says:

    @aimai: City ordinances, public safety and public health and property taxes are damned good reasons AirBnB folks want to run their model as they do. They don’t have to pay what everyone else pays and they don’t have to operate according to local and state regulations.

  41. 41
    OzarkHillbilly says:

    @aimai:

    Hotel tax avoidance is not why people choose airbnb.

    The people renting their apartments out ARE, in fact, engaged in tax avoidance (as well as regulatory avoidance). Let’s not pretend otherwise. This is a game as old as the first King.

  42. 42
    HumboldtBlue says:

    @Cervantes: Because Sparrow and Aimai are participating in a business model that fucks everyone else over, one that is un-regulated and is nothing more than a scheme to avoid paying for the infrastructure in a locale they get the chance to visit and enjoy.

  43. 43
    Cervantes says:

    @big ole hound:

    All these assholes want is to use the cities services but not contribute to their cost.

    It may be true in your locality that taxes on hotel rooms and taxis are the only way visitors can be made to contribute to the cost of public services.

    It is not true everywhere, however, so I’m not sure how widely applicable your argument is.

  44. 44
    OzarkHillbilly says:

    @Cervantes: And me 3. I just don’t like ignoring half the story.

  45. 45
    sparrow says:

    @HumboldtBlue: Your rage is noted. By the way, I didn’t say I didn’t want to pay taxes, or that I didn’t want to support the city I’m visiting. I’m generally pro-tax (when it makes sense), and by no stretch am I a libertarian (LOL!). But because I’d rather give my rental money to college students and retirees than poor little multinational corporations like Hilton, I must be an asshole. Nice.

    Look, I’m pissed off if airbnb is not paying taxes they should. I also think they take too big of a cut from their customers (something like 15% is pretty high). But it has been a very useful service for me, where both I and the person I rent from have benefited. I don’t really get the BJ collective rage at Airbnb, when the other side is… Hilton? Marriot? When is the last time you went to a hotel that wasn’t a big chain, really?

    Airbnb is never going to take business away from most travelers, who will want to stay in a regular hotel. But for people that like to stay in homes, meet people, and save money, I don’t see why it shouldn’t exist. I think the “but they aren’t ADA compliant/don’t pay taxes!” angle is just a convenient one for the usual players who don’t want to give up even a tiny slice of their market share.

  46. 46
    Cervantes says:

    @HumboldtBlue: Thanks. I think I understand your argument, but see above.

  47. 47
    different-church-lady says:

    @sparrow:

    it’s just not clear to me why, when I need to visit Boston for my work, I need to pay for the baseball stadium.

    Just FYI: here in Boston the baseball stadium is 102 years old. It was paid for a long long time ago.

  48. 48
    Richard Bottoms says:

    The same Libertarian dickheads you ridicule daily own these disrupty, tax avoiding, regulation flaunting, union busting enterprises

    Talk about being sold the rope with which to hang yourself.

    You may as well switch your registration back to GOP right now.

  49. 49
    Ruckus says:

    When you use Uber does someone else drive you around? Is there a staff with Airbnb? It isn’t exactly the same as using a taxi or hotel. Now that said if you rent a car you usually do pay taxes that the local population doesn’t, not unlike a taxi.
    Not sure of the answer but it might be nice if we actually knew how much “hidden” taxes we pay and what it costs to run a government, not just that it’s our duty to pay them or that they are too high. There are so many layers of taxes that we don’t normally see. Take your phone service for example. What are the taxes on your service per month, what percentage of your cost for that one item is tax?
    IOW we need a grown up discussion of taxes. Of course this will never happen because when it comes to taxes there is maths involved and so very many revert to being 3 but it should.

  50. 50
    Josie says:

    @HumboldtBlue: I really don’t understand this level of hostility. Many of the AirB&B hosts are not businesses. They are just people who are renting out a section of their home or apartment on a short term basis – similar to taking in a room mate. They should not be considered a hotel. I can see the point if they are actually renting out rooms on a large scale,but that is not the case with the majority.

  51. 51
    different-church-lady says:

    @Ruckus:

    What are the taxes on your service per month, what percentage of your cost for that one item is tax?

    I dunno about you, but the answers to those questions are printed right on my phone bill every month.

  52. 52
    HumboldtBlue says:

    @sparrow: And please excuse my rage, I am just tired of the “look, we came up with a whole new way of doing this thing and we can do it by ignoring every single sensible (and not so sensible) rule and regulation that have been imposed on this industry.”

    It’s nothing more than Silicon valley Randian bullshit about how they shouldn’t have to endure the onerous regulations everyone else should. This is happening at the expense of others and as it always does, those with the least clout and the least power. That includes renters kicked out and smaller businesses that haven’t been able to create an app that allows you to take advantage.

    Don’t shrug off public safety, public health and access, they are there for a reason and it won’t only be the major hoteliers who you find opposed to the model currently being used.

  53. 53
    Another Holocene Human (now with new computer) says:

    Don’t forget that the workers get paid less too and all of the health and safety regulations that have slowly built up over the years for accommodations and transportation are being flouted as well.

    But people love this stuff because “technology!!”

    I guess the problem is that people have always rented houses and shit informally, AirBNB is just house renting on steroids. As for Uber, ugh. I don’t understand how that shit is legal. When the Chinatown buses were Chinatown vans running around unlicensed and unregulated the New York DOT stepped in. Massachusetts kind of ignored them until they got coaches, then they forced them to use the South Station Terminal. Uber is not “car sharing”, it’s not fucking Flexcar with your buddy driving, it is a livery service. I guess the libertarians must be good at bribing/coopting municipal authorities to continue to evade basic requirements like medallions, background checks, fee structures, etc.

  54. 54
    HumboldtBlue says:

    @Josie: And many AirBnB outlets are blatantly flaunting and blatantly avoiding the very real and very necessary regulations that protect the community and generate revenue. Stop pretending this is just a couch-surfing endeavour because it’s much larger than that and that’s why the reaction to it is growing.

    This isn’t about Craigslist postings and providing a space for the weekend, it’s aimed at completely circumventing local ordinances to make money with a new business model and it’s being called out.

  55. 55
    different-church-lady says:

    @Josie: If in 1995 I told you that in ten years time people would be able to make a full-time living selling collectables through a “virtual store” on “the world wide web”, what would you have said?

    When you sell one item a month on Ebay, you’re a hobbyist. When you sell hundreds month in and month out, you’re a professional business. Where do we draw the line between the two? And in the realm of taxes and regulation should we treat the virtual shopkeeper differently just because they use a form of shop that can also be used by the hobbyist?

  56. 56
    sparrow says:

    @HumboldtBlue: Again, these people I rent from pay property taxes, and I pay plenty of other taxes when I’m there, on food, on transport, etc. If Airbnb needs to be pushed to pay an additional hotel tax, fine. Let’s say it adds $10/night to my costs — I’m still going with airbnb. Assuming that happens, am I still an asshole for renting from a local person rather than Hilton (who has somehow wrangled an exclusive deal with my professional organization)? If so, I’m all ears to hear about how that is.

    BTW, I used to do this before airbnb, by using craigslist, but it was *WAY* more sketchy and I am older and wiser now and don’t know if I could go back to those days. One of the things airbnb provides are the verified reviews that you are a nice, clean person who will not trash someone’s space, and vice versa.

  57. 57
    Josie says:

    @HumboldtBlue: Then I would think the answer would be to make some restrictions on how such a service could operate rather than attacking a person who simply wants to find a less expensive and smaller scale option for spending a couple of nights out of town.

  58. 58
    Another Holocene Human (now with new computer) says:

    @sparrow:

    I’m not seeing the moral force behind taxing the hell out of taxis and hotel rooms, honestly.

    Both should pay some taxes as they do impose costs but certainly Florida-style extreme taxation of hotels (soak the tourists plan) is just a way to avoid progressive income taxation so that really really rich people can keep more of their money and little guys can pay it.

    If a retiree is renting that room at $40/night for 300 some nights a year that’s starting to sound like a primary source of income and is going to be subject to federal income taxes. Why shouldn’t the local authorities have a say? Now, if it’s the odd night when the World Series or something similar is in town and under $1000/yr gross, then, yeah, who cares.

  59. 59
    different-church-lady says:

    The first Uber user to die in an Uber crash — that’s when governments will bring the boom down HARD.

  60. 60
    sparrow says:

    @HumboldtBlue: No, I understand where you are coming from. I do think airbnb needs to be kept in line like any other company that might be going against existing laws/regulations. But I also think we need to be sensible about not just jumping on them because they’re different. Apparently, they filled a niche that was missing.

  61. 61
    Richard Bottoms says:

    But…but I save money.

    Whine.

    Self justification.

    Denial.

    At least the Aryan-Randoids stick together, you guys seem to find it hard to endure paying an extra $100 to uphold your “ideals”.

    As the joke says, we’ve established what you are, now we’re just negotiating price.

  62. 62
    Dessic says:

    @Craigo: I was unaware that Lyft and Uber drivers didn’t pay gas taxes for their vehicles nor vehicle registration and inspection fees to the localities in which they operate, nor did owners of spaces rented out on AirBnB pay property taxes on their abodes, or rent to their landlords to didn’t pay said taxes.

  63. 63
    Cervantes says:

    @different-church-lady: To take just one example: If you look at the various terms under which the owners of the Red Sox have been granted the right to use (lease) public streets in the vicinity of Fenway Park on game days, you will see that the city has given, and continues to give, the team-owners large amounts of money.

    Are Boston’s tax-payers still paying for Fenway Park? Perhaps not, but are they still enriching the owners of the team? Take a look.

  64. 64
    Rafer Janders says:

    Jobs are the overlooked issue. The hotel chains, while Evil Mega-National Corporations, also provide work for hundreds of thousands if not millions of people nationwide, from maids to front desk staff to elevator engineers to cooks to waiters to the laundry people etc. Many (though not as many as they should be) of those jobs are unionized.

    AirBnB provides jobs to…what, a few dozen coders and marketers at a loft in downtown SF?

    It is, in effect, a massive jobs-and union killing machine.

  65. 65
    Josie says:

    @different-church-lady: I have a small business (very small) and I pay the same income tax and sales tax for selling locally or online. There is no difference, except for the property tax if I own a shop or the payment to Etsy if I sell online. I don’t see your point. One is not escaping anything by doing business online. I would imagine the people who are renting out a bed or a room are paying property taxes and paying income tax on the income derived. Don’t try to kid me that the cost of the hotel room is completely the result of taxes.

  66. 66
    Another Holocene Human (now with new computer) says:

    @low-tech cyclist:

    So Uber and its ilk can’t just say “we’re a cab company” because if they did, they’d be frozen out of the market by the incumbents.

    There’s a fucking reason for that, did that ever occur to you?!?

    ETA: NYC started medallions because there is only so much space in Manhattan and they were trying to limit the # of vehicles on the roads. Other cities have followed that model because cabs can quickly get into a situation of market failure without some basic guidelines like how customers are charged. Where I live now they believe in taxation as rent-seeking so they require medallions but engage in no regulation and as might be expected the result is market failure. Oh, there are cabs, but just try to hire one and have it a) show up b) in a reasonable amount of time and c) pay a fair price. Here folks take a journey 2x as long but pay 1/10 the price by riding public transit but we’re lucky to have decent transit. But in many cities transit and taxis complement each other. That requires regulation to work.

    There are issues with medallions, it’s like ticket scalping, they get resold and auctioned and drivers are several layers away. Uber does NOTHING to solve this problem, as they force the driver to buy a new vehicle they can’t afford and then race around town making peanuts. Uber drivers cried foul a few months ago over getting squeezed just like Quizno’s and Moe’s franchisees.

    BTW, Supershuttle is a similar business model and those drivers are getting completely fucked as well. Most of the customers are business travelers who prepay and get a receipt to be reimbursed so they get fucked on tips as well. On the East Coast it’s a lot of West Indian and West African drivers and they have to pay airport access fees as well, meaning some days they may lose money. It’s complete and utter bullshit.

  67. 67
    different-church-lady says:

    Sorry for flooding: anyone know what the insurance liabilities are regarding the safety of one’s “guests” in a small scale AirBnB transaction are? Does that condo have a sprinkler system and inspected fire exits? Because I guarantee you the hotel does. When the railing on my porch breaks away, and my “guest” breaks his leg and sues me, it’s law of the jungle at that point, right? Or when the “guest” sets my kitchen on fire and burns my house down I’m shit out of luck because my homeowner’s insurance doesn’t cover me for running my house as a rental property?

