tv The Stream Al Jazeera May 1, 2014 12:30pm-1:01pm EDT
needs help to do that. >> we have got updates on all of the top stories on the website, all the day's developments and views, al jazeera.com. hi i'm lisa fletcher and you are in the stream. from sharing your car to an extra room in your house, an industry is exploding. put it's cutting out the middleman. we discuss the rise of the sharing economy right now.
♪ my co-host and digital producer, wajahat ali is here bringing in all of your feedback. waj, one of the largest segments of the shared economy is sharing a room in your home, renting out a room or your entire home, and we were talking about this earlier. it's kind of a weird concept. >> i'm the paranoid son of immigrants. i don't even want my family members staying with me. to have a stranger live in my room, seepsubious, but . . . >> yeah, indeed. which goes back to what we were saying about lending your house to a stranger.
would you do that? or lend your car? or how about leave your dog with someone that you just met on the internet. average citizens are turning to just that. it's called the sharing economy. people with stuff that they are not using rent it to people who want it, and it has evolved into a $26 billion a year industry. everything from a $12,000 handbag that can be yours for an evening for 100 bucks, to a weekend surfboard, 2-hour lawn mower, or your very own dog for an afternoon. it's about monetizing your idle assets. two of the biggest are cars and houses. enter air b&b and lift. people rent out their homes and cars that they are not using. >> it was a little off putting
at first, but once i tried it was great. b&b. >> ashley converted her basement apartment into an air b&b rental that is booked almost every night. >> pros, you meet really cool people from all over the world and maybe pay your mortgage. cons it sucks having to clean up after everybody. >> millions of square feet of office space are popping up all over the country. dave wineberg wents from a growing shared space company called we work. he says it offers him all of the perks with none of the risks. >> it allows you to shift around as you need. and all of the corporate aspects that help the foundation of a
company are still in place, your printers, your internet, having alone. >> not everyone is so excited. in 2010, europe passed a law that made it illegal to rent out a home for more than a month. 60% of air b&b rentals in the big apple are illegal. so do the short-term gains outweigh the long-term risks? we have a great lineup of guests joining us today. out of new york city, the profess of information and operations systemsfounder of changes, a research lab that tracks cultural, sxhik and ecological trends.
and east feastly, a service that allows anyone to cook and serve food to any location for a fee. so did these begin with the creation of craigslist and' bay? >> in a certain way, yes. it's a natural follow up to ebay and craigslist. but these services take a lot more trust. it takes a lot more to be able to get into a car of someone you don't know and have them drive you to another city, so i think the technological progress that we have seen, the rise of social networking, the ubiquity of mobile, all of these things have lead us to the point where we
can have these peer-to-peer marketplaces that ah lou individuals who have skills or assets to convert them into services and trade them with marketplaces. >> scott what was the catalyst? because the internet has been around for a while now. >> i think a couple of things. first of all as arun said, the technology being put in place and the ability to build a platform from scratch in a very short period of time to basically build a marketplace. the other piece that is really, really important is the timing in terms of where we are in the economy. this sharing economy came along at a point in time when we were starting to see a surge with people with a little bit or a lot of time on their hands, unemployment, mortgages being under water, and needing to find ways to generate income and more and more of their property
sitting unused and i think those two pieces together created a moment in time when it was very fertile for the sharing economy so to speak to take off. >> you might think that this sort of person to person commerce is really only taking hold in major metro areas, but it is popping up across the country. the sharing economy, waj, i mean, as we have discovered is imagine. >> yeah, and your community numbers love it. noah he said personality, but i'm intrigued by what definition of community are we looking at?
is this a solid tangible community? it makes me skeptical. >> yeah, we believe that food is more than a tool for nourishment, but a vehicle to create and sustain relationships. so it's like how do we use these amazing technologies and help bridge this on line off line divide. so yeah, real communities are being formed here. as cities get bigger and more people feel anonymous that the notion of knowing your neighbor has decreased dramatically. and in a sense these online services have enabled us to actually -- to know our neighbors even before we have met them. >> he has a really good point there, because, you know, i think that there's -- there seems to be growing evidence that emphasis happened historically that progress and technology has historically sort
of taken us further apart. and human beings need more connection than we have right now, especially in the united states and western europe. so to noah's point i think a large part of what is driving the sharing economy is not just economics, but a desire to form genuine connections with other human beings. >> air b&b was just valued at more than $10 billion. scott is there a gap growing between companies that aggregate these services and the people who are providing them? >> i think that's a really important point here. you know, you have got a split between the more locally focused, community focused or models that work on a smaller scale, something like what noah is talking about, having a meal around a table works better in some cultures more than others.
