Business | Smartphone apps

The antisocial networks

A bunch of new apps test the limits of the sharing economy

Hurry up and vacate that parking spot!
|SAN FRANCISCO

PARKING can stir intense passions, especially in San Francisco, where demand for public spaces often exceeds supply. Hence the outcry over apps that let occupants of slots on streets make money by alerting other drivers that they are about to drive away. As we went to press, one of the apps, MonkeyParking, was seeking an understanding with San Francisco’s city attorney, Dennis Herrera, who had given it until July 11th to cease operating on the city’s streets or face a lawsuit. Another app, ParkModo, which also attracted Mr Herrera’s attention, is not currently operating in San Francisco, though it says it intends to roll out nationwide in future.

At the heart of the dispute over these services is whether apps should be able to use a public asset to make a profit. Users of MonkeyParking’s service bid between $5 and $20 for spaces about to be liberated by other users. The firm has also launched the app in Rome, another city where parking is scarce. San Francisco’s authorities point to a local law banning efforts to sell or rent public parking spaces. The app firms say it is not spaces that are being sold, just information about their availability, which thus reduces the number of cars circling the streets searching for them.

MonkeyParking wants its app to be seen as part of the “sharing economy”, like those of Airbnb, which lets people rent rooms or houses to others, and Lyft, a ride-sharing service. These also help maximise the use of existing assets. The difference, however, is that the homes and cars are privately owned. Jeremiah Owyang of Crowd Companies, which advises firms on the sharing economy, thinks apps that monetise public assets are “not in the spirit” of the sharing movement.

Even trying to monetise private assets is proving controversial in some cases. Another outfit in San Francisco, ReservationHop, has come under fire for making fake bookings at hard-to-get-into restaurants and then selling them via an app. Buyers are given the false names to use when they turn up to dine. The worry here is that restaurants could lose out if no one buys the fake reservations. Ticket Scalpr is an app incarnation of the age-old business of reselling tickets for popular events, though it says its aim is to cut out conventional touts and let fans swap surplus tickets directly.

There has been a heated debate on Twitter about such arguably antisocial networks, using a new hashtag, #JerkTech. What the apps seen so far have in common is that their creators have identified things that are regularly being priced below their market-clearing level, ie, that at which demand equals supply. And, in Silicon Valley’s spirit of “move fast and break things”, they are conducting a rapid test of the public’s, and regulators’, appetite for shifting the boundaries of what is acceptable business practice. Uber, a taxi-hailing app which has no doubt been called a jerk and worse over the “surge pricing” it imposes at times of high demand, agreed this week with New York’s attorney-general that it would curb its peak rates.

This article appeared in the Business section of the print edition under the headline "The antisocial networks"

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