Why a Vote Against Airbnb in San Francisco Today Matters for Businesses Everywhere
(This post originally appeared on Inc.)
Today, AirBnB is defending itself.
The home-sharing company is battling to make sure that San Franciscans vote no to a new proposal that would significantly curtail the company’s business in the city. Proposition F, if passed, would set a maximum number of days (75) that a person could rent out his home. The Proposition is being supported by homeless rights activists, who contend that AirBnb renters are using their homes for (gasp!) profit in a town where space is tight, rents are sky-high and the options for the city’s homeless community are dwindling. Yes, this point of view seems a little shaky. And even with backing from the hotel industry, the measure is expected to fail at the polls. However, time will tell. And rest assured, this will not be AirBnB’s last battle.
The Sharing Company Battle
AirBnB joins a list of companies in the “sharing” economy that seem to be engaged in a never ending fight for their existence. The most prominent, of course, is Uber–the ride sharing service that has caused protests and demonstrations worldwide from upset cab drivers and the unions and politicians who are paid by the unions. Uber has also sparked lawsuits from disgruntled contracted drivers who demand employment status. But other prominent companies in the “sharing economy” are also facing challenges. Peer to peer lenders like Prosper and Lending Club are facing scrutinyover the interest rates they charge. Food delivery services like GrubHub, Caviar and DoorDash are also facing lawsuits from contractors who want employment status. Last year a start-up that enabled people to auction off available parking spaces wasshut down by the City of San Francisco. Ebay, who essentially started the sharing movement with its online marketplace of used goods, has faced countless lawsuits over the years from disgruntled buyers and sellers, most recently settling a class action suit over problems with its “buy it now” button. Everyone wants a piece of the pie.
And yet, do customers complain? Hardly ever. Why should they? These companies are answering to a huge demand. In a time when hotel capacity in the U.S. is at its lowest level ever, companies like AirBnb fill a critical need. When the banking industry is so constrained by regulations that it’s unable to offer small businesses the financing they require, companies such as Prosper and Lending Club fill this void. For those of us that desire a better, more customer-friendly, on-demand taxi service Uber and Lyft provides us these options.
So why all the fuss? Why are so many companies needing to spend millions to fight proposed laws and be forced to defend themselves in the courts and in the media when what they’re doing is providing much needed services to its customers and opportunities to entrepreneurs who want to profit from their models? The reason is because there’s nowhere else to go.
Give America A Raise
Last year President Obama, struggling against a defiant Congress, asked corporate leaders across the country to increase minimum wages and “give America a raise.” For the past 15 years, personal incomes have been stuck. Our economy has grown at a pace far below recoveries in the past. Meanwhile, tax rates have increased as have other essential costs of living, including food and rent. Both national and local deficits are at their highest levels history and voters cannot bear the weight of more taxes. And yet we demand spending and services. And even as life expectancy rises while retirement ages stay the same, our aging population of workers and soon-to-be-retired baby boomers want their pensions and healthcare to last them to their final days. Governments just don’t have the money. But AirBnb, Uber and other successful companies do. So what’s the answer? Follow the money!
The Impact On All Businesses
If AirBnb loses its Proposition F battle today it would only reinforce this trend. And it will give momentum to other groups who oppose “big business” and “fat cats” to attack companies like AirBnB, Uber and yes…even you if you’re too successful. AirBnB isn’t the cause of homelessness in San Francisco–it’s the lack of resources to help the homeless that’s the problem. One can argue that, without the added income provided by AirBnb to some (and the jobs the company provides), there could be more homeless, not less.
These companies (including yours) are providing jobs, generating wealth and paying taxes. But hey – no matter. What’s more important in these times is finding a target to blame and a revenue source to compensate those groups (and the organizations that make their living “fighting” for them) who want their pensions and healthcare paid as long as possible because governments can’t. Start-ups and entrepreneurism is encouraged in America, but get too big and successful? Well, that’s another thing altogether. For many, the “sharing” economy just means sharing profits with everyone, regardless of whether they’ve done anything to deserve them. And that is likely to be your reward for building a successful company.