my most recent book is looking at the impact of technology on jobs in the labor force and and really looking at the future of what's going to happen to our economy as it becomes more and more high tech oriented i gave an interview a few days ago to a media outlet and and afterwards the interviewer said the since you really scared me so i apologize in advance if i scare you tonight but i should say there are two chapters in my book about solutions or reforms and what we need to do in order to orient our economy in the right direction so it is i try to balance looking with a very realist viewpoint of what's happening to the economy with what we ought to do  you know i look at both the traditional economy as well as what's known as the sharing economy and how many people have heard the term sharing economy with see a lot of people here and i talked earlier today at the university of washington and at the labor center mostly students and very few students had turned to term sharing economy but they had heard of her and air b n b and such so the sharing economy which sometimes is called the gig economy on demand economy peer to peer economy has all these names for it and what it really is about is you know they have these websites and apps now where a seller of a service or a producer of goods can connect directly with the customer and there's no middle person you're just you know you're being connected directly so that's why sometimes i think the best name for is really a peer to peer economy but it is kind of a wonky sort of name and but there's you know it's not it all sounds so rosy and the people who are really pushing this the visionaries and gurus so to speak are will tell you that it's really a great thing but there are some definitely some i think if we put the right regulations around a lot of this there are some good that can come out of it but there are some real problems with it now that we have a few years to look at how it works so so i'm looking at both the traditional cami and this sort of gig economy in my book you meet people for  from the traditional economy like chris young an auto worker in tennessee he works in a nissan plant and chris works alongside a lot of other workers those workers are wearing the nissan shirt because they work directly for nissan chris doesn't get to wear the nissan sure because he doesn't work for nissan he works for a contractor and as a contractor even though he's doing the exact same job as everybody else he's getting half the pay he has no safety net he has  no job security to speak of he could be let go at any time he's what's known as a temp worker and in fact chris has been working at this job as a temp for about four years and so they have a new name for these sorts of workers perma temps how about that for using language in a way to obvious get what's going on some of these permit temps have been working five six seven the record i've seen is eleven years working as a temp worker and in the aftermath of the great  recession about a fifth of the jobs have been created the new jobs are temp jobs so in the in the great recession we lost a lot of the the good jobs as they're called you know they had benefits decent wages  some degree of of job security eat till the deal jobs just disappeared and they're being replaced by a lot of these types of jobs you also meet people like jimmy marina now how many people heard of google buses and facebook buses and all these sorts of things in the bay area you know that it is quite astounding to see these leviathans parking on the corner of you know in the mission district and you  know if you or i were to do what they do you'd get a two hundred fifty holler ticket for blocking traffic they just sit there you know and wait to fill up with tech workers and take them down into silicon valley so we've heard a lot about these buses b haven't heard about are the drivers of these busses these drivers don't work for google or facebook they work for a contractor and again they don't have any safety net they don't have job security and jimmy marina he begins his day at five thirty in the morning he doesn't end until nine thirty at night doesn't get to see his children in the morning because he's gone before they get up he doesn't get to see them at night because they're in bed by the time he gets home to get around federal laws about how long your working day can be the company makes jimmy and his and his colleagues take about four hours off in the middle of the day and they also don't allow them to get another job during that four hours and a lot of these drivers live too far away to go home during those four oh so they basically hang out in the parking lot practically indentured servants to this job that has these sorts of requirements and doesn't really reward them very well you also meet another type of worker in my book  mandas was a dunkin donuts worker she worked in new jersey at a dunkin donuts franchise in fact she she couldn't make it work financially for herself by working at one don't don't condone his franchise so she worked at three of them in one of the franchises would give her enough hours because a lot of these companies the way they work is they say if you work twenty five or thirty hours whatever then you get benefits right so they just make sure everybody is under that threshold so she couldn't make it work working at one of them so she worked at three of them she just drove up and down the jersey pike working an overnight shift one time a night shift another time a day shift just you know up and down up and down in order to make sure she didn't run out of gas she kept a can of gas in her car and she pulled into a walk convenience store parking lot about five thirty in the in the morning one morning to get a little shut eye before her next shift no one knows quite what happened was somehow that can of gas overturned her dunkin donuts uniform in the car in the wall parking lot even as the c e o of dunkin donuts was earning twelve million dollars a year in salary and bonuses and all sorts of things so these are the sorts of workers that you meet in my book and you know when she died there was actually kind of an it precipitate a national discussion about what's happening to jobs in the united states that workers would have to work at three different jobs like this three different part time jobs in order to to piece it together for themselves you know some people very sympathetic others peep people saying well she was dumped i mean she should've kept a can of gas in her car that anyone knows that that's not a smart idea and you know there's maybe a degree of truth to that but it misses the point that when you have workers that are operating at such an edge at such a close margin that any small error can cause such tragic consequences