Airbnb has written to the US Securities and Exchange Commission (SEC)requesting an end to the rule that currently prevents companies from giving shares to anyone other than employees or investors. The missive is in response to a public request for comments on plans to relax legislation for companies in the sharing economy: Airbnb wants to be able to give shares in the company to people who put their properties up for rent on the platform.
Airbnb’s reasoning is straightforward: the company does well when its hosts do well, and granting a percentage of its capital to property owners early on can help to align the incentives between companies like it and the people who participate in them, to the benefit of all. Other companies, such as Uber or Juno, have previously proposed similar schemes, but dropped them when confronted by the legal complexities involved.
The idea now being raised by Airbnb hopefully reflects changing ideas about ownership and value sharing: the vast majority of successful companies only make their founders rich, along with those who had the good fortune to receive shares, often arbitrarily. In many cases such structures are unfair to workers and others who have played a key role in their company’s development and activity. From a philosophical point of view, the idea of treating customers well makes a lot of sense, but not if it requires underpaying or imposing poor working conditions on employees. In recent years, many companies have cut back on employee benefits in a bid to boost profits and keep the shareholders happy.
Balancing the needs of shareholders, the workforce and customers, has been the subject of much comment: when Jack Ma took Alibaba public, he said his priorities were clearly “customers first, employees second, and shareholders third.” Shareholders’ money is important and necessary for growth, but a company is only sustainable in the long term if its customers are satisfied, and only satisfied employees can convey that satisfaction to its customers. If you apply austerity to the point that your employees enjoy virtually no benefits, work under difficult conditions, are paid below the market rate and are constantly being tempted by other companies, they will convey a very different attitude toward their customers than if they are happy and feel valued. If you want your employees to treat their clients well, start by treating them as what they are: a fundamental asset. If you force them to travel on the cheap, to stay in bad hotels or pay them salaries that do not reflect the company’s success, what are you telling them you expect from them?
The example of Jeff Bezos, one of the richest people in the world, and yet whose employees are so badly paid that some of them claim food stamps, illustrates one of the most complex problems in the world today: the management of inequality and wealthy corporations benefitting from taxpayers’ money to alleviate the poor conditions of their staff, which it assumes can be replaced at any time. As a client, do we want to pay for great products and services if it means exploiting the people who provide them? Where’s the sense in philanthropy if your employees don’t earn enough money to be able to eat? How can we be comfortable ordering in food or other services that are delivered by Glovo or Deliveroo employees who are clearly overworked, underpaid and who must come out in all weathers at all times of the day and night just to make a living? Should such business models be encouraged? In many ways, we miss the model of a few decades ago, when people worked in a company because it gave them a sense of belonging. The current model may be marginally more profitable, but in terms of equity and sustainability, it leaves much to be desired. Value sharing initiatives such as Airbnb’s, models that reward workers for the value they generate, dynamic capital distribution schemes among all participants an enterprise, along with the search for sustainability and fair remuneration suggest that the obsession with profitability at any price and unsustainable principles and unethical models are doomed to failure. Or perhaps all this is a sign that some companies need to rethink a few things.
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