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Disruption’s double standard / Tech firms get rich but street vendors get fined

September 19, 2017

: .theguardian – excerpt

In a region where companies like Uber and Airbnb have cashed in on unauthorized cabs and boarding houses, vendors trying to make a living selling food without a license face police crackdowns

For a region that champions entrepreneurship, the San Francisco Bay area can be tough on hardscrabble business people trying to make a go of it.

For street vendors, legal compliance – even for someone delighting children with cold treats on a hot day – is no mean feat. A document explaining San Francisco’s process for obtaining a mobile food facility permit looks like a parody of government bureaucracy, and requires as much as $1,500 in application and licensing fees.

Those challenges were on display in a viral video captured on 9 September of a University of California, Berkeley, police officer citing a man selling a local favorite (bacon-wrapped hot dogs) outside a college football game…

“This is law and order in action,” the officer said as he removed $60 in cash from the wallet of the vendor. The money was taken as “evidence of the suspected proceeds of the violation”, the university explained amid an outcry from many of the millions who watched the video.

Meanwhile, the region’s tech industry has fetishized certain entrepreneurs’ willingness to “disrupt” the petty regulations that hold less savvy businesspeople back. While the former Uber CEO Travis Kalanick’s wallet was stuffed with billions by venture capitalists eager to invest in his unlicensed taxi cabs, Beto’s wallet was emptied for no greater a violation of the law.

What’s ironic about the disconnect between these entrepreneurs and the ones who are able to cash in with VCs is that so many of the internet era’s most successful startups have succeeded by monopolizing a previously informal – and frequently illicit – sector of the economy. Think Uber for unlicensed cabs, eBay for garage sales, Airbnb for unauthorized boarding houses and subletters, and StubHub for ticket scalpers.

Small business owners still trying to make a go of it in sectors dominated by those tech monopolists find themselves facing what can feel like an uneven playing field… (more)

Unfair Business Practices

Ford GoBikes are  the poster child for a new disruptive industry being propped up by realtors in order to gentrify neighborhoods. Corporate officers backing the GoBikes admit they are doing this, and that they rely on government entities allowing them to take over public property to succeed. The games are playing out in our public arenas almost weekly as our officials put the stamp of approval on them. (See the agenda for the September 19, 2017 SFMTA Board meeting, Item 13, to see SFMTA use their regulatory role to pick winners and loses.)

Disruptive ideas that would die are sustained through public/private partnerships, such as we discovered in our investigations of Ford GoBikes, Motivate, and Related Holding Companies, LLC. The bikeshares were losing money until Related rescued them and devised a plan to partner with governments to supply public streets for their private enterprise.

Many unicorns, (well-funded start-up companies pushing failing business plans), turn to real estate and other juicy investments to sustain their failures long after they should have died and the paradigm shifts as money follows money regardless of where it came. As long as the returns are there investors are happy to throw money at bad ideas. It is up to the public to stop these policies and programs by demanding through investigations into these programs.

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