Airbnb is perpetuating – not solving – an income divide
Unlike Uber, Airbnb is designed – quite obviously – for people who already have property to make more money from it, writes Colin Horgan.
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Just when Airbnb thought it had escaped Canadian headlines, an Alberta politician thrust both the platform, and the money that can come from using it, back into the spotlight.
Derek Fildebrandt, a United Conservative MLA, has apparently been renting his Edmonton condo on Airbnb while the legislature isn’t sitting. The thing is, the condo is a residence the Alberta government gives him a stipend to rent, as Edmonton is not his home riding.
According to a tweet he wrote Thursday, he collected just over $2,500 on the rental in eight months. Hardly a king’s ransom, sure, but also money many Canadians wouldn’t turn down the opportunity to make, if they could.
That last point is the crucial one.
Stories about a recent study from McGill that found the majority of money from Airbnb rentals is collected by a slim majority of property owners were right to focus on the growing unaffordability of housing.
But to understand that properly, we need to recognize this: Airbnb is not part of a ‘share economy’.
On the contrary, Airbnb is designed – quite obviously – for people who already have property to make more money from it. Unlike Uber, which exploits manual labour, Airbnb is for folks earning a different kind of capital.
In 2015, Chase released a study it conducted on over 200,000 randomized, anonymized banking customers who earned income from the platform economy. Among its findings, the study showed that 21 per cent of those sampled participated in labour platforms (eg. Uber), 71 per cent participated in capital platforms (eg. Airbnb), but only two per cent did both.
This puts to bed any notion of a collective ‘share economy’ – there are two distinct industries at work.
Importantly, the study also found that capital platform participants made more money than their labouring counterparts. On average, Chase found the monthly median income for capital platform users was (USD) $3,218 versus just (USD) $2,514 for those earning money from labour platforms.
Effectively, it suggests that those at an advantage are continuing to gain more of an advantage, and those who are initially less advantaged are not catching up.
In context of figuring out how to regulate something like Airbnb, these kinds of numbers are important, but just as crucial is understanding that it is not a benign ‘sharing’ app, but a platform that perpetuates the creation of capital for a particular class of people. Which is fine; it can be that. But we should be clear on what that means.
Whether someone is making $2,500 in eight months or tens of thousands a year, we should remember one thing: Airbnb is perpetuating – not solving – an income divide.