TIME Business

The Sharing Economy Boom Is About to Bust

Airbnb'S Value Estimated At $10 Billion After New Round Of Investments
Online home-rental marketplace Airbnb Inc. is about to receive more than $450 million in investments from a group led by private-equity firm TPG. The new investments will value the startup at $10 billion, significantly higher than some publicly traded hotel chains. Justin Sullivan—Getty Images

Startups like Airbnb and Uber are already experiencing a backlash from traditional hotel and taxi industries, all because local governments didn't anticipate the regulatory questions posed by this new economic model.

I have learned the hard way, as father to three small boys, that sharing causes conflict. Ask humans to play with the same toy at the same time, and it won’t take long for a fight to break out. The smart move is to find duplicates of that toy or, if that’s impossible, to urge interested parties to “take turns.”

That’s why I’m afraid the much-celebrated “sharing economy”—the catch-all name for “peer-to-peer” firms that connect people for the purposes of distributing, sharing, and reusing goods and services—is likely to produce more fights than profits. States could be embroiled for years in political, legal, commercial and environmental battles related to sharing.

Companies such as the ride-sharing services Lyft and Uber and the apartment-sharing service Airbnb are success stories; Airbnb is already worth more than the Hyatt or Wyndham hotel chains. In the blocks near my Santa Monica, Calif., office are dozens of such growing companies, among them Tradesy (a marketplace for women buying and selling new and gently used clothing) and DogVacay (connecting pet owners with pet sitters).

Sharing services can eliminate waste, improve efficiency, connect people to one another, and allow us to make money on extra stuff in our closets and garages. And if that’s all the sharing economy promised to do, I’d have no reason to worry. But the sharing economy is more than a business sector—it’s a movement, with the grandest of ambitions for our politics, culture and environment.

Over a couple of months of reading about and talking to people in the sharing economy, I’ve been struck frequently by the limitless ambitions of its participants and proponents. Here are just a few of those ambitions: reversing economic inequality, stopping ecological destruction, countering the materialistic tendencies of First World societies, enhancing worker rights, empowering the poor, curing cancer and reimagining our politics.

It would be easy to dismiss sharing economy hype as just more of the self-aggrandizing, self-righteous nonsense for which liberal pockets are well-known. Except that the sharing economy is already threatening to reach into every corner of our lives, from food to photography, education to finance. If that sounds like an exaggeration, consider this: venture capitalists just funded an app to help you find someone to do your laundry for you.

The best adjective to describe this kind of movement is totalitarian. As the Czech novelist Milan Kundera put it, “Totalitarianism is not only hell, but also the dream of paradise.” So my bid to watch your dog while you’re on vacation—and yours to drive me to the airport—is at once freeing and full of dangers. Who’s responsible if your dog bites my kid while in my care? What kind of car insurance, training and licensing do you need to shuttle me safely? What, if anything, do we owe to the kennel workers and cabbies who lose work? And who decides how we govern all of this?

There are so many potential conflicts—along professional, political, commercial, geographic, generational and gender lines—posed by sharing that I couldn’t list them here. To pick just one more: sharing is a threat to the general plans of virtually every city. After all, what is Airbnb if not a rezoning of residential areas into hotel space?

Of course, the movement doesn’t see itself as a starter of wars—and that may be its biggest weakness. Instead of recognizing the conflict and anger that could be produced by their efforts to transform the world, cheerleaders of the sharing economy celebrate its “disruptive” power—as well as its “sustainability.”

Whether being used by the environmental left or the anti-spending right, “sustainability” has become a vague but powerful way to dismiss somebody else’s idea without having to reckon with the particulars. “That’s unsustainable,” means it can’t go on, so why continue to discuss? It’s how we say no to anything new that might cost money or consume energy. So, naturally, almost every government or corporate bureaucracy you encounter–in California at least–has an office of sustainability.

What many states don’t have are the governance infrastructure to host the multi-front battles over sharing and sustainability that are on the horizon. Weak local governments can’t deal with all the new planning, zoning, licensing and regulatory questions posed by this new economic model. Courts are already too crowded to handle basic functions—much less a host of new claims sparked by sharing enterprises. And our political system, with its low voter participation and big money, simply can’t produce definitive, legitimate answers on the big new policy questions posed by all this sharing.

For all its promise, the sharing economy threatens to turn virtually every aspect of living into contested ground. And that’s no way to live.

Joe Mathews writes the Connecting California column for Zocalo Public Square. This piece originally appeared at Zocalo Public Square.

TIME

Los Angeles Is Too Weak to Make Donald Sterling Repent

Memphis Grizzlies v San Antonio Spurs - Game One
During Game One of the Western Conference Finals of the 2013 NBA Playoffs at AT&T Center on May 19, 2013 in San Antonio, Texas. Ronald Martinez—Getty Images

The controversy surrounding the Clippers owners' alleged comments lays bare how impotent the city is, and how accountability comes only with outside intervention.

