Airbnb and Uber are shaking up New Orleans

In the city of ​laissez les bons temp rouler, the laissez faire capitalism of sharing economy titans Uber and Airbnb has hit some serious snags.

Both companies have sparked heated debates in New Orleans recently, as the City Council​ voted to keep them under tight regulatory reign. This comes at a time when New Orleans is hitting its post-Katrina stride; tourism is peaking at close to re​cord numbers, and the city's nascent tech scene and movie industry are drawing national a​ttention.

From its origins as a raucous port city effortlessly mixing dozens of native and imported cultures, to a liberal enclave today, New Orleans has long welcomed ev​eryone from tourists to social outliers, be they freed slaves in the 1800's or drag queens today.

But behind this unique brand of Southern hospitality is an unspoken caveat—one perhaps best summarized by the homespun signs of local artist, Dr. Bob, that can found in every neighborhood bar: Be nice or leave. New Orleans is a welcoming place, but guests are expected to return the favor by reciprocating its friendliness, and learning, then protecting, the local culture.

The highly individualistic ethos of the so-called sharing economy and its burgeoning corporations is now butting up against this traditional social framework, injecting both promise and concern into a city deep in the process of remaking itself.

As New Orleans approaches the tenth anniversary of Hurricane​ Katrina, many here are taking stock of some of the less savory developments of the last decade. Those include a charter school takeover that is being investigated for civil rights abuses, a real estate boom that push​ed up rents, and a growing sense that the city's long-time residents are being traded out for wealthy out-of-towners.

The city is shaping up to be yet another battleground for privatization, set to mimic the c​lashes that have played out in New York and San Francisco—only this time, the key arena may be the culture and tradition inherent in Southern hospitality itself.

The "sliver by the river," as it's known—the group of neighborhoods that lean against the curving banks of the Mississippi River—has some of the the highe​st population recovery levels, despite sustaining serious damage during ​Katrina. It also has a high concentration of the city's Airbnb listings. A rough estim​ate puts at least half of the available Airbnbs in New Orleans in that sliver, especially in the Marigny and Bywater neighborhoods, which have become bywords for gentrification in recent years.

"The majority of people wouldn't care about Airbnb, but there are people who take it to the extreme and rent out five whole houses," said Miles Swanson, president of the Faubourg Marigny Improvement Association, one of the most vocal neighborhood groups against short-term rentals.

Many of the property owners don't even live in town, he said. "You have complete dead zones where it's people just coming to party on the weekends."

Despite receiving unfavorable terms from city regulators, Airbnb and other short-term rental listings have proliferated. Es​timates put the number of active Airbnbs in the city somewhere between 600 and 1,000 and, around Mardi Gras and other big festivals, when hotel capacity maxes out, Airbnb has been crucial in meeting demand.

The boom in Airbnb rentals prompted months of heated debates about the practice—which has always been illegal—in City Hall. In July the City Council vote​d to strengthen existing regulations to help make enforcement easier, but there are no signs of a resulting crackdown.

Detractors of Airbnb say that without regulation and enforcement, short-term rentals will have a systematic effect on neighborhood integrity and housing affordability, as opportunistic landlords flip full time housing in favor of more lucrative short-term rentals.

Neighborhood and bed and breakfast associations have o​rganized against the full-time, informal hotels—the so-called "bad actors" of Airbnb—that they say are fracturing the same neighborhoods that bounced back strongest after Katrina.

In some popular areas, there could be five or six Airbnbs on a single block, prompting neighborhood safety concerns. "It's the full-time residents that are the eyes and ears of a neighborhood," said Michelle Kimball, Senior Advocate at the Preservation Resources Council. New Orleans' long history of high c​rime rates and a distrusted police​ force have helped to forge closer ties between neighbors, who often keep an eye out for each other. "If that population base begins to erode then the character and stability of a place will also begin to erode."

In a city like New Orleans, loss of local character could also affect the city's prized tourism industry in the long term.

Residents like Lisa Romanienko are feeling the pinch. Her landlord became one of the first to receive an official citation for short-term rentals after he stopped taking Romanienko's rent in an effort to evict her and her disabled Polish mother, in order to convert her apartment to the fourth full-time Airbnb unit in the building. Romanienko, a long-time resident of the Marigny, says her building was overrun by drunken tourists. Even though the courts ruled in her favor three times, she has since moved away from New Orleans to avoid the risk of a similar ordeal in a new apartment.

"I'm all for the informal economy and I've devoted my life to chronicling how cruel government regulations can be," said Romanienko, a sociologist and self-described anarchist who now teaches at Keene College in New Jersey.

Still, she advocates for stronger government regulations against "bad actor" Airbnb hosts like her landlord. "We cannot have a completely lawless neighborhood," she said. "Too many people have invested too much time."

For some renters, like Sam, who declined to use his real name to avoid conflict with his neighborhood association, Airbnb has been a boon. He runs a non-profit in New Orleans and rents out the other half of his duplex to Airbnb guests, which, he says, tripled his income compared to renting to long-term tenants. The extra cash has allowed him to stick to his non-profit work and live comfortably.

Even so, he's a reluctant host and draws a direct link between Airbnb and gentrification. "Who it's really hurting is the renters," he said. "I fully understand gentrification and what it does to communities. It pushes poor people out of neighborhoods. I acknowledge my hypocrisy."

What Sam calls hypocrisy, others call a natural outgrowth of the sharing economy. The cab industry contends that Uber will cause their businesses to collapse by sucking up wealthier customers.

"Uber is only interested in the premium fares," said Sheree Kerner, owner of N'Awlins Cab, "which is going to leave us with the financially-strapped." Kerner, along with others in the industry, says that the high-tipping business traveler and tourist fares help balance out the single-digit fares to the grocery store or laundromat.

