Uber's lastest valuation and capitalizing on "idle" consumption goods

According to the Wall Street Journal, Uber, the on demand car service start-up, has received bids in the realm of $17 billion over recent weeks. At this time last year, it was valued at $3.5 billion (~385% YTD growth in value).

To the disdain of taxi drivers, Uber created an cheaper "UberX" option, which "connects users with drivers willing to offer rides in their personal vehicles without commercial registration."Similarly, Airbnb facilitates short-term property renting, so travelers can enjoy the comforts of home while still living the tourist lifestyle in the streets of their holiday destinations.

It is interesting to note the number of (currently) successful start-ups which attempt to help individuals utilize "idle" consumption goods for additional income. Historically, some "necessary" consumption goods like households and cars appeared to have a sunk cost when not in use - if a family decides to go on vacation for two weeks, it has been thought that not much could be done to earn marginal income from the home or their personal vehicle. However, thanks to the power of the Internet and the technological revolution, it seems like that may change in the near future. However, while Airbnb and Uber both share the characteristic of utilizing "idle" consumption goods as a means for extra cash, they both also face the challenge of dealing with lobbying against such behavior. See here and here.

Housing Prices Rise in London

I came across an interesting info-graphic via Reddit's /r/dataisbeautiful that describes London house prices per square foot (by postcode) that can be found here. It seems that only homes/flats for sale were considered in the chart; from what I could tell the data do not include rentable property. It would be interesting to see how a similar graphic would compare to what we see with rising prices in the Big Smoke.

With my limited understanding of socioeconomic history in London, it may interest some to observe significant developments on the East End of the city - transitioning from a home to mostly immigrant working class families to a mixed community with a growing banking industry in Canary Wharf.

Some cite foreign money as a primary source for the general rise in housing prices itself, but that likely does not explain the whole story (or even much of it). As published by The Guardian, a recent LSE study discusses the unintended consequences of land-use regulation and discriminatory zoning rules. Laws that limit how high construction companies can build their ceilings effectively limit population growth and crowd out would-be residents to neighborhoods further from the city.

There clearly is not a problem with demand for housing in or around London, but there certainly is an issue with how housing is supplied. Curbing back on "urban development" laws would be a start at making life more affordable in the great global city I was so fortunate to spend half a year in already.

Markets in Everything: Parking Spot Edition

Via Wired:

"The office of San Francisco’s City Attorney is “evaluating” the app, says Gabriel Zitrin, a spokesman for the department. So far, he says, the city has merely determined that the app is “pretty weird.”

It will be intriguing to see if the developers face any legal opposition in the future, as users are exchanging private goods (in the sense of being excludable and rivalrous) purchased in a public realm (thus, we are only discussing public parking lots).

From the article:

"The rub is that your parking spot isn’t really yours. It’s the city’s. Whereas services like Uber and Airbnb help us make use of things that would otherwise go unused — at least in theory — MonkeyParking merely lets one person grab something ahead of another." 

MonkeyParking is certainly an interesting concept as a means to help those willing to pay more for convenience and time saved finding a parking spot, but it may irk some in its nature of transforming public property into a market - especially when the public property is essentially the good in demand itself.

 I am also looking forward to reading about future Coasean solutions to potential holdout problems.

Bitcoin regulation hits close to home

Via Wired:

"The Ohio Department of Public Safety didn’t return calls and email messages asking them to explain their thinking, but the agency told the Cleveland Plain Dealer that bitcoin 'cannot be accepted as payment for alcohol in the State of Ohio.” Why, exactly, is unclear. The newspaper quotes Ohio Department of Public Safety Agent Eric Wolf as saying that bitcoin’s value fluctuates too much to be recognized as a currency.' "

Variation in purchasing power sure seems like an odd reason to ban the use of an online currency, especially considering Bitcoin's value has been relatively stable over the past month or so.