    It ain’t just about taxes.

  68. 68
    Alex S. says:

    Very difficult issue for me, ideologically. I think those opportunities are efficiency gains. Car sharing saves fuel which benefits the environment. Sharing in general saves resources, it eliminates market frictions. But of course, regulated businesses will suffer. As much as these two ideas will have to co-exist within my mind, I hope that both industries can survive and that the sharing economy will only ‘fill the gaps’ left open by the other industries, i.e. low or no extra services and only occasional offers. There must be a clear distinction between the reliability and general level of service of private offers and hotel chains/taxi companies.

  69. 69
    Rafer Janders says:

    @Josie:

    Many of the AirB&B hosts are not businesses. They are just people who are renting out a section of their home or apartment on a short term basis – similar to taking in a room mate.

    It’s not similar to taking in a roommate, though. There’s a quantitative and qualitative difference between having one roommate 365 days a year and having, say, 121 roommates who stay about 3 days each.

    And, you know, in a hotel you expect the other hotel rooms to be people coming and going. When you live in an apartment building with your spouse and children, you expect the other people in your building who have keys to be known and vetted stable tenants who were approved by the landlord, not random strangers with a criminal record.

  70. 70
    Josie says:

    @Rafer Janders: You are assuming that,if there were no AirB&B, that those people would stay in hotels. I can guarantee that if I can’t stay in a room for 40.00 per night and have to stay in the hotel for 100.00 per night, I won’t be making the trip. Thus the hotel gains nothing by my not staying in the less expensive option. I have a feeling that might be true for lots of folks.

  71. 71
    Another Holocene Human (now with new computer) says:

    @big ole hound:

    All these assholes want is to use the cities services but not contribute to their cost. How else is a city supposed to maintain a level of attractiveness that makes us want to go there.

    Ding ding ding.

    And the answer is not “incinerate the homeless” and “solicit corporate sponsorship”.

    TAXES pay for new sidewalks, street trees, free circulator shuttles, and they convince investors to buy your bond issues to build new amenities downtown.

  72. 72

    @Betty Cracker:

    I think the only question is, will the aforementioned lobbyists have enough juice to force politicians to level the playing field, when doing so would expose the politicians to the public’s irrational revulsion toward taxes and regulation?

    The taxes Richard talks about will probably have a deciding role. The politicians may have an aversion to regulations, but they also don’t want the government that gives them their power to go bankrupt. They’ll avoid the tax issue, talk about the safety aspects of the regulation, and use that as a reason for pushing these things into the existing model. There will be at least a handful of lurid, sensational things go wrong with the new services to give them their talking points they need.

  73. 73
    sparrow says:

    @Josie: Exactly. It’s not like I’m staying in a Hilton resort quality hotel room, but somehow skirting taxes in order to pay $40/night. The crappier accommodation is made up (in my mind) by usually meeting interesting people who can tell you about the place you’re staying. It’s a lot less soul-less and depressing than going to the local roach-infested motel that would be my only other option (and in some places, there isn’t even that).

  74. 74
    Another Holocene Human (now with new computer) says:

    @Elizabelle: Yet they keep getting away with it.

    Look at PayPal. It is not a bank. It stores people’s money and, sometimes, it steals it for whatever it determines to be TOS violations. Especially if you are not based in US and can have a US lawyer send them a nastygram. I know a Swede who had hundreds of dollars taken from her without notice or recourse by PayPal when they shut down her PayPal button. She wasn’t doing anything illegal but it violated their TOS. Of course, there are millions of people violating their TOS at any time. Was she an idiot–why yes, she was (and is) a blithering idiot. But that doesn’t give PayPal the right to just steal her money without recourse. They just got away with it, that’s all.

    Elon Musk, btw, is a PayPal alum.

    These regulations happened for a reason, because there were horrific consequences in the real world to cowboy-anything-goes-land. But they can get away with this shit for decades. That’s why AirBNB is valuated so high. They’ll sell to other bagholders before all this illegal and immoral and unprofitable shit catches up to them.

  75. 75
    Elizabelle says:

    A John Galt reader comment from that MarketWatch story:

    Shhhh….if the masses learn the true potential of the internet and the power of banning [sic; banding?] together they might see themselves as the Master instead of the slaves. I wonder how much less in taxes we would have to pay if someone smart could apply the Internet to all the bogus taxes and regulations we now have to deal with? The internet figures out how to use excess capacity whereas the government rewards those who can develop networks of excess capacity on the backs of the slaves.

    I’d love to hear what Mr. Galt has to say when he’s out of his apartment, where he works, for months upon months because the Airbnb guest using the apartment above or next door to his had a kitchen fire, and all the smoke and water damage ruined Galt’s electronics and made his apartment uninhabitable. And maybe the building is never again inhabitable. Building codes, dudebro.

    Get so tired of all this “slaves” business, too.

    Glibertarians suck.

    ETA: the other thing I love about dudebro’s comment is his wished for “banding together.” Which is usually what communities and their representative governments are about, but not in his Galtian paradise of dudebros and slaves.

  76. 76
    different-church-lady says:

    @Josie: My point is if one is doing a few transactions a year and doesn’t report that as income, the government is probably going to look the other way. But once one reaches a certain threshold it becomes a business using was was once an unconventional tool, and must play by the rules of a business. The line between the two is not clearly delineated.

    Ebay started off as a sort of virtual yard sale and evolved into something gigantic. Back when it was small people probably thought it was absurd to think you’d have to pay taxes on those transactions.

    Uber, etc. is still in the small phase, but we know full well from experience that once a tool is in place some people will try to exploit everything they can from it. Certainly we view it as absurd to think of the guy who does a couple of Uber rides a week to have to play by the rules of a Taxi company. But what happens when that same guy figures that if he gets really good using the Uber tool he can make 5 or 6 trips a day, day in and day out? At that point he’s a cabbie who’s working outside of the cabbie regulatory system.

    The reason we can figure out what to do about the Ubers of the world is because they live in two worlds at once: today they are tools used by the amateur looking to make some spare dough, but we’d be foolish to think that tomorrow they don’t become tools for full-time businesses. And where we draw the line between those two is, I dare say, almost impossible.

  77. 77

    @OzarkHillbilly:
    Hotel and restaurant taxes are actually a plausible approach to funding a convention center. After all, it’s the local hotels and restaurants that are going to be making money serving the conventioneers, so it makes more sense to tax them for the cost of the convention center than the general public.

  78. 78
    Another Holocene Human (now with new computer) says:

    @Randy P:

    It’s similar to the situation with the “Chinatown buses” here in Philly that run the Philly to New York route at ridiculously low prices, operated by Chinese-speaking owners and originally targeting Chinese customers. They keep their prices down by saving on frills such as maintenance or licensed drivers.

    Too true but the USDOT is cracking down on them now. Fung Wa was actually shut down during the Obama administration for maintenance violations. DOT first required them to rent buses from another company but when the same issues cropped up again, they shut them down. USDOT can only shut down intercity service, so in a big state like Florida or Texas you can have interstate banned operators running intrastate, but for Fung Wa, interstate was their business, so they’re done.

    Megabus and Boltbus actually used the internet to undercut the Chinatown buses. The first seats are like $1 or $5, Chinatown buses were $10 originally. The last seats on the bus are $20-30 range, so basically more for walkups, Chinatown buses same price for walkup. Megabus and Boltbus are owned by massive multinationals.

    The Chinatown bus was a creature of the deregulation that Greyhound pushed for, which resulted in Greyhound being 1/5 of its former size, even during a boom in interstate bus ridership.

  79. 79
    different-church-lady says:

    @Alex S.:

    Car sharing saves fuel which benefits the environment.

    I think you’re confusing car sharing with car pooling. An Uber trip isn’t any more gas friendly than a conventional cab or a rental car.

  80. 80
    sparrow says:

    This reminds me a lot of the freakouts that were happening a few years ago when people realized escort services were using craigslist, and calling for it to be banned. Nevermind that escort services had been using the local weekly publications for the same purpose, for long before the internet existed. Technology *will* allow new business models to happen, and there is going to be some wild-west aspect of the first few years of anything new, and then things will settle down, and in 15 years, you’ll probably still be able to rent a couch and no one will be freaking out about it. I think the answer is to thoughtfully consider how to properly handle these businesses in terms of taxes and regulations, not call everyone using them assholes and call to ban them.

  81. 81
    different-church-lady says:

    @different-church-lady:

    The reason we can figure out what to do about the Ubers of the world…

    Sorry, that should have read, “The reason we CAN’T figure out what to do…”

  82. 82
    D58826 says:

    I suspect, that just like the growing effort to collect sales taxes from Internet commerce, if the pie gets big enough the rules will be changed to include these services in the tax base.

  83. 83
    different-church-lady says:

    @sparrow:

    This reminds me a lot of the freakouts that were happening a few years ago when people realized escort services were using craigslist, and calling for it to be banned. Nevermind that escort services had been using the local weekly publications for the same purpose, for long before the internet existed.

    Actually it’s more like if a high tech startup came out with an app that allowed you to be a sex worker once a month, without having to do all that creepy walking around on a seedy street.

  84. 84
    beth says:

    @sparrow: They’re still trying to hash out taxes due from online hotel booking sites. State and local governments keep suing to try and collect taxes on the difference between the $100 the online site collects from the customer and the $50 it pays to the hotel (the hotel remits the taxes due on the $50). The booking sites insist the extra is a customer fee, not room revenue but the local taxing authorities want it to be considered taxable room revenue. Look how long we’ve been using online hotel booking sites and this issue still isn’t settled.

  85. 85
    Another Holocene Human (now with new computer) says:

    @Randy P:

    I guess part of the trade off is whether or not those companies are driving the better ones out of the market. Greyhound IMO provides excellent value and drivers I trust. But can they survive?

    Greyhound figured not. They hired scabs during their second, massive driver strike (the drivers won, eventually) and had the worst safety record in the business. They pushed for deregulation and dropped bus service like it had a disease.

    The result was British companies and US companies starting up on their “cream” routes and undercutting their prices. Greyhound went bankrupt and was purchased by a massive Canadian concern. The only thing that saved them was the secular increase through the 2000s of people taking buses intercity. (More people pushed below middle class status, basically, and more young people wanting to take transit, where they could use their smartphones or watch movies, than drive for hours on end. And also there are those who for health reasons cannot fly and Amtrak doesn’t go everywhere.)

    Greyhound had to hire back their old drivers and their safety record (astounding to me) is now one of the better ones. But their old management didn’t think that mattered at all.

    Plenty of people have indeed ragequit Chinatown buses after getting left on the side of the road when the bus burned up. One does wonder how they get by destroying vehicles like that.

    I did care about safety records when I was a big coach rider. Peter Pan had the best safety record in the business. Their drivers were very courteous and professional. They had some sort of Trailways codeshare with Greyhound (GLI) in the area (I don’t pretend to understand it) but I would try to get on the PP bus if I possibly could. Greyhound has nicer vehicles now due to the coach boom profits but back then their vehicles were pretty run down and smelly as well. But mostly I was afraid of accidents.

  86. 86
    sparrow says:

    @beth: Hmm, I did not know about that. But I would assume this could be fixed by simply applying whatever tax rate is usually applied to travel agents. Again, these aren’t so much new businesses as new ways of doing them. I think charging a booking agent as a hotel room is rather obviously an unfair money grab, but that’s just me.

    I think these things will sort themselves out eventually, and honestly there are much bigger things in the world for people to be outraged about.

  87. 87
    Marc says:

    This just strikes me as another sign of economic desperation on the part of the middle class. People don’t rent their “spare room” out to strangers regularly if they have a choice. If this is investors then it’s basically a dodge around hotel regulations.

    And as far as the taxis are concerned, the end game is extremely clear if they are not regulated: a horde of poorly paid people on call all of the time making very little money and running their cars into the ground while a handfull of rich people rake off cash from the top and cabbies lose their livelihood.