that's when we have to really think about what's happening to jobs both the quality of jobs and the quantity of jobs so now into this context and keep in mind this is the context coming out of the great recession in the middle of this so called recovery that that's where we see this sharing gig on demand economy plugging in and this is being sold to us as the type of economy that we're all going to plug into eventually to one degree or another the idea that you know you'd work for a company like up work or task rabbit or hoover or air b in order to monetize your assets as it as the gurus of the sharing economy call like to call it monetizing your assets meaning you'll rent out a room in your home you'll you'll use your car to become a taxi driver you'll rent out some of your equipment that you have at home your drill or photography equipment and you'll rent those out to people and that will bring in some money and you'll combine that with working part time maybe for a dunkin donuts  franchise and maybe combine that with you know some other form of work maybe you know even under the table work the the idea that we're going to piece things all together that the there's just sort of just around silicon valley just a given that you know that a lot of the good jobs are disappearing companies like facebook which you know they bought instagram which replaced kodak kodak used to employ fifty thousand people at facebook employees about ten thousand people instagram even less and so that because they're able to use automation in algorithms in others to create high degrees of labor efficiency and productivity they're able to do you a lot more with a lot fewer workers so there's going to be fewer  u they have about six million freelancers on their platform and those freelancers are people who do things like designing graphic logos you know computer specialist data specialists who can design programs computer programs they can crunch numbers for you there are lawyers on there who can write a legal brief for you the key with them is that pretty much anybody who lives anywhere in the world can do this work and they can just email you the product they can drop box it for you know you know they got to be near you geographically in other words and so you can see that you know on this platform you go and you look and there's the u s workers they're all saying you know i'd like to get paid about forty to fifty dollars an hour for what i do and then there's the workers in europe you know they're saying the same thing canada australia and then there's the workers there from india thailand philippines and they're saying i want to get paid two to three dollars per hour to do the same job and they're very skilled in these places you know they've had great training these places so basically workers the united states are competing against workers in developing countries a do is you know you as an employer or a business who wants to hire these people you post your job in the workers go and they all bid on this job it's an auction but it's an it's not an auction which the highest bid wins it's an auction in which the lowest  wins it's just a race to the bottom that's what these these platforms are putting forward same with task rabbit and some of the other labor brokerages they you know have similar dynamics built into their labor platforms task rabbit is something where you know if you want to hire someone to put together your ikea furniture or paint a fence or rake some leaves or pick up your prescriptions you can do that by hiring people on the platform now all these people who are working on these platforms like a lot of the workers in the traditional county they're contractors they're freelancers so they're not getting any safety net there's no you know  security wages can be quite low some of the workers are complaining that they're not even making minimum wage on these platforms but there's also something really revolutionary and disruptive i mean the of the sharing economy love that word disruption that to them they wear that as a badge of honor they believe they you know it's good to disrupt government regulation and to disrupt companies who have been around for a while and old models of business and such so you know if you think about it when you work at a job in the you know regular employee job at the in the traditional economy you report to work and you're there from nine to five or eight to four whatever your hours are and you're paid for every minute you're there at that job you're paid to go to meetings with your coworkers you're paid to you know if you need to go somewhere to get some research or meet with someone outside the office you're paid if you're even just standing around the water cooler with your co workers that's where some of the best most interesting creative ideas come from right water cooler conversation you're paid for that you're paid for rest breaks you know there's just a lot of things that you do that you're paid for the entire time but with this gig economy work you're only paid for that moment when you're producing that report when you're producing that graphic file when you finish the project if you have to you know have some meetings in order to figure out you know how to complete that project you don't get paid for that if you need to get some extra training in order to complete that project you don't get paid for that you know it's sort of like imagine is russell wilson is that his name the quarterback  see it's is it you know russell wilson only gets paid when he throws a touchdown pass and all the other plays he doesn't get paid for that all the training is to get paid for that is if a chef and a top restaurant only gets paid by the meal it's all piece work it's taking us back to a conception of work that is pretty new deal like in the one nine hundred century you're also not paid to look for the next job you know even when if you have a gig lined up and you know you know you might take you two weeks to complete a gig where you need a job lined up for when that gig is over so you're not paid to look for that a lot of these workers spend a huge amount of time looking for the next gig in fact it's almost a full time job it's one of the chief complaint is like i'm always looking for the next job you're not paid if you show up for a gig with someone you know has paid you to come to your home and do whatever and they spaced it out and they're not there sorry you miss out on the wage you also as a contractor and a freelancer you know in a regular job you pay your share of social security and medicare i amounts to about almost eight percent and then the employer pays their half but as a contractor for that freelancer you now have to pay the employer's half so that's another almost eight percent that comes out of your wage