Hey, that’s rich! The ‘helping industry’

Posted in Culture of Lickspittle, The Corporate Bund at 11:36 am by George Smith

Unemployed, underemployed, or unemployable, when you’re down and almost out, Silicon Valley’s libertarians are there for you with apps to allow you to help others by turning your abode into a hostel.

For a small fee, of course.

The buzzphrase for this has been “the sharing economy.” Except now the word’s getting out and the bloom is off the poison oak.

From the New York Times, on a piece earlier this week on how New York’s attorney general, Eric Schneiderman, has lowered the boom on AirBnB, the residence sharing enabler, issuing a report stating that three quarters of the firm’s rentals in NYC were illegal:

Critics say that the start-ups are unsavory efforts to avoid regulation and taxes, and that the very term “sharing economy” is ridiculous.

“We need to move forward … We need to work together on some sensible rules that stop bad actors and protect regular people who simply want to share the home in which they live,” AirBnB spokesman Nick Papas told the newspaper.

“Anyone operating an illegal hotel should be on notice that the state and city will take aggressive enforcement actions in this area … A slick advertising campaign doesn’t change the fact that this is illegal activity,” retorted the attorney general.

Schneiderman’s report, according to the Times, found that 37 percent of the revenue generated through AirBnb came from just six percent of the rentals, specifically from landlords of entire buildings who had used the service to simply convert their apartment high-rise properties into transient hotels.

This was very bad news for AirBnB. So it did what the sharing economy start-ups always do. First, ignore the law. Then send out the call for a libertarian flack to ride to the rescue in the opinion pages of the big newspaper.

In this case, it’s Arthur Brooks of the Unregulated Business Uber Alles lobby American Enterprise Institute.

The phrase sharing economy now begins to leave a bad taste. This is because it’s not sharing at all. You pay for a cheap service, provided by someone Silicon Valley technology can take advantage of and leverage in the desperation economy.

Or as I put it a year ago:

The sharing economy: American tech industry euphemism for the creation of an economy in which the top 1 percent gets all the share.

So libertarian pundit Arthur Brooks uses a different phrase to describe it: the helping industry.

As in, “Everyone wants to help. Wouldn’t you want to be part of such an industry, helping people with more money than you by cheaply renting your home to them at their convenience?”


WHAT is a “helping industry”?

To hear him tell it, [AirBnB co-founder Nathan Blecharczyk] started the business because it was fascinating and fun. And most of all, he says, because it could help ordinary people who needed an affordable place to stay or had some excess capacity in their homes. That’s right — Nate sees Airbnb as a “helping industry.”

Some will howl at this …

Ordinary people, especially vulnerable people without power and privilege, find Airbnb empowering and useful. It lifts Americans up …

Any of us can work in a helping industry. That includes teachers, nurses, stay-at-home parents … The blessing of our free enterprise system is that any of us can sanctify our work. We just need to ask if what we are doing truly lifts others up.

For his sterling example, Brooks finds a woman who has been disemboweled, as many have been, by the American economy. By subletting her apartment out for a few days monthly and “[bunking with a friend or family member]” she can keep paying the bills on the place.

But what if the “friend” or “family member” decided they wanted to be part of the helping industry and charge for the few nights the guest is staying over? Ah, that ruins everything.

And it exposes Brooks’ argument as risible. AirBnB, the helping application is just leveraging desperate people, in this case making some money off the “friend” or “family member” that puts up its user for free.

And none of it addresses Schneiderman’s report that states most of AirBnb’s revenue generated by it in NYC is illegal, coming from landlords/owners who’ve just used to flip entire apartment buildings to unregulated hostels.

From when I first looked at AirBnB:

At Google images, “sharing economy” returns the Silicon Valley pissed-in [bathwater] of the future. The sharing economy, as defined here, is just a euphemism for installing network technology that atomizes labor costs, unleashes the economy into free-lance downward bidding wars, taking larger pieces of a stagnant economic pie for the owners of the technology. In other words, they always get the share, no matter how much smaller the total economic swag becomes. And, as is always the case with snake-oil sellers, they’re backed up with other fine-sounding euphemisms, in case “sharing economy” just isn’t enough. In this instance, Google offers “collaborative consumption“…

But if you look more closely at AirBnB property, you will see that some of the rooms are also offered as monthly rentals, revealing the desire of the owner to be an apartment manager. Of these, we already have loads in Pasadena — and in your city — and they use Craigslist, too.

Others, when examined, are renting all the rooms in a given house, which may look nice on the outside, turning it into a stealth motel. One must assume that some are illegal. Pasadena and all cities do have various ordnances for apartment complexes, hotels, motels, probably increasing in importance if the rented structures are not built in the business district.

This is the case with granny cottages here.

Most of them are illegal, in one way or another, under strict municipal code enforcement. But they are a staple in southern California where people have converted garages into them in trying to build revenue. And AirBnB makes it easier to rent them out, perhaps not that much easier than Craigslist.

In any case, this puts AirBnB in the role of virtual slumlord, although that may not be the large part of its business.

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