  88. 88
    Elizabelle says:

    @different-church-lady:

    Not an Uber passenger death, just yet, but a pedestrian: a 6 year old girl on a San Francisco street. Uber claims its driver was between fares, and thus not an Uber driver. Good luck with that.

    NYTimes: Rough Patch for Uber Service’s Challenge to Taxis

    Uber compares itself to the auction site eBay, connecting a buyer and seller but not liable for what happens between them. Regulating Uber, the company told the California Public Utilities Commission, would stifle innovation.

    The commission, which oversees limousine companies, called Uber’s arguments “creative” but decided in September that it was a transportation company after all, subject to regulation. Uber is appealing. A spokesman for Uber said the company’s system of asking passengers for feedback meant Uber was self-regulating. (!!!)

    The issue is pressing because, as the company rapidly expands and Uber drivers flood the streets, the possibility of accidents increases. Who is responsible when something goes wrong?

    The Uber driver who hit 6-year-old Sofia Liu and injured her mother and brother was arrested on suspicion of vehicular manslaughter.

    “We have deactivated his Uber account,” Uber said in a statement. But the company pointedly said the driver, Syed Muzaffar, did not have a passenger in his Honda Pilot at the time of the accident, and thus the accident had nothing to do with Uber.

    Mr. Muzaffar’s lawyer said that was false and self-serving. “He was working for Uber,” said the lawyer, Graham Archer. “He was waiting for a fare.”

    … “Uber may be the next Amazon, but Amazon doesn’t have the same potential capability to leave a trail of bodies in the street,” Trevor Johnson, a director of the [San Francisco Cab Drivers] association and a driver himself, wrote in an email.

  89. 89
    Another Holocene Human (now with new computer) says:

    @different-church-lady:

    When you sell one item a month on Ebay, you’re a hobbyist. When you sell hundreds month in and month out, you’re a professional business. Where do we draw the line between the two? And in the realm of taxes and regulation should we treat the virtual shopkeeper differently just because they use a form of shop that can also be used by the hobbyist?

    I’m pretty sure IRS.gov has handy-dandy answers to exactly that question! (Note: you’ll be surprised at how low the threshold is!)

    The issue here is state and local government getting steamrolled by libertarians, the “franchisees” who think they will GRQ and are making phone calls and filling forums on their behalf, their little bots in the press who are like “Uber is better! because reasons!”, and the usual tax- and reg- avoidance lobby.

    The next stage is for those hotels Aimai disdains for their labor practices lobbying states to get rid of what little regulation they must adhere to because AirBNB doesn’t have to and that’s unfair competition.

  90. 90
    Richard Mayhew says:

    @different-church-lady: I think that is where things are going. In my world of soccer refereeing, there is a clear split. The guys who make enough to make multiple mortgage payments a year (I’m in this group) keep good records and declare the income and claim deductions. And then there are the 15 year old kids who work 7 Saturday mornings a year for movie money. If more than 3% of them or their parents claim the income, I would be shocked.

    Is it a real job/business or a casual money making oppotunity where that split is defined at some number of nights or some cash value (much like the 1099 $600 threshold is used as a de facto standard of “job” or “hobby where I make a little money”)

  91. 91
    Another Holocene Human (now with new computer) says:

    @different-church-lady: Keep waiting.

    People keep dying in coach buses due to a loophole in the FSLA as well as lax USDOT HOS regulations that allow interstate drivers on crazy splits not to be paid overtime so they work two jobs fall asleep behind the wheel and kill people.

    Oh, and the coach/tour lobby (small proprietors, used to be bulk of the industry before the Brits showed up with “Coach USA, LLC”) has kept regs at bay for years so plenty of horrible crashes with vulnerable old people caused by frankly incompetent operators, like the driver who drove off an overpass deck in Atlanta, GA.

    Nobody seems to care, except for the president of the Amalgamated Transit Union.

  92. 92
    Elizabelle says:

    NYTimes: Uber and a Child’s Death

    More details on the tragedy of Sofia Liu’s death, the implications of this “sharing economy” and risk, and on the dudebro who founded Uber.

    Travis Kalanick, chief executive of the on-demand transportation service Uber, originally used “The Fountainhead” as his Twitter icon. It was viewed by many as a proclamation: Ayn Rand’s novel is beloved by Silicon Valley’s regulation-is-useless crowd, and Uber is in too much of a hurry to want anyone slowing it down with questions about safety and responsibility.

    …Mr. Kalanick, he recently ditched Ms. Rand as his Twitter icon for the considerably more pro-government figure of Alexander Hamilton.

    “People think I’m a crazy libertarian,” he said. “I’m a little crazy, but I’m not a libertarian.”

  93. 93
    OzarkHillbilly says:

    @Roger Moore: No disagreement from me on that point in particular. Just saying that the urge to tax the other guy is high, especially when he can’t vote. (in the MO election yesterday there were 2 votes to raise taxes, both on people who would receive no direct benefit from them)

  94. 94

    @Another Holocene Human (now with new computer):

    If a retiree is renting that room at $40/night for 300 some nights a year that’s starting to sound like a primary source of income and is going to be subject to federal income taxes. Why shouldn’t the local authorities have a say? Now, if it’s the odd night when the World Series or something similar is in town and under $1000/yr gross, then, yeah, who cares.

    IIRC, you can rent out your primary residence for up to 14 days per year without having to pay income tax on the proceeds. One of the people at my work has taken advantage of this by renting out his house for movie location shooting. Something similar seems like a reasonable rule for something like AirBnB. If it’s an ordinary person who’s renting out their house while they’re on vacation, that’s one thing. If it’s somebody who’s buying properties just to let them out, they’re clearly running a business.

  95. 95
    boatboy_srq says:

    Speaking as a) a sometime landlord, b) a frequent (and current) tenant, and c) a professional who at least occasionally travels for business, I’m having a very hard time not saying anything snarky. The combination of Web enterprises that enable tax and municipal code scofflaws for a quick Bitcoin, the vendors who skimp on regulatory compliance and ignore the fine print in exchange for some quick cash, and the grifters who can figure out the scheme and take advantage, all sound like the kind of libtard dystopia Randians are fond of. The combination lets them wag the due-diligence finger at the folks who get taken advantage of while still looking down their noses at all parties, all the while complaining about how expensive and inconvenient it is to play by the rules if they had to use the conventional room and transit options (are you listening, sparrow?).

    There’s also the certainty that, whatever their failings, taxis and hotels are expensive in part because they pay to ensure that all those fees are paid and all the accommodations (ADA etc) are provided, and that customers who do not receive the product/service they find acceptable have reasonable methods of redress. There are attorneys on payroll or retainer, accountants, engineers, architects and a whole army of support staff just to ensure that the bills are paid, the ramps are built and the electricity/plumbing/mechanicals are all up to code. It’s not a perfect system, and those companies are just as interested in skipping or skimping on those things as private citizens, but their liability is so much higher that reasonable effort at least has to be provided, and that reasonable effort is not cheap. AirBnB, Uber, and the others save money by skipping all those salaries as well as the related fees, and their users on the vendor side benefit from that as much as from the unpaid taxes and unprovided accommodations.

    @aimai: IYAM The biggest reason that sparrow is coming in for all the heat is that we have a proud federal grant recipient skipping out on local sales and use taxes because stretching grant dollars is more important than anything else. It’s the traveler’s version of “keep Big Gubmint hands off my Medicare”. Hospitality has a horrible track record on employment, and taxis get their share of bad press, but if a customer or employee has a genuine beef then there are simple legal options available to them and not the “gee, that’s too bad” judicial response AirBnB and Uber users (whose only assessable penalties are likely to be removal from those services’ listings) are likely to get. Hotel and taxi local fees and taxes are higher because the sales and property taxes those municipalities already assess are not enough – and the choice there is to find ways to generate revenue or continue to shrink the municipalities’ costs through reduced services and infrastructure investment, which at a time when most cities are flirting with bankruptcy and when local taxpayers are incensed enough over what they pay already to resist paying more is an increasingly painful dilemma.

    @Elizabelle: I’m having especial trouble sympathizing with your AirBnB host example. This sort of bad behavior from short-term tenants is hardly new, and has been fairly well documented. I agree completely that she ought to contest the situation, and that she deserves representation, AND that AirBnB should be assisting with her case – but if she’s thick enough to rent a residence in a choice location for an extended period without bothering with a lease or other written and enforceable agreement (never mind an agent or other local presence), then there’s not a whole lot to be said.

  96. 96
    Another Holocene Human (now with new computer) says:

    @Rafer Janders: I disagree with this. Your thesis is that expandable and collapsible hotel space, facilitated by technology, is a “jobs-killer”.

    I say that huge 10-year tax breaks to developers to build huge hotels only used a fraction of the year is actually a really shitty use of government money as opposed to investing in education or fixing a bridge.

    Just because some people were busy building it or busy keeping the lights on doesn’t mean that it has a great multiplier or it was the best multiplier for the local economy. Just look at Florida, hotels != prosperity.

    This is not at all the issue I have with AirBNB.

  97. 97
  98. 98
    Omnes Omnibus says:

    @sparrow: Where are the calls for banning these services? The arguments I see being made seem to be in favor of making sure that these services don’t get a free ride and that they are safe, hygienic, insured, and the like. If you break a hip falling at a hotel, odds are it has insurance to cover compensating you. If the same thing happens at an AirBnB room, can you be sure of the same?

    Right now, these service providers are taking advantage of two things. The fact that regular providers are expensive. And the fact that they can skirt regulations. If they can manage to be less expensive than traditional providers and be certified as safe, clean, and insured, then they are worthwhile innovation. If they cannot, then they are exploiting their customers and gaming the system.

  99. 99

    These kind of ‘sharing economy’ schemes are hot because avoiding hotel, or taxi taxes & regulation are the closest they can come to disruptive innovation. Sadly, there is one logical next step, that can help them avoid nearly all taxes including sales taxes and that is crypto currencies like bitcoin. Using TOR and bitcoin, it will be nearly impossible to tell that money changed hands in the first place, much less that taxes are owed. Crypto currencies are serious ‘disruptive innovation’ and if they gain popularity, serious thought will have to be given to how to collect taxes in a world where all income and transactions are easy to hide.

  100. 100
    Another Holocene Human (now with new computer) says:

    @Alex S.:

    I think those opportunities are efficiency gains. Car sharing saves fuel which benefits the environment.

    Unlike Uber, many taxi commissions are transitioning local fleets to hybrids, which pollute less and use less fuel. And in a busy city taxis will go from fare to fare. In some cities taxis actually pick up multiple fares at once. (Did this in NJ, it was cheap and fast.)

    Uber combines an abusive relationship with the employee-not-classed-as-employee (which, of course, is nothing new these days), with an easy to use app (you don’t have to make a phone call and talk to a human!!!!! libertarians love this one cool trick! yes, I am genX not millenial I actually use my fucking cell phone to make calls, fuck me!) the one actual innovation and the taxi co’s should kick themselves for not doing it first, and of course the skirting of taxes and regulation so that the owners can make way more profit, at least until authorities catch up to them. Lose-Win-Lose and of course Lose for the residents who weren’t party to the transaction. Nice.

  101. 101
    Another Holocene Human (now with new computer) says:

    @Josie: So many people have never heard of hostels, it seems.

  102. 102
    Rafer Janders says:

    @Josie:

    You are assuming that,if there were no AirB&B, that those people would stay in hotels. I can guarantee that if I can’t stay in a room for 40.00 per night and have to stay in the hotel for 100.00 per night, I won’t be making the trip. Thus the hotel gains nothing by my not staying in the less expensive option. I have a feeling that might be true for lots of folks.

    You are assuming that, if there were no AirBnB, none of those people would be making the trip. People will still want to go on vacations, go to their friend’s weddings, visit the grandparents, etc. If AirBnB didn’t exist a lot of these people would otherwise suck up the price differential and stay in motels and hotels, because the emotional and/or business value of the trip to them outweighs that differential.

  103. 103
    Another Holocene Human (now with new computer) says:

    @Elizabelle:

    I’d love to hear what Mr. Galt has to say when he’s out of his apartment, where he works, for months upon months because the Airbnb guest using the apartment above or next door to his had a kitchen fire, and all the smoke and water damage ruined Galt’s electronics and made his apartment uninhabitable. And maybe the building is never again inhabitable. Building codes, dudebro.