for these types of workers and really when you start putting it all together i mean a lot of the workers say initially i like the flexibility and sure having a flexible work schedule is a is a beautiful thing but on the other hand when you're costly running from job to job and the jobs don't always pay that much you don't have any safety net you know you're you're paying your own social security medicare you've got a you know you don't have access to an organization that has resources you don't have the support of a of a of a team all these sorts of things suddenly are on you that's why i mean you know lay a bust from task rabbit and some of these others they like to say you're the c e o of your own business right well last time i look are making barely minimum wage and they actually make sure they have their own safety net and they have a lot of other things that these workers just don't have and so you know this is a pretty radical  think of as work in this country that somehow this would be an ok thing to be going from gig to gig piece work to piece work you know that you'd be the c e o of your own business and somehow think that there are going to be some real knock on effects to not only what happens to that individual but to their families who depend on that income and you don't know from month to month how much you're going to make for a lot of these workers you can't even count on it so  i really think we have to think more thoroughly about this at whether this is going to be a good replacement for the types of jobs we have in this country for decades you know the types of jobs that came out of the new deal and had safety nets and had some degree of job security because you know the other component of this is what happens to the broader macro economy our economy is built seventy percent on consumer spending that's what drives our economy well not if not enough people have enough money in their pockets to buy up all the goods and services that the businesses are producing what happens to the economy starts having ongoing recessionary pressures pulling it down so this is you know could be particularly jarring to what we think of as the middle class the american dream which is you know it has been one of the main selling points of the the glory of america to the world the world's you know people try to come here to get a piece of that american dream and so we're just we're just letting this sort of fritter away in many ways and not realizing that it's not it's cannot just could affect our economy but it's going to affect our geo political standing in the world to let this go you all looking a little depressed right now but  on so let's look at just a few of these companies some who you have heard of before mover and air b n b had a little experience with those companies here in seattle so are we in san francisco hoover is a rather interesting company that really i think has revealed something about americans that this company has gotten as far as it has breaking all sorts of laws not paying its taxes you know and strictly because i mean granted taxi industry is not very good i live in san francisco the neighborhood i live in out near the beach it could take thirty five forty minutes for a taxi to show up so i totally understand why you know what that's about but here's the thing you know you can't just have a company whose stated mission is to flood the streets with their cars and drivers in order to they're in a  competitive battle with taxis with their competitors ride share competitors lift others you know travis county stated mission is to flood the streets with cars you can't just expect that that's going to happen and not end up with other impacts such as congestion have you noticed the traffic is getting worse in seattle as in san francisco as in los angeles even more in los angeles new york city i mean this is represents america's big fantasy that we can all have our own private chauffeur that shows up to pick us up whenever we want and we don't pay very much for and yet we're going to choke on our car convenience because it's great when you hit that happened and goober shows up in five ten or fifteen minutes compared to a taxi but what happens when you get in that car and now you're sitting in traffic fifteen twenty twenty five minutes longer because there's so many ride sharing cars on the road i mean the traffic in seattle isn't only caused by r but claims it has ten thousand drivers in seattle done all driving at the same time obviously but you know several thousand of them could possibly be especially during busy times you know rush hour and what have you i mean how could you not just throw a few thousand cars on the roads and not expect that you're going to have increased congestion increased carbon monoxide there goes your goals for climate change right this is what's happening to streets this is happening in san francisco where i live the traffic has become brutal and everybody is complaining about everybody is talking about it and somehow they're not connecting it to we have this company who's decided to flood your streets with cars so that you don't have to very long and so they can be taxi and they can beat a lift in the in the competition that they're in with them you know you really have to think of your street as a public utility and you have to think of you know you have to all these different types of viewers i think ride sharing is here to stay i think actually with the right regulations we could make this technology work in finland they've taken the uber tracking technology and they put it into public shuttles and you you know you get into the shuttle and you tell the driver where you want to go and other passengers in the van have done the same thing and the driver can plot a course in real time using the technology they don't have to follow a specific bus route and so you know it's it's like having a vanpool in the public transit system this is the types of things that we can do with this technology if we think of our streets as a public utility if you start having things like congestion zones like they have in london where you know at a certain time of day you could put quotas about how many types of vehicles can be in downtown if that's where the traffic problems are you know you can have a certain amount that are public vehicles of you know people like yourselves who are driving certain amount ride sharing certain amount of taxis certain amount of trucks making deliveries and you could track all these vehicles and make sure that your streets are just become flooded with the cars of this one company who's decided that you know they're going to make a lot of money by b you know making you wait less time for a taxi type ride so there's this huge environmental impacts i mean it credibly to me travis