Saturday, October 4, 2014

AirBnB, Uber, the "Sharing Economy," and US!

Recently, Uber, the pseudo-taxi ride-sharing service that allows any licensed driver to use their personal vehicle as a money-making pseudo-taxi, has been in the headlines a lot here in Chicago. It started in late 2012:

Chicago accuses cab dispatch company of violating city ordinances

Alleged infractions include adding mandatory 20% gratuity; citations accompany separate lawsuits from taxi companies, riders

An alderman on Thursday called out a new taxi dispatch company that allows people to hail cabs using their smartphones and has run into problems with city regulators.

The city cited Uber Technologies Inc. this month with a variety of ordinance violations, including allegedly charging riders a mandatory 20 percent gratuity. The citations came at the same time that Chicago-based taxi and livery companies and passengers filed separate lawsuits against the company, alleging that Uber violated multiple Chicago and Illinois laws and engaged in false price advertising, among other violations.

This is not the first time Uber has found itself in hot water. Traditional cabbie companies, who are subject to strict regulation in many locales, have cried foul. For the moment, Uber and its rival, Lyft, seem to have won the day, at least in Chicago, and Illinois more generally, as Governor Quinn recently vetoed a bill that would have regulated Uber like a taxi company.

While I almost never pay for taxis nor Uber, by extension, my lovely wife and I are intimately familiar with Uber's close cousin in what is now being called the "sharing economy," AirBnB.com. If you're unfamiliar, AirBnB is a space-sharing, pseudo-hotel service where average folks with spare rooms, spare couches, or an alternative place to stay, can post spaces in their homes for rent, to tourists passing through. You can think of these stays as "very short term sub-leases" or "very short-term roommates." Relatively cheaply, compared to hotels, travelers can get a comfortable room, bathroom, and often kitchen and living room amenities. Some AirBnB hosts - like us, on occasion - even rent out their entire apartments for certain lengths of time, when they're on vacation or otherwise elsewhere for awhile.

The Flower of my life and I have been doing AirBnB both as hosts, and as tourists, since around the December of 2012. I can honestly say that AirBnB has changed our lives. This is our story.

~

New York City for the Holidays

Like most couples, I imagine, my wife really is the smart one in the family.

She came across AirBnB, as I recall, looking for relatively inexpensive places to stay during our trip to New York City over the Holiday Break of 2012. I'm a schoolteacher by trade, and she works as an office administrator AND is putting herself through school; so when we travel, we do it cheaply or not at all. To save money both on lodging and on food, she rented us a-few-night stays at both a Lower Manhattan apartment, and a Brooklyn apartment, so we could see different areas of the city. We saved on food because instead of eating out constantly, we did some shopping at nearby grocery stores, and generally cooked our dinners at least a few times during the week, while packing lunches for daytime excursions.

Kind of on a lark, we decided we'd post our place up too, for the time we were gone. We got a booking request shortly after we left for the road trip, though, so we weren't able to make our own booking pan out. But no matter. And why not?

Because once we got to New York City, it was awesome. The Lower Manhattan apartment was small but funky. Yes it was kind of weird that there was a dude apparently tent-camping in the living room - another short-term guest, we supposed - but everything basically worked, and hey, we didn't come all the way to NYC to hang around in an apartment, right? We crashed there when it was bedtime, cooked a couple of meals and mostly hit the town. In the mornings, we threw together some lunch and/or breakfast, then split. We're the sort of people who generally roll pretty well with, "a little weird," and after all, we didn't really interact with the guy living-room camping, nor the other roommate, very much. It all worked out just fine.

The Brooklyn place in the Williamsburg was even better. The roommates there were full-time, so we got to hang out a little with some local folks, and the neighborhood was a funky joy to walk around. For just a few days, we were living like real Brooklynites, and the glorious Tip Top Bar and Grill was just down the street. We really felt like we won New York. The trip was a total joy.

Yet our lodging, for 8-9 nights in New York City, was less than $500. And in fact we DID stay in a relatively nicer hotel for one night, just to class things up a little, which comprised more than a third of that $500, for just the one night. To say we were thrilled with AirBnB at the time is quite an understatement.

