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[Resources]Risk of Shared Economy – Conflict with Existing Business
As the shared economy is centered on sharing instead of existing ownership, and it brings about a big change in the focus of transactions between individuals based on trust among individuals, it is creating friction with the existing system. Among the many concerns about the side effects of the shared economy, the most prominent issue is conflicts with existing systems and regulations. Second, how to legitimately levy and collect taxes on shared economic activities. Third, it is a conflict of interest with existing companies. Fourth, it is feared that the labor environment will deteriorate due to the increase in part-time jobs. Fifth, some say that it is a citizen-centered economic form, and that it will only make the platform operator hungry for sharing. Sixth, as global Internet dinosaurs do, big shared platforms like Uber and Airbnb are concerns about monopolizing the global market. Seventh, many people participate in the shared economy, mostly through smartphone apps. As a result, there are concerns that personal privacy could be violated in that personal information can be easily exposed. Eighth, there is also concern that the expansion of shares instead of ownership will reduce consumption and adversely affect the economy. These controversies are similar to the Internet's first appearance. In other words, these controversies and issues could be resolved gradually through the social consensus process in terms of the shared economy being an irreversible trend of the times.
First of the problems described above, let's take a closer look at conflicts of interest with existing operators.
Friction between Uber and conventional taxi drivers is surfacing as massive protest rallies by taxi drivers spread around the world. For taxi drivers, they have invested a lot of time and money to get a taxi license, a protest against Uber drivers operating without a taxi license. Because taxi licensing policies and business types differ from country to country, it cannot be judged by the same standard. Taxi drivers in California and New York, for example, have rather increased profits from Uber and protested against the possibility of state regulation of Uber
The concern for Uber is certain to be that it is not the taxi drivers but the mid-sized businesses that existed between drivers and passengers, such as taxi companies and taxi unions. The cost of these middle operators will be reduced and the economic benefits will be changed to taxi drivers and passengers. However, while many people without a license will be taxi drivers under the name of a car sharing service, those with excellent driving skills and friendly professional taxi drivers will have a chance to earn more money than they have before as differentiated services. Especially considering the poor working conditions of taxi drivers in Korea, it is imperative to actively introduce the concept of vehicle sharing as a way to streamline the taxi business. In the U.S., the use of existing taxis and rental cars has been gradually declining with the emergence of vehicle-sharing services such as Uber and Rift. The use of car-sharing has quadrupled in the past year. According to an article in the Wall Street Journal in October 2015, satisfaction with the car-sharing service is also high. Reflecting the trend, Yellow Cab, San Francisco's largest taxi company, is expected to file for bankruptcy soon. San Francisco is home to Uber and Rift headquarters. Sales have also been suffering from a double whammy as Uber or Rift's popularity drove drivers to move to the two services.
Friction between Airbnb and existing hotel operators is also gradually coming to the fore. Hotel operators are protesting that Airbnb, which is practically in the accommodation business, does not meet the requirements for the lodging business and does not follow various regulations. In September 2014, a group called ShareBetter launched an anti-airbnb campaign worth $3 million to counter Airbnb's campaign. Politicians in New York, local activists and hotel industry workers are participating to highlight "airbnb illegal." SB said two-thirds (64 percent) of the 20,000 rooms in New York (January 2014) registered with Airbnb were illegal. As a case in point, five hosts pointed out that 200 rooms are registered. Airbnb has disrupted the housing market in New York and violated residents' right to live. In a counter-argument, Airbnb argued that 20,500 rooms out of 3 million households are not large numbers, and that 87 percent of the hosts share empty rooms in their homes. Typical hosts earn $7,530 a year, which is a very important source of income for maintaining their own homes. It said the $768 million annual economic inducement effect and created 6,600 jobs in New York. He also said he paid $36 million in taxes to help financially. Citing research by Professor Ken Rosen of the University of Berkeley, Airbnb argued that accommodation sharing does not affect the residential environment of urban residents and stressed that it contributes to boosting tourism by providing travelers visiting New York with a chance to get close access to New York's culture and people while traveling throughout the city as well as to the city.
