Lights and shadows of the sharing economy — The Airbnb case
In Spain, the judges have rejected the accusations made by the bus companies against BlaBlaCar, the well-known car-sharing company, accused of competing unfairly with public transport. Evidently, the losses of bus companies originate from other factors, but the easiest solution was to find a scapegoat to put to the public pillory.
Everyone talks about sharing economy, but few know exactly what it is. As a matter of fact, it is a new concept, not uniquely defined and very transversal, therefore subject to countless interpretations. This is frightening to many, and it is understandable.
Some people don’t even like the adjective sharing, and, indeed, there is little to object to when there is a profit involved. But when do we talk about profit?
Let’s consider the Couchsurfing platform that allows you to host a stranger at home for a few nights without asking for money in return: in this case, it is truly about “sharing”. Let’s suppose, now, that a couple hosts you for two nights for free: you can decide to show your gratitude by participating in the cost of the dinner or by bringing a cake from a pastry shop. Not required, but let’s say it would be a natural act of kindness. In the case of Blablacar, this fee is not optional, but compulsory. The term sharing, therefore, is made more flexible to include the participation in the expenses:
“The Cost Contribution is determined by you, as Driver, under your sole responsibility. It is strictly prohibited to profit in any way from using our Platform. Consequently, you agree to limit the Cost Contribution you ask your Passengers to pay to the costs you actually incur to make the Trip.” (blablacar.com)
Is that profit? No, it’s not. So it’s not taxable. “Revenue derived from sharing platforms (such as Blablacar), which are not intended to make money but to share costs, are indeed not taxable, and are therefore not affected by this measure.” (startbusinessinfrance.com). No receipt to be issued = no tax return.
Why are taxi drivers mad at Uber but not at Blablacar?
“[…] BlaBla Car and other similar services, where in the midst of (real) sharing there is a driver who shares a precise route chosen by him and does not act as an abusive taxi driver; he receives a real reimbursement of expenses and transports passengers only if and when he finds someone who wants to share his journey at a specific time. Uber Pop, on the other hand, works on a “call” basis, i.e. the user opens the app, books a ride from one point to another in the city, and the driver, who works as a real private taxi, runs to pick it up and transports it where required. […] Car sharing has already existed for years, and I am very much in favor of proposing it as an alternative to the expensive taxis. The problem is that (probably) it doesn’t allow you to earn the money that the Uber’s lords want to earn.” (uritaxi.it)
After all, when you travel by car with your friends, you all share the expenses, and no one would claim that the driver is making a profit. Blablacar simply extends this rationale by asking the platform users to share the costs incurred by the driver for the journey they are interested in. In short, Blablacar has made more usable something that has always existed, but on a smaller scale: giving a ride. A saving for the wallet, a relief for the environment.
When does the sharing economy stop being about sharing and turns into a wild economy? Well, when you act like some (many?) of the Airbnb hosts, i.e. when you trick rental laws, behaving like a hotel owner but not fulfilling the same duties.
If Airbnb had proposed an idea similar to that of Couchsurfing, with the only variant of a compulsory expense contribution, winking at Blablacar, it would have been in effect an online platform for sharing economy. But that’s not the case, and the consequences are there for all to see:
1. Tax evasion
“Airbnb tracks each payment by issuing a regular receipt that each host user must then report in their tax return. “But it’s very difficult to expose the evaders”, admits Alberto Reda, general of the Guardia di Finanza in Venice. He also reveals: “In the winter of 2015 we were in the Italian headquarters of Airbnb. It was a cognitive visit. We asked for the lists of the landlords, but they did not provide us with them, explaining that the data was kept on the servers abroad”. Traceability of electronic payments is therefore not of great help in the hunt for escapers.” (lastampa.it)
2. The struggle between tourists and tenants
Airbnb hosts earn much more by renting their apartment to tourists than to ordinary citizens, creating huge problems for all those who are looking for a home to rent. (Report)
3. The depopulation of cities
One example above all? Venice. Due to the widespread diffusion of houses for rent on Airbnb, the city centre is in fact a single large hotel taken by storm by tourists. The citizens, in fact, have been forced to abandon it, preferring the suburbs, if not another city. The impact on local communities is therefore devastating: contrary to what is boasting, Airbnb is exactly the opposite of sustainable and authentic tourism.
4. The rich get richer
It is the wealthiest hosts — owners of 2 or more homes — who benefit most from the earnings with Airbnb. The social gap widens further, therefore. Born in antithesis to the largest hotel chains, Airbnb, self-styled champion of the poor, has instead confirmed and strengthened the pre-existing hierarchies in the real estate market.
5. Job losses
A hotel employs many people, while an Airbnb host entrusts all the work to a domestic helper, who is payed significantly less than a normal hotel contract.
6. Rentals skyrocket
Several studies prove the impact of Airbnb on the rental costs, which have risen sharply in many cities, putting a further strain on citizens looking for a home.
For these reasons, many cities have declared war on the wild economy perpetrated by this house sharing giant, whose market value is just below Marriott International.
Berlin no longer allows Airbnb hosts to rent an entire apartment, but only one room. Miami Beach has imposed heavy fines on hosts for failing to comply with stringent new short-term rental regulations. In New York, Airbnb advertisements were even banned. In San Francisco it will no longer be possible to rent more than one house in the short term. In London and Amsterdam, Airbnb was forced to impose a maximum number of nights per host. In Barcelona the hardest punch:
“The mayor of Barcelona, Ada Colau — according to the Corriere della Sera — ordered the closure of 256 illegal tourist apartments and imposed a fine of 60 thousand euros on the portals HomeAway and Airbnb. Ada Colau has appealed to the citizens of Barcelona to denounce those who rent house in an irregular manner, and in a short time 400 complaints came and the closure of many apartments.” (huffingtonpost.it)
The effects of these measures are already beginning to be seen. In Berlin, for example, there has been a 40% drop in offers on Airbnb, which shows that many people rent an entire apartment and not just a room for a finite period, thus behaving like a real hotel.
The battle against the (false) sharing economy is therefore underway.
Stay tuned.