~

The Betrothal

Fast forward a couple of months, and the two fiancés are planning their wedding for April 5th, 2013. Like everyone, we wanted our wedding to be something special. As rock-solid agnostics, we didn't want to get married in a church, but the costs of doing it at the event spaces we were looking at - by no means the most grandiose venues, by the way - were discouraging. Again, the schoolteacher and the office girl/student dilemma reared its head. It was either do it outdoors at a local park, with the weather and all, or start off our life together deeply in debt.

Enter AirBnB. Instead of spending $2-3k renting out a banquet hall or art gallery or what have you, why not just rent a bougie loft for a night or two? Instead of charging headlong into a huge credit card bill, we spent $250 on a classy West Loop loft for 24 hours; a place larger and more elegant than our modest apartment. To my joy, we were married in the living room, in front of about 60 friends and family. Our wedding was a do-it-yourself affair, and it cost us around $1200 total to pull off. It was a lovely, intimate evening, and it didn't cost us a fortune. Our reception was immediately after the wedding, and our modest party raged well past midnight. Luckily the neighbors didn't complain much, because the whole thing was relatively low-key. So there wasn't any real blowback to the party, for us, nor for the host. Now I ain't braggin', but I gotta say we felt pretty smart.

~

Big Plans, Big Bills, and Elevated Living

Fast forward another couple of months. The newlyweds are loving life together, and making some BIG PLANS, dealing with the usual and some unusual big bills. And how are the schoolteacher and the office girl affording all these big plans and big bills? Well, we started booking our place out on AirBnb.

You see, the Flower and I were (and are) in somewhat unique circumstances. Chicago is a "destination," so people are always looking to come here and stay cheaply. We lived pretty close to the nearest El stop, so we were easy to get to. Our apartment was pretty modest, but we always kept the place clean, and we found that we could start making some decent money just vacating for the tourists on a couple-of-nights-a-week basis. Compounding the uniqueness of our situation, my mother-in-law lives close to us, and has an extra bedroom herself. She is also one of the coolest people in the world. So she didn't mind when we'd skip out on our place for a few nights, renting things out for our guests.

And it's pretty ridiculously easy with AirBnB. You just post a few pictures up, pick a price you think you can get, do a write-up for your place, and wait for the contacts to start. You DON'T have to worry about money or hassling the guests for their payments. AirBnB takes care of the whole process. The booking isn't finalized until your guests' credit or debit card swipes. Then, they sit on the money for 24 hours, to make sure there's no cancellations or complaints from the guest. Then the money hits your bank account automatically, minus $10 for the company, for their trouble. We were starting to see some real money come in.

Meanwhile, our plans kept getting bigger and bigger . . . and some of our bills. Our honeymoon plans went from "two weeks in Rio" to "we'll spend the entire summer of 2014 traveling all over Brazil." We had some extra-large bills that hit us too - car troubles, veterinary emergencies, and the like; things that many couples of modest means would have had to put directly on a credit card. But not us. We paid for everything through AirBnB bookings. "Well, we'll just take another couple of bookings," kind of became our motto around the spring of 2013. And we were doing well. We ALWAYS had money in our savings, a completely new thing, to me. We found ways to pay for life's little emergencies. We were getting more ahead.

My lovely Flower of a wife, by the way, a.k.a. Sra Inteligente pretty much managed all the incoming guests perfectly, kept the coffee and the breakfast cereal handy for them, and communicated with them and made them feel at home. She managed our account while I more or less just did he grunt work of moving stuff from place to place, when we "moved out," for a few days.

Anyway, before what turned into a grandiose moonshot of a honeymoon, I had the opportunity to visit my brother during the summer of 2013, while he was a visiting post-doc in Glasgow, Scotland . . .

~

The UK Swing

My twin brother had been working, meanwhile, as a post-doc researcher and adjunct professor at the University of Glasgow. But he was returning to the States soon, and the window to find a way to make it over there for a visit was closing rapidly. So, how does the schoolteacher afford an overseas vacation?

I suppose the answer is obvious, by now. While I ultimately paid for the whole trip out of my own pocket, in the short run, a few AirBnB bookings helped me put together the cash to make it happen.

And that's not all. Once over there, I booked a couple of different stays on AirBnB, to go beyond hanging around Glasgow. My brother, god bless him, was still working, and didn't really have the time to be a full-time tour guide, although he did an admirable job on a part-time basis. So I booked an AirBnB in Belfast, and took a side trip for a few nights. My host there had a spare bedroom, just a twenty minute walk or so from downtown.