    I don’t. I gua-rone-tee it will be extended rants about immigrants, “the Negro”, and other “low-lifes” that have made his living quarters uninhabitable, not to mention yew-yuns holding up the reconstruction.

    I know because I used to hang out on message boards and blogs with some truly horrible people.

  104. 104
    different-church-lady says:

    @boatboy_srq:

    I’m having especial trouble sympathizing with your AirBnB host example. This sort of bad behavior from short-term tenants is hardly new, and has been fairly well documented.

    I don’t know enough about the AirBnB model to say this definitively, but I can imagine one hazard of this “sharing” model is that by having AirBnB facilitating the transaction they are creating a sense of trust that might be (a) false and (b) negligent. Perhaps they are even cultivating that image.

    When one posts a room to short-term share as a classified (say, Craig’s List or the local paper), the expectation is landlord beware. One must do one’s own background checks.

    AirBnB, on the other hand, might had a set of policies in place that are designed to lend a sense of security to the endeavor — registration, ratings, etc. There might be a sense that AirBnB has vetted your potential guest in some small way.

    It’s easy to imagine bad people figuring out ways to exploit that trust in novel ways. At that point does AirBnB own their marketing or wash their hands?

    Again, it’s a way of trying to live in two worlds at once: “we want you to believe it’s safe so you’ll use it, but in the end you’re still responsible for your own safety.”

  105. 105
    Another Holocene Human (now with new computer) says:

    @different-church-lady: Please take that back. There are several class layers between “escort” and “streetwalker” not to mention the vast difference (vas deferens hur hurr) in how they are treated by law enforcement and the legal system. This has always been the case.

  106. 106
    different-church-lady says:

    @Another Holocene Human (now with new computer):

    I am genX not millenial I actually use my fucking cell phone to make calls, fuck me!

    If you haven’t got anything good to say about anybody, come sit next to me.

  107. 107
    Another Holocene Human (now with new computer) says:

    @Marc:

    And as far as the taxis are concerned, the end game is extremely clear if they are not regulated: a horde of poorly paid people on call all of the time making very little money and running their cars into the ground while a handfull of rich people rake off cash from the top and cabbies lose their livelihood.

    Yes! Someone on this thread gets it! This is exactly what is going on.

    The only part you missed is where the public at large gets fucked because health and safety regs like hours of service for drivers become a dead letter.

  108. 108
    snoey says:

    >One of the things airbnb provides are the verified reviews that you are a nice, clean person

    Pale too.

  109. 109
    Rafer Janders says:

    @sparrow:

    The crappier accommodation is made up (in my mind) by usually meeting interesting people who can tell you about the place you’re staying.

    Well, good for you. But bad for me.

    I live in a four-unit rental building. I know all my neighbors, they know me, we’ve all lived there for years, the landlord has vetted all of us. I have no worries about the other people who have keys to the building where my wife and children live, and they have no worries about me having keys to the same.

    It’s an entirely different situation if one of those units starts renting out to AirBnB on a weekly basis, and suddenly the lobby is regularly filled with four drunken frat brothers on a weekend getaway to my city, or a wedding party, etc. That’s inherently unsafe for me, for my family, for the other families in the building, having to live with a constant and changing slew of strangers who suddenly have keys to where we live. We didn’t sign leases to live in a hotel. We signed up to live in a home, and AirBnB would destroy that.

  110. 110
    Rafer Janders says:

    Um, why is my comment in moderation? Can someone please rescue it?

  111. 111
    Alex S. says:

    @different-church-lady:

    You’re correct, I had the buzzword ‘the sharing economy’ on my mind. Though ridesharing is one of Uber’s services.

  112. 112
    heckblazer says:

    @low-tech cyclist:

    (medallions?! what funny terminology!)

    .

    I don’t think it’s that strange as the license is an actual metal medallion attached to the hood of the taxi.

  113. 113
    Another Holocene Human (now with new computer) says:

    @different-church-lady:

    If you haven’t got anything good to say about anybody, come sit next to me.

    :) Heh

    I don’t even enjoy making phone calls, I just have this dinosaur mental block about not riding a paratransit service without talking to a human first. I used to call public transit all the time too but their websites are better than they used to be. (Also, some of those CSR’s were downright nasty. I was in a weird part of DC and called before I paid my exit fare to find out if the bus I wanted came to the station I’d gotten off at and the lady yelled at me “ARE YOU CALLING FROM A METRO STATION?!” I was, uh, calling Metro. From a Metro station pay phone. Clearly a rookie error!

  114. 114
    raven says:

    @Rafer Janders: We just stayed in a joint in Beaufort, SC for $59 and that was with our doggies.

  115. 115
    different-church-lady says:

    @Another Holocene Human (now with new computer): Is one of the class layers “sporadic hobbyist”?

    Please don’t take it too seriously, but what I was attempting was Swiftian exaggeration aimed at the idea that the tool-slash-toy encourages people to do things they would ordinarily not think about doing without it. And the toy-like component of the tool leads to a sense of safety that is false. “Hey, this app lets me make some money by sleeping with people in my spare time! That’s not at all the same as prostitution….”

  116. 116
    marky says:

    @Marc:

    And as far as the taxis are concerned, the end game is extremely clear if they are not regulated: a horde of poorly paid people on call all of the time making very little money and running their cars into the ground while a handfull of rich people rake off cash from the top

    … and this is different from existing taxi service how?

  117. 117
    Rafer Janders says:

    @boatboy_srq:

    There are attorneys on payroll or retainer, accountants, engineers, architects and a whole army of support staff just to ensure that the bills are paid, the ramps are built and the electricity/plumbing/mechanicals are all up to code.

    Which gets back to my earlier point that AirBnB, Uber, etc. are first and foremost job-killing enterprises. They destroy hundreds of thousands of lower and middle-class jobs.

  118. 118
    muddy says:

    Repeating from another thread: I’m still having issues getting onto this site. The main page won’t load. The RSS thing won’t accept the site. The only way I can get on is to google the author names individually without the actual site address.

    It just sits and tries and tries to load. I can scroll down a tiny bit quickly sometimes right at the very beginning, but then the page gets stuck at that point. I can’t click on anything or scroll anymore. I don’t have any problems at other sites at all.

    I am running Chrome on a macbook air. I have tried with and without ads. Really I shouldn’t be sitting here messing with this, but it’s bugging me! Does anyone have any suggestions?

    ETA: commenter lurker dean from the Weds morning open thread is having the same problem.

  119. 119
    Alex S. says:

    @sparrow:

    Indeed, I like what you say very much. Although I think that at some point, the whole process is going to hit a wall. The internet is essentially a producer of communication. Taxing communication might not be legally possible. The easier it gets to communicate with another person the harder is it going to be to tax and regulate.

  120. 120
    trollhattan says:

    Funnily enough, today’s dead tree news has a full-page, section 1 ad telling me to support some bill to “keep California moving forward!” and by all means, go to http://www.CAneedsUber.com

    My hunch: they’re trying to preempt localities from limiting commercial ridesharing.

  121. 121
    Elizabelle says:

    This has been such an interesting thread, with lots to think about. Thanks, BJ pals.

  122. 122
    Linnaeus says:

    Folks here may be interested in this article by Susie Cagle that offers some needed critique of the “sharing economy”.

    I’d like to see the term “sharing economy” dispensed with, or at least unpacked so we have a more thorough understanding of what it really means in our current context. Because, as one of the people in Cagle’s article asks, why are people needing to “share” in the first place? Second, who is benefiting from the sharing and who is not?

    To me, the “sharing economy” is old wine in new bottles. There’s nothing really new here – it’s not that much different than taking in a boarder in your house for extra money, or doing piece work at your house to supplement your income as a tenant farmer.

  123. 123
    Elizabelle says:

    @muddy:

    Good luck to you.

    Having none of the same issues; sorry to hear that you and lurker are.

    Schrodinger’s cat turned me on to adblocker months ago, and I adore it. I see that you’re experiencing trouble with and without ads, but I wonder if some script is hanging up your computer?

  124. 124
    different-church-lady says:

    @Alex S.:

    Taxing communication might not be legally possible.

    The tax isn’t on the communication. The tax is on the sale or service that results from the communication.

  125. 125
    boatboy_srq says:

    @different-church-lady: Exactly what I meant referring to the scenario as dystopian Randian libtardism.

    @Marc: This, too. Aimai’s complaint about horrible labor and tax avoidance practices in hospitality have to be weighed against no hospitality jobs and no tax receipts, and a two-tier situation where five-star hotels and plush limos with gloved chauffeurs run side by side with the room in Mom’s basement and Junior’s beater with an unwashed Junior at the wheel (or, a return to landed elite and serfs with nothing in between).

    @Another Holocene Human (now with new computer): Too many spoiled travelers who haven’t bothered to look at hostels because Rewards Points and Free Nights and other marketing.

  126. 126
    peggy says:

    Another complaint that the site won’t load using Chrome. Firefox works on an oldie XP PC.

  127. 127
    OzarkHillbilly says:

    @trollhattan:

    commercial ridesharing.

    Contradiction in terms?

  128. 128
    Linnaeus says:

    @snoey:

    Pale too.

    I haven’t verified this, but one of the people quoted in the article by Susie Cagle that I linked to in my previous comment says that the best perfomers on AirBnB are white women, and the worst are black men. Wouldn’t surprise me at all if that’s true.

  129. 129
    Eric U. says:

    here in the towns surrounding Pedobear University, this renting out of houses has been going on for quite some time for football games. The municipalities have adjusted their definition of hotels to keep it from happening, because football fans are sociopaths. Particularly when they are partying at a house they don’t own.

    Most large cities actually worry way too much about visitors, so the visitors should actually be paying. To the extent that taxis are a great way to avoid car ownership, I do have a question about raising those prices too much

  130. 130
    Mnemosyne says:

    So after reading through this whole thread, it sounds as though what sparrow wants is something like the old-fashioned boarding house, where you can stay in a room at someone’s home for a fee. Nothing wrong with that though, as others have noted, there should probably be some taxes and regulation to go along with it.

    As others have pointed out, part of the problem is AirBnB’s own success, which has led to people being evicted from their apartments so their landlords can turn them into AirBnB space instead. It’s one thing to let someone rent out a room in their own home or condo, but it’s totally different for a landlord to be using multiple units for that purpose.

    (I’m kind of disregarding what aimai said because it wasn’t clear whether she’s using AirBnB for domestic travel or only international. The rules and taxes are different for international travel, so it’s not the same thing as people in San Francisco being evicted and their apartments being turned into AirBnB lodgings.)

  131. 131
    trollhattan says:

    @different-church-lady:
    Heh. “Well, I got you here, now gimme that mop and go get hitched. I’ll watch the raccoon.”

  132. 132
    Mnemosyne says:

    @muddy:

    There seem to be some current problems with Chrome in general — people I work with are having trouble getting it to function, so they’re switching back to Safari or Firefox. Try switching browsers.

  133. 133
    trollhattan says:

    @OzarkHillbilly:
    Confess the whole thing has my brain a wee bit boggled, including the shock of seeing cars with giant pink mustaches out in traffic.

    Zip Car is something else again entirely, and seems like a brilliant alternative to owning a car for occasional use.

  134. 134
    Another Holocene Human (now with new computer) says:

    AirBNB started in the heights of the Bush economy as a way to rent pieds-a-terre. The whole notion was ownership was outdated, just rent it, or if you own and now realize how stupid that is, defray your costs by renting out. Couchsurfing.com was a thing and the way AirBNB was marketed I don’t think they seriously anticipated how deep they would end up in that market.

    The anger at AirBNB really has to do with the middle in between billionaires’ time shares and grad students’ couches. It’s where some people who use the website figured out they could run a hotel without, ya know, being a hotel, because AirBNB was providing booking like Priceline or TripAdvisor for their illegal scheme.

    I don’t really understand Squirrel’s attitude but why shouldn’t s/he couch surf? I mean, whatever. It’s the massive tax, regulation, and even deed/covenant evading operations going on in major cities that are really pissing everybody off.

    My real question is whatever happened to flophouses? Is this like the zoning and code creep in residential homes where they were eliminated through zoning and other codes and now that the prosperities of the 50s/60s is long gone we’ve now made it illegal to bring them back? I’ve stayed at Y’s but they’re few and far between, it seems. Or is it that the developers have caught on that they can always sell another “luxury” development but there’s no money in middle-middle. I wonder if buildings cost more to build back then and tax abatements were not forthcoming so you really could lose your shirt if you overshot the market. There seems to be no reason not to today.

