Tag Archives: Sharing Economy

Hillary Clinton Criticizes Uber, Airbnb Peer-to-Peer Economy in Economics Speech

On Monday, 2016 Democratic presidential candidate and former Secretary of State Hillary Clinton gave an economic policy speech at The New School in Manhattan which Politico characterized as “an attempt to address the threat posed by Bernie Sanders’ populist crusade without being pinned to a set of liberal proposals that will hurt her in a general election.

During the speech, which her campaign promoted as a major policy address, Clinton parroted recent criticisms that have been raised by left-leaning politicos against innovative sharing economy startups like Uber, Lyft, and Airbnb for brokering the assets and skills of independent contractors rather than hiring employees directly.

I’ll crack down on bosses who exploit employees by misclassifying them as contractors or even steal their wages,” said Clinton.

She did not mention any specific companies by name, but said, “Many Americans are making extra money renting out a spare room, designing websites, selling products they design themselves at home, or even driving their own car. This ‘on demand’ or so-called ‘gig economy’ is creating exciting opportunities and unleashing innovation, but it’s also raising hard questions about workplace protections and what a good job will look like in the future.

These are well-paying jobs, well above minimum wage when people drive, offer lots of flexibility in schedule, etc,” said Menlo Ventures partner and Uber investor Shawn Carolan in an email to Reuters on Clinton’s speech.

The New York Times notes that Uber currently faces a class-action lawsuit in California over its classification of its drivers as independent contractors and that labor activists have argued that the sharing economy’s innovative peer-to-peer business model is “simply a way for companies like Uber to minimize costs, even as they maintain considerable control over drivers’ workplace behavior.

In an op-ed blasting Clinton’s speech as belonging in “1930s America,National Review’s Charles C. W. Cooke wrote, “In the eyes of us free-marketeers, the teams behind the host of new peer-to-peer services are no less than digital liberators. For us, the arrival of a system such as Uber is salutary, not scary… it is the source of golden opportunities for those who wish to construct odd or custom-built work schedules or to make money without answering to a boss. That a few ingenious programmers have found a way around the artificial scarcity, state-union collusion, and high barriers to entry that The Man has seen fit to impose is, in our view, an extremely positive development.

According to Politico, Clinton’s speech was interrupted by a protester who, prior to being escorted out by security, shouted, “Senator Clinton, will you restore Glass-Steagall?

In 1999, Former President Bill Clinton signed the Gramm–Leach–Bliley Act, which repealed two provisions of Glass-Steagall legislation that had previously created barriers between investment banks, commercial banks, and insurance companies.

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Santa Monica Reveals Pricey, Obtrusive Plan To Regulate Home Rentals

Santa Monica, CA- Earlier this month, Santa Monica city council officials unanimously passed an ordinance to place restrictions on private short-term rentals.

According to the overview of the ordinance, people wishing to provide part of their residence as a rental space are required to acquire a business license from the city and pay a 14% hotel tax, and must physically stay at the residence with their customers. This is identified by the city as a “home-sharing” activity. “Vacation rentals”, in which a person rents their residence exclusively to another person for a span under 30 days without remaining at the residence, would be illegal.

The ordinance applies “to all residential units in all zones in the City, including single family houses, apartments and condominiums,” and is expected to ban about 80 percent of the city’s homes that are listed on short-term rental sites such as Airbnb.

Airbnb spokesperson Alison Schumer told Southern California Public Radio that “the unnecessarily restrictive proposal would prohibit hosts from sharing their home with guests while the host is out of town- a unique provision which has never before been proposed.”

The city of Santa Monica is planning to spend $410,000 in the first year of the law’s passage to enforce the ordinance; three full-time staffers will be hired to review the online sites where short-term rental advertisements are posted to identify illegal rentals.

Since many short-term rental sites like Airbnb do not list rental addresses online, “staff will look at photos and drive the city’s streets trying to identify people who are breaking the law,” according to Southern California Public Radio.

The ordinance will be taking effect on June 15th, and “Vacation Rentals that are operating illegally may be issued fines of up to $500 per day, and could even face criminal prosecution if they do not cease operating,” according to the overview.

Opponents of the ordinance argued that many people who list their homes as a short-term rental are simply trying to make extra money to pay bills. “The people who are Airbnb-ing– guess who they are? They’re not rich people; they are people trying to pay their bills,” said Santa Monica resident Cat Healy, who rents her property using Airbnb.

Santa Monica Mayor Kevin McKeown expressed criticism of vacation rentals to NPR.

“When a landlord or other property owner takes a unit off the housing market and uses it for vacation rental, there is no permanent resident on the site, we’ve lost that part of the fabric of our community,” McKeown said. “And the people who are coming to stay are not directly supervised, so they, being on vacation may, in total innocence, may be coming and going at two or three in the morning. They may be not aware of the noise they’re making for the neighbors. The neighbors aren’t sure who the people are. You end up with somebody you don’t know who has the keys to the building, to the parking garage. You don’t who they’re going to bring in with them. And you don’t have that connection.”

According to McKeown, about 1,700 properties in the city have been used for short-term rentals, with most of those being vacation rentals where the owner is not present during the visitor’s stay. McKeown believes that the ordinance will bring many of these properties back to the housing market and “restore the residential fabric of our neighborhoods.”

This post has been updated.