New Book Describes How AirBNB Influenced City Laws (backchannel.com)

"For years, Airbnb was the friendly foil to Uber, aiming to work with cities rather than against them," writes Slashdot reader mirandakatz. "But as it grew and regulatory challenges mounted, the startup had to grow fangs." She shares an excerpt from a new book called The Upstarts: How Uber, Airbnb, and the Killer Companies of the New Silicon Valley Are Changing the World. The reality people saw often depended on where their sympathies lay. Regulators, left-wing politicians, hotel CEOs, union leaders, affordable housing advocates, and angry neighbors tired of carousing guests saw Airbnb as nothing but a rule breaker from the far-away land of arrogant, entitled billionaires. Investors, hosts, property owners struggling to make their monthly mortgage payments, travel-discount shoppers, and high-tech aficionados tended to believe in the startup with good intentions that was disrupting the stultified hospitality industry.
The book is by Brad Stone, who also wrote The Everything Store: Jeff Bezos and the Rise of Amazon. He describes how "good AirBNB" got Portland to eliminate the $4,000 permits for B&Bs by agreeing to collect lodging taxes from AirBNB hosts (and by opening a Portland call center). But his excerpt ends as "momentum was shifting" against AirBNB in New York City, as powerful hotels and their service employee unions convinced city lawmakers that legitimizing the company would be "politically radioactive" -- while the company's CEO "was going to fight for every inch of territory".

Comments

all about the taxes

[turkeydance]

and who pays the fees

Regulations

[stephenmac7]

Companies such as Airbnb and Uber serve to show just how regulated most industries are. When they waltz into an existing industry with services just different enough to escape regulations, the suffocating nature of special interest-driven regulation becomes apparent. Entrenched taxi companies demand licensing restrictions. Hotels demand regulation and taxes. Unions demand classification of contractors as employees (and people realize they aren't so different from each other -- employees are just special contractors with government-mandated benefits). The New York decision is a classic example of special interests aiming to limit competition and creative destruction.

Re:Regulations

[kinthalas]

Because god fucking forbid I take a ride in a car and don't have to worry that the driver is a rapist or murderer.

Or that I stay in a place that isn't a fire prone death trap.

Or that people make a living wage doing what they're doing, so they don't have to starve in the damn street or die of a preventable illness.

Fucking government, making rules and shit to protect people, even though most people aren't violently killed by the very things they're trying to prevent.

Re:Regulations

[Anonymous Coward]

You should have AirBNB rental apartment next doors with rowdy crowd each weekend. Maybe that would teach you something about:
a) why we sometimes need regulations
b) how is it too feel when big corp is pushing their cost externalities on to you and you're too small to fight back.

Re:Regulations

[93 Escort Wagon]

I tend to lean in the same direction as you - but it's not like the entrenched companies are all sweetness and light. I think we need to realize this isn't an either/or situation, but more of a continuum.

The regulations which exist weren't originally put there to protect special interests - by and large, they were created to protect customers. But companies, being companies, have done what they could to mold the regulatory environment into something which gives them a leg up on any upstarts. And the agencies tasked with protecting particular regulations often act to serve their own power.

I see unions in the same light. They were created to empower to workers who were at the mercy of abusive corporations - and I still think they serve that important purpose. But in my personal experience, when those same unions have to choose between what is best for a worker versus what protects the union's entrenched power, the worker loses.

Basically Lord Acton was right, in other words.

Re:Regulations

[Pinky's Brain]

They also show how regulated cities attractive to tourists are ... it's possible there is causation among that correlation.

Re:Regulations

[Gravis Zero]

Fucking government, making rules and shit to protect people, even though most people aren't violently killed by the very things they're trying to prevent.

EXACTLY! For too long governments have been making it difficult for all us low-level serial killers making our stab at the big leagues! ;)

Re:Regulations

[Solandri]

The problem isn't regulation or lack of it. The problem is one of classification.

How do you distinguish between someone finding out another person is going to the same place they are and agreeing to split car expenses for the trip, vs someone paying another person to drive them to a destination? Or how do you distinguish between someone finding out another person wants to visit their home town the same dates they're going to be on vacation so he agrees to rent his house, vs someone regularly renting a second home out as a business?