  135. 135
    different-church-lady says:

    @OzarkHillbilly: Yeah, I picked up on that too. First of all, it ain’t “sharing” if you’re charging for it. Second, if you weren’t already going to the same place the person you’re picking up is, it’s not “sharing a ride”.

    If Uber were a service where you said, “Hey, I’m driving to Chicago on Tuesday and if anyone else is we can go together and split the gas money” it would be “ride-sharing”. As it is, it’s more accurately described as “dilettante cab driving.”

  136. 136
    burnspbesq says:

    @sparrow:

    I’m not seeing the moral force behind taxing the hell out of taxis and hotel rooms, honestly. Stadiums (i.e., the means by which part of bread&circus is distributed to the masses) should be paid for by the fans of those idiotic sports, or perhaps the public if they vote to do so.

    In the overwhelming majority of cases where infrastructure projects like stadiums, convention centers, etc. are funded by issuing bonds and the bonds are paid off by revenue from targeted taxes, there was either a vote by a democratically elected legislative body or direct voter approval by referendum.

    You, and folks like you who believe that such projects should be funded some other way or not be built at all, had your chance to get your way, and you either lost or didn’t even show up.

    Be happy to hear your explanation as to why you should have what amounts to a sore-loser opt-out.

  137. 137
    Eric S. says:

    @different-church-lady:

    I dunno about you, but the answers to those questions are printed right on my phone bill every month.

    That may not be 100% true. Here in Illinois each utility bill (natural gas and electric) has a line item for “Customer Charge.” This is a charge the utility collects as part of its profit. The State buries a charge ($0.48 on residential bills) to fund Low Income heating assistance. I’m not complaining about this tax or its use but just pointing out that there very well could be hidden taxes on your monthly bills.

  138. 138
    Another Holocene Human (now with new computer) says:

    @muddy: I am running Chrome on Macbook Air as well. The only thing I have plugged in is ghostery. I had to ban Sitemeter. I think that one is actually the problem. I left Newsmax on, let them spend their money. They don’t seem to cause any problems at all.

  139. 139
    catclub says:

    @GregB: Re: those good times ahead.

    ISIS says it may next take aim at Mecca, and given Sunni populace of Saudi Arabia, and their extreme views, it may have an easy run to it. Except Saudi Arabia DOES have an Air Force, unlike Iraq.

  140. 140
    Alex S. says:

    @different-church-lady:

    I said that it might become a tax on communication, not that it is one now. Uber is just another company, providing a service and trying to extract money from it. You can tax that. But if communication between people gets easier and easier, then these possibilities will expire. You won’t need Uber anymore and can just offer a ride on your own. It’s as if hitchhiking is coming back on a massive scale, with people offering rides to make some money. The government does not have the ability to tax the driver unless it controls every single street, so maybe it should make a law against hitchhiking – which actually has been done. In some states hitchhikers are not allowed to stand at the roadway. But with a phone announcing your desire you don’t even need to stand there. What is the government then going to do, tax the internet itself?

  141. 141
    different-church-lady says:

    @trollhattan:

    Zip Car is something else again entirely, and seems like a brilliant alternative to owning a car for occasional use.

    Zip Cars are rental cars that use an updated business model. But they’re still rental cars, rented by an official business. They’re not a collection of individuals selling “spare” resources sporadically.

  142. 142
    Origuy says:

    I turned on “click to play” in Chrome and it’s made a big difference. Enter chrome://settings/content in the address bar, scroll down to “Plugins” and choose “click to play”.

    AirBnB is planning to expand into food service. It sound to me like another glibertarian idea to avoid health and safety regulation.

  143. 143
    Another Holocene Human (now with new computer) says:

    @marky:

    and this is different from existing taxi service how?

    In the old system, cabbies could unionize, or pressure the taxi commission (see: NYC). Portland, OR’s cabbies unionized so the owner ragequit. So the workers bought the taxi company.

    The prices were reasonable.

    I have ridden cabs a lot of places, I find that the more regulated, the less I seem to pay. Lightly regulated areas experience market failure. Oh, you can get a cab (eventually, when the 1 guy working today because the rest of them are working for another company in another town right now shows up) but you will pay and of course you won’t quite get be sure what you’ve been charged until you get there. Have fun!

    People bitch about DC cab prices but that city is big and spread out and fuel costs are very high! They have “gypsy” cabs which are cheaper, lol, but they will take you on a riiiiiiide.

  144. 144
    Another Holocene Human (now with new computer) says:

    @different-church-lady: The IRS has no interest in the sporadic hobbyists. The local government really shouldn’t be that worried about it either.

    You’ll make less on AirBNB anyway because less ratings since you rarely do it, much like the random person who tries to sell something on eBay.

    For someone who lives in a desirable area but only rents out on vacation, going with a real estate broker, just as sporadic equipment sellers go to local eBay seller storefronts, may be a better option.

  145. 145
    Another Holocene Human (now with new computer) says:

    @Alex S.: Governments absolutely do have the power to ban unlicensed cabs. That’s what this entire fight is about.

    Before Uber and Lyte, unlicensed cabs were known as gypsie cabs or jitneys are were associated with, well, the ghetto. They often ran along known bus routes and charged the same fare as the bus. Or they hung around bus stations scamming travelers. Presumably the cops would chase them away after a rash of complaints like dudes f*cking in public parks.

  146. 146
    Another Holocene Human (now with new computer) says:

    @burnspbesq: Tell that to the residents of Cook County, burnsie.

    Or the residents of Baltimore when the governor slashed out their school funding in the state budget and stole a football team instead. Pretty sure they didn’t get a vote on that.

    It’s great when it’s put up to a vote. But don’t pretend it always goes like that. Voters are getting sick of these projects so increasingly they are being done covertly.

  147. 147
    Paul W. says:

    @aimai: Exactly, a lot of these fees and taxes serve to keep the incumbents safe (think of cable companies and how hard it is for newcomers to provide service). Of course you need some level of regulation and protection for users, but it shouldn’t be prohibitive. I use Uber in NYC and it is often operated by people and cars that are nicer than being in a taxi, plus I can have the car come to me which is huge.

    This is simply a matter of disruptive technologies and companies that exist without current regulations, I’m sure they would welcome some level of tax and enforcement but comparing BnB to a hotel is not fair since it is more akin to a better protected and more transparent craigslist ad.

  148. 148
    TF79 says:

    A key principle of using taxation for revenue raising purposes is that there needs to be limited substitution and avoidance. If technology makes substitution and avoidance easier, then there may need to be a rethinking of levying those taxes on those goods/services.

  149. 149
    trollhattan says:

    @different-church-lady:
    Right. And instead of the hassle of circling your block for half an hour looking for a spot to open up in which to shoehorn your Civic for the next week (or the next street-cleaning day) whenever you run an errand, you can simply get a car when you need a car. Might not be so attractive for the burbs but makes tons of sense for the Urbans. And no hired driver.

  150. 150

    @aimai: There’s no company that makes money off of arranging for relatives to sleep in the guestroom, so far as I know.

  151. 151
    different-church-lady says:

    @SatanicPanic: Not yet

  152. 152
    Rafer Janders says:

    @Linnaeus:

    I haven’t verified this, but one of the people quoted in the article by Susie Cagle that I linked to in my previous comment says that the best perfomers on AirBnB are white women, and the worst are black men. Wouldn’t surprise me at all if that’s true.

    Hotels and taxis are subject to numerous anti-discimination laws, and can’t refuse to rent to African-Americans, Hispanics, the elderly, the disabled, gays and lesbians, etc.

    AirBnB, Uber, Lyft, etc.? Not so much. There’s very little mechanism in place, and very little regulatory enforcement, to prevent such discrimination. A million independent operators can systematically discriminate in a way that a few large national chains can’t.

  153. 153
    Origuy says:

    Speaking of parking, there was a case not long ago in San Francisco involving MonkeyParking, an app help you find parking. The person reporting an available space got paid when they gave it up to someone looking for parking. The court found that that was selling city property.

  154. 154
    Kylroy says:

    .@Alex S.: I said that it might become a tax on communication, not that it is one now. Uber is just another company, providing a service and trying to extract money from it. You can tax that. But if communication between people gets easier and easier, then these possibilities will expire.

    The communication itself isn’t the issue – the hubs are. In a world of omnipresent cellphones, much less smartphones, I can call anybody and arrange a ride in a matter of seconds – the issue is finding the one person who actually *wants* a ride. So some sort of hub gets set up (AirBnB, Uber, even Craigslist) where buyers and sellers can find each other.

    If the hub is large enough for people to reliably use, it’s large enough for the government to find. A hands-off hub that does nothing more than provide connections (like craigslist) can’t be taxed for revenue it doesn’t have; a hub that *does* take a share of the money exchanged (and is making nontrivial amounts of money) is running a business, and should be taxed and regulated as such.

  155. 155
    Alex S. says:

    @Another Holocene Human (now with new computer):

    I guess technology offers some kind of professionalisation of these freelance activities though, a bigger market, less idle time, more visibility, and because of that, more credibility. Like I said in comment 68, I think these industries will become a two-tier system.

    @Kylroy:

    I think that’s precisely the problem. You sort of have to kill the hubs which means that you have to prevent people from announcing that they would like to make a business transaction.

  156. 156
    sparrow says:

    @boatboy_srq: I think you misunderstand me completely. I’m a huge capital-l liberal and support taxes to do things like build infrastructure, to care for the less fortunate, and you know, conduct government research. I am not whining about my grant money. I’m actually trying to give YOU, the taxpayer, a better deal, by staying on freaking couches so that I can stretch my grant money further. I do NOT choose airbnb because I get giddy at the thought of not paying taxes or something. I am most decidely not a dudebro (not even a ladybro!). If the government cracks down on airbnb and my price goes up $10 to cover whatever taxes they are allegedly dodging, then fine by me. If some mega-renters who are really running a hotel business get thrown off airbnb, super fine.

    If you look back over my comments I think you’ll be surprised at the lack of Ayn Rand quotations and anguish over paying taxes, is all I’m saying.

  157. 157
    Paul W. says:

    @Marc: That strikes me of being ignorant of what your average person thinks. Put simply: if I have an extra room that I can rent out and pay some proportion of my rent/mortgage with just by letting someone stay there for a single weekend…. fuck yes I’m gonna do that!

    And the fact of the matter is, the nicer your place the more you can charge so the income probaly scales with how much you are paying a month. Most people I know would jump on the chance to pay rent in this way when you are already running out of time to make money on your dayjob (regardless of how good that job). It could mean the difference between saving for your kids college fund, or a vacation to Europe instead of the local national park.

  158. 158
    Al Swearengen says:

    As people showed long ago with Walmart, if it’ll save a dollar the world can burn.

  159. 159
    Emma says:

    I often use a b&b finder when I travel in the UK, like http://www.bedandbreakfasts.co.uk/. Is this the kind of thing AirBnB does in the US?

    I guess I am used to people renting a room in their house in the UK. However, owners have to submit to some regulation if they want to be listed in the sites. When I was doing it regularly back in the 90s, they would even inspect places. I don’t see why the American version of those sites couldn’t perform the same way.

  160. 160
    different-church-lady says:

    @Origuy:

    The person reporting an available space got paid when they gave it up to someone looking for parking.

    I say, just as a “social experiment“, we take MonkeyParking and drop it into a city where they have both open carry and stand your ground laws and see what happens.

  161. 161
    Villago Delenda Est says:

    @OzarkHillbilly: DING DING DING DING DING.

  162. 162
    Sister Rail Gun of Warm Humanitarianism says:

    @muddy: Have you tried disabling Javascript? Tried another browser? Cleared your cache?

  163. 163
    Linnaeus says:

    @Rafer Janders:

    Right, although I think the quote was referring to the situation for those renting out, i.e., white women are the most successful in renting out their places on AirBnB and black men are the least successful.

  164. 164
    Cervantes says:

    @sparrow:

    If the government cracks down on airbnb and my price goes up $10 to cover whatever taxes they are allegedly dodging, then fine by me.