county runs around saying hoover is good for the environment you know because you're all going to leave your cars home and you're going to quit driving your cars and maybe even get rid of your cars and you're just going to use his service when he has the monopoly that he wants i mean nothing makes frightens me more than the idea of leaving the entire public transit system in the hands of travis county i mean you know think about it also from the the standpoint of public transit the way a public transportation system works is you have certain bus lines that are the busy ones they make the money they're profitable because the a lot of people use them those ones subsidize the other bus lines that don't have as many people and that don't make money and if you can have a comprehensive public transit system you have to have both kinds of lines you can't just have the  profitable ones well what happens if travis county decides you know what we're just going to send drivers up and down the busy profitable routes and we're just going to poach passengers from the fact he's already created a service called pool that is wants to do just that so this is going to drain money from your public transit system and you know they've they've done studies as you can imagine of who's using  what kind of people and what the studies are showing is that fifty percent of the people using if they didn't have to use instead they would use public transit they would bicycle or they would walk so how could we possibly think that this company is going to somehow be green when the people who are getting into a car belching carbon monoxide are not using other greener forms of transportation instead it's just not real world so that's the environmental that his drivers full time drivers are making one hundred thousand dollars per year i mean didn't pass the laugh test and yet the washington post and all these other outlets were just you know it was like reporting off the  release and then you know somebody started writing with these writers and asking them for pay stubs and there's a whole trajectory there was a report put out by the alan krueger reportings a princeton economist a very renowned economist and somehow he put his name on this report that all relied on data and you know i mean relying on oprah's data is like letting the tobacco companies do their own tests this company plays fast and loose with the facts like saying they are right their drivers are making one hundred thousand dollars per year so they you know they rode with some of these these drivers and lo and behold they're not making any more than taxi companies some of them are saying actually they're not even making minimum wage after you subtract their considerable costs for driving you know imagine making a living driving and the cost to your car and how your car gets beat up doesn't last as long you know they have to replace their cars much quicker much quicker as a result of driving for this platform so you know i mean the krueger report actually came out with a number saying drivers are making anywhere from seventeen to thirty dollars per hour depending on the city and so when you start doing the math it's like ok well and so that means they'd have to be riding like ten hours a day three hundred sixty five days a year in order to make one hundred thousand dollars so so their own report killed the first mover myth and then but then on top of that leg they said when you start adding in the driver's expenses you have to subtract that  this particular krueger report which again was reported by the media at face value they didn't do a whole lot of analysis of it it turns out that they collected the data in october of two thousand and fourteen they released the report in january of two thousand and fifteen in time for the conference of mayors trying to impress all these mayors about you know all these middle class jobs they were creating and then two weeks after that conference they cut the drivers wages in in or in forty eight cities by forty percent this was not the first time that they had cut the driver's wages they cut the driver's wages in two ways one they decrease the amount per mile that the drivers receive and then they increase the amount that overtakes of every fare when you were first started out they were taking five percent of every fare and now they're up to twenty five to thirty percent depending on the city the type of service who are service that you get in these sorts of things so they are squeezing the drivers into in these in two ways and you know they're doing it because they're in a price war with taxi and lift and they're they're mounting this tax this this price war on the backs of the drivers this is absolutely clear now that krueger report actually you know i mean again i think you have to be really suspect with data but you can be sure that the data they tell you is the best at it that it is right so it's they that report showed that eighty percent of our drivers were part time about half were driving fifteen hours or fewer and about half of them only lasted a year on the platform and after a year they left because they got tired of putting up with hoover and it's tough and it's price cuts and it's wage cuts and all these sort of things and you know a lot of people say to me you know i talked to my cobra driver and he says he likes it pretty good and what i say back is ask that driver how long he's been driving for because the clear pattern that you see is that the longer you've been driving for and the more hours per week you drive the less you like it and that's telling i mean if these jobs were such a good jobs and paid so much why would drivers be leaving after year and why would they drive it only a few hours  profile you know tied into the top stablished democrat and he's now the chief p r flack for member so he came here to speak against the seattle city council proposal that would create a clause i way for these drivers to have collective bargain because they are con you know these drivers a contract so they don't have a safety net they don't have health care there's no job security to be cut off this platform at any time so they can't contractors are allowed by law to form a union so the laws doing some creative things to try and give them some collective bargaining rights so here's a top democrat who came here with an anti labor stance to speak against a collective bargaining bill think about that in the middle of  presidential election you know this is a battle for the soul of democratic party in my view because the democrats may they may not always followed through on their convictions in their statements about being pro labor but they at least were pro labor and now we have a top democrat who is speaking against a collective bargaining bill that is to me