Disruption’s Tragic Flaw The case of Uber shows why European companies should not follow the example of their American competitors too closely. It pays to take the needs of customers and contractors into account.
Tuesday night, the Santa Monica (CA) City Council unanimously passed one of the most restrictive laws in the nation on short-term rentals. The ordinance (which strengthens and enforces laws already on the books) explicitly bans vacation rentals – rentals of 30 days or less where the primary occupant of the home or apartment is not present – while legalizing and taxing “home-sharing” – i.e. renting a couch, spare room or backyard cottage - providing at least one of the primary residents lives on-site throughout the stay. Santa Monica (pop. 92K) receives over 7 million visitors annually; Salvador Valles, the city's acting chief administrative officer for Planning and Community Development, estimates the number of available listings on home-share sites would go from 1700 to 300. The ordinance goes into effect June 15. [more inside]
Meet the lawyer taking on Uber and the rest of the on-demand economy. Shannon Liss-Riordan has filed lawsuits against five of the largest "sharing economy" start-ups (Uber, Lyft, Homejoy, Postmates, and Caviar), contending that they pay the people who supply the equipment and manpower that power their businesses like independent contractors, while burdening them with the work expectations of employees. Previously.
Ben Smith of Buzzfeed reports: Uber Executive Suggests Digging Up Dirt On Journalists [more inside]
In the Billfold: a tale of a day-long tryout for an early stage startup, the author dubs The Start-up From Hell. The COO responds in Valleywag, "While it posted today (October 21), the article [...] relates to an experience she says she had 15 months ago. [...] At that time, Handybook employed less than 15 people. Today, Handy is two and a half years old and employs 200 people. [...] In short, as we continue to grow we're working every day to ensure the happiness of our customers and employees." [more inside]
Regulators 1, Lyft 0 (or perhaps 0.5). After trying to launch its unlicensed "ride sharing" model in New York City, Lyft has capitulated to the regulators' demands and will instead launch as an ordinary livery car service -- using only TLC-licensed cars with TLC-certified drivers. [more inside]
The Case Against Sharing: "The sharing economy’s success is inextricably tied to the economic recession, making new American poverty palatable. It’s disaster capitalism. 'Sharing' companies are not embarrassed by this — it appears to be a point of pride." [more inside]
Mealku is a service designed to help people obtain home-cooked meals, by connecting strangers online. It's sort of like AirBNB for leftovers as takeout meals, though right now it's only in New York City. An article from The Atlantic Cities describes Ted D’Cruz-Young's vision for the network and addresses concerns. “There’s always food left over. It’s nice to know it could be someone’s dinner", said one fan.
The Locust Economy
I was picking the brain of a restauranteur for insight into things like Groupon. He confirmed what we all understand in the abstract: that these deals are terrible for the businesses that offer them; that they draw in nomadic deal hunters from a vast surrounding region who are unlikely to ever return; that most deal-hunters carefully ensure that they spend just the deal amount or slightly more; that a badly designed offer can bankrupt a small business. He added one little factoid I did not know: offering a Groupon deal is by now so strongly associated with a desperate, dying restaurant that professional food critics tend to write off any restaurant that offers one without even trying it.[more inside]