In the old days, running a taxi or hotel commercially required advertising, and advertising meant mass exposure (mailers, billboards, TV). That made it easy for regulators to spot who was doing these things as a business. But like music distribution, the Internet destroyed that distinction. It dropped the cost of distributing information (e.g. music, or advertising) to near zero, allowing anyone running the above businesses commercially to advertise to people directly (spam, targeted ads, craigslist, Uber/Airbnb). It's a lot harder, if not impossible, for regulators to distinguish between two people coming to a friendly arrangement, vs someone secretly running a business.

Just like with music, the Internet has changed the world. Many of the old models don't work anymore - including regulatory models. And like with music, a new regulatory model is needed. Unless you want to move to an extremely invasive regulatory system which monitors everyone's personal interactions with other people (for one, eliminating cash thus allowing all financial transactions to be traceable).

Re:Regulations

[nbauman]

limiting taxi cabs to X number prevents the streets from being so clogged with taxi cabs that traffic is slowed to a crawl, and even the taxi cabs themselves can't get anywhere.

There were studies of traffic flow, starting with the Holland Tunnel, which showed that you get the maximum flow by limiting traffic. If you allowed unlimited traffic, you just get traffic jams.

Re:Regulations

[Crashmarik]

Because god fucking forbid I take a ride in a car and don't have to worry that the driver is a rapist or murderer.

Or that I stay in a place that isn't a fire prone death trap.

Or that people make a living wage doing what they're doing, so they don't have to starve in the damn street or die of a preventable illness.

Fucking government, making rules and shit to protect people, even though most people aren't violently killed by the very things they're trying to prevent.

Or god forbid you ever grow up and take responsibility for yourself. The government isn't your mommy and it isn't your daddy and stop acting like it's a security blanket.

Re:Regulations

[Crashmarik]

Sorry if there are more than X cabs the profitability of adding an additional delta X goes down at some point it stops being profitable for people to be cabbies which btw would be influenced by how rapidly the cabs can get around. Then there is the fact that having more readily available and cheaper taxi cabs limits the desirability of using your own vehicle.

The fact there are optimum flow levels hardly means a city government is better than the continuous calculations of the actual flow network in determining how to allocate the resources.

Re:Regulations

[Oceanplexian]

I don't mean to be a contrarian or non-empathetic, but where I come from that's called 'personal responsibility'. Just as it is your responsibility not to set your hand on a hot stove, or not to leap off a cliff, or not to eat poisonous plants, it is your responsibility to conduct business with others who are reputable and safe.

Re:Regulations

[davester666]

No, they are not "just different enough to escape regulations". They intentionally, willfully, on purpose and planned to not follow those regulations. It's why they incorporated overseas, so they can evade fully being prosecuted for doing so.

Re: Regulations

[dnaumov]

You got things backwards: the whole reason why goverments exist to begin with is "being a security blanket". There are literally few to none other reasons for a goverment to exist at all.

Re:Regulations

[drinkypoo]

Because god fucking forbid I take a ride in a car and don't have to worry that the driver is a rapist or murderer.

Taxi licensing doesn't do that. I know two women who were raped by taxi drivers. They both use Uber now.

Or that I stay in a place that isn't a fire prone death trap.

Code doesn't do that. Moreover, code mandates that house fires will be as toxic as possible. Unless you file for an exception you have to build your house out of manufactured wood products and plastic wrap and the wire has to be sheathed with PVC (again, by code) which releases dioxin and chlorine gas when it burns. (Yes, all wood releases dioxin when it burns; this releases a lot of it.) Every house fire is super-carcinogenic; it might not kill you, but it's dramatically increasing the cancer risk of everyone downwind.

Or that people make a living wage doing what they're doing, so they don't have to starve in the damn street or die of a preventable illness.

The jobs are going away, and make-work is destroying the biosphere. Cheering for everyone to have a job is completely missing the point. You should really try to be more progressive than the Puritans.

Fucking government, making rules and shit to protect people, even though most people aren't violently killed by the very things they're trying to prevent.

Indeed, people are violently killed by government. We had the technology for self-driving vehicles in the 1800s. They were called "trains". We had electric vehicles, too. Then Big Oil and Big Auto bought all the laws, which they were permitted to do when it became clear how much skimming they would enable, and the rest is history. This is just about the safest time in all of history to be a law enforcement officer, and yet they've killed more citizens this year than any prior year on record. "Justifiable Homicide" is code for "anything we can get away with in court". And now this titanic monstrosity that we have created is in the tiny hands of another monstrosity. How's that system working for you?

