Vassar Quarterly - Spring/Summer 2017 - 23
© Ken Orvidas-theispot.com
IRB N B STARTE D OUT as a dream by three young tech entrepreneurs, a new way for couch-surfers to avoid the high costs of hotel
rooms. Now, nine years after its founding, the $30-billion company faces a nightmare backlash by cities that accuse the home-sharing site of squeezing
their rental markets. Uber set out in 2009 to revolutionize the taxicab market with a
more efficient way to connect drivers and riders. Now it faces dozens of lawsuits from
drivers and riders alike. The travails of both companies illustrate the growing pains
of the sharing economy as companies face pushback from the industries they've tried
Airbnb began with a simple concept-allow homeowners to make a few bucks renting out spare rooms or apartments while they were away. But the site has since been
flooded by savvy investors buying up properties en masse. In tight rental markets,
government officials and housing advocates charge that the company is driving up
prices for long-term residents by allowing owners to take homes off the market for
"It's not home sharing, it's home stealing, and it has to stop," labor activist James
Elmendorf told the Los Angeles Times in December, protesting outside Airbnb's annual
conference in that city, one of many considering putting limits on the number of days
hosts can rent out their flats. A week before, New Orleans had imposed a 90-day per
year limit on rentals not occupied by the owner, and banned short-term stays in the
popular French Quarter except in the Vieux Carre Entertainment District on Bourbon
Street. Other cities have imposed stiff fines on rentals of less than 30 days-including
$7,500 in New York City and $20,000 in Miami Beach. Even in Airbnb's hometown of
San Francisco, the company faces a pitched battle with lawmakers, with the board of
supervisors approving a bill that would limit Airbnb stays to 60 days annually (the
company received a reprieve when the bill was vetoed by the mayor).
After vigorously contesting such bills, Airbnb has recently shifted tactics to play
nice with municipalities. It recently withdrew lawsuits against New York and San
Francisco, and is actively pushing a "one host, one home" policy in those cities. It has
also offered to collect taxes and share revenues with cities and other apartment owners in buildings as a way of offsetting the costs to the rental market.
Separately, Airbnb faces protests by some customers, who accuse hosts of discriminating against people of color. Last year, Harvard Business School researchers found that
hosts were 16 percent less likely to accept users with African American-sounding names
than those with white-sounding names. "Life is tough if you're a black guest on Airbnb,"
associate professor Ben Edelman told Bloomberg News. "If you're a black guest, you just
make a reservation at the Marriott." After the report, users began tweeting about their
own discrimination experiences using the hashtag #AirbnbWhileBlack.
The company has moved to combat the problem, hiring former U.S. Attorney General
Eric Holder and civil rights activist Laura Murphy to help them craft new policies, which
it released in September 2015. In an Airbnb Citizen post in May 2016, the company laid
out its steps to combatting discrimination on the site, including the creation of a new
feature called "instant book," which allows travelers to book automatically, preventing
hosts from discriminating by race. While Airbnb hosts have placed more than a million
listings using the feature, that represents only one-third of the company's total.
Uber, meanwhile, has faced its own issues with discrimination. According to a report by researchers from
MIT, Stanford, and the University of Washington in
October 2016, Boston Uber drivers cancelled rides for
people with black-sounding names 10 percent of the time,
double the rates for whites. And black riders in Seattle
faced longer wait times for Uber and its rival company
Lyft. Moreover, in November a federal magistrate ordered
Uber to pay $2.38 million in a lawsuit charging that drivers refused to pick up blind people with service dogs, a
violation of the Americans with Disabilities Act.
That lawsuit is just one of dozens the ride-sharing
company has faced over the past few years, generating
new court actions almost as soon as it can settle them.
For years, the company has been criticized over safety
concerns after cases in which riders have been raped
or otherwise assaulted by drivers. This past October, a
driver in California was charged with allegedly raping
a 17-year-old girl who passed out in the back of his car;
the following month, the company settled a suit with
two women in Boston and Charleston, South Carolina,
who charged the company with negligence after they
were allegedly sexually assaulted.
It's not just customers who have challenged the company, however-but also Uber's own employees, who have
filed class-action lawsuits in California and Massachusetts
calling the company's whole business model into question. Uber classifies its drivers as independent contractors, but lawyers representing some 200 drivers have
argued that they are actually employees, which would
make them eligible for minimum wage and benefits such
as overtime and sick leave-as well as reimbursement for
mileage and tips. Back in April, Uber agreed to pay $100
million to some 385,000 drivers to settle the claims-a
victory for the company, which would be allowed to keep
the independent contractor designation. After some workers protested, however, the judge in the case denied the
settlement, saying it was "not fair, adequate, and reasonable" since it only amounted to a 10th of what drivers
could potentially recover.
Most recently, Uber fired 20 corporate employees
after systemic issues, including sexual harassment by
executives, were uncovered. According to Forbes, however, Uber still provides five times more rides than Lyft.
As the experience of both Uber and Airbnb has shown,
it's never easy to revolutionize an industry. But no matter
how either company is forced to adapt, neither urban
transportation nor travel lodging will ever be the same.
-Michael Blanding is a writer for publications including
WIRED, Slate, Boston Magazine, and the Boston Globe
Magazine. He is the author of the nonfiction book The
Map Thief (Gotham, 2014).
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