The place wasn't glamorous, I don't guess, but it was comfortable, clean, affordable and very private, and again I was able to save money on food by doing some of my own cooking, instead of eating out constantly. My host Steven even turned into "my guy in Belfast," in a way. He directed me to what must be one of the coolest little bar and venues in town, and we hung out for awhile having drinks and checking out the local arthouse music scene. I had a phenomenal time.

Steven was a lifelong Belfastite who had bought a home, with an extra bedroom, but had had some rough luck with full-time roommates, or so I gathered. It was he who told me in a classic brogue: "AirBnB changed my life." What AirBnB had allowed HIM to do, was keep paying the mortgage, without the inherent commitment of having a full-time roommate. Like us, he had ALSO had some experience traveling on the cheap with AirBnB, to Moscow and Germany, as I recall.

AirBnB is world-wide, no doubt.

I booked another place for just a couple of nights in London's West End so I could do the town there for a bit, before I came back to Chicago. Staying in the West End was Just. So. Cool. Like Brooklyn, for a couple of nights I got the experience of feeling like, "a real Londoner," and although I did go check out some of the touristy stuff during my stay, strolling around the West End during the daytime was a joy. When you stay with AirBnB, you tend to find yourself in more authentic locales, in my opinion, as opposed to those more specifically designated as tourist areas. I had halal at a Middle Eastern place, walked about a small local park, and yes, definitely enjoyed some British hospitality at local watering holes. Staying at an apartment in the West End was a great way to see London, even if briefly.

~

When Problems Arise

After I returned from the UK, as summer turned into fall, I became a self-professed "New Jesus For AirBnB." Our big bills, both expected and unexpected, got paid off pretty well, by our bookings. Our plans for the "Big Brazil Trip" kept getting bigger and bigger. To be honest, we were spending A LOT of time at my mother-in-law's place, and yes she was getting a piece of the action too. Which was fine; there was plenty of "love" to spread around to all!

It was around last fall that some of the difficulties of elevated living via AirBnB became clear. To be honest, we hadn't exactly been disclosing to our landlord how much, and how often, we were having guests over. We kinda figured, well, don't bring it up unless he raises a concern. Our rent was paid, our place was kept spotlessly clean, and to this day, NOT ONE of our AirBnB guests has EVER created a problem for our landlords, or other tenants in our buildings. There have been zero complaints from our neighbors about our guests, nor their behavior, while they were there. Not one.

But our landlord was no dummy, and in the process of doing some work around the building . . . he was around quite often . . . he'd seen some of our guests coming in and out, and started to wonder what was us up.

This is EXACTLY the territory in which AirBnB hosts had found themselves some trouble in New York City.

While we never experienced any concerns during our stay in NYC during the Holiday break of 2013, city officials, landlords, and (especially) moneyed, lawyered-up hotel groups, have found themselves up in arms over AirBnB's alleged skirting of rent regulations, and heavily-taxed and regulated hotel operations. Basically, hotels want AirBnB to be regulated like hotels, and landlords - understandably, I guess - have concerns about strangers in their buildings.

It was early fall of 2013, I think, that I had to have "the talk," with my landlord, about our using the place as sort of a de facto hotel, or pseudo-hotel. He wasn't to pleased with the idea at first, although, he DID later tell me that as long as we kept the place clean, and paid the rent on time, it was fine to have our guests. We did all three, and we continued to make money off of AirBnB, with our landlord's explicit consent, for another couple of months.

It was a wonderful time. Our honeymoon just kept expanding and expanding. What had once been a two-week plan to visit some relatives in Brazil, turned into the All-out Extravaganza of Awesome that WAS our Summer of 2014: Nove semanas no Brasil!. We were living up extremely well. Our guests came from all over the United States, and the world: North Carolina, Montreal, Moscow, Costa Rica, Brazil, California, Texas, Turkey and France. We generally gave them privacy and didn't try to "be there best friends," or anything. We stayed at my mother-in-law's and let them have the run of our place, our on-line reviews were about 95% positive, with only a few little minor bumps in the road. We learned about what types of guest to avoid - particularly brand-newbies to the service and those who, from their profiles, appeared to expect some kind of bougie uber-condo like the one we got married in. Our pitch was basically: "cheap, clean, and easy-access."

~

When Problems Arise, Part II

Then, all of a sudden, one day in the middle of fall, my landlord completely changed his mind. The earlier comments about having tourists stay "as long as we kept the place clean, and paid our rent on time," went completely forgotten.