is something that needs to be watched to see how far that infects into the presidential campaign is hillary clinton going to adopt this kind of stance you know specially you know  ones she wins the nomination which i assume she will though you know the very same as people are trying very hard you know what will happen there what kind of position will she take for collective bargain for these sorts of drivers now the drivers are figuring out that one they can be cut off this platform at any time i mean there is flexibility that's one of the things the drivers say they like about driving for or you can do it when you want but here's the thing it's not so clear cut just recently three hundred  fifty drivers in los angeles were cut off the platform without notice just taken right off why because their acceptance rate was too low their acceptance of accepting rides that when they get paying by  a passenger they say no why would they accepting so few rides their own accepting about fifty percent because a lot of the rides are for very short rides for a mile or two and with the street so congested you're sitting in traffic for fifteen twenty minutes to go a mile or two and you know you're not going to make any money on that ride so you know someone pings you you just say no now if you are if these drivers truly are the c e o s of their own drivers business that's as  know the sharing economy leaders try to say that these are your c e o s their own business if you're really to c e o of your own driving business and you can't refuse a ride that you know is going to lose your money what's the point of being a c e o of that business you know and so the idea that somehow hoover is not an employer which is the legal issue at question and there's a lawsuit now a class action lawsuit about a bunch from a bunch of drivers that will be heard in  in the federal courts next june the standard is how much control you exert over those workers and here's a company that is cutting them off the platform basically firing them because they're not accepting rides that they're going to lose money on that to me says this is an employer where the when that lawsuit i don't know but you know these are the types of things that i hope the court will look at but drivers are figuring out that they only make money during surge pricing of every how many people surge pricing if you hands with mover and ride sharing they have this mechanism where when the demand for rides is higher than one of drivers on the street the price can shoot up two three four five as high as ten times i've seen and so people who take a nuber early in the evening you know they pay twenty twenty five dollars for a ride when they come back later in the evening for the exact same ride they're paying two hundred fifty dollars for that same ride and they didn't realize that you know sometimes the drivers don't even know when they're apologetic like i'm sorry i don't know why the ride is so much you don't take it up with good luck with that you know you can't get on the phone you just email them and maybe they'll respond you know customer service is not their forte  and so you know some of the surge pricing happenings for example during hurricane sandy you know people were trying to flee lower manhattan because the surge of water that was coming and suddenly the price of nuber goes up eight nine times well that's actually called price gouging it's actually illegal to do that in the middle of a crisis and the attorney general of new york really went after them in sydney australia there were there was a someone who went bizerk in a cafe took hostages they had guns people getting shot suddenly the price of a tube or jumped to one hundred dollars in australia as people were trying to flee now apparently is now realize that this is terrible for public relations and so they have sort of rein that in a little bit at least during the crises injured during emergencies but during like holidays new year's eve and all these sorts of things it's in full form mode and so the drivers are figuring out we only make money during this surge pricing thing so how do we how do we fit manipulate this thing so i'd like drivers in san diego they started getting together about sixty of them at a pizza hut on a saturday night and they all logged into the app so the algorithm thinks ok this is how many drivers we've got on the app and that's on the platform and they figure out the price and then they all order pizza and beer and they log off creating an artificial shortage of drivers and they wait a certain amount of time while they're eating their pizza and beer yagur them shoots up the price the price surges and then they go back out and drive and you the customers pay for this this this price surge this is you know what the drivers are doing understandably because they're not making money unless they do these sorts of things so you know i mean i could talk forever about the background checks are inadequate the lack of insurance for these drivers they don't have the standards of the taxi industry i mean say what you want about the taxi industry in the poor service but there's a lot of regulation around those companies  regulation to has been crafted over many years in order to protect you the consumer and suddenly this new ride sharing industry is not being held to the same standard i just don't understand it i mean you know you go over overseas you go to france for example and they look at uber and they say this is a taxi company we don't care that you connect the drivers and the passengers in some newfangled way you know you're not a technology company even though change its name it's originally into technologies you're a taxi company and you must follow the same rules as the as the taxi industry here in france the two heads of in france are sitting in jail right now awaiting trial because they've broken the law so many times and just tells the driver just keep driving we'll pay your fines will pay if your car gets impound they just keep breaking the law and they're doing this in country after country in south korea there's a warrant out for the arrest of travis callan it could be steps foot in the country for breaking the law i mean the rest will world looks at this company and they say it's a taxi company it's only here in the united states we're like oh my god what is it what do we do with this thing how do we regulate this thing is it technology is it a taxi is it some new flying saucer what is this thing how do we regulate it and so we you know i mean we've made this thing so complicated that now we have two different sets of laws for the same basic service i mean there was a time when taxis didn't have meters in them and then when they put meters in did that make them a technology company oh it was still a taxi company