
A solution to the Uber and Airbnb problems that no one will like - libovness
http://www.nickgrossman.is/2015/07/23/heres-the-solution-to-the-uber-and-airbnb-problems-and-no-one-will-like-it/
======
danhak
Uber's problems are not Airbnb's problems, and I find this continued trend of
always mentioning the two in the same breath when it comes to regulation quite
baffling.

Opposition to Uber is a clear case of regulatory capture. Every negative
outcome that regulation is meant to mitigate (accountability, safety,
reliability, discrimination, non-predatory pricing) is _better served_ by Uber
(and two-factor location tracking) than traditional cabs. I have not heard
anybody raise compelling objections to Uber's model based on objective harm to
consumers or market non-participants (negative externalities).

Airbnb's model, on the other hand, is rife with negative externalities. The
most significant of these are the degradation of communities that were never
meant to accommodate de facto hotels (noise, parking, transient traffic), and
the drying up of affordable housing stock for people who actually intend to
live in the homes they purchase.

~~~
conanbatt
Sorry but there a bunch of reasons to dislike Uber, from how they use the
information they gather of you and your location, to all price manipulation it
does with surge pricing.

Surge pricing is so intransparent that Im 100% sure that has been gamed
against the consumer and the drivers in favor of Uber. Not only that, Uber
doesnt tell you how much it costs while its going which is also a huge
disadvantage for the consumer. Who knows what happens between what you paid to
Uber and what the driver received?

~~~
jaredhansen
Wait, what? I don't want to have a flamewar over Uber here, but most of this
isn't even a little bit true:

 _> surge pricing is so intransparent that Im 100% sure that has been gamed
against the consumer and drivers in favor of Uber_

I guess this isn't "false" since you're just stating your belief, but if it's
totally opaque to you, then how can you be so sure? I mean, OK, I guess,
but... [citation needed].

 _> Uber doesn't tell you how much it costs_

What? Yes it does - it tells you up front the multiple you'll pay, and even
makes you manually type it in to confirm before your ride is started.

 _> Who knows what happens between what you paid to Uber and what the driver
received?_

The driver gets the same 80% that they get during non-surge times. That's why
surge pricing works: it summons more drivers to the street by paying them
more.

This is all very publicly known stuff; I don't understand your complaints
here. By all means, don't ride it if you don't like it, and criticism is fair
game, but try to get the basic facts straight.

~~~
conanbatt
> I guess this isn't "false" since you're just stating your belief, but if
> it's totally opaque to you, then how can you be so sure? I mean, OK, I
> guess, but... [citation needed].

You really think a for-profit company that doesn't have to or doesn't disclose
the process to do surge pricing, having the knowledge and capacity to use
surge pricing to maximize profit, will sacrifice profits in favour of the
consumer?

Its opaque on Uber/Lyft, it's not opaque on taxis, so thats definitely a
reason to dislike Uber(Sidecar does disclose prices before you get on the car)

> What? Yes it does - it tells you up front the multiple you'll pay, and even
> makes you manually type it in to confirm before your ride is started.

A multiple is not the same as the number you are going to pay. A multiple of
what? I don't see a ticker like I do in a cab that tells me they are not
gaming the numbers.

You say the driver gets the same 80%, but I dont know how much it cost me
until I'm out of the car. If Uber tells me it cost me 10 dollars, and tells
the driver that trip was billed 8 dollars for him, I would never know, and
neither would the driver.

------
wdewind
This is a nonstarter for Airbnb because if they gave the type of data
suggested here you'd be able to extremely easily analyze it and find all the
places where illegal sublets were happening, which is a major part of their
business. There is no way around Airbnb's problems without changing zoning
legislation.

~~~
oh_sigh
What percentage of units on Airbnb do you think are actually illegal sublets?

~~~
fweespeech
[http://nypost.com/2014/04/21/two-thirds-of-citys-airbnb-
rent...](http://nypost.com/2014/04/21/two-thirds-of-citys-airbnb-rentals-are-
illegal-apartments-state/)

> Nearly two-thirds of the city apartments recently listed on Airbnb were
> being offered in violation of the law, an analysis by state authorities has
> found.

> The study of data from the subletting service’s own Web site showed 64
> percent of its 19,500-plus offerings for Jan. 31 covered an “entire
> apartment,” says an affidavit from the state Attorney General’s Office.

There is no way to really know without being AirBnb + knowing which apartment
complexes sublet illegally.

But...at least in NYC, 64%.

~~~
wdewind
Yep. And then you need to multiply that by the fact that most of their
business undoubtedly comes from major metro areas, in which almost all have
laws which make AirBnB illegal.

