
Airbnb asks SEC to let it give hosts equity - sethbannon
https://www.axios.com/airbnb-asks-sec-to-let-it-give-hosts-equity-a7d99495-0782-4bce-92bb-4c692ef1b621.html
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CamTin
I know this is probably impossible because the "actual" investors wouldn't be
able to cash out, but it would seem to make sense to me for companies like
AirBnB and Uber to be organized as host/driver co-ops, with the "corporate"
services like ops/marketing/engineering being subordinate to the interests of
the workers (hosts/drivers), who also happen to be the owners of the majority
of the actual capital stock (apartments and cars). Nothing would even need to
change from the customer perspective, very little would need to change in
terms of the technology. AirBnB employees would just be working for hosts
instead of the other way around.

Many agricultural co-ops work like this. You probably are more familiar with
the brand names these co-ops employ than their actual organization: Oceanspray
cranberries and Florida's Natural orange juice are two you probably know
about. These are co-ops where the farmers who produce the oranges and
cranberries have pooled to do all the things necessary to actually sell their
product on a national market, like advertising and running processing plants
(i.e. squeezing the oranges, packing the cranberries) but farmers still own
and harvest their own crops. It's not really that radical an idea, and seems
to make even more sense in the case of AirBnB where the actual capital needs
of the centralized entity (an app) are much less expensive than the physical
plant needed to handle gigatons of produce.

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Aloha
You said pretty much what I was going to say.

The gig economy starts to look a whole lot more equitable with employee
ownership, or a co-op structure.

I'll point out, there are several very large companies that are partially,
mostly, or wholly employee owned - most notably Graybar.

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tomp
Isn’t one of the (rare) benefits of the gig economy it’s “on again, of again”
nature? How would coownership work if/when hosts/drivers decide to stop
working for AirBnB/Uber, or even start working for a competitor? What if they
resume after some time? How is this solved with existing coops?

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CamTin
Do you mean "Should a driver still have a vote/share in the co-op if they quit
driving for 6 months?" If so, then there are various ways to handle it. I'm
not an expert but in agricultural co-ops like Oceanspray, the problem simply
doesn't arise: there's no scenario where it is in the farmer's best interest
not to harvest his cranberries at all, and they contract for delivery before
the harvest season (they can go it on their own or sell to a different
processor next harvest if they want, in which case they leave the co-op). For
worker co-ops like grocery stores, there are various solutions: some give
credit (including voting power and dividend) per hour worked, others just pay
regular wages but have tiers of ownership that you move up with tenure. There
are infinite possible models.

For Uber specifically, I can see miles=votes for each election period. IOW, if
you've driven 10,000 miles since the last election, then you get to cast
10,000 votes. The fact that all the work is tracked mechanically makes it
easier in Uber's case than in others.

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walshemj
Well it would not be a coop then its one member one vote

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Aloha
It could be a split system, much like the US Congress is - I do think that the
person who works full time on a platform ought to get a bigger voice than the
guy who takes rides on weekends, for example.

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chipperyman573
While that makes sense in theory it usually leads to policies that exclusively
benefit the people that work the most, because they're the ones with the most
votes. Unions often have this problem, where new hires are often taken
advantage of by the union in favor of people who have been working longer.

~~~
CamTin
Either scheme ("one worker, one vote" or "some workers are are more equal than
others") has downsides, but they're both probably preferable (to labor) than
the status quo arrangement where labor gets no say at all in managing an
enterprise.

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leroy_masochist
So many questions about how this would be implemented....

Does the equity vest immediately?

Options or pure equity?

To the extent that AirBnB remains private, how do they determine share/strike
price? I.e., last round valuation or some kind of mark to market?

Is there a clawback option if you later make AirBnB look bad by being a bad
host?

If anything, this strikes me as a political gambit that is largely devoid of
meaningful thought. Chesky's playing the long game; he knows this isn't ever
going to go anywhere, but if Congress ever gets pissed off at his company the
way they currently are pissed off at GOOG/FB, he has a card to play. "As a
matter of fact, Senator, we forcefully advocated for giving our hosts equity
in AirBnb, but the SEC decided not to implement the simple legal changes that
would have been necessary for us to do so."

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maehwasu
Bingo: seems political, and not a pressing business concern.

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mceoin
Venture Coop.

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gammateam
HEY FULL TIME ANGEL INVESTORS AND VCs:

Any federal district judge in the country can say these aspects of the
Exchange Act (and the Securities Act) chills speech. The only reason this
hasn't been challenged is because it doesn't affect accredited investors like
you, and the people it does affect don't even know it affects them BECAUSE THE
SPEECH IS CHILLED!

Please help. These laws are nearing 100 years old, but it has only been the
last 20 or so where its been a problem because companies are going public so
late as well as few and far between, all while the market efficiencies have
improved enough where it makes sense to easily give out equity and things that
may be construed as securities. But these laws have always chilled speech and
recent case law can be used to extend "free speech" into corporate and
financial matters. So please, go for it! Hire the same law firm that did
Citizens United, they always go for 1st amendment no matter what the context!

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xevb3k
Could someone spell this out for me, I don’t really understand how speech is
chilled here.

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evbots
I think the line of reasoning here is that money == speech