We desperately need a more distributed system, with only those things which must be handled at a national level concentrated in the federal government. Never put a weapon in the hands of your friend that you wouldn't like to see in the hands of your worst enemy. I suggest that bioregionalism is most logical.

Re:Regulations

[drinkypoo]

limiting taxi cabs to X number prevents the streets from being so clogged with taxi cabs that traffic is slowed to a crawl, and even the taxi cabs themselves can't get anywhere.

A lot of charts look very scary if you simply project a straight line off into infinity, but reality doesn't work that way. There are not an infinite number of taxicabs in the area, and the incentive for more taxicabs to enter the area is also not infinite. Try limiting your estimates to what is physically possible, next time.

Re:Regulations

[drinkypoo]

The regulations which exist weren't originally put there to protect special interests - by and large, they were created to protect customers.

The regulatory frameworks may have been created to protect customers, but the government framework was designed to protect oligarchy, so the regulations wind up promoting oligarchy.

Re:Regulations

[nbauman]

The question is whether the free market or the government can provide better services to the public.

You seem to automatically assume that the free market is always better. I don't know what your evidence is for that. Maybe you're basing it on ideological theories https://mises.org/blog/new-yor... I notice that nowhere in this essay does this author refer to data. Nor did she actually talk to people who oppose Airbnb to find out what their actual arguments are.

I believe that the answer depends on the market, and the best way to answer this question is through empirical observation of the actual facts.

This is an example of the tragedy of the commons, where the continuous calculations of individual self-interest leads to the destruction of the resource for everyone.

One example is ocean fisheries. https://en.wikipedia.org/wiki/... If every economic actor follows his own greedy self-interest, as the Wall Street Journal editorial page advocates, then they will destroy the fishery, and no one will benefit.

"The Grand Banks: Where Have All the Cod Gone? New Scientist 16 Sept 96 p24

THIRTY years ago, children in Newfoundland could catch fish by dipping a basket into the ocean. Now Canadian research vessels sweep the seas in vain, finding not a single school of cod in what was once the world's richest fishery. The destruction of the Grand Banks cod is one of the biggest fisheries disasters of all time. And science helped make it happen. The Canadian government banned fishing on the Banks in 1992, when scientists discovered there were nearly no adult cod left. That ban is likely to remain in place for at least a decade. Canada has blamed Spaniards, seals and the weather. But the real damage was done by years of "safe" catches that scientists now realise were just the opposite... Cod stocks there collapsed, and the fishery has been totally shut down since 1993, with the loss of 40 000 jobs. "Signs of recovery of the stock are still very small, and in fact some stocks still seem to be in decline," says Cook's co-author, Alan Sinclair of the Canadian government's fisheries department".

New York City tried to charge motorists according to the demand they made on a limited government-provided resource (city streets), by charging them a special tax, and require a special windshield sticker, to drive in midtown manhattan during rush hour, as some European cities have done. Suburban motorists got laws passed against it.

Re: Regulations

[Anonymous Coward]

How exactly does making the owner bribe politicians prevent the noise violation? Oh, that's right, it keeps poor people away, which is EXACTLY why middle class ignored the huge cost of malicious regulations.

You're babbling, but I'll persist.

You prevent ahead of time the noxious uses of property through regulating the allowed uses.
In residential areas you are allowed to occupy the home and use it as your residence. You can't raise hogs, manufacture chemicals, operate a shooting range and countless other activities that are noxious to your neighbors. It varies from one location to another what is or is not allowed, and usually the increased restrictions are put in place after someone has abused the good will of the neighbors.

Among those activities that you cannot do in a residential area is operate a hotel.

Occasional renting of a home or room isn't operating a hotel, but what Airbnb does is facilitate people renting properties on a continuous basis as if it were a hotel.
Airbnb refuses to police their customer base (the renters) and attempts to maintain the fiction that they just do temporary rentals for homeowner's, but they're lying.

Re:Regulations

[SvnLyrBrto]

> limiting taxi cabs to X number prevents the streets
> from being so clogged with taxi cabs that traffic is
> slowed to a crawl, and even the taxi cabs
> themselves can't get anywhere.