still providing a safe there is so why seattle san francisco city after city doesn't just simply say you need to follow the laws of taxis i don't understand or if you're not going to do that then remove the regulations off taxis because i mean on the flip side i don't know why taxi companies in drivers here have just taken in my view just kind of lying down i mean in france the tires in the streets the you know they do all sorts of protests to prevent this they you know and that's what makes the public officials pay more attention and throw the heads of who are in jail because you know there is consequences if they don't but here in the u s even though taxis in the medallion is being extremely devalued i don't know why the owners of medallions are suing seattle for not enforcing its laws and devaluing the value of that medallion because that's exactly what's going on but for some reason you know everybody here is just going passive around these things were also doesn't pay taxes the livery taxes that taxi companies have to pay on and on on and so i'm going to move on from move or we could talk more about it maybe you know again i want to say that i understand that it's awfully darn convenient to hit that app and have that car show up you know a lot of people think that app is beautiful wow but you know what that's not what's beautiful about you but that's not what is because if you are hitting that app and the car was taking forty five minutes to show up you wouldn't be so thrilled with that app you would be proud of frustrate like go out and still stuck down in rivendell and sixty fifth with a heck what is that car going to get here innovative about uber is they flooded your streets with cars that's what you have to remember that's what makes it possible for that car to show up in just a few minutes because there's so many drivers buzzing around trying to to make some money that's all it is the an add on let's talk about air b n b a little bit air b and b is a good example of a company of a service that started out as a good idea you know the idea that you know someone as a spare room in their home they want to rent it out make some extra money and in the middle of a bad economy you know seems like a pretty good idea what could be rolled out of that too many people who you know weren't supportive of that but that's not what air b n b is anymore it has morphed drastically as a company it has become a company a service that has been completely invaded by professional real estate operatives those professional real estate operatives  are taking over that platform using it to break laws to get around laws you know most cities have had laws on the books for many many years saying you can't rent out your home your house your property for less than thirty days the reason why you have laws like that on the books is to prevent your housing stock which is where local people have to live right you don't want your housing stock to suddenly be rented out to tourists because it could be no place for the locals to live so that's why they put those laws in place now along comes a service like craigslist some others it allowed these laws to be broken a little bit but it was happening at a level that was small enough that you really didn't have to worry too much about it dangerously hurting your housing stock now along comes error be and be and rips a giant loophole in the law because it allows professionals to rent out their homes or rent out their buildings rather and not get caught because it's happening at such a massive level that it it's floods the ability of city officials to track it and that's what's going on what do i mean by professional real estate operatives well you know in san francisco for example i've interviewed a lot of people who are in the book and you know this one apartment building four units and what the owner of the building was ninety six years old she actually lived in the building and every one of the building got along really well as a community this part is of sam's it's gone thinking of it's called north beach it's also little italy the old italian communities the old fisher communities that used to live there and lived in these apartments for decades rent controlled apartments a lot of the people in their seniors disabled people in some of these apartments so the owner dies wills it to her niece in southern california niece immediately issues even actions for everyone in the building get out she's invoking a loophole called owner occupied move and you know she's going to move into the building and not being the rental business anymore us and that's one of the you know that's one of the reasons you can even people you know she sewed bases say i'm going to move up from southern california into this building where you can't live in all four units well i have some family members from other parts of the country and they're going to move into the other units you know and so by the time you know that's what she's saying you can't prove she's wrong and by the time you realize it's not happening the tenants are gone no one's there to to monitor the build and see if they actually do that so that you victor everyone in the building and they turn it into an air b n b tourist hotel and one street there were six buildings in which everyone in the building had been evicted one of those buildings you know you can see outside the four doors lock boxes telltale sign that that building has been air b b because you know you go on the website the anonymous website you make your reservation you show up at the address you let yourself in with the key in the lock box you stay there when you leave you put the key back in a lock box there goes your community there goes i mean that building they had the four lock boxes used to have four families in every one of those units they're all gone now it's just pete tourists coming and going pulling their roll away suitcases through the realities of north beach this is happening in building after building throughout the city another type of professional is property managers you have people now who are buying houses in san francisco and they have no intention of living in these houses or renting them out to locals they're going to rent them to tourists there was a leaked call well banker memo that it was basically a memo to people in the real estate industry saying korea are studies if you rent your property out on air b rather than to a local resident you can double your revenue that's the profit incentive that we're talking about here so these real these property managers are managing the properties of absentee owners  and just renting them out on air b n b there goes your housing stock now it's true as heir b b you will say hey look we're not the cause of the affordability crisis in seattle or