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New York Post

 

Airbnb, Uber & NYC

June 23, 2014

By Nicole Gelinas

Are Airbnb and Uber new-economy “disrupters” of New York's entrenched special-interest economy? In fact, one of them enables vested interests — and the one that is a “threat” has itself adjusted to play by the city's rules. Each is a reminder of why we have such rules.

The disrupter isn't Airbnb, the apartment “sharing” service.

Airbnb favors entrenched interests: real-estate owners and rent-regulated-apartment tenants.

Both groups profit from renting apartments at hotel prices.

That's a clue why Airbnb has gotten away with enabling its users to break occupancy and zoning laws: Those users are well-organized political forces benefiting at the expense of the less organized — hardly a brave new business model for Gotham.

Uber, the “car-sharing” app, is where it gets interesting. An unbridled Uber would be a threat to the powerful taxi industry.

Like a city apartment, a taxi medallion is worth something. Yellow cabs are the only cars in the city that can charge to pick people up on Manhattan streets — and that valuable right was worth $1.3 million per car last year.

But unlike a city apartment, a medallion has no value by itself. The medallion value entirely depends on city and state regulations. The city caps supply — at about 15,000 — and it sets fares.

An app that lets people dial up “volunteer” drivers to ferry them around in private cars — the way Uber works in much of the country and the world — would threaten medallion values.

That's especially true since, unlike an apartment, the medallion isn't the only thing of value here. The person driving the car adds value — and would prefer not to hand much of his income over to the medallion owner if he doesn't have to.

The fact that Uber, unlike Airbnb, poses a threat to entrenched interests helps explain why Uber can't break the law.

To drive for Uber in New York, you've got to be city-approved as either a taxi driver or a “black car” driver, driving a cab or a black car.

No, the city doesn't cap the number of black cars, as it does with medallions. But it does require black-car drivers to carry commercial licenses and commercial insurance, and to adhere to safety standards.

Allowing black-car drivers to connect to customers more easily does pose some challenge to cabs. But probably not a fatal one: We've long had the telephone, for people to call black cars — yet taxis and black cars have coexisted for decades.

Why? If you need a ride from Midtown at 2 p.m., you go outside and hail a cab. If you need a ride at 2 a.m. from Gravesend, you call a black car.

Sure, you could stand on a Manhattan street and use your phone rather than your hand. But why would you, unless you can't find a cab in the first place? Uber makes it possible to connect with a ride through technology. Manhattan's density makes the connection even easier.

The taxi industry doesn't want even more intense competition, sure — but that isn't the only reason why the city enforces the law against Uber but not Airbnb.

People can grasp intuitively why the city regulates cabs and black cars.

No sane woman is going to get into a random car driven by a random man on the street.

Likewise, the city can't have foreign families with children landing at JFK get into the van of an unlicensed guy who just borrowed an uninsured van. If you show up in your random car to pick up random people at the airport to make a buck, the city will take your car away — and you'll pay thousands to get it back.

There is value to professional uniformity.

That's also why the public demands that the city hold taxi drivers to a higher standard when it comes to running people over in their cars.

Since cabdrivers are doing this as a job, the public expects them to do a better job. (And they do: Per mile driven, cabbies kill fewer people than private drivers do.)

Uber works in New York because it doesn't pretend to be something it's not. It's helping qualified people drive paying customers around under government regulation, hardly a radical idea.

Airbnb “works” because it is what it pretends not to be: an illegal-sublet service.

And both are just old-fashioned businesses: people “sharing” their capital or labor — in Uber's case, both — for a profit.

Original Source: http://nypost.com/2014/06/22/the-city-that-never-shares-airbnb-uber-nyc/

 

 
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