Late in Quentin Tarantino’s 1994 film Pulp Fiction, Marsellus Wallace—a criminal boss played by Ving Rhames—banishes prizefighter Butch Coolidge (Bruce Willis) from Southern California. “You lost all your L.A. privileges,” Rhames says with lethal menace, and Willis quickly leaves the Southland on his motorcycle.

If only it were that easy to kick Los Angeles Clippers owner Donald Sterling out of L.A. But, alas, Tarantino’s film is pure fantasy. There is simply no person, institution, or network in today’s Los Angeles with the clout to force powerful Angelenos to repent their sins—much less drive them out of town.

The racism heard on the leaked tape (which multiple people have confirmed is Sterling himself) may be news around the country, but Sterling’s discrimination against renters in his apartment buildings, and his anti-black, anti-Mexican, and misogynist views, have been well-known facts of Los Angeles life for 30 years. Despite that, no one has sought to dislodge Sterling from his role as owner of a major sports franchise. And now, with his bigotry a national news event, Sterling has become an outrageous example of the inability of L.A. to police itself, and its elite.

Even after the public release of an audio tape of Sterling demanding his girlfriend stop associating with black people, it’s safe to bet that no Southern Californian will pull a Marsellus Wallace and kick him out of L.A. If Sterling faces any consequences for his racism, they will come from the outside—the commissioner of the National Basketball Association, Sterling’s fellow team owners, or corporations that sponsor pro basketball.

Who here would have the juice to force him to sell the team?

Prominent business leaders? L.A.’s rich corporate types are more engaged nationally and globally than locally, and they don’t have the public profile, or leverage, to threaten Sterling or his team.

City political leaders? L.A.’s charter keeps mayors and city council members from having too much power, and the state holds tight to municipal purse strings. Ironically, the mayor of Sacramento, former pro basketball star Kevin Johnson, could have more of a role than L.A.’s own mayor since Johnson has been retained by the players’ union for advice on dealing with Sterling.

The town’s newspapers or TV stations? They’re shrinking in ambition and staff, and their audiences have splintered so much that grabbing the attention of a plurality of Angelenos through the media is nigh impossible.

In L.A., accountability almost always requires outside intervention. Los Angeles County Sheriff Lee Baca had mismanaged the jail for years, but only resigned earlier this year after the federal government began investigating. When Dodgers owner Frank McCourt was sabotaging the team, it took the commissioner of baseball, in Milwaukee, to force the team’s sale. In the past generation, the Metropolitan Transportation Authority, the Los Angeles Unified School District’s special education program, and the Los Angeles Police Department all have required forms of federal receivership.

Outside intervention, of course, is no panacea. But the alternative is unchecked defiance, the best current example being Brian D’Arcy, head of the biggest union of L.A. Department of Water and Power (DWP) employees. For months, he has refused demands from city leaders, the courts, and the media that he turn over financial documents on two nonprofits that received $40 million from ratepayers. Even as he stonewalled, D’Arcy served on the Los Angeles 2020 Commission, a group of distinguished L.A. citizens, as they issued a report complaining about a lack of accountability in city government. Did I mention that defiance is a close cousin of shamelessness?

In Sterling’s case, it’s unclear whether other powerful Angelenos would have moved against him—even if they could. For one thing, he’s got the kind of hallowed, homegrown personal narrative—poor kid from the Eastside (Boyle Heights) who becomes a Westside titan (real estate) —that buys plenty of second chances here. And Sterling bought social status by becoming a major player in the phony, philanthropic Beverly Hills hotel chicken dinners that always make rich people look charitable and sometimes raise money for a good cause.

By handing out money to many different people and organizations across all lines of geography, cause, and ethnicity, Sterling incentivized much of Los Angeles to ignore his racism. Among those who looked the other way was the Los Angeles chapter of the NAACP, which was about to give him a second lifetime achievement award when the recent news broke. It didn’t hurt Sterling that he advertised his charitable exploits in the L.A. Times, a paper that has portrayed him more as creepy uncle than as unrepentant racist.

This particular moment exposes the underbelly of Southern California’s open culture. Weak institutions and weak leadership free people here to do as they please and be who they are. But when someone powerful, by being who he is, does real damage to Los Angeles and its reputation, there’s no one able and willing to protect us.

Sterling’s conversation with his girlfriend—who, as a 30-year-old multiracial gold digger, was the perfect companion for the wealthy 80-year-old Los Angeles racist—was offensive and nonsensical. But Sterling did say one thing that hit close to home. When his girlfriend asked why he wouldn’t stand against racism in the world, Sterling said on the tape: “We don’t evaluate what’s right and wrong. We live in a society. We live in a culture. We have to live within that culture.”