Nearly one year after then-Taxicab Bureau Director Malachi Hull sent a cease-and-desist letter to Uber for recruiting local drivers, the city council voted to allow Uber​ Black, the company's black car service, to operate.

The decision followed months of intense opposition from the taxi and limo industry and organized social media campaigns by Uber.

With the vote, the Council added tight restrictions: Uber must use licensed chauffeur cars from a fleet that owns at least two stretch limos, and any Uber fare must be at least $15, which the co​mpany says is among the highest in the country. Regulations still bar Uber X, which allows anyone with a car to sign up to be a driver, but Uber is pushing for change and has been openly recruiting drivers for months.

Uber's entrance into New Orleans comes at a time of widening economic inequality. As of 2013, New Orleans' population was still less than 80 percent of pre-Katrina l​evels. Recen​t data shows a gradual wave of single, educated white people—the kind that cities crave and that also tend to be the biggest evangelists of new technologies like Uber and Airbnb.

African Americans' share of the city's population has fallen from 67 percent to 59 percent while the white population has risen from 27 percent to 31 percent between 2000 and 2013, according to The Greater New Orle​ans Data Center, an independent research organization.

Single households jumped from 33 percent to 42 percent over the same period, and the share of those with a bachelor's degree increased from 26 percent to 36 percent—certainly a positive development, but not one that has made a dent in the poverty rate since the start of the century. New Orleans remains well above the national average for those that have no access to a car and spend 50 percent or more of their income on housing.

The changing picture can be spun to look like a healthy recovery or a disconcerting trend. "If you have rising home costs, more housing cost burdened people, and rising inequality, well, that's becoming a city of haves and have-nots." Dr. George Hobor, the Senior Research Fellow at the Data Center, told me.

The power of the sharing economy, advocates say, is that it can speak to both sides of the equation. Sharing economy services offer people new ways to make money and provide premium options for those willing to pay.

Tom Hayes, Uber's general manager in New Orleans, echoes the message being broadcast from San Francisco: technology can optimize our lives and offer everyone the chance to be an entrepreneur—an especially promising pitch in a notoriously inefficient city like New Orleans.

"The silver lining to the storm was that you got to hit the reset button on a lot of things," said Tom Hayes, Uber's general manager in New Orleans, who moved to the city a month before Hurricane Katrina hit to work for the contro​versial education nonprofit Teach for America.

Today, New Orleans runs just 36 percent of its pre-Katrina bus and stree​tcar lines, leaving taxis—which many complain are unreliable—to fill the gaps. Hayes says services like Uber X, the company's car-sharing service, could help better serve the city's needs while also providing jobs for drivers.

Taxi company owners like Kerner counter that, after complying with years of costly city-​mandated reformsand regulations, the industry is just asking for a fair playing field. If Uber X is allowed to operate, say taxi industry advocates, the service would be able to undercut taxis, who have to manage overhead costs and are bound by regulations and constant vehicle inspections.

Former Taxi Bureau Chief Hull says that a loss of conventional taxis to Uber would hit the poor—a significant segment of the population and, historically, the source of much of the city's beloved culture—hardest. "Low income, minorities and senior citizens. These are the groups that are most dependent on taxis and are going to get hurt in the long run." He predicts that surge pricing will be a huge issue in this event-driven, hurricane-prone city. He also notes the fact that Uber runs on a smartphone and requires a credit card excludes much of the same population that depends on for-hire transportation.

Uber says customers can use a computer browser to order a car and pay with PayPal instead of a credit card, but on the issue of how it can actually serve the poor it passes the buck. "I would say that, as a country, we need to do a better job of providing people with updated ways to pay," said Hayes.

While it's too soon to tally the effects of Uber Black, it seems to have had a limited impact so far. The service started rolling in the Crescent City on September 19 and fares have been regularly running up to twice the normal rate for taxis, if you can get a car at all. Uber won't disclose how many vehicles it has on the road, but one Uber driver estimates there were around 12 to 20 cars participating as of early October (compared to around 1,500 active taxi licenses).

Robert Daspit, owner of Lagniappe Chauffeured Services, a traditional limo outfit and one of the few companies running Uber Black, describes having a rocky start with the company. He says margins so far have been slim—averaging about 30 percent with Uber jobs, compared to 50 to 60 percent on regular jobs—and sign-on benefits were weak. "That 20 percent Uber takes is a big gash," he said, referring to Uber's cut of every ride. "I would think that if you were a new kid coming to school, [you would] waive that 20 percent for the first ninety days because [you] know [you're] about to tear up our cars. They offered us basically a tank of gas, a hundred bucks," for every car that signed up with Uber.

Daspit has been running his own business since 2012 but, as a second-generation livery man, his history with the industry goes back further. "I kind of have a debt to pay to keep my father's name alive," said Daspit, whose father died when he was young and known as someone who always offered a helping hand, even helping friends start competing businesses. Carrying on the family name is a story not unfamiliar in such a tradition-driven city—Kerner's family history in the industry has continued since the 1930's, even after her brother, a driver, was murdered by a passenger in 2011.

"I've tried to support Uber as much as I can," said Daspit. But he draws the line at opening up the market to the company's ride-sharing service. "I'm totally an Uber person, but if they allow Uber X in, it will be a big problem," he said.

"Everyone is for capitalism and making money, but you have to have a sense of compassion and pride for other people making money," said Daspit. "You can't just come in and be the big man on campus and step all over everybody. You've got to be a little more ethical in coming in."

But in a city that has managed to retain its charismatic approach to life despite its long history of periodic devastation and renewal, many locals seem sure that the new influences in this increasingly expensive city could just as quickly be washed away.

Sam, the ambivalent Airbnb user, perhaps put it best: "The hipsters won't stay after the next hurricane."