    Here’s what the company says:

    In some tax jurisdictions, Airbnb will take care of calculating, collecting, and remitting local occupancy tax on your behalf. Occupancy tax is calculated differently in every jurisdiction, and we’re moving as quickly as possible to extend this benefit to more hosts around the globe.

    For what it’s worth.

  165. 165

    The problem these service present is that they blur the line between private rentals that the government has always avoided – in part because they would be unduly expensive to regulate, and corporate rentals that, well, are easy to regulate. What they point to is a regulatory structure that is too caught up in pre-information-age business processes and is unable to scale as enterprise can now scale.

    I think this is just another arrow pointing to the inevitable big/small government collision – not the one that the GOP keeps pointing out, but the one that healthcare.gov pointed out – that governments are becoming increasingly antiquated relative to the populace. They need to adapt quickly. And that’s hard to do given their size and how entrenched they are in historical methods, and the inability to escape policies that are written by the people that aren’t responsible for execution. The average age of our legislators is 60, which means that their technological peak was around 1974. Top inventions in that time period – dot matrix printer, disposable lighter, food processor, and the videocassette. It was a very analogue world making it’s first steps into a digital age.

  166. 166
    Cervantes says:

    @Villago Delenda Est: You seem to have swallowed an alarm clock.

  167. 167
    muddy says:

    @Mnemosyne: Thanks, and for your reply in the other thread. But… argh! I’d be super bummed to give up chrome.

  168. 168
    muddy says:

    @Another Holocene Human (now with new computer): Thanks, will try to get rid of site meter. I’m not great with the details of tech things.@Origuy: That too!

  169. 169
    Lurking Canadian says:

    Like most people (heck, I remember a joke in The Onion about it), I have many times (more often when I was a poor student), walked or driven past the local U-Store-It place and said to myself, “Wow, I could rent a U-store it for $30/month and pay $50/month for a gym membership and it would be JUST LIKE HAVING A STUDIO APARTMENT!” You get yourself a little kerosene heater so you don’t freeze to death, something to act as a chamber pot, and presto! You’re saving $500/month in rent!

    We don’t allow this, though, because if we did, it would rapidly turn into Dickensian slum-lord housing. It doesn’t really hurt anybody if *I* do it, but once it becomes a social phenomenon, it quickly has results that are intolerable.

    That’s kind of how I feel about these “sharing economy” things. Some guy wants to let you crash on his couch for $25 so you can get to your buddy’s wedding? Sure, why not. Where’s the harm? But beyond a certain scale, when the guy buys a ten room house, puts two couches in each room and starts renting the whole place out and grossing $500/night, it’s not a guy letting you crash on his couch anymore. Now, it’s a guy running a substandard hotel and ducking the local hotel regulations. The Silicon Valley types are going to wave their hands and say “cloudsourcing” and “sharing economy” to make it sound better, but that’s what it is, and it should be regulated (health, zoning, ADA, all of it) as such.

  170. 170
    Linnaeus says:

    @Lurking Canadian:

    We don’t allow this, though, because if we did, it would rapidly turn into Dickensian slum-lord housing. It doesn’t really hurt anybody if *I* do it, but once it becomes a social phenomenon, it quickly has results that are intolerable.

    Yeah, it’s one of those things that on an individual level can be beneficial, but then there are systemic effects that can get obscured.

  171. 171

    @burnspbesq:

    You, and folks like you who believe that such projects should be funded some other way or not be built at all, had your chance to get your way, and you either lost or didn’t even show up.

    That’s not fair. Hotel taxes are primarily collected on visitors from outside the area, since most people rarely use hotels close to where they’re already living. That means the people who are paying them were given no say in the matter at all, and the only way they can express their discontent is by staying away entirely. For people who have a professional reason to go there, that isn’t a practical choice.

    As I said above, it makes some sense to pay for convention centers using hotel and restaurant taxes, since those taxes will fall hardest on the people actually using the facilities. It would probably make more sense to include the true cost of the facilities in the rental rate for the convention center, but that would wind up inflating registration fees at the cost of lower hotel rates, which turns out to be bad advertising. At least hotel taxes are making some attempt to put the cost on the right people. Paying for sports venues that way makes a lot less sense, since they are primarily used by residents.

  172. 172
    Cervantes says:

    @Roger Moore:

    Paying for sports venues that way makes a lot less sense, since they are primarily used by residents.

    Ticket prices being what they are, sometimes those venues are used more by suburbanites than by residents of the city center.

  173. 173

    @Emma:

    I don’t see why the American version of those sites couldn’t perform the same way.

    Because that would cost money and eat into the profit margin.

  174. 174

    @Cervantes:

    In some tax jurisdictions, Airbnb will take care of calculating, collecting, and remitting local occupancy tax on your behalf. Occupancy tax is calculated differently in every jurisdiction, and we’re moving as quickly as possible to extend this benefit to more hosts around the globe.

    Shorter AirBnB: we’ll collect local taxes when the alternative is being shut down.

  175. 175
    Villago Delenda Est says:

    @Roger Moore: The MBA mentality rules the private sector of this country. To its long term detriment…but I forget, there IS no long term. I’ll be gone, you’ll be gone, someone else will clean up our mess.

  176. 176

    @Cervantes:

    Ticket prices being what they are, sometimes those venues are used more by suburbanites than by residents of the city center.

    Sure, but A) in a lot of cases the tax extends beyond city limits to cover some larger share of the metropolitan area and B) those suburbanites are still close enough to home that they aren’t likely to be staying in hotels.

  177. 177
    different-church-lady says:

    @Villago Delenda Est:

    I’ll be gone, you’ll be gone, someone nobody else will clean up our mess.

    Let’s get these things right.

  178. 178
    Cervantes says:

    @Roger Moore:

    Shorter AirBnB: we’ll collect local taxes when the alternative is being shut down.

    Yes, that could be what they mean. Or not.

    In any event, it seems obvious they can be convinced to collect and remit taxes — so everyone concerned about this issue should contact their local revenue authorities to see what can be done in this regard.

    Or we can call sparrow names — that could work, too.

  179. 179
    Cervantes says:

    @Roger Moore: Yes, I’m not sure what “in a lot of cases” means there, precisely, but in general I agree.

  180. 180
    Francis says:

    @sparrow:

    But because I’d rather give my rental money to college students and retirees than poor little multinational corporations like Hilton, I must be an asshole

    ARGH. Hilton is only collecting the tax. They forward it on to the local government.

    A few basic points here:

    1. Cities and counties have been taxing travelers since forever. If you are that outraged by the thought of paying TOT (transient occupancy taxes), then you can happily refuse to travel to that jurisdiction. But if you come, you pay. Our city, our rules.

    2. Hilton and all the legal hoteliers are just pass-through entities. They put the tax on the invoice, collect it, and send it along. Just like every single retailer who collects sales taxes. So their labor practices are simply irrelevant to the issue.

    3. The only relevant point is that the ‘sharing’ companies are facilitating avoidance of tax collection and of compliance with public accommodation laws. It’s up to each city and county, NOT airbnb, to decide the point at which a couch-surfing arrangement becomes a business. If these sharing companies want to be taken seriously, they need to do a much better job of requiring that their providers come into compliance with applicable law.

  181. 181
    Mnemosyne says:

    @Emma:

    AirBNB (at least in the US) is different because these are unofficial B&Bs — they don’t have to register with anyone (except the website that promotes them), they don’t have to have any safety measures in place, and they don’t have to be inspected by the government.

    As others have pointed out, there have always been informal ways to rent out rooms in your house, but AirBNB basically created a clearinghouse for people to do it more easily. And because people can do it more easily, now you have jerks taking it over and essentially running unlicensed, untaxed hotels.

  182. 182
    Cervantes says:

    @Roger Moore:

    As I said above, it makes some sense to pay for convention centers using hotel and restaurant taxes, since those taxes will fall hardest on the people actually using the facilities. It would probably make more sense to include the true cost of the facilities in the rental rate for the convention center, but that would wind up inflating registration fees at the cost of lower hotel rates, which turns out to be bad advertising. At least hotel taxes are making some attempt to put the cost on the right people.

    Restaurant taxes aside, I agree.

  183. 183
    Kerry Reid says:

    @celcus: Really excellent point. Thank you!

  184. 184
    boatboy_srq says:

    @sparrow: I appreciate the perspective – but you must admit that “I’m getting by on grant money, but I hate having to pay inflated-hotel-bills-because-city-taxes-and-besides-Joe-Shmoe’s-couch-is-cheaper”, which is how you started out, doesn’t sound much like what you just wrote. And the “I’m getting by on grant money” start does sound awfully like Craig Nelson’s “nobody from Big Gubmint helped me out when I was on food stamps” rant.

    As a taxpayer I appreciate that you’re trying to help make my tax dollars go further. However, as that same taxpayer (not to mention once-and-future landlord who has and will jump through all the contractual b#llsh!t just to make sure I have a legal and enforceable agreement with my tenants, and the tenant who appreciates every last renter-protection clause in his current lease on a house that would get about six times what it’s rented for if it were on AirBnB), I’d rather you spent a bit more energy lobbying your venues to exempt academic/non-profit events from event taxes, and a little less enabling tax- and health-and-safety grifters who are running micro-hotels out of their attics.

  185. 185
    catclub says:

    @different-church-lady:

    drop it into a city where they have both open carry and stand your ground laws

    Missouri appears to have put some of those into its constitution as Amendments, yesterday, by ballot.

  186. 186
    boatboy_srq says:

    @boatboy_srq: @sparrow: Afterthought to my last comment: when I was studying, and I knew grad students who traveled for events such as you describe, there were a whole host of exchange-in-kind night-for-a-night arrangements between students at different schools where the hosts at one event became the guests at another, and the highest price involved was usually pizza and beer. Perhaps if you’re traveling to events as a student and not availing yourself of local student lodgings – or lodging through someone at the host institution – then exploring that might make your $30-40 per night become $30-40 per entire stay, which would keep the traffic in the academic world and save taxpayers even more.

  187. 187
    sparrow says:

    @boatboy_srq: I have no idea how the fact that I’m paid on grants sounds like a person whining about it. When I said they were hard to get, I meant exactly that — acceptance rates for grants these days are well below 15% in my programs, some much less than that. If I want to travel for work, I have to find funds for it, and so I try to make it go as far as possible. I’m exceedingly grateful that I basically have my dream job of being a scientist, believe me. I do a lot of public outreach because its a small way to pay it back. But I never said anything about *avoiding taxes* being my motivation, nor do I think I said anything that remotely resembles that idiot Nelson’s “no one helped me” rant. Believe me, no one dependent on gov’t funding the way scientists are could possibly be unaware that that they are, well, dependent on gov’t funding! Goodness!

    What I think is stupid, is that my professional org has contracted with expensive hotels that eat by far the biggest chunk out of my travel funds. I really don’t care about staying in a luxury hotel, so I make the obvious choice. As someone else suggested, I would take an old-fashioned boarding house, if those existed. I’ve also done hostels and cheaper B&Bs, and yes, motel 8s. I’d definitely prefer if the world were perfect and all those offerings were equally taxed and regulated, and I assume eventually they will be.

    Anyway, I don’t think we really disagree all that much. What I am surprised by was the vitriol that got slung my way. Even if I *had* been a dudebro libertarian-leaning type, I don’t think calling me an asshole (not saying you did, specifically) is not really going to help convince me I’m wrong in this situation!

  188. 188

    @Cervantes:

    Restaurant taxes aside, I agree.

    Restaurant taxes in the immediate area surrounding a big attraction like a convention center or stadium probably make sense, since they’re getting a lot of spill-over business. Hotel taxes in the immediate area around a convention center (but not necessarily a stadium) make a lot of sense, because they’re primarily serving the convention business. But both of those only make sense because they’re trying to tax the actual market for the attraction. Hotel and restaurant taxes that apply across a much wider area don’t make sense the same way.

  189. 189
    shecky says:

    Boo. Fucking. Hoo.

    Who’ll think of the poor medallion owners?

  190. 190
    different-church-lady says:

    Who’ll think of the poor medallion owners?

    Oh I’m thinking of them. I’m thinking, “Maybe the upside of Uber will be they’ll put enough pressure on the regular cabs in my fair city that the medallion holders will finally wake up to the fact that there’s not nearly enough cabs and they can’t keep the number artificially low in order to use their medallions like investment property.”