------
jasode
This essay has some interesting analysis contrasting the differences between
the model of licensing/guild vs crowdsourced reviews.

However, analyzing that aspect misses the point.

The heated issues around Uber is _economics_ and how the pieces of the pie are
cut up. Explaining how new technologies allow a different trust model to
emerge is _irrelevant to the French taxi driver throwing bricks at Uber cars_
or _DiBlasio 's proposed cap to curb congestion_.

In other words, this essay is more relevant to a _potential passenger_ of Uber
who wonders how he/she can _trust_ a car that doesn't have a government
medallion.

One needs to write a totally different type of essay to appeal to angry taxi
drivers and angry politicians.

~~~
wrkng
(author of the post here)

There are issues on a number of levels. One is "public safety" which is
essentially the licensing issue. Another is externalities like traffic, which
aren't about licensing for safety but more about regulating for other impacts.
Then, there are the economic / labor issues, which deserve their own
consideration.

~~~
jasode
Yes, I agree with that and also the analysis in your essay.

My point is that your content (though intersting) does not live up to your
ambitious (and generic) title, " _A Solution to the Uber Problems_ ".

Talking about "real time data sharing" with mayor of NYC is interesting but
the "congestion" problem, which could be perceived or real, is not what comes
to mind when people discuss "Uber problems." Traffic congestion caused by Uber
is a relatively minor debate so far in relation to other problems it has.

The following google search for "Uber congestion" is 504,000 hits:

[https://www.google.com/search?q=uber+congestion](https://www.google.com/search?q=uber+congestion)

The following searc for "Uber labor" is 11,100,000 hits:

[https://www.google.com/search?q=uber+labor](https://www.google.com/search?q=uber+labor)

------
DennisP
I'm a little confused here. The article says Uber and Airbnb are quite
effectively regulating themselves, and never bothers explaining why they're a
problem.

~~~
pauloday
I think he means they're good at regulating problems that affect them directly
but they're bad at/don't care about regulating externalities. There are laws
in place to protect people who stay in hotels and AirBNB does a good job of
emulating those, but there are also laws to prevent hotels from messing up
society as a whole (e.g. zoning laws) that AirBNB doesn't emulate well or at
all.

~~~
apendleton
Right, the regulations are meant to protect both the parties to the economic
activity and people who aren't parties. The Uber equivalent, I guess, would be
that their system can eliminate drivers passengers don't like, and passengers
drivers don't like, but they have no incentive (except bad PR) to make sure,
for example, that drivers not carrying customers are properly insured should
they hit pedestrians. The self-regulatory mechanisms don't give the
pedestrians or other non-parties a lever to advocate on their own behalf.

~~~
DennisP
It looks like the insurance issue is already being solved:
[https://www.policygenius.com/blog/uber-lyft-and-other-
ridesh...](https://www.policygenius.com/blog/uber-lyft-and-other-rideshare-
drivers-now-have-insurance-options/)

------
Daishiman
Ahh, yes, the Randian ideology of the self-regulating data-driven, no-bullshit
enterprise, because governments are Big and Bad and will stifle the
hardworking man in their attempts to do right for society.

~~~
haberman
Did you read the article? It's not about self-regulation. It's about
government regulation based on real-time data provided by private enterprise.

~~~
Daishiman
Yes. There's no way a data-driven company would give out its crown jewels for
regulation just like that. Hell if I had a data-driven company I would
definitely not trust anyone with the secrecy of said data. And the receiving
end of said data should have little reason to trust me either.

I think governments still have a _lot_ to do as far as taking decisions based
on collected data. However, we're slowly getting there. But the politics
surrounding the data will still be around forever.

~~~
wrkng
The trick to releasing data is to provide the right incentives.

For example, relaxing the traditional regulation in exchange for data.

Or, releasing the platforms for some types of intermediary liability in
exchange for the data

