mfioretti: airbnb* + lyft*

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  1. The public doesn’t need a middleman for sharing-economy services, but it does need to make sure they are regulated

    So-called sharing-economy companies such as Uber, Airbnb and Task Rabbit are posing policy headaches for governments around the world. Their argument that they should be exempt from existing regulations because their services are ordered over the Web does not make much sense, but it provides a fig leaf for politicians seeking campaign contributions from these highly capitalized newcomers.

    Part of the response to the innovations associated with these companies should be to modernize regulations. It is reasonable to regulate taxi services in ways that ensure that cars are safe and drivers are competent and responsible. It is also reasonable to regulate rented rooms to ensure they are not fire traps. Similarly, both should be regulated in ways that ensure access to the handicapped and prevent discrimination. In addition, employees in these companies should be covered by workers’ compensation and protected by minimum wage and overtime rules.

    These efforts will require a rewriting of existing regulations, many of which were put in place to protect the existing companies in the industry rather than serve a legitimate public purpose. This sort of modernization is clearly a doable task from a technical standpoint, although sharing-economy companies will undoubtedly use their money to try to block the imposition of rules that put them on an equal footing with their old-fashioned competitors.

    For example, a taxi service could allow for drivers to register in the same way as they do for Uber and Lyft. Customers could use an app to order their services just as they do with Uber and Lyft. The difference would be that the public service would likely take out a lower share of the fare than its for-profit competitors. If its design were effective, only drivers who felt like being ripped off would work for Uber and Lyft.

    In addition, a public service could directly apply standards to providers as a condition of participating. Cab drivers would have to meet licensing standards, and their cars would have to pass inspection. And they would have to arrange insurance for both car and driver. A public version of Airbnb could require that potential renters had their rooms inspected for fire safety and provide copies of leases or condo agreements to ensure that these were not being violated by renting out rooms or whole units.

    A nonprofit in England (with the unfortunate name Beyond Jobs) has established an open-source program for many of these purposes. This system may not be fully up to the job, but it should provide a basis from which to work.

    In addition to cutting out the middleman and ensuring that necessary standards are met, a public service could provide other important benefits. Most notably, it could ensure that customer reviews are the property of the service provider. As it stands, the reviews are typically the property of the company.

    This means if an Uber driver has established himself as a safe and reliable driver, he can’t use his recommendations with another service. The same would be the case with someone renting out a room or apartment through Airbnb. This issue is perhaps most important with labor-service providers such as Task Rabbit. If workers have established themselves as reliable electricians, plumbers or child-care providers, they should be able to carry their records with them. While Task Rabbit and comparable services may not allow such transfers, a public system could assure workers of transferrable recommendations.

    Another great feature of the public option route is that it can be implemented at the local level. There is no need to worry about an intransigent Congress or even hostile state legislators. Any city with a substantial progressive base should be able to take the initiative to set up its own public sharing-economy system. Such systems could be linked among cities — which could be especially helpful in the case of competing with Airbnb.
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  2. Last week, a new class action complaint was filed against the company over Uber’s failure to secure drivers’ data in a breach. In another court, a Northern California district judge ruled that a jury will decide if Uber’s drivers should be classified as independent contractors or employees. And, earlier this month, a Memphis transportation company sued Uber and Lyft for operating without proper licensing and insurance. Similar suits have been filed in Miami, Philadelphia, Atlanta, and Houston.

    The five-year-old, multibillion-dollar company’s troubles don’t stop there. Uber faces a continuous onslaught of litigation in the US for stiffing drivers, swindling taxi companies, eschewing traditional insurance obligations, and skirting regulations—or so the drivers, companies, and state or district attorneys say.

    when it comes to litigation, Uber and other sharing economy startups are different from the Googles and Facebooks of the last startup wave. Because unlike search or social media, Uber, Lyft, Airbnb, and even Instacart operate both on our phones and on the streets. We sit in Uber cars, we walk past them on the street, and we use our phones to flag down their drivers—so some of the litigation facing Uber has to do with “real-life” problems, like injured passengers or bystanders from car accidents.

    Uber is also competing with entrenched taxi and limo companies, which means there’s already a robust regulatory infrastructure standing by to issue licenses, mandate insurance, and police new companies.
    Tags: , , , by M. Fioretti (2015-03-19)
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  3. In almost every case, what compels people to open up their homes and cars to complete strangers is money, not trust.

    To understand why the sharing economy is thriving now, it's worth taking a look at how many full-time jobs have been replaced by part-time jobs since the recession of 2008:
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