
Welcome to the ‘Sharing Economy’ - pg
http://www.nytimes.com/2013/07/21/opinion/sunday/friedman-welcome-to-the-sharing-economy.html?pagewanted=all
======
paulsutter
The sharing economy is great for anyone who thinks bankruptcy is a cool idea.
If you share your home with someone, they can sue you for arbitrarily reasons.
If you share your car with someone, and they get into an accident, the victims
(or "victims") can sue you for arbitrary reasons.

(Yes the services provide liability insurance, but the caps are well below
awards that are commonly made in accident cases. Just trawl some websites of
ambulance chaser lawyers to see what I mean)

EDIT: NO this cannot be solved with "boilerplate waivers". YES it's a shame.
Try to find a lawyer who is willing to share his car over the Internet. You
can't. Because they know.

EDIT: As for jurisdictions, I'm referring to the US. California is probably
close to worst case.

~~~
cmsmith
This is an excellent point that people miss when talking about the 'sharing
economy'

The difference in price between equivalent quality airBnBs and traditional
hotels can be attributed to a few things:

1) Difference in demand due to people being more comfortable in anonymous
hotels

2) Inherent efficiency in 'sharing', because the owner was going to own the
property whether or not they rent it out.

3) Corruption. Unfair zoning and political influence of hotel industry.

4) The risk that you mention is priced into hotel rooms, but not into airBnBs.

5) External costs. The negative impact on the neighborhood (traffic, noise,
damage) caused by high-turnover renters. Hotels pay some of this through extra
taxes and regulation, while sharers pay none of it.

Now to the extent the price difference is made up of 1,2, and 3, the sharing
economy is great. We are moving towards a more efficient marketplace, with
lower prices and better quality for everyone.

The trouble is, the hotel industry is already pretty competitive. So I would
guess that a good amount of the price difference actually resides in 4 and 5,
in which case the sharing economy is saving travelers money and taking it out
of the pocket of the hosts and local communities.

~~~
muzz
Excellent points, although what do you mean by #3?

My impression was that the hotel industry is subjected to regulation, as
opposed to it wielding power.

In addition to regulation, many states and localities impose significant taxes
on hotel stays. For example, the theoretically low-tax Texas has a 6% state
hotel tax [1], but localities also levy taxes on top of that, bringing the
total to often 15%.

[1]
[http://www.window.state.tx.us/taxinfo/hotel/](http://www.window.state.tx.us/taxinfo/hotel/)

~~~
shpiel
I assume it meant zoning that limits the number of hotels that can be built in
a particular municipality. I also assume he meant to suggest that established
players attempt to limit the growth of competition by being in favor of
regulation (permits, zoning restrictions, business licenses) that makes it
difficult to enter their market.

------
nlh
I love love love AirBNB. I host w/ my apartment in NYC and it's enabled me to
travel around the world this year and still have a home base when I need it.
I've used AirBNB a lot in those travels.

BUT (there's always a 'but' isn't there). I'm skeptical. On two fronts:

First, it's becoming increasingly difficult to make reservations as a guest in
a nice place unless you're planning 4-6 months ahead of time. Some people have
the luxury of doing that, many do not. I've just taken reservations for both
Xmas and New Year's eve at my place in NYC and it's barely the end of July.

As a guest, this irks me. I spent 3 weeks in London recently, booked the trip
about a month in advance, and tried to no avail to find a place on AirBNB --
nada. All the nice places had been snapped up months ago, and the ones that
were left were either shady brokers or absolute crap (it makes sense -- I
wanted a 3 week booking. If a nice place had even a 1-day booking in that
window, the whole place was unavailable). I ended up booking on HomeAway or
FlipKey or one of their competitors.

Second, I feel in some sense, the tide is turning the other way on the
regulation front. I've been lucky with my place in NYC in that I'm in an
AirBNB-friendly building and I've had extremely good luck in getting terrific
guests. But the regulatory environment is not AirBNB-friendly and it's getting
less so. Several people who used to host in NYC have stopped doing so for fear
(irrational or otherwise) of running afoul of the law.

I tried to host w/ my apartment in SF and within 72 hours of posting the
listing, I received a very strongly-worded C&D letter from the building's
management company staff attorney. They had someone in the office who
constantly scanned for listings on AirBNB and came down hard and fast. Others
have reported similar stories from HOAs and management companies.

So of course I want nothing but the best for AirBNB - I've a happy customer on
both sides. But I don't think it's such a slam dunk as many seem to think it
is...