so that's going deep into community. then you have these services like uber and lift, and air b&b that are going for scale. now they have had a new round come in at hundreds of millionsover dollars and valuation for $10 billion. that's the kind of optimized scale, logistical play. and i look at that as sort of building community on a local level in the same way. >> scott i just want to disagree with you there. our plan is that we want to be in every city in the world, so you can find a meal -- an authentic meal in all of these places, so i don't think it's about just being local or global. you are connecting with these people on a local level, but me getting a tip from a host or maybe even going out with them. whenever i travel i only stay on
air b&b, and i only travel on lift. and i have met some amazing people. you are having brands come and centralize these hospitality or service industries through a decentralized network. >> i have to hit the pause button guys. the implications of sharing beyond making money. and when access trumps ownership like upgrading your rental car airport. >> i could have a mercedes or
of people that have died in the desert. >> and the importance... >> experiencing it, has changed me completely... >> of the lives that were lost in the desert >> this is the most dangerous part of your trip... >> an emotional finale you can't miss... >> we got be here to tell the story. >> the final journey borderland continues... only on al jazeera america ♪ welcome back. we're talking about this idea of the shared economy, probably more aptly called the rented economy where folks make money by renting out their items. people have used their vehicles to sort of become taxicab drivers on the weekends. >> yeah, the average jose can become a micro
entrepreneurer. but there is also controversy. check this out. >> i downloaded the uber x app. it allows you to bypass taxis. you just click on the app and a regular dude comes by and picks you up. my uber x driver pulled up within two minutes of my first order. all right. we are in our first uber x car ride here, and we're going to dumont circle. and so you are a printer and on the side -- >> on the side, i drive. most of my customers are young generation, especially from college. it's cheap. you can go anywhere day one, and i have all of your information on the phone. afraid. >> wait, wait. wait. you said all of my information. how much do you know about me? >> all of your
information, your credit, your address. >> when it comes to taxicab drivers will uber replace the taxicab service in the next three to five years? >> in they don't improve themselves, first of all they have to accept credit cards, because nobody carries cash. second a lot of places that tax i can cab drivers, they don't go, but we do. and thigh use the same expression -- like sometimes you have the same expression. nowadays, people are using like let's go uber it. >> scott, look one of the biggest selling points of shared economies is it will help the average joe. but isn't it squeezing out the lower and middle class? >> if you have a new market
emerge like this. and you resource for labor et cetera, you will have a displacement of people out of the taxicab industry, and hotel industry. there have been studies done out of the university of texas looking at jobs that have been displaced. and that is something that is going to be quite jolting when you have a market growing this rapidly. >> but arun isn't competition good for business? >> absolutely. i think that there are a couple of important points to note here. one is that, you know, this kind of displacement from an old way of doing things to a new way of doing things is sort of a signature of progress. it's something that we see all the time. and the fact that it's being led by platforms like these has a benefit, because i think that as we start to sort of reinvent the way that we get rides from
people, these familiar things, getting a place to stay, taking a ride from one point to another, we're going to have to reinevent the regulatory infrastructure as well. and this wouldn't happen if it was just a bunch of independent people trying to do it. you do need the scale to clear the regulatory landscape, so that kind of peer-to-peer business will flourish. it's definitely the case that we're going to see a lot less traditional taxicab drivers in a decade. i don't expect that the tax cab driver is going to disappear in places like new york. but we'll see a similar shift in people who are vacationing, looking for short-term accomodation. but a lot of the people who are providers today. the hoteliers, taxicab drivers
they are going to connect to the major platforms and start providing their services in that new way, or they will sort of like find other jobs -- >> or they are going to fight it and insist on regulations similar to those they have to conform to -- >> but these regulatory battles -- trying to block technological progress through regulatory obstruction is not a run. >> all right. in. >> i think it's kind of the use of the terminology clear the regulatory landscape is a little bit telling. if you are going to build something that appears to customers, users, and providers who are participating at the bottom level as a true community, that using rhetoric from the bottom level or using business models that say we're going to clear the landscape, and displace people without
thought on how it will affect the community is a something a little bit problematic. air b&b and uber is finding that out now. so they will update the approaches but doesn't allow for the idea that you can just simply step all the way around regulation to carry on -- >> speaking of regulation guys -- hang on just a second, guys. i want to broaden out this idea of regulation a little bit more. and get back to the little guy and gal. so if i was lucky enough to have a $15,000 handbag and i was renting it out for $100 a night and somebody destroyed it or i got sick eating at feastly -- >> that won't happen. >> -- what is my recourse. >> lisa what happens if you get sick at a small restaurant? you know? we don't need to look at them as much different.