For all the criticism of Sterling that you hear from Angelenos now, he is decidedly the product of Los Angeles culture. He has thrived here. Now, he defines us.

This piece originally appeared at Zocalo Public Square.

TIME celebrities

Dear Alec Baldwin: Please Don’t Move to LA

Actor Alec Baldwin shoves a photographer and tells him to move out of his way after he arrived in his SUV at the building where he lives in New York
Actor Alec Baldwin shoves a photographer and tells him to move out of his way after he arrived at his home in New York on November 15, 2013. Carlo Allegri—Reuters

An open letter to the actor, who's moving back to Los Angeles from New York, by Joe Mathews. 'Your moving to Los Angeles would certainly be good for us,' he writes. But: 'Really, just don't.' Have you thought about Silicon Valley?

Dear Alec Baldwin,

Let me be the first to welcome you to the great state of California.

I know you haven’t arrived yet. But, in a piece published in New York magazine that made headlines across the country, you made it plain that after years of being terrorized by Manhattan’s media and increasingly nosy public, you’re done with living and working in New York City, where you were once so popular that you toyed with running for mayor. Your next destination: Los Angeles, where you believe you can be free to be yourself.

“I just can’t live in New York anymore,” you wrote. “Everything I hated about L.A. I’m beginning to crave. L.A. is a place where you live behind a gate, you get in a car, your interaction with the public is minimal. I used to hate that. But New York has changed.”

Your moving to Los Angeles would certainly be good for us. All Californians would benefit from another rich person out here paying those higher Proposition 30 temporary rates on income taxes. And, given your political ambitions, your presence in Los Angeles would also be welcome, if only because it might light a fire under our overly understated new mayor, Eric Garcetti.

But I’m concerned that, as much as we’d love to have you, L.A. might not be the best fit for you.

You’ve lived in New York since 1979, so it makes sense that you don’t know that this is no longer Annie Hall’s Los Angeles. In fact, L.A. in 2014 is a lot more like New York than we would care to admit.

If you are truly looking to retreat from public life, as you say in your piece, L.A. may not be the best place to do it. The city is becoming considerably more dense (particularly on the Westside, where you Hollywood types hang out) and more connected (via new rail and subway lines). L.A.’s economy is less about going off by yourself to write or invent something and much more about constant collaboration and exchange: design and international trade are crucial industries here.

And your notion of L.A. as a place where people stay inside their homes? It’s outdated. The homeownership rate in the county is now just 47 percent, compared to 56 percent for the state of California and 65 percent nationally. More people in the city of L.A. (54 percent) are living in multi-unit buildings than in houses.

You wrote that you and your young wife had a child last year. So did my wife and I—our third. And while your piece seems to suggest L.A. is a great place to raise a kid (“I want my newest child to have as normal and decent a life as I can provide,” you wrote), many Angelenos disagree. Indeed, the number of children under age 10 in L.A. County declined by 17 percent in the last decade. The costs of education and housing, and the difficulties of commuting here, have defeated many a young family.

Your wealth may protect you from those pressures, but it can’t protect you from the fact that many of the things that are driving you from New York are all too present in L.A. “Everyone has a camera in their pocket,” you wrote, in describing how professional photographers and regular citizens alike invade your space and privacy. News flash: We’re also known to carry cameras around here, though I must say in our defense that the beautiful sunshine and purplish light of Southern California can make an aging movie star look 10 years younger in cell phone photos.

You also railed against TMZ, the actor Shia LaBeouf, sanctimonious gay media figures, back-stabbers, and incurious TV executives who don’t have a scrap of paper on their desks. I am sad to report that, despite our best efforts, you may find these scourges in the City of Angels. And while you may think you can escape it all by moving into some compound up in the hills, the last person who tried that—a young musician named Justin Bieber—came under such attack from tabloids and neighbors that he’s fleeing to Atlanta.

You made it clear that you want to be fawned over. You wrote that in the past, “New York was my town. I’ve had people come up to me and say, ‘You’re a great New Yorker.’” But in L.A., there are too many celebrities and too little time to fawn. Maybe you think you could run successfully for office here, considering that you’re a Democrat coming to a Democratic state, and that California has a history of electing movie stars. But the movie stars we elect are Republicans, and the last guy left the governorship so unpopular that it might be another decade before we entertain another Hollywood politician.

Just because you’re not right for L.A. doesn’t mean that you’re wrong for California. As I was thinking about your predicament, I was reminded that there is a place where a celebrity such as yourself could be fawned over and embraced—but also left alone.

Have you thought about Silicon Valley?