~~~
joering2
I saw a bright lightbulb above my head for a moment: a paid service for $99
per month (or whatever!) and we will daily/weekly monitor if any of your
properties/tenants are listed on BnB. Optional service for extra buck: we will
mail them C&D letter (with Realtor logo on it, of course) to violators. I can
see a brilliant marketing campaign and can imagine many Realtors signing up!

Does something like that already exist?

~~~
jmtame
Why would you want to be a force for something like that? Spend your energy
doing something productive. I think Airbnb has an honest mission and the
legality will hopefully work itself out. I guess if you're just looking to
make a quick buck, maybe. But then why not go into finance or something,
rather than build a startup that aims to hurt startups?

~~~
beambot
Force for what? For preventing contractually-prohibited uses of my property?
That sounds like a fine application, even if it doesn't match your worldview.

I own a home (remote, long story). I hope my property manager monitors my
realestate in this fashion. Legally, I'm on the hook for all sorts of
eventualities and insurance related to the property (eg. fire and perhaps even
injury). I'm not willing to foot the extra risk (or bills!) of having a tenant
inviting itinerant AirBnB visitors -- that's why subleasing is not permitted
by my contract with the leasee.

Would I be happy with an alternative that yields higher net returns than a
property manager? Absolutely. Do I want it done on my property against my
permission? Hell no.

~~~
muzz
Agreed. I really don't understand the sense of entitlement that people have
when it comes to doing things that are _specifically_ against the lease they
signed upon renting and apartment (or against the CC&Rs of the HOA they
willing bought into).

------
jtchang
There is going to be a head on collision between current government
regulations and this rise of social sharing. Airbnb vs the entrenched hotel
industry. Uber vs the taxi commissions.

I, for one, welcome it. It's time the market voiced their opinion over how
much value these groups provide.

For example, take internet. Right now everyone can get cable/dsl but in many
contracts it is against their terms to share it. I understand why because a
lot of their #s are based around utilization. But I still feel in some way
taken advantage of.

~~~
frossie
Not just social sharing, I am amazed how many regulations there are that
protect businesses from disruption by other businesses. For example, Tesla
cannot sell cars in Arizona, because it is against the law for a manufacturer
to sell a car directly to a consumer:

[http://bit.ly/143Zvqt](http://bit.ly/143Zvqt)

~~~
muzz
That regulation affects not just Tesla, but all car makers. Tesla is certainly
innovative, but these restrictions have nothing to do with that innovation;
gas-guzzling SUVs cannot be sold direct-to-consumer either.

~~~
jodrellblank
"In its majestic equality, the law forbids rich and poor alike to sleep under
bridges, beg in the streets and steal loaves of bread."

\- Anatole France, Le Lys Rouge [The Red Lily] (1894), ch. 7

------
graeme
If you think Airbnb is big now, just wait.

I'm 27. Most people I know have not stayed in an Airbnb rental, or considered
becoming hosts. They haven't heard of it, or they're reluctant to stay with a
stranger.

Eventually, positive word of mouth will convince them to try. They just have
to like it once and they'll do it again.

Friedman tried to paint Airbnb as massive, but all I can think about it how
tiny it still is compared to the global hotel industry.

You may say that for use case X, a hotel would be better. Fine. But I'd
estimate 80% of the market hasn't tried Airbnb, and X% of them will switch
once they do.

~~~
jmtame
There has been somewhat of a stigma associated with it. I was the guy telling
my friend in Illinois about it when we were planning a trip to LA with some
other friends. I also told my parents when we were planning a vacation. Once
you experience it, it's awesome and people will talk about it.

You can find this pattern in other markets, like online dating. A lot of
people were initially hesitant (and still are), so there are social forces at
work. Once the lid comes off that, I think it'll blow up.

I have the urge to box Airbnb into this "paid couch-surfing" category, but
that's not really what they are. They positioned their company as something
greater than that: all of the services that went along with their experience.
Funny enough, the investors didn't buy it because they were tunnel visioned by
how big it could be and whether it would scale at the seed stage. Those are
the wrong questions to be asking at seed, and actually I don't think many
founders could have pulled off starting Airbnb. The team clearly was the
overriding factor in Airbnb working, followed by their excitement to be doing
that startup.

I liked the Subject: Airbnb "essay" which showed how true this was
([http://paulgraham.com/airbnb.html](http://paulgraham.com/airbnb.html)).

