Barry Fagin, Business/Economy, Denver, Featured, National

'Sharing economy' a high tech version of free market capitalism

Several weekends ago, Leslie and I engaged in a consensual act that involved my paying money to sleep in her bed. When it was over, we both felt satisfied. We didn’t ask anybody’s permission, and we shouldn’t have to. We ask only that all you busybodies stay out of our private lives.

I went to Boston to spend Passover at my sister’s. There were no hotels close. Instead, I went online to a shared lodging site.

icon_op_edThat was where I learned about Leslie and her charming Victorian home, five minutes’ walk from my sister’s. Significantly cheaper than a hotel, it was just what I needed. We traded emails, I gave the site my credit card, and that was that.

How did Leslie know that I wouldn’t trash her place and torture her cat? Why was I confident that Leslie would provide me a clean, safe place to stay? Because of the Internet. Leslie wants potential customers to rent her room, and I want potential hosts to rent to me. The Internet helps us build our reputations as good, trustworthy people.

For example, every time I return from a trip, I rate my host. The site asks me how accommodating they were, how clean the place was, how I felt about value for the money, how honest they were and so forth. Any deception or unsatisfactory experience will be read by potential customers and will quickly eliminate any host’s customer base. Similarly, I always check a host’s ratings before contacting them about a possible rental.

On the flip side, every host I have ever used rates me. They are asked about my respect for their property, punctuality, behavior, and overall quality as a guest. I have every incentive to be a model of propriety, because I want to have a good rep on the site. I know once I contact a host they will check my ratings before renting to me. That’s fine, I want them to.

This is the “sharing economy,” made possible by the Internet. It is popular among those of us who use it. It is effective, and it is above all disruptive to existing arrangements. This bothers people, particularly those who are convinced that the world cannot possibly run itself without their help. Yes, I’m talking to you.

If you’re a busybody on the right, perhaps you have a lot of money invested in the hotel industry. Rather than compete on the merits of what you have to offer, you’ve poured millions of dollars into lawsuits and lobbying legislatures to make it illegal for me to sleep in Leslie’s house. You shouldn’t do that. Please stop.

You’d think the left would support allowing Leslie and me to do what we want in the privacy of her home. Not so. The entrepreneurs who developed this concept have created enormous amounts of wealth. Last I checked, their company was worth about $20 billion. That’s billion with a “b.” If you’re a busybody on the left, this bothers you. To you, that’s simply not fair.

So you will tax them to death, write about the evils of capitalism, and denounce the greed of the evil one percent. You will rail about their economic power, and demand they be brought to heel, just because their creativity and hard work made life better for millions of people like Leslie and me. You shouldn’t do that. Please stop.

Maybe you’re not particularly political, but you just don’t like the idea of your neighbor renting her home to strangers. Tough. I’m sorry if you are bothered by having to look at people you don’t know, but if we’re not harming you or your property then we (and your neighbor) ought to be allowed to live our lives in peace.

Leslie was a delightful host and a nice person to talk with. Thanks to the wonders of the sharing economy, I’ve made a new friend, and hope to stay with her again the next time I’m in town.

Provided, of course, we continue to be left alone.

Barry Fagin is Senior Fellow in Technology Policy at the Independence Institute, a free market think tank in Denver.  He can be reached at barry@faginfamily.net

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