Don't buy the 'sharing economy' hype: Airbnb and Uber are facilitating rip-offs 1

Don’t buy the ‘sharing economy’ hype: Airbnb and Uber are facilitating rip-offs

The  “sharing financial system typified by way of organizations like Airbnb or Uber, both of which now have market capitalizations in the billions –, is the modern-day fashion craze among commercial enterprise writers. However, in their exuberance over the following big aspect, many boosters have omitted the reality that this new business model is essentially based totally on evading regulations and breaking the law.

For the uninitiated, Airbnb is a web-based service that lets humans out spare rooms to strangers for short stays. Uber is a web taxi carrier that enables tens of hundreds of human beings to answer trip requests with their automobiles. Many other services involve renting or promoting the lot, from electricity tools to used suits and wedding dresses.


The best factor about the sharing financial system is that it helps use underutilized assets. There are thousands and thousands of people with houses or residences with empty rooms. Airbnb allows them to make the most of those empty rooms while permitting visitors to stay at expenses that might be regularly far less than the ones charged by hotels. Uber offers costs that are competitive with trendy taxi costs, and their drivers are periodically a good deal quicker and more reliable –. Its drivers can force as much or as little as they prefer without creating a dedication to standard shifts. Other offerings allow for objects to be used productively that might otherwise be gathering dirt.

However, the downside of the shared financial system has gotten much less attention. Most cities and states each tax and modify accommodations, and the vacationers who stay in inns are typically a crucial supply of tax sales (since governments have long diagnosed that a modest lodge tax isn’t likely to discourage most visitors nor provoke the ire of components). However, many of Airbnb’s customers don’t pay the taxes the law requires.

Airbnb can also create safety issues for its customers and a nuisance for host pals. Inns are often inspected to ensure they’re not heart traps and do not pose other dangers for traffic. Airbnb hosts face no such inspections –, and their pals in rental, co-ops, or rental homes might imagine they have got the proper no longer be dwelling around the corner to an in (that’s one purpose that cities have zoning restrictions).

Insofar as Airbnb allows humans to avoid taxes and policies, the employer isn’t always a net plus to the economy and society – its miles really facilitating a bunch of rip-offs. Others inside the financial system will lose by bearing an extra tax burden or being pressured to stay next to an apartment unit with a never-ending parade of noisy site visitors, simply to cite two examples.

The same tale may also apply to Uber. Uber is currently in disputes with regulators over whether its cars meet the protection and insurance requirements imposed on general taxis. Many cities also impose some regulations on the range of cabs in the hopes of ensuring a minimum level of earnings for drivers. However, if Uber and associated offerings (like Lyft) flood the market, they might damage all drivers’ ability to earn even a minimal wage.

This downside of the sharing desires to be taken critically, but that doesn’t mean the contemporary tax and regulatory shape is perfect. Many present regulations need to be changed, as they have been in the beginning, designed to serve narrow interests and have outlived their usefulness. But it doesn’t make experience to exempt complete lessons of commercial enterprise from safety guidelines or taxes just because they provide their services over the net.

Going ahead, we want to ensure that the regulatory structure allows for real innovation but does not make rip-off facilitators into billionaires. For example, rooms rented under Airbnb should be subject to the same taxes as hotels and accommodations pay. Uber drivers and motors must meet the same standards and bring the same stage of coverage as business taxi fleets.

If these services are nevertheless viable while operating in a stage gambling field, they will be providing real value to the economy. As it stands, they’re highly profitable to a small number of people who find a creative way to cheat the gadget.



I am a writer, financial consultant, husband, father, and avid surfer. I am also a long-time entrepreneur, investor, and trader. For almost two decades, I have worked in the financial sector, and now I focus on making money through investing in stock trading.