  191. 191
    Waynski says:

    @Josie:

    @Rafer Janders: You are assuming that,if there were no AirB&B, that those people would stay in hotels. I can guarantee that if I can’t stay in a room for 40.00 per night and have to stay in the hotel for 100.00 per night, I won’t be making the trip. Thus the hotel gains nothing by my not staying in the less expensive option. I have a feeling that might be true for lots of folks.

    Agreed. My wife and I have relatives in Napa, CA and Portland, OR. Both beautiful places, but not places we could afford to go to for 10-15 days a year, if we couldn’t stay with the family units. Consequently, both cities benefit from the money we spend while we’re there. If the only option was a Hilton or a Marriott. We wouldn’t be there enriching the local economy. So, the cities miss out on the Hotel tax, but make some of it up through tourism and the revenue generated by people visiting who otherwise wouldn’t.

  192. 192
    Keith G says:

    @Omnes Omnibus: Congratulations and thank you.

    You managed to sum up a very important argument and presented it to Sparrow without attacking him or her. It’s a shame that what should be very interesting sharing of experiences and points of view has been littered with juvenile insults and attacks.

    I really just don’t get it. I was brought up to believe that this (attacks) is the way conservatives operate not thoughtful progressives.

  193. 193
    Phoebe says:

    @boatboy_srq:

    But unless I’m very much misunderstanding her, Sparrow’s issue is not that she’s seeking an academic exemption from local hospitality taxes. She’d be fine with paying the taxes; it’s the baseline cost of the classic hotel room that’s often unreasonable given her budget and rational priorities.

    The issue is more one of generalized market failure. There are plenty of places that one can travel where a middle-class travel budget will cover the cost of a normal hotel, with its associated taxes. Those places do not always include the jurisdictions where major professional organizations like to have conferences. I suspect that there are a lot of people who would be thrilled to be able to book a traditional hotel room in New York or San Francisco for $100 a night plus all hospitality taxes who will not and cannot book that same room at $450 a night plus all hospitality taxes.

    Should people who can’t reasonably afford traditional hotel prices in these cities give up on the idea of visiting there unless they can rely on old-fashioned personal-connection couch-surfing? Do we really want to protect city tax bases (which we do) via the specific means of continuing the spiral by which people with normal incomes are priced out of these cities entirely? Because seriously, that’s the argument that’s lurking under a lot of the rage here: that if the market isn’t providing a regulated service at an affordable price point, it’s unethical to use a less regulated one that does, regardless of the collateral damage that the market’s failure to provide the affordable alternative may create.

    I’m not sure I understand why the better alternative isn’t to consider how to levy taxes on the new hospitality industry, rather than to insist that if you’re not buying a hotel room from Hilton you’re a moocher and a looter, and that if you can’t afford to do that you owe it to the world to just stay home. (Where you won’t pay restaurant taxes for the meals you’re not eating out, and also won’t contribute to the success of the little restaurants where you might have had dinner if you could have gone to that conference. So you might be a moocher and a looter if you stay home, too, but let’s not think about that.)

  194. 194
    lol says:

    Uber has been great because they’ve dragged the horrendously shitty taxis in DC kicking and screaming into the modern age and forcing the commission to start having some modicum of accountability for drivers who break the law.

    Without Uber, DC Taxis would still be cash-only.

  195. 195
    bjacques says:

    @different-church-lady: Here in Amsterdam, some years back, a stupid approach to replacing the city taxi monopoly with competition meant that a taxi medallion, which was a serious investment that funded the driver’s pension, suddenly became worth zero (also the head of the monopoly was looting the pension fund), and riots ensued. Following that, the market was opened entirely, and some cabbies colluded to swarm the taxi ranks and then impose a “zone system” that effectively doubled rates (and they could refuse short rides). It gave the city a black eye internationally, and finally we got proper regulation and enforcement, at least at Central Station. Things are a lot more stable now.

    Amsterdam has always had a shortage of hotel space during tourist season. During New Year’s Eve, Queensday (now Kingsday; end of April) and Gay Pride (1st week of August), the city can’t hope to absorb the excess without Airbnb or similar. Hotels used to abuse the seller’s market by demanding that weekend bookings be for three nights. People were clandestinely renting rooms anyway, and many “hotels” here are pensions, not much bigger than the houses people were clandestinely renting out rooms in. When this became a thing, like Segway tours and pedicabs, the Amsterdam city council found room for it in the rule books. People renting their places regularly can register with the city and comply with most of the rules applied to pensions, such as fire alarms and extinguishers, standard of cleanliness, and paying taxes. I know someone in my building who does this and it works out okay. Only about a quarter of renters register, though.

    As Mnemosyne points out, in places like London, you have an acute housing shortage due to people gobbling up real estate, and Airbnb and similar came along at the right time when landlords worried about going broke because they had bought before 2009 and nobody could afford the rent needed to offset high mortgage payments And the housing shortage remains.

    Uber doesn’t seem to be gaining traction here, at least according to the free paper here. You really need to know the city to provide decent taxi service, because of the narrow and mostly one-way streets.

    What I don’t see mentioned above about Airbnb, Uber, Lyft and that one for auctioning off the parking space you’re about to leave is that, aside from the dudebro douchiness, these aren’t value-added innovations.

    These systems are extractive, like the drilling-for-equity boom of the mid-1990s to 2008. They only offer a somewhat trusted (among users) framework for putting idle property to work in exchange for handing over a cut of the proceeds. It’s voluntary sharecropping. Meanwhile, cars and housing depreciate faster and need more frequent maintenance, and nonparticipants bear costs and risks according to proximity (which was mentioned above).

    It’s negative-sum business, the epitome of douchiness.

  196. 196
    sparrow says:

    @Phoebe: You said much more eloquently what I was trying to say. Yes. :)

  197. 197
    Linnaeus says:

    @sparrow:

    Believe me, no one dependent on gov’t funding the way scientists are could possibly be unaware that that they are, well, dependent on gov’t funding! Goodness!

    As an aside, you’d be surprised.

  198. 198
    Person of Choler says:

    “there was no ball field bond sinking fund fee” “avoid paying for football stadium construction”

    How about having the billionaire owners of sports teams invest their own money in their own facilities instead of taxing travelers to help bribe the owners not to go somewhere else?

  199. 199

    @Phoebe:

    Those places do not always include the jurisdictions where major professional organizations like to have conferences.

    I would say those places essentially never include the kind of place where professional organizations like to have conferences, or at least the reasonably priced places tend to be outside of easy traveling distance. There are two things going on there. One is that big conferences need to be at big convention centers, and the hotels in the vicinity know they can charge a substantial premium for their convenient location. If you’re willing to stay further from the convention center, it’s often possible to find reasonably priced conventional accommodations, but the travel can be a drag.

    The bigger thing that’s going on is that this is all part of the plan. There is a strong tendency to turn major professional meetings into barely disguised junkets, with the cost picked up by grants, institutional funds, or whatever. There are actual meetings and sessions for people to attend and prove the business purpose of the trip, but there are also plenty of opportunities to skip out and have fun instead. That creates an incentive for the meeting planners to pick locations that are fun tourist destinations rather than cost effective meeting locations. Attending the meeting becomes a mixture of obligation and perquisite, with the balance always leaning toward perquisite.

  200. 200
    Francis says:

    @sparrow: Sparrow:

    The problem was you started with this: ” Personally, I’m not sure what the benefit of taxing those people to death is going to do, besides shut down affordable services like airbnb. I’m not seeing the moral force behind taxing the hell out of taxis and hotel rooms, honestly.”

    Whether you intended to or not, this sounds a lot like you want to be able to travel into a city but avoid the legally established taxes. So what makes you so special that you get to avoid taxes? The explanation that you’re being paid by taxpayer dollars isn’t terribly persuasive. The federal government, after all, is a different taxing agency from the one levying an occupancy tax.

    The moral force behind taxing hotel rooms is that taxes are the price of civilization.

    And you have the arrow of causation backwards. If airbnb is affordable only because it’s allowing landlords to avoid collecting taxes, then it’s an illegal business. If landlords can’t get renters at the price they want to charge, including applicable taxes, then they should lower their rates.

    Look at it this way: Retailers collect sales taxes on goods sold in their jurisdiction. If someone wants to start a pizza delivery company out of his kitchen, he still needs to include the sales tax on his product even if he uses airbnb to find customers. If his price is lower than the competition because he’s not collecting taxes, he’s just a cheat. And airbnb should not be facilitating tax cheats.

  201. 201
    Mike G says:

    @Person of Choler:

    How about having the billionaire owners of sports teams invest their own money in their own facilities instead of taxing travelers to help bribe the owners not to go somewhere else?

    This. They bitch about taxes but don’t hesitate to confiscate money from people who have no interest in the games. It’s not like they don’t screw you on ticket prices and food and drink as a thank you for subsidizing their rich guy’s status toy.

    And why the fuck is the public being taxed for a convention center? It’s a profit-making business that should pay for itself. Attracting the regional Dental Hygienists Conference or Rodeo Clowns International is not a public service.

  202. 202
    Jackie Chiles says:

    I am part of the hipster demographic but I don’t consider myself one, and here’s my view of the services provided.

    AirBnB – I travel to places during large muisc festivals (sometimes as a performer, others as a fan) where the demand for lodging far outweighs the supply. One town I travel to in Europe has less than a dozen hotels (and incidentally they now have exactly 12 taxis – an upgrade from 7 last year!). 8,000-10,000 people attend the festival annually, so you can do the math. AirBnB provides a more convenient and more transparent way to connect people seeking accomodations with those providing them.

    This used to be handled via Listerserves, then AOL, then MySpace (no, I’m not kidding) and later Craigslist. My other option is to stay 30-50 miles away and take the train in every day, and I still haven’t figured out how to get back to my hotel at 5am (when thef festival ends every night).

    AirBnB is indespensible for these kinds of scenarios.

    I don’t typically use AirBnB in larger cities. I can afford not to, and don’t need to take on the risk in most circumstances. Still, I cannot imagine how non-wealthy people can afford to stay in hotels in major cities. Ever priced a hotel in SF, London or NYC in the summer? If it’s 3 stars or greater, the prices are extortionate and it’s not regulatory overhead that drives the high prices. A weeks’ stay is going to be 4 figures. Period. So I can see why people are willing to assume some risk, and go with AirBnB so they can make it to that wedding/graduation/etc.

    That being said, I am sympathetic to the involuntary risk being forced on people when thei neighbor rents their apartment to strangers.

    It’s a sticky wicket which should be a wake up call to the hospitality industry – there is a market which exists between youth hostels and full-service hotels (or even motels) that is underserved. Right now, freebooters are leveraging tech to serve that market.

    Uber – The number of times I have been passed over by cabs because of my race (I a black) or had to fight with other prospective fares at peak travel hours makes me believe that the artificial scarcity/oligopistic rent seeking by existing cab companies has created yet another untapped market that is being expoloited by freebooters. Taxicab regulatory commissions nationwide need to take the hint and come up with a better regime.

  203. 203
    boatboy_srq says:

    @Phoebe: It’s not the “buyer” in this equation that’s the problem. It’s the seller. I’m happy that sparrow is trying to save scarce grant dollars. What bugs me is that s/he’s helping to enable what’s become a tax-avoiding market segment. The looter/moocher in this equation isn’t sparrow for getting a cheap(er) room outside the mainstream hospitality sector, or an Uber ride outside the main transit sector: it’s the homeowner that is making a killing by NOT providing an ADA/OSHA/whatever-compliant space for paying guests and the Uber driver who’s NOT providing a certifiably-safe and similarly compliant ride, both of whom are skipping out on the relevant taxes/fees in the process.

    You can’t say that just because someone figured out a way to game the system because Internet and Smartphones, and people are taking advantage of that, that “the market is broken” and just throw up your hands.

