No, Urban Tech Startups Aren't Transforming All American Cities
If you live in a mid-sized city like Akron, the battles over Airbnb and Uber have likely had little impact on your life.
Few issues in urban tech today are as controversial as the impact of short-term rental startups like AirBnB and VRBO on neighborhood housing. The battle lines are clear: Do these startups help residents earn much-needed extra dollars on the side, or are they so constricting housing supply and raising rents so high that locals are forced to move out? Billions of dollars—and the livelihoods of vibrant communities—are at stake in this debate, and regulatory battles royale have already been waged in cities like Washington, D.C., and Austin. Of course, urban housing isn’t the only bedrock element of city life undergoing rapid and controversial change: Public officials have wrestled for years with how to handle ride-hailing’s destabilizing effect on taxi service, and potentially on public transit as well.
If you live in a place like San Francisco or New York where urban tech startups (and, ahem, national media) are concentrated, these conflicts seem to be reshaping cities throughout the country. But if you dig a little deeper, it’s clear that’s hardly the case. With fewer than twenty new homes built in a city of 200,000 last year, Akron recently abated property taxes for new housing as a way to prop up the construction market. Many of Akron’s leaders would love to have the problem of excessive housing demand that Airbnb has allegedly created.
And although Uber and Lyft are available in almost all American cities at this point, their use is concentrated in big, dense regions. It’s extremely unlikely that the ride-hailing industry’s piece of the mobility pie in a place like Topeka or Louisville comes close to the 20% of vehicle miles seen in San Francisco.
In fact, urban tech innovations—as well as the narrative surrounding the field—disproportionately focus on a handful of cities that are already winning the competition for mobile workers and tourists. Urban tech’s relevance and impact are much more limited in the many mid-sized cities that are spread across the country. Why is that?
Well, for one thing, urban tech startups are often launched by the well-educated young people clustered in thriving “unicorn cities” like New York, Boston, San Francisco, and Austin. They also happen to be the places where venture capital firms concentrate, ready to finance growth (such firms tend to fund startups near their headquarters to keep a close eye on investments and minimize travel).
It’s natural that these entrepreneurs would draw ideas from their own experiences. Tired of lugging around your laundry through the Mission in San Francisco? Enter Rinse. Tough to find a parking spot in Manhattan? SpotHero can help with that. Inconveniences like these are most felt in growing, dense cities chock full of affluent people willing to open their wallets to make their lives a little easier. But they are just that—inconveniences.
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