The problem with the sharing economy - Page 3

Airbnb seemed so simple — but collaborative consumption can raise complex issues


Our dinner began with introductions, and Love Swap Home founder Debbie Wosskow said she had come all the way from London for this dinner and some related meetings, on the ground just 36 hours. "I thought I could learn a lot from you guys out here," she said in her charming British accent, later calling San Francisco the world hub for this new economic approach.

"Our business model is very simple: it's like online dating for homes," she said, explaining how the company registers people with cool homes that they can vacation-swap with others they meet through the site. Contrasting it with Airbnb, she said, "We're swapping purists...I was less interested in turning my home into a money-making machine than moving my home to places around the world."

The company caters mostly to those with higher-than-average incomes, while others at the table seem to be giving more structure to underground transactions pursued by the average Craigslist or Yelp user. "We have a platform of trusted folks who watch your dogs in their own homes," was how Dog Vacay owner Aaron Hirschhorn described the business he started with his wife, which attracted $1 million in venture capital financing and now has 10 employees.

"I want to be the premiere national pet services company," Hirschhorn said. "That's the long-term play, but in the near-term we're solving an immediate problem. And we're giving people a chance to make money."

As dinner was served, SparkPR's Jamie Walker played hostess and encouraged us to chat about our common issues, so I offered an apparently impertinent topic for guests to address: "How do you all feel about taxes?"

An uncomfortable silence chilled the room, but I asked them to humor me because it was Tax Day and I was curious how they all felt about being required to pay taxes on the economic transactions they were facilitating. Again, silence, before someone finally ventured an answer.

"There are other societal benefits to this collaborative consumption industry," was how Getaround's Avery Lewis answered my question, talking about the many economic and environmental benefits of people being able to share their cars or avoid having to own a car for only occasional use.

And that may be true, but it doesn't really answer the question: Why should these economic transactions be exempt from the taxes charged on most other economic transactions?



Airbnb spokesperson Kimberly Rubey and Airbnb customers who testified at the tax hearing also speak of the wide variety of social and economic benefits of the service, and they make a compelling case that this company — with 100 employees here and 300 around the world facilitating 5 million nights booked in four years, up from just 1 million a year ago — is a boon to San Francisco.

But when you push them on the tax issue, they don't know quite what to say. Rubey abruptly ended two short phone interviews when I pressed for an answer, both times saying she was late for meetings and would get back to me. The third time, she had this statement prepared: "We do not shy away from tax obligations, nor do we believe that all types of private residential rentals should be excluded from transient occupancy tax in all situations. That said, we do think that staying in someone's spare bedroom or in someone's home while they are away is different in a variety of ways than staying in a hotel."

Yet that distinction isn't one made in the city's Transient Occupancy Tax law, says Greg Kato, the policy and legislative manager for the Tax Collector's Office. "When we talk about a guest room under the law, that does include private residences," he told us. "We want to make sure we're taxing everyone properly."