san francisco it's true there's many causes for that but when you have a city  like seattle and san francisco where the vacancy rate is you know maybe two to three percent and you have air b n b that has in the case of seattle about thirty five hundred homes on its platform in san francisco twice that many in new york city twenty five to thirty thousand homes on its platform those homes are eating into the small number of vacancies they are literally the straw that is breaking the camel's back in terms of creating the affordability crisis and or adding to the affordab crisis so you know in seattle air b n b recently they're on a publish the blitz right now we just did it in new york they released same they're saying now we're sharing our data you know they're cherry pick data  and they're trying to say in seattle eighty percent of the whole homes that are being rented are from people who are living in those homes but there are other people that go to the air b n b website and they can do what's called scraping the web site they can suck the and they can do their own analyses and they say ah that's not who is gone your platform in fact in seattle forty percent of the of the the of the listings of the hosts have multiple listings one listing in seattle has fifty eight listings one prop one host has fifty eight listings about half of the rest of the revenue from air b n b is coming from from hosts that have multiple properties and so you know it is true that there are the so quote regular people as air b n b likes to call them who are benefiting from this platform but it's also true that the professionals are on there and a major major way and here's the thing air b knows it because they have access to their data more than anybody and with one swipe of the computer mouse they can say ah you're renting out multiple properties you can't do it on our platform they could take those people right off the platform they can take off the hosts in new york city that have over two hundred properties but they don't why obviously it's money it's profit there i venture capital funded start up there you know desperate for market share they're trying to spread around the world they're heading towards their i p o they want to blow this thing open to something that's bigger than facebook and in order to do that you know they're not going to stop that steamroller for a few you know one of the guys in this building that i talked about earlier in san francisco he had advanced stage of parkinson's disease and he got evicted they don't care about that chinatown language minority people getting evicted the landlords are using what's called nuisance the vixens in chinatown they were trying people because they were hanging their laundry outside on their balconies these are the types of excuses they're using they use excuses like we're going to rehabilitate your billing really sorry but you have to get out here's a couple thousand dollars to get on your way these are rent controlled apartments they'll never find a place in san francisco at that rent they have to get moved out of the city but they don't even tell that the tenants in again these are a lot of seniors disabled language challenged tenants by law you're allowed to move back into the building once the rehab is finished at your at the rent you were at when you when you were kicked out so i mean the landlords are showing no shame air b n b is showing no shame air b n b could get rid of these sorts of people off the platform it's obvious who they are in san francisco there's actually a law and portland to where the host by law have to register with the city and even though that's the law only ten percent of the hosts in san francisco registered air b n b could say to the hosts look there's a law here folks you've got to register if you don't do it you can't be on our platform just that simple they don't do it i mean the air b n b website is a virtual advertisement for criminality that's what it is because it's there is this go ninety percent of those a silicon valley venture capital billionaire who happens to be a major investor in air b n b so the tentacles of venture capital has reached into city hall and so there's virtually no enforcement even though they try to say oh we're working as hard as we can we just don't have the resources now it is true that without the data from air b n b it's very hard to to force any of these laws and that's where you know air b and b s absolute refusal to give up the data again it shows i mean you know they like that incredibly they say we're sharing economy we're the trust in belonging company i mean the you know brian chesky the c e o is got all these little speeches he likes to give about he said one point where like the blue helmets you know un we arrive to save people we're saving the middle class david plouffe has also said we're saving the middle class and yet the really easy things they could do to really make this platform work for the regular people and to kick off the professionals they're not willing to do that's who this company is that's why i call these companies the share the crumbs economy not the sharing economy oh here's the other thing that's really beautiful you know air b n b also doesn't pay its hotel in occupancy taxes they haven't they've just started paying it they'll tell you we're there in thirty four thousand cities around the world they're now paying taxes in about twelve of those cities their pay was san francisco is now one of them it was clearly there was steam building behind a popular effort to rein in air b n b an action resulted in a ballot measure this past november proposition f that lot lost after air b n b spent ten million dollars to defeat it's the most money that's ever been spent in a local election in san francisco so air b n b will will say you know you know look we we're the trust and belong in company we really do want to be regulated we really want to pay our taxes but you know we're thirty four thousand cities and use so many laws and it's just you know it's going to take time to figure out all the local laws and all these sorts of things but we are going to get to it we promise well at the rate they're going to take about sixty years to get to those thirty four thousand companies but here's the thing  you know let's say you're dupont and you want to set up a chemical plant out near seattle or let's say you're boeing and you want to move from seattle to chicago or you know you're microsoft and you want to open up a facility somewhere else you can't open up that facility and tell the local government we'll figure out the taxes that we owe you later on we'll figure out the local regulations later on when we've had a chance to do it i mean are asserting this new corporate right to stop parading first and figure out the