Bullocks.

If that were truly the motivation than Uber's and Lyft's approach... a data-driven algorithm that seeks to optimize the number of cars in a given area by dynamically adjusting fare prices to encourage drivers to relocate to where they're most needed, AND (now) encourages drivers to use certain routes which the app had calculated to be optimal... makes a whole lot more goddamned sense than an arbitrary limit of $x. What I see with the arbitrary limit is not an attempt to optimize the availability vs. demand vs. traffic; but regulatory capture: keep those taxi medallions priced as high, or higher, than the case of a house, so that the established taxi companies can hoarse them and block competition from entering the market.

Re:Regulations

[nbauman]

If I were trying to get from West 43rd St. in Manhattan to West 23rd St. between 6 and 8pm (which I often am), there is no algorithm that can find an auto route which is optimal. Every avenue between those streets is stalled in bumper-to-bumper traffic jams. It's faster to walk. By adding more auto traffic, you extend the area of the traffic jams and the hours of the traffic jam. This isn't based on algorithms or theory, it's based the actual experience of New York area traffic over the last 70 years.

In midtown Manhattan, you can't transport more people by adding autos. We're already at (or past) the maximum. When you add more cars, you get bigger traffic jams. That's our experience. There are traffic engineers who study these things and have experience with them in the real world.

And the simple example -- if you like algorithms -- is the traffic accross the Hudson River tunnel. That's been proven theoretically and in real life.

If you know of any real published studies of traffic by engineers who actually work with traffic, I'd like to see them.

Classing contractors as employees is good!

[Joe_Dragon]

Classing contractors as employees is good! Or we can just forget about an min wage and let people be deep in the hole to the place they work for to pay for there tools needed to do the job.

AirBnB is not your friend, neither is Uber

[Anonymous Coward]

Time to just come out and admit it, "sharing economy" things are just unregulated businesses.

AirBnB was fine when it was actually B&B's, but as soon as it turned into "entire building" or "entire condo", it became an unlicensed hotel service, and that is bad because it puts substantial pressure on the rental housing stock, and in some cities like SFO, NYC and YVR rental housing is at such a premium, and no new housing is being made available, that AirBnB shouldn't exist in these cities.

What AirBnB should have done to "hose off" claims of destroying rental stock is to ALSO become a conventional rental management payment gateway. If it did that, then the same people who want to rent a unit monthly unfurnished can also list their units on the service with the stipulation of "month-to-month lease" or "fixed lease expiring on (date)" and thus anyone who wants to actually wants to see the history of a unit wouldn't need to go very far.

Likewise with Uber. Uber should have initially started out as "car sharing" where person X is going to Y, if you need to go to Y too, X will go out of their way to get you" and gradually moved up to "safe taxi/limo service" with finally having "automated personal vehicle service". That way Uber acts as the last mile of a conventional transit system instead of being "an alternative" to legal taxi services, which is why it's ruffling so many feathers with cities. When it starts doing things that are not in everyones best interests (like harming union activities) it is quite literately asking to be regulated out of existence.

Much of the "sharing economy" comes at the expense of those that are following the rules. So in the case of NYC, SFO and YVR, both AirBnB and Uber have damaged a lot of goodwill with the cities they operate in and in the case of YVR(Vancouver) AirBnB got a huge slapdown, the city put in place empty-home taxes, and the province put in foreign-buyer taxes. If AirBnB didn't exist, the pressure on rental prices would go back down. Uber is also banned from operating in Vancouver since it tried to operate without appropriate licencing.

Aww, your so cute

[Anonymous Coward]

You really think the government is out to protect YOU?

How cute.

Hmmm

[rmdingler]

Without playing to either side of the political spectrum, I mean, honestly; do you see anti-hotel legislation flourishing during Mr. Trump's administration?

Is that a New York thing?

[waspleg]

I've never heard of a "service worker union". Could definitely use more.

Re:Is that a New York thing?

[tipo159]

Here is one - Service Employee International Union.

I don't think you can fix AirBnB

[rsilvergun]

because for high demand areas with lots of tourists the only thing that keeps everything from becoming a hotel is zoning; and AirBnB ignores zoning (kinda has to).

