Most cities have laws against individuals running unlicensed hotels out of their apartments. AirBnb chose to ignore those laws and encourage others to do so as well.
Well, Airbnb customers are deliberately choosing to use a service that flaunts and evades every kind of regulation.
If you use a hotel or a taxi, there's plenty of legal recourse should anything bad happens, because they don't operate in a gray area, there are specific regulations and oversight for them.
There's also the important bit where VRBO attempted to comply with local hoteling regulations and AirBnB just ignored them or even actively encourage hosts to ignore the law.
You forgot to mention regulatory capture. AirBnB breaks all sorts of local laws and profits from this, but because of its political connections/lobbying efforts it's been successful and stopping itself from being shut down or even fined in most markets.
Only a very small fraction of the people involved actually break the law, but those bad actors are a surprisingly large fraction of the total nights booked through AirBnB, so the company wishes to conceal and defend them.
For instance, renting a room inside your home to visitors, while you continue to occupy the home, is perfectly legal almost everywhere. Often, there is little or no regulation to comply with. (For example, actual BnBs.)
But many, many, many of AirBnB's rentals are illegal flophouses. Entire-apartment rentals inside established buildings, or flophouses with 2-4-6-8 bedrooms rented to unrelated strangers, with a maintenance service that comes by to turn down the beds. Those are where the money are at.
In fact, AirBnB take active efforts to ensure that cities cannot verify that their listings are legal. They actively resist giving cities information about landlords using their platform.
I don’t know about other places, but Airbnb has been a mixed bag for NYC: I’ve seen it used to keep housing stock off the market, to dodge the obligations associated with keeping a property livable, and to essentially run entire illegal hotel businesses without attracting regulatory (including safety) scrutiny.
The article points out that Airbnb is constantly trying to undermine local laws that are trying to provide affordable housing. A couple of links in you'll find this quote from the NY City Council:
"Airbnb consistently undermines the City's efforts to preserve affordable housing, and regularly attempts to thwart regulations put in place to protect New York City residents... Despite claims to self-regulate and crack down on illegal listings, Airbnb continues to be complacent in the illegal practices of over half of their hosts."
I agree that it's probably pointless to appeal to a company that has no interest in following laws that impact the bottom line, but at some point externalizing the costs of regulation shouldn't be a business model.
Airbnb has to comply though. There is regulation in NYC, and Airbnb doesn't help the city verify at all. So if you show up here, you never know if the cops are going to knock on your door.
Somehow, every other VRBO site (such as VRBO.com) manages to comply with local laws. AirBnB doesn't--by choice. It refuses to comply with local laws because this lets it avoid the costs of compliance. Ultimately, AirBnB's competitive edge over its competitors is simply regulatory arbitrage.
This is why AirBnB generates such apathy. Take the regulatory arbitrage away and AirBnB isn't a technical startup or a market disruptor; it's just another VRBO site with pretty CSS.
They are overkill and would be the same as if Congress, at the federal level, had passed laws saying that YouTube-style services should be banned because they can facilitate copyright infringement that hurts others.
No, completely different, and as a lawyer you know this. Local issues are valid concerns for local laws. If New York wants to pass an across the board tax on temporary rentals, it is absolutely not the same as if Congress passed a country-wide ban on Youtube-style service.
The key to all this is to deal with the abuses while preserving the values conferred by the new services. If there is antipathy toward the wrongdoers, there is no basis for directing this to the innovators themselves.
Existing laws already do this. And as a business that injects itself into the market governed by such laws, AirBnB has taken on the burden of complying with such laws. Moreover, AirBnB isn't an innovator--it's a copycat. The only innovation AirBnB provided was sub-unit rentals (i.e., just a room or a couch), which is no longer the mainstay of its business.
reply