The valuation of San Francisco-based technology companies has been skyrocketing, with Airbnb reaching a reported $10 billion last week, Uber at about $3.5 billion, and Twitter's market capitalization just shy of $30 billion.
But in each of these cases, the companies and their wealthy investors are profiting from exploiting their communities and refusing to play by the rules. That's a point of pride among the tech titans, who speak proudly of the "disruption" that they create and adopt vaguely libertarian anti-government postures when it suits their interests.
Yet there's mounting real world damage being done by scofflaw companies that refuse to take responsibility for their actions or to use some of their growing resources to help clean up the messes they create. The companies deceptively call themselves the "sharing economy," even though renting isn't sharing, and they're utterly unwilling to share their wealth.
California Insurance Commissioner Dave Jones held a March 21 hearing that included representatives of Uber and other so-called rideshare companies, and representatives from the insurance industry, trying to create a regulatory framework that would protect drivers and the general public.
As we've reported, Uber and similar "transportation network companies" undercut San Francisco's taxi industry without providing commercial insurance for their drivers, leaving both its drivers and those they injure on their own in many cases.
Insurers and regulators dismissed Uber's claim that it's "only an app," an argument used to justify not fully insuring drivers or taking on others responsibilities shouldered by taxi companies, with one insurance industry spokesperson calling on the TNCs to "step up, and be the insurers of their drivers."
Airbnb has a similar business model as what ValleyWag last week called an "outlaw middleman," creating a simple online system for connecting tourists with cheap rooms in San Francisco and other cities, heedless of the fact that such short-term rentals often violate local zoning, housing, and tenant laws, as well as the leases of many tenant hosts.
And when San Francisco ruled two years ago that the 15 percent Transient Occupancy Tax applies to Airbnb stays, the company simply refused to comply and tack on the tax. It recently added insult to injury by saying it would support requiring hosts to pay the tax — an unworkable solution to a problem that this company got rich creating.
With the power to disrupt comes the responsibility for that disruption, something these companies refuse to accept. Twitter extorted more than $50 million from San Francisco taxpayers by threatening to leave town, and now it refuses to even provide meaningful benefits to this community, a condition of that subsidy.
Just because they've found ways to make money, and/or a bunch of rich investors who are willing to lend them the power that comes with their wealth, that doesn't validate their business models or excuse bad corporate behavior. Bullies riding bubbles are still bullies, even if they have cool apps.