    But you can ask why people like sparrow aren’t leveraging their professional communities instead of Web apps; why people think that they can run their timeshares like Motel 6 or their daily drivers like jitneys, and make a profit from not paying the fees. Not asking the question allows that you’re also willing to admit that Walmart’s profits-equivalent-to-tax-breaks-and-screw-the-workers business model is laudable as well. The savings from AirBnB/Uber/etc for the consumer come mainly from failing at due diligence required from the mainstream industries and from failing to pay for staff/oversight/accommodation/liability/etc.

    if the market isn’t providing a regulated service at an affordable price point, it’s unethical to use a less regulated one that does

    This is not the argument. The argument is that the “one that does” is not less-regulated but unregulated, and that it’s far less the consumer than the provider that’s being unethical (though w/r/t AirBnB there are plenty of unethical consumers out there as Elizabelle pointed out), and it’s questionably ethical at best to enable those providers.

    Your “old-fashioned personal-connection couch-surfing” had multiple distinct advantages over the current system. There was a known quantity providing the accommodation. There was an understanding that the economies folks like sparrow seek were optimally served this way. On, and on. And in sparrow’s case we’re discussing not “personal-connection” but “professional-connection”: there’s a distinct difference between staying with a colleague who is working in the same sector and able to support one’s research/career/whatever, and simply staying with somebody you know (perhaps only casually) because you’re friends and s/he’s agreeable.

    I’m trying not to pile onto sparrow as much as some. But I AM trying to point out that by using these services, sparrow and folks like him/her are enabling a market segment rife with folks who are in the business of shirking their own civic responsibility. Sooner or later there will be a Zoe Baird of AirBnB: we need to get a grip on both the shortcomings of the app-enabled economy and the failures of traditional service industries before that happens.

  204. 204

    @Mike G:

    And why the fuck is the public being taxed for a convention center? It’s a profit-making business that should pay for itself. Attracting the regional Dental Hygienists Conference or Rodeo Clowns International is not a public service.

    The idea is that the convention center is benefiting the community three ways. One is by bringing in business and money from out of town, which is supposed to help the local economy. The Rodeo Clowns International conference isn’t just using the convention center; they’re staying in hotels, eating at restaurants, visiting local landmarks while their in town, and snapping up local kitschy tourist crap. All of those things provide jobs and profits for local business owners. Also, by charging below cost for the actual convention center and making up for it with a tax on hotel rooms, locals who want to use it are effectively getting a subsidized rate.

    Finally, convention centers are often put in blighted areas as part of an urban renewal project, which is most easily done when the government is in charge. The new convention center is supposed to attract private investors, who will buy up blighted properties to put in the hotels and restaurants that will serve the convention business.

  205. 205
    lol says:

    @boatboy_srq:

    Uber is almost always more expensive than a taxi ride. DC taxis are such utter shit that people are willing to pay *more* money just to avoid using them.

    I’ve never had an Uber driver refuse to take me home. I’ve never had an Uber drive refuse to pick me up. I’ve never had an Uber driver refuse to take a credit card. I’ve never had an Uber driver rant the entire ride about Benghazi. And if I did ever have a complaint about the ride or route, they have a responsive customer service that will take me seriously and potentially refund money. Good luck getting any acknowledgement of a problem from the taxi commission.

    Uber is problematic in a lot of ways (the customer rating system is a civil rights lawsuit waiting to happen Imho) but I think a lot of people miss how terribly dysfunctional the status quo is.

    Edit: I also use Car2Go a lot to avoid using taxis too.

  206. 206
    sparrow says:

    @Francis: Perhaps my statements were not very clear. When I say “taxing the hell out of” I meant “using very high tax rates to discourage new business models” — this has been tried in a few places where the existing players do NOT want to compete with a newcomer and have gotten cozy with lawmakers to either ban those businesses or make them effectively impossible to operate. I shouldn’t have really focused on taxes because that’s not really the main way this is being done, and is besides the point. I have no problem paying taxes (even the silly tacked-on ones to pay for stadiums and whatnot, which I still find questionable), and I’m not asking for a free pass or anything like that.

  207. 207
    Glocksman says:

    @Dessic:

    Unless Uber or Lyft drivers have the specialized driver’s license (public passenger chauffeur’s license) needed to operate a vehicle for hire, along with the commercial vehicle liability insurance coverage, they’re already violating the law.

    If they have the correct DL, commercial vehicle insurance, and comply with all state and local inspection regulations, I don’t have much of a problem with Lyft or Uber.

    That said, I’ve read too many stories about their drivers only having a standard operator’s license and their insurance company has no idea they’re using the car as a commercial vehicle.

  208. 208
    Elizabelle says:

    Speak of the devil. Email just landed in my inbox from Virginia Attorney General Mark Herring:

    Herring and Governor Terry McAuliffe announce Uber and Lyft can operate in Virginia IF they meet a boatload of agreed upon security, safety and insurance requirements, and the Dept of Motor Vehicles has certified that they currently do. 2015 General Assembly will take up more formal legislation.

    The companies have been granted transportation broker’s licenses and temporary operating authority, and their drivers must now undergo background and vehicle registration checks, carry an additional $1 million in insurance while carrying passengers and liability insurance while logged onto their companies’ software, and comply with applicable taxes.

    From the announcement, released today:

    … The Department of Motor Vehicles has informed Uber and Lyft that their applications for transportation broker’s licenses and temporary operating authority have been granted, effective immediately, they meet an extensive set of regulations to promote passenger safety, have appropriate insurance, and comply with Virginia law. If at any point either company fails to comply with these terms, DMV can revoke the temporary operating authority.

    … Virginia DMV is currently leading a study at the request of the General Assembly to developing a long-term legislative solution that addresses services provided by Uber, Lyft, and similar companies, while also ensuring a level playing field for taxicabs and all other passenger transportation services. The study is scheduled to be completed in time for the 2015 legislative session. This temporary authority agreement can serve as a foundation for potential legislation and will also provide valuable data on the operations of these companies as legislation is crafted.

    It will be interesting to see if Uber/Lyft take off in more rural areas, which truly are underserved by taxis and mass transit.

  209. 209
    Brooklyn Girl says:

    @OzarkHillbilly:

    In NYC, locals like me use taxis all the time. I’ve also used Uber, which is more like a limo service than a taxi, since you have to call for it. It was quite luxurious compared to a taxi.

  210. 210
    Cervantes says:

    @Roger Moore: Just want to add how much I appreciate your detailed comments on this subject — and others. Thanks.

  211. 211
    Mnemosyne says:

    @Elizabelle:

    It will be interesting to see if Uber/Lyft take off in more rural areas, which truly are underserved by taxis and mass transit.

    That’s an interesting idea. I actually don’t have a problem with services like this filling in if there are places where it’s unprofitable to run a traditional taxi service or hotel. It’s when you have people in San Francisco getting evicted so their landlords can put the apartments on AirBNB that the weaknesses of the model really become apparent.

  212. 212
    Ella in New Mexico says:

    I performed my primary function in making sure my brother showed up on time, sober, and wearing pants.

    I really wish you’d been around the day I got married. ;-)

  213. 213

    I performed my primary function in making sure my brother showed up on time, sober, and wearing pants.

    When I was best man, I had to make sure he showed up with no pants; it was a Scottish wedding, and he needed to be wearing a kilt. Since there wasn’t much risk of him failing to show up in decent condition, my main duty was to preserve the bride’s sanity by keeping the groom our of her hair and occupied running minor errands.

  214. 214
    Comrade Luke says:

    I don’t understand why people vote/behave against their own self interest. So stupid.

    Comrade Luke

    Sent from my iPhone, in the backseat of an Uber car, on my way to my super cheap AirBnB house.

  215. 215
    Violet says:

    Did this AirBnB use get mentioned yet?

    Hookers are using the controversial Airbnb home-sharing Web site to turn prime Manhattan apartments into temporary brothels, The Post has learned.

    One escort service is even saving a bundle by renting Airbnb apartments instead of hotel rooms for clients’ quickies, says a 21-year-old call girl who works for the illicit business.

    “It’s more discreet and much cheaper than The Waldorf,” said the sex worker, who spoke on condition of anonymity.

    “Hotels have doormen and cameras. They ask questions. Apartments are usually buzz-in.”

  216. 216
    Comrade Luke says:

    @Phoebe:

    I respect your argument, which is very thoughtful and well articulated, but I disagree with it almost entirely.

    It’s not a “market failure”, and using the terms “middle-class travel budget” and “the cost of a NORMAL hotel” are so vague as to be meaningless. Who is defining what middle-class, normal and affordable are? In this case, it seems to be whatever you yourself can afford to pay.

    And no, people don’t have a right to go anywhere they want affordably. Back in the day, when we wanted to go somewhere that was too expensive, we went somewhere more affordable or didn’t go at all. It wasn’t that long ago that air travel was so expensive that it made going ANYWHERE expensive.

    Finally, regarding your suggestion of raising taxes on these businesses. If/When the taxes are raised (or regulations are added), the cost of these changes will be passed directly to the customer, at which point the deal evaporates. So then we’re left with a bunch of unregulated “taxis” and “hotels”, whose costs over time will approach those of regular taxis and hotels. And the regular taxis and hotels will be worse then we have today, because they will have been gutted by the Ubers and AirBnBs of the world, who undercut them by skirting the tax laws that eventually caught up to them anyway.

    I don’t see how anyone wins here.

  217. 217
    Mnemosyne says:

    @Comrade Luke:

    If/When the taxes are raised (or regulations are added), the cost of these changes will be passed directly to the customer, at which point the deal evaporates.

    I disagree — the cost and overhead of renting out your couch or your spare room is not going to approach that of a full-size hotel, so I think there will still be quite a bit of cost savings for people for choosing an AirBNB-type of option.

    Someone else used the sales tax comparison above, and I think it’s a valid one. If I sell crafts once a year at my company’s craft show, the state of California doesn’t care and I don’t have to pay taxes to them on the $100 I make annually. But if I start a business of selling crafts on the side and do it regularly, I need to pay the state their cut as the cost of doing business.

  218. 218
    different-church-lady says:

    @Comrade Luke:

    In this case, it seems to be whatever you yourself can afford to pay.

    Well duh. Don’t you know that the world is whatever I can see from where I sit?

  219. 219
    Comrade Luke says:

    @Mnemosyne:

    That seems reasonable. Still not convinced that these businesses are willing to take on any tax burden whatsoever, but it couldn’t hurt to try. And I have no idea where to draw the line wrt when and when not to pay taxes.

    Great to talk about it on a blog though. No pressure on my end :)

  220. 220
    Nate Dawg says:

    Wow. So much animosity towards these services.

    Uber is amazing. Unlike a Taxi, you can actually order one and know it will arrive. You not only have a reasonable estimate of its arrival but can read reviews if the driver and track it’s progress as it approaches you. In most places I’ve lived, getting attack is an enormous PiTA and so I have no problem with private individuals undermining the stupid taxi industry. Cars are cleaner; drivers are friendlier.

    I’m tired of horrendous industries hiding behind regulatory burdens of entry. Taxis can either begin to offer a better product or suffer the consequences, but they shouldn’t be able to shut competitors down with the State. They suck and have for a king time. It’s 2014, and people demand better.

    AirBnB will never replace the hotel chains. It is the same short term rental market that has always existed, but now actually works. Get over it.

  221. 221
    Mnemosyne says:

    @Nate Dawg:

    Unlike a Taxi, you can actually order one and know it will arrive.

    I keep seeing this complaint, and I honestly don’t get it. I can’t say that I order taxis every day, but whenever I order one, they tell me how long it’s going to be and they ring my cell phone if they arrive and I’m not standing outside. I’m in Los Angeles, where roving taxis are illegal (except outside hotels and airports) so the only taxi option is to call one. I’ve never ordered a taxi and had it not arrive.

  222. 222
    Nate Dawg says:

    @Mnemosyne:

    Lucky you?

    No LA SF and NYC are not the worst. Try mid-tier cities. Your St. Louis’s. If you, say, go downtown and drink and need to get to the suburbs late late late, you may not find a taxi AT ALL. If they are busy, they won’t even answer the phone. (God forbid they have a answer machine with a message like every other business does).

    This is not the only complaint. I got kicked out of a cab in Chicago for the sin of asking to go to Halsted and Cornelia.

    UBER drivers are also better drivers. Sorry it’s true. It is THEIR car. They are careful.

    Can’t believe people are defending the status quo re: taxis.

  223. 223
    Nate Dawg says:

    @Nate Dawg:

    Not the it’s your fault you have good taxi karma. But if I never step for in another government-run livery car (heh), then fine by me.

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