San Francisco Bay Guardian

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SAN FRANCISCO BAY GUARDIAN

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the problem With the Sharing economy CONT>>

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campaign last year, has significant investments in Airbnb and other “shareable� companies that Lee opposes taxing, as The New York Times reported last month. Around that same time, I, along with other local journalists was invited to a fancy round-table dinner hosted by SparkPR to facilitate schmoozing with a half-dozen collaborative consumption start-ups, an event that felt more like the decadent peak of the last dot-com bubble than the launching of a people-powered economic revolution.

Wined and dined Over fine wine and a seated gourmet dinner in a private room in Perbacco Ristorante + Bar, journalists representing the New York Times, San Francisco Examiner, Bloomberg, TechCrunch, and other media outlets chatted with representatives from Love Home Swap, Getaround, Zimride, Event Up, and DogVacay. This was the latest event in the public relations blitz by advocates of “The Sharing Economy,� which was the title of an event at the San Francisco Planning and Urban Research Association two weeks earlier, which featured representatives from Airbnb, TaskRabbit, Shareable, Vayable, and Getaround (representatives of this car-sharing company do indeed seem to get around). 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 food + Drink

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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 longterm 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 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?

Some thingS don’t change 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.� music listings

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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.� It was a broad and fairly unusual coalition of groups that pushed the city to begin regulating and taxing Airbnb and similar companies — from the Tenants Union and labor unions on the left to Hotel Council and Building Owners and Management Association on the other end the spectrum — making the prospects of a successful legislative challenge to the tax law interpretation unlikely. Gullicksen said Airbnb may be one of the biggest companies affected by the ruling, but it isn’t the worst. He said Vacation Rental By Owner (www.vrbo.com) converts entire blocks of apartments into tourist hotels. By contrast, he said many renters use Airbnb to occasionally supplement their incomes. “It depends on how often it’s used and to what scope it’s used,� he said. Mayor Lee and some members of the Board of Supervisors recently created a Sharing Economy Working Group to hammer out those distinctions and make policy recommendations, but it has yet to be constituted or begin meeting. And Board President David Chiu has introduced legislation developed by the Tenants Union to ban the worst “hotelization� of rental units by corporations. I’ll be curious to see how these issues play out, even though I no longer use Airbnb. Advocates for collaborative consumption seem to think they’ve invented something new under the sun and the rest of us just need to catch on. “When new business models emerge, you’re going to constantly be in ongoing discussions with policymakers to educate them about the difference with traditional models,� Rubey said. Clearly, they’ve convinced Mayor Lee, who unsuccessfully sought a delay in the Tax Collector’s ruling, following the tax breaks he extended last year to Twitter, Zynga, and other tech companies. But I’m less convinced. Airbnb once seemed like a simple and harmless way to make extra money, but in San Francisco — where landlords and tenants often battle over the very soul and essence of the city — life here and the policies that govern it are endlessly complicated. And that’s nothing new. 2

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