i would say if anything you are a lot more connected to the cooks on feastly than the chefs in a restaurant, and it's not the same as mcdonald's or burger king, and even with that, you know, we take security as well as food safety very seriously. all of our chefs are always vetted -- >> but are your regulated and inspected? do you have a license like a restaurant would have -- >> but there's also a shift in what regulations mean. why did regulations first come about? because people were going places and there wasn't technology around, and you need to have some sort of body that says these are good, these are not good. and now a lot of services are putting in democr democratize the system. so it's not that there isn't regulation, the way that things are being regulated is shifting
and becoming a bit more egalitarian and more transparent. >> i agree with noah completely, actually. and i'm not saying that nobody -- nobody is saying that regular lace has to go away, or that the government doesn't have a role to play, but we're blurring the lines between commercial and personal at this point. the lines are blurring because of these companies, and so we have to rewrite the regulations and stop and think, what it is that the platform does effectively on its own, and what are the kinds of things for we actually need to spending public resources having the government come in and inspect? as society we make a tradeoff between safety and convenience and we draw the line somewhere.
it's just that the lines that have been drawn for a full-time taxicab driver or full-time restaurant they don't apply to this new world where you are driving your car occasionally. >> arun here is a trade off according to roxanne . . . but orn the flip side having lived in new york and d.c. most of the drivers don't know where they are going anyway. >> what does the future mean for business? >> on real money with ali velshi, a yearlong series, america's vanishing middle class... >> i'm on a mission, that i have to keep this business going... >> three families struggling every day >> we had to pull the whole retirement fund... >> real stories... real people... real advice... >> you need to pay the water bill, if you don't pay it, we're shutting your water off in a half hour >> how will you survive? >> the stakes are so high... >> america's middle class:
welcome back. we're talking about average joe entrepreneurship, people renting out their idle assets to earn a little extra cash. it has turned into a $26 billion a year industry. those kinds of numbers cause established industries to stand up and take notice. and they infringing on revenue streams or creating new ones? >> we have already seen from companies like the rental car industry. they acquire or partner with the companies that came into the car sharing business early on. so in a way it's an innovation pipeline, and companies are taking risks they normally wouldn't have taken. so i think you could probably see companies like air b&b, yuber, they are going to be completing with amazon, they are logistics companies effectively already.
so you will see a lot more innovation. the biggest companies are not going to stand back and let this happen without them stepping into the market. >> i think -- go ahead, arun -- >> one of the most exciting things for me about the sharing economy is the fact that i think that these platforms can be engines for renovation. and here is how. now -- today when you want to start a business it's sort of a high-risk proposition. it's all or nothing. a lot of people stay in traditional jobs. it takes someone to strike out on their own with a particular personality type. when you can dip your toes in the water, trying out driving a lift car, or selling your stuff on [ inaudible ]. i think this will bring a whole
net set of people into the entrepreneurship landscape, and so the long-term economic growths effects are going to be quite substantial. >> one of the long term effects is community, a. . .. noah, i'm going to use an outdated pop cultural reference, let's take a da lowerian ten years into the future. will be the global definition of the community that you will be interacting with? >> i don't think the shared economy is moving anything. for example in brazil for the world cup, you have people renting out their homes just as
another form of air b&b, so it's spreading not just among, you know, the developed countries, but it is going to be moving both into the emerging markets as well. and for air b&b and other companies it already has. i think in general, they are thirsting for authenticity. now it has taken us another step where we can connect online and have meaningful interaction or services provided off line. >> scott you used the word sticky earlier in the program. and i'm wondering if you think the shared economy services are going to stick and develop the kind of loyalty and repeat businesses that we see in traditional businesses. >> i think to me it seems like a vertical scaling.
you are talking about making these businesses homogenous. and i think you have two levels. one are the businesses that will scale become quite large, and probably, you know, quite generic, but i think the things that are really -- and that's going to appeal to a certain kind of customer, the things that will be stickier on a local level are the way that individual communities and cities develop their own individual economies, and i think you will start to see some separation. air b&b is doing a smart thing right now in the face of what they are facing in portland and new york, and developing a program that is unique to portland. what is going to be going on in rio for the world cup are going to be quite unique, and they will not be something you can
replicate in other areas. >> our community cites darwin . . . >> all right. on that note, thanks to all of our guests. until next time, waj and i will see you online at aljazeera.com/ajamstream. welcome to am al jazeera america, these are the stories we are following for you. from the deep south to the northeast, tornadoes and torrential rains leaving behind a sea of nba owners are now starting talking about the next move for the league. >> also, the taliban's campaign
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