~~~
seiji
_Once you experience it, it 's awesome and people will talk about it._

Why is it so flatly awesome? My experience was: overpriced room (overpriced
because the high airbnb fees get passed on to the person who stays), annoying
extra "cleaning/deposit" fees that don't get refunded (and you're not notified
that they didn't get refunded), and a quasi-too-personal system of booking
where half the listings are by weirdos ("RENT A ROOM IN MAH CAMPER ON THE
STREET!") you can't filter out or fake listings nobody responds to.

It's squarely not in my "things that make me happy" column.

~~~
fennecfoxen
I had the opposite experience. I was moving to New York City, had been staying
with a friend, decided it was high time to move out, and found a single
bedroom in a really nice penthouse in east Williamsburg for the short term
for... barely more than I was paying to commute to and from my friend's place
in White Plains on the train. More convenient, too.

(Granted, it was something like a fifth-floor walk-up, and the neighborhood
was a little gritty, but in the edgy-up-and-coming cool-if-you're-into-that
sort of way and not the help-get-me-out-of-here fear-for-your-life drug-
dealers-on-the-doorstep kind of way.)

I can only expect that I'd be out another few hundred bucks if I used a
traditional hotel.

~~~
seiji
Exactly! Saying "airbnb is good" by itself is meaningless. It's a product of
the context of experiences sustained over multiple interactions. If you're
renting $500/night rooms in Upscale Town, USA, you'll probably love it like
you love your $800 shoes and your $3000 jeans. If you're renting $40/night
rooms in NYC, you'll probably hate it.

Irrational exuberance of startups around here tends to get out of hand. I get
it. Everybody is the friend of a rich person and you want to promote them
because you know them. hi-5's and bropong all around. Great. But they're still
delusional. Gotta speak truth to ego-elevating unrestricted happiness. Life is
pain, not million dollar post-exit condos in SF.

------
salimmadjd
OH NO! Tom Freedman just invented the Sharing Economy. Be hold for 1000 pages
plus book and endless pontifications on virtues of "What I call the Sharing
Economy" on the Charlie Rose and other shows.

~~~
wikiburner
I've never really understood the Tom Friedman backlash. He seems to be a
pretty thoughtful, reasonably imaginative writer.

My guess is that it's because he's not a doctrinaire liberal, plus probably
the whole Iraq thing.

~~~
u2328
The backlash exists because most of his writings consist of regurgitated ideas
plucked from elsewhere that he attempts to pass off as his own as though he's
some sort revolutionary thinker in the modern era. Then he sells tickets to
his Friedman Forum for $1K a pop to people who aren't read-well enough to
realize as much.

~~~
wikiburner
So your issue with Friedman is that he's aggregating, popularizing, and
improving the accessibility of new ideas that he himself didn't create?

Sounds like any number of journalists/writers to me.

Do you really feel that he has an attribution issue? He seems to always put
the focus on people at the forefront of the change he describes (for example,
in this article the focus is on Chesky.) It's not like his articles are some
TED like exercise, where he portrays himself as being at the center of making
all of these new things happen.

------
anigbrowl
This is sort of a rip of the Economist story:
[http://www.economist.com/news/leaders/21573104-internet-
ever...](http://www.economist.com/news/leaders/21573104-internet-everything-
hire-rise-sharing-economy)

I do think it would be more appropriate to call it the 'renting economy' or
the 'ending economy,' however. Sharing implies something more equitable than a
straight business transaction.

~~~
jrn
Yep rental economy. Internet lowering of transaction costs is enabling the
unbundling of ownership rights to capital/durable goods. AirBnb, facilitating
exchange by providing 'trust', which is reducing the asymmetric information
between the two negotiating parties.

------
minor_nitwit
Sharing Houses is just time shares taken to the logical internet extreme.

What are some other sharing ideas that are out there?

