Support Skift’s Independent JournalismMake a Contribution Now
Source: San Jose Mercury News
By Dana Hull
May 10–Looking for a place to stay, dinner to go, or a car to drive? A new economy is emerging in the Bay Area and around the country with a different, more convenient and often cheaper way to find what you need: sharing.
A wide array of local startups are angling to make a business out of matching those who have with those who need. There’s Airbnb, which helps travelers rent out spare futons or rooms from private parties and has emerged as a popular alternative to hotels. Getaround and RelayRides make it possible to rent cars like “Jimmy’s Toyota” in Mountain View for $8 an hour. When dog owners go on vacation, they can use DogVacay to find a host willing to take Fido into their own home.
The goods and services being bought and sold are familiar, but the way the marketplaces work is brand new. Location-based technology in smartphones often makes it possible to find what you need in your immediate neighborhood. And social media offer reviews from fellow users, creating a community of trust around the transaction.
This sharing economy, sometimes referred to as “collaborative consumption,” is disrupting traditional industries, from hotels to car rental agencies and restaurants. Gobble, which is based in Palo Alto, bills itself as “peer-to-peer lasagna” and connects aspiring local chefs with customers willing to pay for home-cooked ethnic meals. The service is currently available in Peninsula cities such as Atherton, Los Altos, Palo Alto, Menlo Park
and Mountain View. Many of its customers are time-pressed families with young children.
“We wanted to make ordering healthy, home-cooked food as easy and convenient as takeout,” said Gobble CEO Ooshma Garg, a 24-year-old Stanford graduate. “Chefs that could never afford to open a restaurant are now earning a living off of Gobble.”
The chefs include people like Alisa Chotibhongs, who earns rave reviews for her traditional Thai food, and Gigi Abdalla, who found high demand for dishes like her Ballotine De Poulet, which is deboned stuffed chicken served with mushrooms, pearl onions and rice pilaf. Each dish is priced separately; Chef Alisa’s Spicy Drunken Tofu Noodles is $15.95 per portion. Gobble delivers to homes, offices and soccer fields for a flat rate of $3.95.
Executives at many of the startups say smartphones and social media are driving much of their growth as consumers become more comfortable forming relationships and handling monetary transactions online. Gobble, for instance, allows users to sign up for an account via Facebook and review meals for others. They can also “share” their Gobble purchase on Facebook, which promotes the local chefs that are cooking the meals to Facebook friends.
“We’re at the very beginning stages, but we’re big believers in this space,” said Tod Francis of Shasta Ventures, an investor in startups RelayRides, TaskRabbit and LiquidSpace. “All of these companies started on the Web, but mobile is the accelerator.”
Another hot startup is TaskRabbit, an online marketplace that allows people to outsource errands and odd jobs to people who bid on them. Line-sitting at Apple (AAPL) stores is a common task, as are runs to Costco and Ikea. More than 4,000 people work as TaskRabbits nationwide, and thousands more are on a waiting list. TaskRabbits must be at least 21 and undergo a vetting process and criminal background check.
Treasure Island resident Regina Aguilar became a TaskRabbit as a way to earn spending money while she stayed at home with her young son. She’s done all kinds of jobs but also used TaskRabbit herself when she needed someone with a truck to help her move furniture.
“I had a mom who needed a keg dropped off at the liquor store because she was about to go on vacation and didn’t have time to do it herself,” Aguilar said. “I was in the neighborhood so it was easy for me to do.”
Most companies in the sharing economy make money by facilitating transactions and charging a fee. TaskRabbit, which has raised $25 million in venture funding, typically charges a fee equal to 15 to 18 percent of what the poster pays to have the job done.
“Our big vision is to disrupt the global labor market,” said TaskRabbit founder Leah Busque, a former software engineer at IBM. “When you think about work, most people think about working 9-5 in an office, for someone else. This empowers more and more people to freelance, set their own schedule, be their own boss.”
Alexandra Saavedra, 23, graduated from Santa Clara University in December and joined TaskRabbit six months ago as a way to make extra money.
“If you have a free evening, weekend afternoon or are simply unemployed, TaskRabbit fills a void,” Saavedra said. “Not only is this creating jobs, but it is solving this all-too-common problem of people just not having enough time to get everything done.”
Others say the recent economic crisis has made many consumers creative at doing more with less.
“The recession forced people to look at how they live, and Americans live pretty wasteful lives,” said Shelby Clark, a startup veteran and founder of RelayRides, the nation’s first peer-to-peer car-sharing network.
“There’s something like 1.2 cars for every driver in the United States, and a lot of those cars are sitting idle.”
Thilo Koslowski, an automotive analyst at Gartner who has studied the car-sharing phenomenon, predicts that 10 percent of the urban population in the United States will embrace car sharing as an alternative to vehicle ownership by 2016.
“Young people would rather have a smartphone than a car, and ownership is no longer the only way or the best way to satisfy your needs,” he said. “But this goes beyond just sharing cars — it’s a whole trend. People are taking a hard look at how much they pay for things, and there are alternatives.”
Many of those alternatives focus on “authentic” experiences, like staying with a local host instead of a hotel. Chris Caldeira, a graduate student in sociology, lives in San Francisco’s Castro neighborhood.
She became an Airbnb host in December and rents out a room — with a coveted private bathroom — for $119 a night, much less than many downtown hotels. Caldeira’s space, known as “Castro Spot” on Airbnb, is booked months in advance. Guests love Caldeira’s deep knowledge of the city — she steers tourists away from Fisherman’s Wharf and toward favorite local restaurants and walks.
“It’s an act of trust on both ends: I’m opening up my home to a stranger, and a stranger is staying with me,” Caldeira said. “But there’s something really special about that, and there’s a really strong community feel to Airbnb. I love meeting new people, and I love sharing my favorite parts of San Francisco.”
But as the sharing economy moves from the margins into the mainstream, a host of oversight and regulatory issues loom. Though Gobble’s chefs are cooking food in small batches and from family recipes, Gobble requires them to cook in or rent space from a commercial kitchen in order to comply with health codes.
Another big issue is taxation. San Francisco has announced plans to make sure its hotel tax — currently 14 percent — applies to any room rented there, whether the Four Seasons or a spare couch in Bernal Heights. There are currently about 4,600 Airbnb hosts in San Francisco, and guests have typically not paid the tax.
Faced with a raft of such thorny issues, San Francisco Mayor Edwin Lee recently announced the nation’s first “Sharing Economy Working Group” to take a comprehensive look at the movement’s economic impact and emerging policy issues. Lee and his staff want to nurture and promote the new startups, which are creating jobs, while protecting the tax base and assuring health and safety standards.
“As the birthplace of this new, more sustainable ‘sharing economy,’ ” Lee said in a statement, “San Francisco must be at the forefront of nurturing its growth, modernizing our laws and confronting emerging policy issues and concerns.”
Contact Dana Hull at 408-920-2706. Follow her at Twitter.com/danahull.