From there you've got the folks who work in an area unable to live anywhere near it. That means long, soul crushing commutes and the problems that come with them (lots of nasty traffic and lots more accidents/pollution/etc).

Cities do zoning for good reasons. We regulate businesses to solve existent problems; not just to spoil fun. You nailed it with "unregulated businesses". The only solution is to enforce the regs, which puts AirBnB & Uber out of business since their entire model is to side step the regs.

AirBnB is a plague

[wickerprints]

The problem with AirBnB is that it doesn't distinguish property owners who are renting out a room in their primary dwelling are doing it to earn extra cash on the side, versus landlords who use it to turn entire buildings into vacation rentals without regard to noise ordinances and the surrounding rental market. So, AirBnB defends itself by holding up the former case as an example, while ignoring the legitimate complaints caused by the latter case.

Let's be absolutely clear here: for many major cities, if apartment landlords are able to use AirBnB, they would make a lot more money than they would through regular rentals. If enough of them do this, it would increase the cost of rent for the entire region by making housing more scarce. This is unacceptable.

Cities have fought back by trying to force limitations on the circumstances under which an AirBnB would be allowed. But AirBnB fights these because it threatens their business. They put out propaganda saying that cities are limiting the freedom of struggling property owners, or accusing government of bowing to some all-powerful hotel lobby. The reality is that they care nothing about the destruction of the housing market, or to noise complaints. I know from first-hand experience: they do not take noise complaints seriously; as long as they get their cut, there's no accountability. I've had to call the police on various "guests." I've complained through their site numerous times, to no avail. I have no leverage.

Regulations are not some intrinsic evil as libertarians would put it. Until it happens to affect YOU, there's always this prevailing belief that it's nobody's business to dictate what others should or should not be able to do. But let's see how you deal with AirBnB guests who party until 3-4 am on a weekday when you have to get up in the morning to work; how you deal with landlords who ignore your threats to take them to court; how you deal with having to call the police on a weekly basis until even they stop caring because there's nothing they can do except tell drunk asshole guests to quiet down. Let's see how you deal with having your property value decrease because you're next to a 24/7 party house. Let's see how well your "live and let live" attitude serves you when you find rents increasing in your region by 10%+ every six months because every fucking apartment owner is doing AirBnB so that they can make $4000/month on each apartment instead of $2000/month.

Re:AirBnB is a plague

[nastyphil]

Uhhhh... you do realize that the way to deal with landlords who ignore your threats to take them to court. ...is to take them to court?

Burn VC money to set up unsustainable biz

[orin]

Uber is burning through VC cash at a prodigious rate. At some point that will stop. Maybe it will stop before Uber has eradicated the incumbents. Maybe it will happen after Uber has eradicated the incumbents. But if you think that the hammer won't come down on the public at some point so that all those VCs that invested get their fat payout, you're delusional.

Sigh

[nospam007]

Hundreds of years did little old ladies rent their grown-up kids rooms to strangers to have some additional income by hanging a sign in the front-yard, but now since it's done digitally it's a 'problem' for cities, because they can check easily how many there are, vs. driving around the country counting bed an breakfast signs in front-yards, which they obviously never did.

Re:Sigh

[tipo159]

And it wasn't a problem when it was a handful of little old ladies doing this. But it can be a big problem (described multiple times in comments above) at the scale that AirBnB facilitates.

Also, do you really not think that municipalities haven't had officials out looking for little old ladies renting their grown-up kids rooms to strangers and collecting a cut of the action for hundreds of years? In medieval times, folks renting accommodations were subject to high taxes and do you think poor widows caught a break from their lords (who, even if benevolent, needed to pay the guy above him)?

The thing that I find most amusing about AirBnB, Uber and the rest is the "sharing economy" euphemism. When I share the things that I have, it is at no cost to the person that I am sharing with (except for costs directly related to its use, like fuel, or there is loss or damage during its use). Charging for its use isn't sharing; it is short term rental and a business and should be subject to the same regulations as other businesses.

they exist because there is a need

[kencurry]

Taxis and hotels have become too expensive and a pain to use. Just like cable companies, they have a monopoly so service is lousy, too expensive, and they could care less. Alternatives are starting to wake them up, but rather than compete better, they use their protectionist schemes to chop back the competition.