The nerds up north would absolutely adore you. Google and Facebook host a stream of celebrity visitors big enough to solve the drought. Valley venture capitalists have thrown money at celebrity entrepreneurs like MC Hammer and Jessica Alba. I’d bet Kleiner Perkins, the revered venture capital firm with a weakness for big names (Al Gore, Colin Powell), would find a role for you. Remember: Silicon Valley folks have touted Ashton Kutcher as a tech guru; imagine how warmly they might welcome someone like you, who can actually act.

Why do the nerds find it so hard to resist the likes of you? The answer is that Silicon Valley titans can become many things (rich, powerful, respected), but they will never be sexy, and they will never be Hollywood. We all overvalue what we don’t have.

So if you know what’s good for you, you’ll have your people scope out a place on a Bay Area hillside. Atherton, maybe. Or even better—head over the Golden Gate and buy a house in Marin. Reality rarely bothers anyone there; it’s an aging county with more than its share of self-righteous boomers who talk longingly about the places and times they left behind.

If you can’t fit in there, you won’t fit in anywhere.

Sincerely,

Joe Mathews

Joe Mathews writes the Connecting California column for Zocalo Public Square.

TIME Television

Jimmy Fallon Is Now an Enemy of the State (of California)

Jimmy Fallon
James White—NBC/Getty Images

The move to New York makes sense for him — but what about those of us left behind?

It’s dangerous for a people to declare one man their enemy. It’s unwise for a state to scapegoat one man for its problems.

Nevertheless, I think California should make an exception and declare war on Jimmy Fallon.

Yes, I know. The comedian who is taking over The Tonight Show next week is cute and cuddly. Yes, his musical chops and comic timing make him a consummate entertainer. And yes, his Barry Gibb impression is irresistible.

None of this, however, absolves him of the great crime he has committed against our state: relocating The Tonight Show from Burbank to New York City.

Media stories about the move have missed the point. The Tonight Show’s departure is a blow not merely because it cost 200 people their jobs, or because of what it symbolizes for Hollywood promotion, or because of the expected decline in tourists visiting the section of Burbank where the show was taped.

Fallon’s theft of The Tonight Show robs California of its biggest stage for statewide communication, a rare place where a Californian (Leno) could ask questions of presidents, governors, mayors, and moguls—and all Californians could hear the answers.

We’re missing the depth of this loss because The Tonight Show was first and foremost a forum for movie stars and other entertainers, and because it was a national entity with a national audience. But California is so big, with so many different media markets, that there are few other shows or venues that reach all of us.

Tonight did, and not just because it was based in Burbank for the past 40 years. Johnny Carson, who moved filming from New York to L.A., made the state and its people a character on the show. His successor, Jay Leno, may not have been as funny as Carson (who is?), but he was a bigger part of California life.

This was personal—Leno and his wife are reliable supporters of local charities—but also part of the show. Presidents and other national politicians, on their frequent California fundraising trips, routinely ignored local journalists and rarely held town halls with citizens. But they sat down with Leno, who was often the only Californian who got to question these powerful visitors in a public forum.

He consistently put California newsmakers on the air, and got them to say things that were picked up by other media. Leno’s regular bit, “Jaywalking,” in which he asked people on our streets basic questions about government, was a devastating critique of the state of civics education in California. It also raised the question, still unanswered, of why we trust these citizens to provide final verdicts, via ballot measures, on so many complicated questions.

No one made more news on the show than Gov. Arnold Schwarzenegger, who announced his entrance into California politics in Leno’s studio. Schwarzenegger, about whom I wrote a book, was friends with Leno and was comfortable promoting movies on his show, but he also chose The Tonight Show because it was the best way he had to reach all of California at once. While in office, he would return often to talk about politics, and was often more candid on Leno—where he first disclosed that he wouldn’t oppose same-sex marriage—than with reporters.

Now Fallon, that likable enemy of the state, has taken our stage away from us. The move to New York makes sense—for him. Fallon has Brooklyn roots and was raised in New York State. And his years in Los Angeles, in the middle of the previous decade, were not happy ones. He made two movies that didn’t do well, and “I was probably drinking more than I should have been drinking,” he told Vanity Fair.

What can we do? We could boycott all things New York, but I would miss bagels and New York Times wedding announcements. Some will suggest using tax credits to lure the show back, but we already have too much corporate welfare in this state. Bottom line: If any Californian has blackmailable information on Fallon, now is the time to use it.

Better yet, Californians can get busy on a replacement. Neither Conan O’Brien’s nor Jimmy Kimmel’s late-night shows has big-enough audiences to replace the impact of Leno. Which creates an opportunity for some enterprising and entertaining Californian to come up with a show—or new kind of venue—that can serve as a space for Californians. We’ve lost Tonight. Let’s get started on tomorrow.

Joe Mathews writes the Connecting California column for Zocalo Public Square.

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