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The Sharing Economy

Can Airbnb give a Lyft Uber the destruction of the middle class?

As global capitalism continues to wring more and more profit out of the economy year after year, which after all is the raison d'etre of its corporate structure, a catastrophically impacted casualty of this using of more and more leading edge technology to make ever increasing profits has been the middle class. That is why it is all the more gratifying when that same technology can now be used to counter this unregulated corporate juggernaut, while helping the middle class to survive, if not flourish.

Recently, I took a sentimental journey to Berkeley as a friend's guest to attend a wedding. On the closet door in the postage stamp sized room we shared was a card listing the $450 a night room rate for staying in what had been a rather old and decrepit hotel not so many years before. And yet now -- presto chango -- it has been miraculously transformed into a superficially high-end money maker.

It dawned on me by looking at my Airbnb home-sharing app that we could have stayed in the same neighborhood in a truly elegant turn of the last century Victorian home with more space and more privacy for about $100.

And unlike when I was a kid and drove a Yellow Cab in New York or for Beverly Hills Cab Company, cab drivers now have to rent their cabs and pay for the gasoline and other charges, instead of being employees of the cab company that covers the overhead of the cab and pays a percentage of the meter to the driver. Those days are long gone. So once you figure the overhead, how many hours a day does a driver have to drive to make $500 a week clear?

Given a longstanding corporate agenda that more reasonably approximates a definition of cancer -- uncontrolled growth -- than it does an economic system, is there any wonder that car sharing services like Uber and Lyft are flourishing?

Michael Eric Dyson has a rather nice way of putting it, "Intelligence will always find a way." So whether it's about people's core desire to travel or pay a reasonable price for transit, Airbnb, Uber, Lyft and other services in the shared economy seem to be finding an alternative that had up until now seen nothing but greater and greater wealth shared by a smaller and smaller segment of our society. Could this be the start of a more social, if not socialist economic trend?

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Caught with their pants down, monopolistic and entrenched business interests in the hotel and cab businesses have cried foul, alleging that this is unfair competition that has a negative effect on their economic well being and ability to compete.

Caught with their pants down, monopolistic and entrenched business interests in the hotel and cab businesses have cried foul, alleging that this is unfair competition that has a negative effect on their economic well being and ability to compete. Nothing could be further than the truth, since they haven't competed for years in what had been a limited market where the prices of accommodations and transportation could artificially be maintained high with low labor costs and disproportionately high profits.

Just looking at the demographic of those using the shared economy and the rapidly expanding services that are offered, it becomes immediately clear that people who could not previously have afforded to travel, because of the inflated expense of hotels and transportation, have now caused an explosion in travel -- local, national, and international -- whose positive impact on local economies around the world far outweighs the negative effects on monopolistic tourist centered businesses that have thrived at the public's expense for years.

It is also worth mentioning that the shared economy is not a black market economy, since all these services send a federal 1099 Form to all who provide service under their businesses. And once cities finally decide that the shared economy is not going away, they too can assess a fair tax, which nobody supplying these services would begrudge the city.

However, probably the strongest argument as to why a sharing economy will not just go away is political. With 6000 Airbnb participating homes in the Los Angeles area -- 1500 in Silver Lake alone -- for many of these folks negatively impacted by this last recession, sharing their homes is an economic Godsend for staying in the middle class. This has not been lost on savvy candidates like Teddy Davis, who is running for a Los Angeles City Counsel seat in District #4. He seems to understand very well that a motivated Airbnb constituency might just be the balance of support he needs to get elected. To that end, he has given back developer contributions to his campaign, while taking a pro-Airbnb stance.

In a political reality where 18% of the electorate showed up to vote in the last primary and only 8% voted for the LAUSD Board seat of the late Marguerite La Motte, a highly motivated and voting sharing economy supporter bloc might just obtain the king making power that the Eli Broads and Koch brothers have spend millions trying to wrap up.

For me, the most positively revolutionary byproduct of the sharing economy is the people to people connections that see fast friendships formed between those sharing. It is not uncommon for people who share their homes with Airbnb to stay with people they have accommodated, when they themselves travel. And in a world that often loses sight of others humanity, this is an invaluable exercise in human empathy that sees the world as a village and not a battle field.

With all the money a middle class under siege can now save by taking part in the shared economy, they just might be able to afford $3.50 for a soft drink at Taco Bell on the Santa Monica Pier.

leonard-isenberg

Leonard Isenberg