I think women's fashion could benefit from something like this, sharing shoes
- dresses, gowns etc. Think of all the money that is spent on weddings, proms,
etc.

For the typical man, power tools and machinery. The one guy in town with the
Bridgeport will make out like a bandit.

Neighbours let each other borrow sugar or borrow an egg. - There's definitely
a location aspect involved in all of this. Vacations are different because
you're specifically going to some place far away. Maybe otherwise, you
shouldn't focus on a single type of item, and simply connect the nearby
community with a focus on sharing any and everything.

~~~
pg
_I think women 's fashion could benefit from something like this_

There's a startup in the current batch doing Netflix for women's fashion:
[http://letote.com](http://letote.com). It's quite popular among the women who
work for YC.

------
kevinalexbrown
Most remarkable to me is that their success required so few conceptual shifts
(but important ones). Time-shares and couchsurfing and vacation rentals
already existed. I'll try to remember this the next time I think something's
'obviously' been tried before.

It also seems like there was a large shift in (or discovery of) the
willingness of individuals to participate in the way that makes sharing work.
I suspect that many other innovations will be primarily social ones enabled by
the internet (the watsi model?), and that these will be just as powerful as,
say, graphene or spacex.

~~~
seiji
_It also seems like there was a large shift in (or discovery of) the
willingness of individuals to participate in the way that makes sharing work._

The "large shift" was when people started getting paid. People will do
anything to get paid, including inconveniencing themselves by illegally
renting out rooms in their apartments.

------
thejteam
I don't really like the term "sharing" applied to airbnb and the like. More
like renting out excess capacity, which businesses have been doing since the
concept of business first came into being.

~~~
muzz
It is indeed a misnomer. Services like AirBNB allow for spare personal
consumption to be monetized as business would, yet users of it don't want to
pay the costs of operating as a business or follow the same rules. EDIT: "The
monetizing economy" would probably be a better term, but that doesn't sound as
noble.

------
muzz
Hasn't the sharing economy already reached the tipping point?

The ideas in the piece clearly aren't new for most of us on HackerNews, but I
would contend they're not really new for many in the general public either.

There have been many mainstream news stories about the sharing economy. And
even battles in big cities (SF, NY) over regulation. I would've guessed that
this was already on many people's radar.

~~~
graeme
You'd be surprised. About half the people I talk to under 25 haven't heard of
Airbnb yet.

This usually comes up when I tell them what Ycombinator is.

"Have you heard of Dropbox? Airbnb? Reddit?"

Usually one of those three works, but a surprising amount of people don't know
what either of the first two are. I even talk to a lot of people who don't
know what Reddit is.

They're all obviously mainstream, just not as mainstream as, say, staying in a
hotel.

~~~
stephengillie
I was having dinner with some college friends recently who hadn't heard of
Google's self-driving car. O_o

------
sellandb
I like to think about the "Sharing Economy" kind of like the shift from
physical servers to virtual servers. A similar set of principals come into
play when you try to make better use of excess memory and CPU cycles VS when
you try to make use of nights when your spare room is empty.

------
brownbat
What's the airbnb equivalent for renting a drill/lawnmower/weed
whacker/snowblower from a neighbor?

~~~
namenotrequired
[https://peerby.com/](https://peerby.com/)

------
VLM
"can be trusted like a company and provide the services of a company. And once
you unlock that idea, it is so much bigger than homes. ... There is a whole
generation of people that don’t want everything mass produced. They want
things that are unique and personal.” "

Failure of analysis. The reason why people want to trust each other rather
than companies is not some weird cultural shift that doesn't exist WRT anti-
mass production, its the death of trust in existing big companies. I want a
coffee mug. I don't really care how many other copies exist, I'd just like one
not made with lead, where the artwork isn't water soluble, and it hasn't been
value engineered to fail rapidly. Because of crony capitalism and
consolidation, and the careful cooperation of for-profit media also owned by
consolidated crony capitalists (in some situations, the same individuals...),
those options are not available in the big company mug market. So a system
that rates individuals for their production is going to do well if the big
companies are unable to provide what individuals are allowed to provide.

The TLDR is a monopolistic command economy (ours) is inherently inefficient.
Computers and tech and stuff can make at least some inefficient things,
efficient enough.