Agree that absent of a proper incentive there's no way this could come about

------
norea-armozel
I can see why no one would like this sort of regulatory scheme as it would put
everyone's relevant data in the open. Everyone would be able to look at it
whether you're the affected company or not. Effectively, it gives more data to
competitors to figure out where a market is being underserved or
underdeveloped which would mean existing firms would have to deal with
potential losses of economic profit. Honestly, I prefer this approach despite
being an anti-capitalist. This approach could be part of the solution to cure
the inequities of capitalism.

~~~
cdubzzz
Hm, why would that be necessary? Are there reasons such an ideal wouldn't just
create one-to-one channels with individual companies providing data directly
to regulators? Perhaps this article oversimplifies, it's not something I've
ever thought about.

------
fweespeech
> 2) In exchange for that freedom to operate, companies will need to share
> data with regulators — un-massaged, and in real time, just like their users
> do with them. AND, will need to accept that that data may result in forms of
> accountability. Just like user data informs accountability measures within
> their platforms:

The problem with this is it imagines a world where the regulators don't need
to perform any kind of audit/inspection.

The reality is, companies cut corners which will cause bugs and "bugs" in the
data transfer process. The only way for a regulator to discover these issues
is....to do what they do now.

It also ignores the fact that companies like Amazon _explicitly tell people
who interact with the reporting portion of their MWS business that they cannot
report information in real time_. And I'm pretty sure that is due to costs.
This regulatory model would likely increase compliance costs for businesses
with delayed reporting mechanisms because they don't need to guarantee
processing in real time. The same is true of numerous companies I deal with at
#DayJob. There are numerous remote sites with low bandwidth connections
including _in other countries_ that regularly have replication delays for
reporting purposes.

There are soooooo many holes that are going to require the "expensive" part of
regulation (boots on the ground to inspect/examine) to continue to operate the
"old" way anyway.

------
s73v3r
Can we stop referring to business models which choose to simply skirt or
ignore the law as "innovation"? I'm pretty sure the Mafia has been doing that
for decades.

~~~
wrkng
(author of the post here)

Sure, that's true

But what's also true is that we will continue to see things -- things that are
perfectly acceptable to society, or at least will come to be that way -- that
are out of sync with current laws and regulations. So the question is how do
we get there. Clearly every innovation is not positive, but many are, and we
want to give ourselves the opportunity to try things and learn from them.

~~~
s73v3r
As I said in another post, most of these things are not new. They've been
done. Maybe not "on a computer" or "with an app", but they've been done, and
are the reason why the regulations were enacted. The startup that tried to
sell parking spaces was one such example. There were regulations on the books
making it illegal to sell a public parking space for a long, long time. Why?
Because someone tried to do it before, and it was decided that it should not
be allowed.

------
nickbauman
Polymet is about to get permission to open one of the first copper sulfide
mines in Minnesota. This mine will be directly over the Superior Watershed,
one of the largest fresh water aquifers in the world.

We have _plenty_ of data about how destructive copper sulfide mining is yet it
looks like it will get rammed through. So the idea that "asking permission" is
a thing, well, I'm not sure it really is anymore.

~~~
hkmurakami
_> So the idea that "asking permission" is a thing, well, I'm not sure it
really is anymore._

Oh I'm sure it still is. You just have to ask very, very, very nicely (with
campaign contributions).

------
evunveot
The solution seems to gloss over the fact that these businesses (with their
relaxed licensing requirements and greater freedom to operate) would have to
build a real-time government data sharing system before they could operate.
Sounds almost like a way to keep smaller competitors out of the market via
onerous regulatory requirements, almost the opposite of the stated goal.

------
avz
One step towards the proposed idea would be for a tech-savvy government to
build a platform and offer APIs. Just imagine: an API to file your tax return,
to vote, to register marriage, to open a business, to register a child, to get
government statistics generated from all this data and of course an API to
authenticate.

------
s73v3r
"I am not sure there’s a near term alternative to this process — new ways of
doing things will never see the light of day if step 1 is always “ask
permission”. The answer will nearly always be no, and new ideas won’t have a
chance to prove themselves."

Usually the regulations are in place for a reason. Someone has already tried
those things. Maybe not "on the internet" or "with an app", but they've been
done. Trying to skirt lodging and rental regulation by using your apartments
as hotel rooms, bypassing both hotel taxes and rent control is not new.

------
snowwrestler
This doesn't actually solve the problems.

Businesses have used real-time data for decades to optimize their processes,
and that's all we're seeing referenced in this post. Setting aside the
question of whether Uber drivers are "employees," they are certainly inside
the business model, and so is the data about their performance.

But the reasons we have regulations is that business optimizations can be
counter to social goals. And knowing about a bad thing doesn't allow one to go
back in time and fix it.

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exelius
This article makes an assumption that regulation is a tool used to protect
consumers. While the rhetoric may be to make it sound that way, most
regulation exists to protect incumbents who stand to lose money. This is just
how governments have always worked; which is why driving accountability in
government is so hard.

~~~
maxmax
When incumbents have invested capital specifically to comply with regulations,
it makes sense that the incumbents will demand that the regulations are
applied equitably.

Regulators tend to be held highly accountable to the community they regulate.

------
edgarvaldes
I don't see a clear idea in those graphics. What are they telling?

~~~
hkmurakami
The graphics should have been split in half. The left half is the pre-approval
process and the right half is the post-approval process. The two halves
compare the relative differences in the compliance burden in the two models.

------
tfigueroa
If these companies are going to flout regulation anyway, what's the point of
making regulation more permissive?

