Everywhere, Big Tech firms are working tirelessly to keep governments at all levels on side.
Four years after Toronto City Council legalized Uber, valued today at $76 billion, and de-regulated the taxi industry, it has become apparent to everyone that Uber failed to deliver the efficiencies it promised. Consumer convenience is being paid for in increased congestion, an eroded tax base, avoided safety standards, race-to-the-bottom wages and rights for drivers, compromised accessibility, and environmental damage. Uber's ability to deliver an appealing service is driven, not by the efficiencies it promised, but by venture capital underwriting its true cost. In its attempt to position itself as an essential service, Uber, like Airbnb, has built its business model on avoiding the costs associated with being a good corporate citizen.
While City Council took a decisively less enabling approach with Airbnb by regulating the home-“sharing” company in 2017, a number of appeals financed in part by the $38 billion company have slowed down the implementation of Toronto’s rules. What has become apparent since is that rather than providing efficiencies by making better use of underutilized assets, Airbnb has turned more than 7,500 entire homes into what has been called “ghost hotels,” homes that are being rented exclusively to tourists and guests by absentee landlords. A recent report by Fairbnb Canada estimated that without Airbnb operating in Toronto, the City’s vacancy rate would increase from the current 1.3% to what CMHC considers a healthy 3.%. There is no way around the fact that Airbnb significantly contributes to housing crisis in urban areas with tight rental markets.
Even though Toronto reels from the double assault by Uber and Airbnb, decision makers continue to consider Big Tech a solution to the problems that governments face. When Waterfront Toronto courted Google to come and build a “smart city,” Toronto’s mayor, the Province’s Premier and Canada’s Prime Minister fell over each other to announce the partnership between Waterfront Toronto and Google’s sister company Sidewalk Labs. Sidewalk Labs, headquartered like Google at Alphabet’s global head office in Mountainview California, has since made a mockery of Waterfront Toronto. A report by Ontario’s Auditor General has shown how the tri-government agency has brought Sidewalk Labs to Toronto in what reads like a cooked-up deal between the Prime Ministers’ Office and Waterfront Toronto’s leadership at the time. What transpired since is a long list of faux pas that had Waterfront Toronto tumble into legal arrangements that removed much public oversight and gave Google too much leeway.
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What Google has in common with Uber and Airbnb, particularly when compared to cash-strapped local governments following decades of neoliberalism, are sheer limitless resources. Google’s revenue for the first quarter of 2019 was $40.3 billion U.S. This power imbalance is what steamrolls government agencies like Waterfront Toronto. Bound by rushed legal agreements that were signed without due diligence and democratic oversight, the tri-government agency has effectively become the co-creator and evaluator of Google’s plans for Toronto’s waterfront. As such, the agency’s ability to provide independent oversight has been severely compromised. Accepting $5.8 million from Sidewalk Labs to pay for current and future staff, representing 83% of Waterfront Toronto’s total operating budget for 2017/18, entrenched Google’s influence in Waterfront Toronto even further. The fact that Google provides more money to Waterfront Toronto than the $4.5 million it receives from all governments combined should give us reason to pause. It’s not a stretch to suggest that Sidewalk Labs is paying Waterfront Toronto to approve Google’s plans. Waterfront Toronto has become the de facto development arm for Google in Canada, owing more to Google executives in Mountainview California, than to our own elected governments.