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Airbnb and the Real World

The home-sharing service Airbnb has grown quickly, and it’s no surprise why: those who rent from the service are able to enjoy lodging considerably cheaper than many hotels, while the renters are able to make a quick buck. But, like Uber, the new peer-to-peer service is running afoul of the establishment, especially in blue cities. Maybe the biggest of the blues, New York City, has a law on the books prohibiting renting one’s apartment out for less than 30 days if the renter is not present; Airbnb users risk fines in the thousands of dollars for using the service there.

No doubt, NYC’s hotel industry—like DC’s taxi industry—is lobbying hard against what it sees as an upstart challenger unburdened by the same taxes and regulations the rest have to mind. In response, Airbnb said in a letter to NYC Mayor Bill de Blasio this week that, if allowed, it would pay $21 million in city and state taxes, “on top of—not in place of—lodging taxes the city already collects from hotels.” And, as the Washington Post reports, the firm has some more numbers it would like blue cities to see:

[Airbnb published a roundup of studies] on the service’s economic impact, with numbers that Airbnb will no doubt be touting regularly: Between these nine cities, Airbnb says, the site’s users are staying on average nearly twice as long as typical tourists, and spending about $300 more per trip – figures the company has illustrated for mass consumption here. […]

“The real point is not ‘What is our impact on hotels?’” Turner says. “The point is how is this distributing spending across the city differently than the traditional tourism industry does? It’s going to local households directly; it’s being spent in more neighborhoods at those local businesses. If the same amount of money was spent in the traditional tourism industry, that would impact the city very differently than how it’s being spent on Airbnb.”

This is, no doubt, a savvy bit of brand management, but underneath that shiny PR gloss lies a portent of some big changes coming in this next century. Companies like Airbnb are part of the new economy emerging from the ashes of late industrial society, but the interests and habits of mind locked into the blue model want them dead. Hotels don’t want ordinary citizens competing with their often overpriced and boring offerings—even though a company like Airbnb can make it possible for someone to stay in their home. Regulated taxi companies want a monopoly on business, and hate competition from Uber and other companies that take advantage of the information web around us to offer more convenient service.

We hope many more new companies emerge to challenge stale industries and outmoded ways of doing things. The information economy is still in its early stages, but it is already demonstrating enormous capacity to make human life richer and more interesting.

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  • RCPreader

    This article chooses a very poor vehicle through which to fight NYC’s excessive tax and regulatory environment.

    There are very good reasons why it is illegal to rent out one’s apartment as a hotel room, the biggest being the impact on the neighbors. There have been innumerable cases of one or two-day renters disturbing and endangering neighbors with wild parties, loud music, fire alarms, and illegal activities. (Sometimes, the rooms are in fact rented by locals for the express purpose of engaging in illegal activities.) And, security is always a concern in NYC, so apartment buildings have doormen, access codes, or both, and these measures are completely thwarted by giving total strangers access to the building.

    Actual hotels have staffs to ensure that guests do not disturb others and to provide a measure of security — though security is still lower than in most apartment buildings, a sacrifice you voluntarily make when traveling. People who mail their keys to strangers and go away are hardly hoteliers.

    AirBNB is a classic case of some individuals profiting while shifting much of the cost onto other, unwilling, uncompensated parties — neighbors and building owners. It is theft.

  • ShadrachSmith

    Who am I to tell people which rooms they can rent. There must be reasonable zoning for this new service. But as changes go, locals seem to win on this one. And the locals control the zoning. The hotel’s fallback fight will be in the state house.

    This will be a hard fight. The current regulators will mostly side with the industry they know. This is will become part of the platform of independent city office candidates all through the country. If it works as a political winner, it can be done.

  • Steve Tagg

    Last week I was due to take my 2 children skiing (10 and 7) with a bigger group. We had booked a lovely chalet through Airbnb, or so we thought.Sadly, my brother discovered the week before that we had been defrauded. He had struggled to get hold of the owner to clarify directions. When he called Airbnb (eventually getting through) they explained that there was a “technical fault” with that owner – what a euphemism!
    It transpires that they discovered the owner was phishing for customers’ money using them as the intermediary.
    Now call me odd – but I would hope that an “intermediary” would bring something to the table – at a minimum consumer protection, particularly as they claim “security” on their website.
    I was hoping that they would have stepped in and fixed things such that we could have re-booked but, sadly, no. Instead we are left pursuing them in the hope that we get something back.
    This business model is seriously challenged. Until, and unless, AirBnb works harder to protect guests and landlords, there will be scope for a better player. And one bad experience such as mine will put me off..and as many people as I can warn.

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