details as they go along i mean just imagine what it would be like if all these corporations did that i mean how can we let these companies just get away with  because they say we're technology you know i mean we're americans so infatuated with technology that we are just turning a blind eye to what's happening beneath our noses it appears this  so and i meet somebody i think is that these companies are still new and people are figuring out what beyond the convenience they give us what are the downsides and so you know hopefully my talk tonight in the book and some other things will help us to to figure out these impacts in a way that will will help us figure out you know how can we regulate this because i do believe that you know at the at the core of air b n b of any other things there is something good but you have to put the right regulations right it's an old old story they were always corporations doing good you know that initially who did a combination of good and bad things and you have to regulate them to get the good and get rid of the bad it's an old old story but you know these companies seem to have particular ethos about them calling government broken and you know these laws are old i mean i should say this is kind of funny too i'm actually an air b n b host and i saw an interview between brian chesky the c e o and katie couric and she was asking about things like fire and safety and other things having to do with their b and b and he said oh we've got two hundred people who i've hired to look after these sorts of things and make sure everything is going to be safe and she said what about you know  fire codes and things like this he's like oh you know those laws are so nineteenth century i mean this is the new economy where we have self rating systems and the rating system between the hosts and the people staying there that's what's allowed us to regulate you don't want to put government regulation around this because we can do use the rating systems to self regulate so i thought well let me try this out let's see what it's like to become an air b n b host so i got on my computer i took photos of my house inside and out within fifteen minutes i was live as an air b n b host no contact from these two hundred fire and safety people no even attempt to contact me and say you share your house isn't going to burn down you know nothing it was just i mean it was i was both impressed and appalled that it was so darn easy i mean you know i could have put photos from better homes and garden you know and they're saying that's how my house looks like i could have put a castle in in in scotland and said this is my home you know it  till somebody stay there and report like it's actually no it's all cracked up to be folks how would they know i mean i could've been jack the ripper how would they know they don't they just trust that the rating system will take care so in addition to when when katie couric was asking about fire fire codes and stuff he said we don't need any of that katie because you know what we do we have besides a rating system we give all of our hosts a free smoke and carbon monoxide alarm like well that sounds pretty cool i don't so i get on my computer and try to order my fire and smoke my smoke and carbon dioxide alarm and that they send me to a website and i click on the link and that sends me to an e mail to someone over here and they send me over their logs story short there was no smoke and carbon dioxide alarm instead what they said was we've run out and but what we will send you is a card that you can write like scape routes for your guests if case of a fire and you can tell them how to call the fire department and you can so you know this was the the t wenty first century version of fire and safety codes on air b n b you know it's just a tragedy waiting to happen and in fact these tragedies have already happened just recently there was a young man who wrote about this was someone who loved the b stated many times his family booked an air b n b and there was a swing set tied to the tree and a tree and the father got on the swing said thought i'll give it a try you know families having a good time it was turned out to be a rotten tree the branch broke came down hit him on the head killed him instantly air b n b said wow we're really sorry about that but you know what we are just a technology company setting up a medium between you who's the renter and the person renting it we have no liability here this is happened another fellow rented out an air b n b turned out there was a dog there the host never said anything about a rottweiler the dog completely mangled his arm you know stripped the skin right off he had to go to the hospital plastic surgery eventually air b n b again said we're really sorry about that we feel badly but then we can find nothing in our terms of agreement that allows us to assume liability in this situation until this person contacted the new york times you started writing about it and suddenly air b n b found something in their terms of agreement to assume liability for this guy's medical bills hoover also has had trouble in this regard you know in the they do their background checks they say it's the best in the industry and in a matter of fact the district attorneys of sam cisco in los angeles are suing because they charge you the draw of the passengers two dollars used to be one dollar now it's two dollars for every ride as a safety fee to fund the background checks and they say the best the best in the industry but in fact they don't do fingerprinting that's considered the gold standard in background checks they refused to do it the taxi companies do fingerprinting for the most part they don't do that and they say it's not necessary and so it's a couple  years ago new year's eve in san francisco there was a driver who took a right hand turn into a cross walk plowed over a family killed a six year old girl sophia lu badly injured her eight year old brother and her mother and air b n b immediately said we're really sorry it's a horrible tragedy but we have no liability here this is driver is a c e o of his own driving business and he is the one who's responsible think about this you order a pizza from pizza hut that driver is covered by commercial insurance from the moment he or she gets in that car delivers your pizza and gets back to the restaurant completely covered hoover you don't know what kind of covers they have some states have started implementing some programs insurance it's not clear what anything covers and here's the thing the driver of that car that killed sophia lou he had been arrested in florida for reckless endangerment with a car for going  hundred miles per hour on a city street trying to pass someone and who was background checks failed to come up with that so