I don't really care if I'm sleeping in the most unique bedroom in the world...
I'm asleep, what do I care. On the other hand, I'd like it to be reasonably
clean, no bed bugs, and no one stealing my stuff. I'd feel more ethical if no
illegal aliens were being treated inhumanely as part of my experience. And no
customer service script readers. The big corporations simply can no longer
provide that experience like they could in the past, too bad. Airbnb can
provide some trust in that experience. Guess which is growing?

------
jjsz
The sharing economy is also known as the collaborative consumption based
economy, a directory of websites I found a while a go:
[http://www.collaborativeconsumption.com/directory/](http://www.collaborativeconsumption.com/directory/).

~~~
jjindev
Toffler should get some credit for "prosumer," years and years ago.

~~~
jjsz
Looking at Wikipedia, he did get some recognition:
[http://en.wikipedia.org/wiki/Prosumer#General_meanings](http://en.wikipedia.org/wiki/Prosumer#General_meanings).

------
unimpressive
Can I see some of the castle listings? I'm curious.

EDIT: Sweet...

[http://www.probnb.com/the-most-expensive-airbnb-listings-
in-...](http://www.probnb.com/the-most-expensive-airbnb-listings-in-the-world)

------
ansdkfus13
I like the business concept behind Airbnb because it can apply to so many
other industries - which suffers from the mismatch between supply and demand.
It definitely helps spawn similar ideas that are set out to help eliminate
inefficiencies in the economy. Now there are a lot of start-ups that help you
share your car, vacation home, yacht and pretty much whatever you own that you
would rather share with someone than let it sit rotting in your garage.

------
VLM
An area of failure in anecdotes about "sharing economy" or specifically airbnb
is the locality and individuality of the transactions vs the "big domain name"
for the whole thing.

Anecdotes, good or bad, are as pointless as reading nation wide multi thousand
tower cell phone company reviews. "Oh, you're looking for a cell phone company
(in LA)? Well let me tell you, (multinational) is (terrible|great) (in NYC)."

------
namenotrequired
Reminds me of [https://peerby.com/](https://peerby.com/) which is also
definitely part of this.

------
dano414
Great concept, but in Marin county I would get a huge fine for doing this. My
neighbors would turn on me in a second.

~~~
spiritplumber
I've had people here for a while - they were homeless. I took them in, helped
them stop doing (most) drugs, and taught them a trade.

Nobody in my condo cluster had a problem with it.

And yes I live in Marin.

------
sixbrx
Can't help but wonder if this is one of those things that will go downhill
towards the "dangerous, better not try" once a wider demographic than the
early adopter tech crowd gets involved. Like hitch-hiking?

------
acd
Sharing is caring.

------
trevorstarick
I recently co-founded a startup
([http://outpost.travel](http://outpost.travel)) that aggregates the 'sharing
economy'. So far we've had a great response to it from investors and users.
It's been a crazy experience going from idea to MVP to where we are today and
I get exactly what they mean when they say to keep an eye on startups/sites
like Airbnb/Vayable. Almost all our users hadn't known about Airbnb before we
introduced them to the whole P2P travel experience and quite a few then booked
experiences, rideshares and place rentals using us. The one think that I am
concerned about is that quite a few federal/state tourism agencies are now
banning P2P travel as theres no taxes being made and it takes away from bigger
chains such as Hilton and Holiday Inn.

~~~
trevorstarick
And there goes the backend... We're fixing the problem should be back in a few
min. Sorry about that!

EDIT: Fixed!

~~~
wikiburner
Did you really get HNed just from a link in your comment, or was the outage
coincidental?

~~~
graeme
I had top comment on pg's most recent essay; I got an extra 1,500 visitors to
a subreddit I mentioned in the comment.

And my comment only rose to the top when the essay was quite far down the
frontpage.

The link in this post was top or near top at the time this essay was #1, so I
imagine they got quite a few visitors quite fast.

------
Dewie
[http://en.wikipedia.org/wiki/Local_exchange_trading_system](http://en.wikipedia.org/wiki/Local_exchange_trading_system)

I like the idea of something like this, with a local non-monetary exchange
currency.

------
andyidsinga
i read the title as "welcome to the sharding economy" \- oops - but still,
looking fwd to reading that post somewhere.