Next time, we will look at the platform monopoly by a small number of global operators.
As the shared economy is centered on sharing instead of existing ownership, and it brings about a big change in the focus of transactions between individuals based on trust among individuals, it is creating friction with the existing system. Among the many concerns about the side effects of the shared economy, the most prominent issue is conflicts with existing systems and regulations. Second, how to legitimately levy and collect taxes on shared economic activities. Third, it is a conflict of interest with existing companies. Fourth, it is feared that the labor environment will deteriorate due to the increase in part-time jobs. Fifth, some say that it is a citizen-centered economic form, and that it will only make the platform operator hungry for sharing. Sixth, as global Internet dinosaurs do, big shared platforms like Uber and Airbnb are concerns about monopolizing the global market. Seventh, many people participate in the shared economy, mostly through smartphone apps. As a result, there are concerns that personal privacy could be violated in that personal information can be easily exposed. Eighth, there is also concern that the expansion of shares instead of ownership will reduce consumption and adversely affect the economy. These controversies are similar to the Internet's first appearance. In other words, these controversies and issues could be resolved gradually through the social consensus process in terms of the shared economy being an irreversible trend of the times.
First of the problems described above, let's take a closer look at conflicts of interest with existing operators.
Friction between Uber and conventional taxi drivers is surfacing as massive protest rallies by taxi drivers spread around the world. For taxi drivers, they have invested a lot of time and money to get a taxi license, a protest against Uber drivers operating without a taxi license. Because taxi licensing policies and business types differ from country to country, it cannot be judged by the same standard. Taxi drivers in California and New York, for example, have rather increased profits from Uber and protested against the possibility of state regulation of Uber
The concern for Uber is certain to be that it is not the taxi drivers but the mid-sized businesses that existed between drivers and passengers, such as taxi companies and taxi unions. The cost of these middle operators will be reduced and the economic benefits will be changed to taxi drivers and passengers. However, while many people without a license will be taxi drivers under the name of a car sharing service, those with excellent driving skills and friendly professional taxi drivers will have a chance to earn more money than they have before as differentiated services. Especially considering the poor working conditions of taxi drivers in Korea, it is imperative to actively introduce the concept of vehicle sharing as a way to streamline the taxi business. In the U.S., the use of existing taxis and rental cars has been gradually declining with the emergence of vehicle-sharing services such as Uber and Rift. The use of car-sharing has quadrupled in the past year. According to an article in the Wall Street Journal in October 2015, satisfaction with the car-sharing service is also high. Reflecting the trend, Yellow Cab, San Francisco's largest taxi company, is expected to file for bankruptcy soon. San Francisco is home to Uber and Rift headquarters. Sales have also been suffering from a double whammy as Uber or Rift's popularity drove drivers to move to the two services.
Friction between Airbnb and existing hotel operators is also gradually coming to the fore. Hotel operators are protesting that Airbnb, which is practically in the accommodation business, does not meet the requirements for the lodging business and does not follow various regulations. In September 2014, a group called ShareBetter launched an anti-airbnb campaign worth $3 million to counter Airbnb's campaign. Politicians in New York, local activists and hotel industry workers are participating to highlight "airbnb illegal." SB said two-thirds (64 percent) of the 20,000 rooms in New York (January 2014) registered with Airbnb were illegal. As a case in point, five hosts pointed out that 200 rooms are registered. Airbnb has disrupted the housing market in New York and violated residents' right to live. In a counter-argument, Airbnb argued that 20,500 rooms out of 3 million households are not large numbers, and that 87 percent of the hosts share empty rooms in their homes. Typical hosts earn $7,530 a year, which is a very important source of income for maintaining their own homes. It said the $768 million annual economic inducement effect and created 6,600 jobs in New York. He also said he paid $36 million in taxes to help financially. Citing research by Professor Ken Rosen of the University of Berkeley, Airbnb argued that accommodation sharing does not affect the residential environment of urban residents and stressed that it contributes to boosting tourism by providing travelers visiting New York with a chance to get close access to New York's culture and people while traveling throughout the city as well as to the city.
Next time, we will look at the platform monopoly by a small number of global operators.