"No more guests," he told me, no uncertain terms. And as a landlord, he was completely within his rights. It was no more guests.

What changed? He told me my neighbor . . . let's call her Sharon . . . had complained about my guests. Here is what gets me: it's not that they were too loud. It's not that they were partying loud and late, or cooking crystal meth, or having orgies, or anything . . . though to be fair, like any service whose reach extends to over 15 million people, there have been some horror stories.

Nope. Like I stated, we've had ZERO complaints from neighbors about any of our guests behaviors. Sharon just didn't like seein' 'em there and around, at all. No parties. No meth labs. No orgies. She just didn't like seeing strangers in the building. I don't know how you get to be 55 years old, living in Chicago your entire life, but somehow being afraid of strangers coming and going from an apartment, in your building, but it was what it was.

And that's really what ended our run with AirBnB. My landlord invoked his prerogatives, and changed his mind, and there was to be no further discussion. We were through.

~

When Problems Arise, Part III

We were in a bind. Although our ever-expanding Summer in Brazil was mostly paid for, several critical items still remained. And although we'd built up quite a bit of savings, we had really come to a point, during the past six months, where we rather counted on that money, to come in and help make things work for us, especially for the trip.

We made a decision: we wanted AirBnB more than we wanted to stay in that apartment, and quickly found a two bedroom place - instead of a one-bedroom - so that we could continue to build up our trip. We encountered a decent two-flat with a friendly landlord, who made a point to tell us that what we did with our home and our extra bedroom was our business. That did it. We moved in the fall of 2013, primarily so that we could continue to build our Big Brazil Trip.

And build we did, using our extra bedroom, primarily, as a way to make our Brazil dreams come true.

~

Nove semanas no Brasil!

It all worked out. We put together a fabulous trip across Brazil, which lasted my entire summer break, from teaching school. When it came time to sub-lease our place while we were gone, guess what we did? We found a sub-lessor through AirBnB. Rent was of course our biggest bill to pay, and while we were in Brazil, we wouldn't have to worry about it. Our new landlord was very cool about us sub-leasing the place. The two met early on, and the situation was fabulous.

And do they have AirBnB in Brazil? Why yes they do.

So what do you think we did? When we weren't staying with family down there, we just stayed with AirBnB hosts! In Curitiba, where we spent nearly a week, and saw two World Cup games, our hosts were an extremely friendly elderly couple, who served us bread, cheese, coffee and cake every morning! A full-on continental breakfast that would rival ANY hotel you'd go to, was served each day in their darling apartment, right in the heart of the city! We were less than a block from the historic square, and had a great time chatting it up with a woman we came to call Tia Marta (Aunt Marta) about the city, her life (she, like me, was a schoolteacher), and the glorious Paris of Paraná, Curitiba.

In Brasília, our hosts let us use their bikes. Their BIKES for gods' sake. And when we tried to offer them extra for rental fees, they refused. We must have biked 70 kilometers around Brasília during our stay there. It was GLORIOUS.

Our host in Rio de Janeiro had us living just three blocks from Copacobana Beach, overlooking a metro station and a small public square. Our place in São Paulo was within walking distance from Avenida Paulista, and both of these were just delightful places to stay in, as travelers; less touristy, more "real," and just way . . . WAY cheaper, as a way to travel, than paying for a hotel. And of course, lest we forget, you travel more cheaply when you're not eating out 100% of the time. It was perfect.

It's worth noting here, again, that there is no way in a million years that this fabulous moon-shot of a honeymoon could have taken place, without the money we made, booking our extra room, and our apartment in some cases, through AirBnB. And the money we saved on hotels while traveling was nothing to sneeze at either, probably in the thousands of dollars, since we first started in New York City in 2012. The service has, quite single-handedly, elevated our standard of living, very noticeably. Thus, does a "two weeks in Rio" honeymoon morph into nine weeks all over Brazil.

~

THE ISSUES

We came home with a plan of allowing some guests for a little while this fall, before taking a break for awhile this winter. The urgency of the coming trip has gone, and we feel more comfortable having a lot fewer houseguests in general, from here on out.

The recent Uber controversy has got me thinking a lot about the sharing economy, it's impact on my life, and the lives of others around me.

