The "Sharing" Economy: Issues Facing Platforms, Participants, and Regulators A Federal Trade Commission Workshop #00545

Submission Number:
00545
Commenter:
Beth Klobuchar-Oliver
State:
Illinois
Initiative Name:
The "Sharing" Economy: Issues Facing Platforms, Participants, and Regulators A Federal Trade Commission Workshop
Airbnb has been a Life Saver, and has provided an opportunity to grow as a person. Not only have I been able to continue the lifestyle I had before the economic crash, it has afforded me the opportunity to start a new business, and to meet new people. When I learned of Airbnb, I took the time to prepare an ROI,(return on investment) encase our own city would have a problem with the recent openings of the Airbnb properties with our community. I also wanted to know for myself what the economic value was, and what the impact was for our community. Folks it is Simple Math. After interviewing my guest who came for a weekend, the average guest was prepared to spend between $500 and up to $1000 for their weekend.(majority $500, after their transportation to arrive) This was the room, and all their activities. Keeping it simple, I will work with $500 as our Weekend Vacation dollar amount. A one night stay at the Hilton (average $150.00) Weekend $300 Person traveling with $500 is left with $200 to spend in and around our city. The Hilton paying 20% tax on this guest gives the city $60.00 (not to mention the tax breaks the Hilton is given from the city, so this figure is probably much less per guest.) Airbnb Host When the traveler stays at my Airbnb, it is approximately $164.00 for the weekend. I am taxed by the Federal Government, which gets $32.00 of the earnings. This leaves me with $130 dollars to spend in my local economy. It is also taxed 9% in my local economy and the city government gets another payout of $11.70. Host is Happy, with $130.00 City Earns $11.70 Airbnb Guest The traveler is left with $336.00 to spend in our local economy. Adding that with the earnings of the host the new total to spend in the local economy is $454.00 The total spend to the local economy is $466.00 Let's take 10% away and give it to taxes on the products and services purchased during their stay. The city now receives an additional $45.40 for the travelers stay. Let's combine this payout with the host payout of $11.70, the new total to the city is $93.20. The Local Business The local business now have the opportunity to earn $372.80. The local business are also paying taxes to the local government, so let's give the city government another payout at 10%, which is $37.28.(The city Government has now received a total of $130.48 for this traveler visiting for a weekend. Entire Monetary/Economic Value for the city when the traveler stays with an Airbnb is $ 130.48 Entire Monetary/Economic Value for the city when the traveler stays with the Hilton is $40.00 The most important part to this discussion is the happiness and well-being of those who are earning, and for those who are saving in this shared economy. The wealth is spread to the business owners, and to the local city government. For a city to grow and thrive, it is all about the small business owners, their neighbors and the local government. If tourism is a big part a city's economic growth,then it is opportunities like Airbnb that will let help with the success of that community and the people who live there. It is only corporations like the Hilton, and other large Hotels who are against this movement. Frankly it's time for the people in our nation to be winners and have opportunities. There is room for everyone to Thrive. If a corporation is threatened by this, it's probably because they don't want to lose the millions and billions they have taken from us all. Remember Airbnb probably would not be a thought had it not been for the crash in 2009-2010. And who caused this crash to happen? Thank you Airbnb! Sincerely Beth Klobuchar-Oliver