Earlier quoted context omitted.
And one of the interesting questions for me is "where does 'cheap' come from"? In the case of WhatsApp, it came from telco monopolies overcharging for a particular use of data. I'm certainly ok with that. And I was initially excited about Airbnb, rideshare, etc, because some of the cheap comes from finding underutilized resources (an apartment that happened to be empty for a few weeks, people who were going somewhere…
> "Privatize the gains, socialize the losses" is undeniably a lucrative business strategy, but it's not one I particularly want to celebrate. This doesn't describe anything that AirBnB or Uber are doing. Taxis were expensive and horrible because governments created artificial scarcity via taxi medallion systems. They were "socializing the gains", to build off your aphorism. Uber re-privatized the gains by circumventi…
But taxi medallion systems served a number of purposes. One of the big ones is reasonable regulation of taxi and driver quality. Another was keeping supply and demand balanced at a level where people didn't have to cut corners on things like taxi maintenance just to survive, which helped keep taxi fleets safe. A third was setting up a reasonably livable wage for career taxi drivers. A fourth, at least in some cities, was creating a de-facto retirement system: since drivers had dibs on medallions, they could invest and create an asset that would fund their retirement. A fifth was creating a revenue stream for cities to that helps pay for regulatory and road costs. Those are off the top of my head; I'm sure there were more.
Now instead a lot of those costs are borne by other people. Uber has shifted capital and maintenance costs entirely away from cab companies and on to random people desperate enough to drive for Uber. Losses are no longer the problem of the cab company, but individuals. When those drivers go bankrupt, society bears the costs. When those drives use public assistance [1], society bears the costs. When they retire and we make up for their lost retirement savings, society bears the costs. And that's to say nothing of the direct and indirect societal costs that come from more traffic.
Similar issues come up with Airbnb. E.g., if you thought you were living next to a neighbor and now are dealing with an illegal one-unit hotel in your building, you are experiencing a loss. If the apartment you rent out is trashed because somebody is running an illegal business out of it [2], you experience significant loss. When rent goes up because people are illegally converting housing to de-facto hotel stock, that is a socialized loss with privatized gains.
I'm not even saying this is necessarily worse. As with the bankruptcy system as a whole, it can sometimes be overall better for society to pay for something. But we shouldn't sweep this stuff under the rug.
[1] E.g., https://uberpeople.net/threads/you-may-qualify-for-governmen...
[2] https://www.cnbc.com/2017/09/01/airbnb-nightmare-homeowners-...