I understand why heavily-regulated taxi companies don't like the threat posed by Uber, Lyft, and other like services. Similarly, I understand why landlords, hotels, and some neighbors dislike AirBnB. Obviously the horror stories are cautionary, although I feel less charitable to neighbors who "just don't like seein' them strangers around," like Sharon.

Landlords are a bit of a different species, from hotel groups, of course. They are well within their rights to make the rules in their own buildings with regards to strangers. It's quite likely that AirBnB hosts are more upstanding rent-payers, but if landlords don't want strangers around, that's their prerogative. The "nightmare scenario" with poorly-behaved guests are clearly an issue, and in fact AirBnB is insures up to $1,000,000 for each booking, in case someone DOES open a meth lab, kill somebody, or what have you.

But the publicly-available guest profiles are for all of the 15 million+ users to see, and I think this DOES help police bad behaviors. If you mess up someone's apartment for it, you can certainly believe that you're going to be publicly shamed on your profile. And as for outright thieves . . . again not saying it couldn't happen, it can and it obviously has . . . but when you pay for AirBnB you put in all of your bank details, social security, name and address info. AirBnB has verifiable user-submitted information on all lessors, unless all of that is stolen first, which granted, is of course possible in all situations. For my part, I think the horror stories are few and far between, and reasonable checks on bad behavior are there. Like I said, we've had no serious problems with any guests. The worst that happened was that we had one somewhat less-than-enthused review, and one angry cancellation.

The landlords are within their rights to set their own rules, and the neighbors MIGHT be given cause for concerns, depending on the situation, with AirBnB. But the hotel groups?-the traditional taxi companies in Uber's version of the equation? I don't feel the least bit bad for them at all. People are flocking to AirBnB because hotels aren't able to provide the same kind of experience that AirBnB can offer. You can save money cooking in a standard kitchen. You get to live in a "real local neighborhood;" you might even make friends with your host, as I did in Belfast! What hotel is going to offer you a couple of extra bikes so you can pedal around town? At no cost? NONE. That's which one.

With Uber and Lyft coming around, taxi companies are in the same situation. It took Uber to widely distribute a smart phone application that got you a taxi. Why in God's name couldn't a traditional taxi service come up with that first? Who knows? But they didn't. Uber did. End of story, and end of the line. And Uber offers people, who wouldn't OTHERWISE see their car payments as an investment in extra income, a way to make some extra cash, under the fairly simple and widely-understood concepts that:

1) It's their car.

and

2) They can do what they want with it.

We don't take cabs very often, but can definitely attest that finding a cab in certain neighborhoods here in Chicago can be a major pain . . . and sometimes when you call one, they simply don't show up! Uber fills a niche by giving users a user-friendly interface, and while the practice of adding 20% tip is certainly questionable, if they made it clear before-hand that the tip was included, then I don't see how any customer could complain

AirBnB is operating on a similar principle: "it's my place, I can do what I want with it." It's true that landlords have the ultimate say-so in their own building, but in my opinion, traditional taxi companies and hotel operations are in the same unpleasant place to be - they're getting beaten at their own game to micro-operations that can offer something they've not been able to.

I really doubt attempts to force Uber drivers or AirBnB hosts into regulatory compliance with taxi companies, and hotels, are likely to be a winning strategy, in the long run. Now that the cat is out of the bag, even if they could shut down AirBnB and/or Uber tomorrow, some other enterprising gray market "sharing economy" entrepreneur will pop up with the next iteration. These groups should either learn to compete, or prepare to lose market share to savvy individuals that are offering a superior product.

The sharing economy, specifically AirBnB, has indeed changed our life. We are more economically independent, and we've been able to pursue dreams that would have seemed impossible just a few short years ago. No amount of corporate bloviating about the need for strict adherence to outdated models of regulation is going to stop us, and others like us, from continuing to push the envelope.

Traditional corporate models, and the regulations that govern them, have benefited a tiny percentage of our population, and preyed upon the great majority for far too long. I have personally seen the transformative power of folks' taking their economic destinies more into their own hands, and I firmly that It Is Good. my own life would be about 30% less fabulous, and 30% more boring and/or debt-ridden, if it weren't for AirBnB.com, and the magic of the "sharing economy." So far be it from me to quibble with Uber-drivers or my fellow hosts on AirBnB. I saw Godspeed and Safe Travels, everyone!

1 comment:

Anonymous said...

I really enjoyed reading your article - peter

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