Airbnb has embraced the sin first, ask forgiveness later method of dealing with local laws. They'll now need to learn how to negotiate rather than conduct business as usual.
This morning WNYC Public Radio in New York City devoted its first 20 minutes on the conflict between the state Attorney General Eric Schneiderman and the vacation rental service Airbnb.
Host Brian Lehrer had the station’s business editor Charlie Herman and the New York Daily News‘ real estate reporter Matt Chaban, who broke the news of the Attorney General’s move yesterday morning. They asked listeners to call in if they were hosts who received an email from Airbnb CEO Brian Chesky regarding the Attorney General’s request.
In the email, Chesky wrote, “we believe that the Attorney General is only seeking to target a small number of bad actors.”
Herman said that a person in the AG’s office stresses that the service is “Not targeting the casual user.”
A caller named Scott in Boerum Hill has rented out his apartment for “about three years,” and by his description doesn’t violate the state law. Despite his great experience with the service, he was still unsettled. “Most upsetting is that I learned I should be charging an occupancy tax. I feel Airbnb should let us know this.”
Another caller echoed his concern “Until this email I had never heard about this hotel tax issue.”
One caller from the city’s Bedford–Stuyvesant neighborhood told the show about her landlord and upstairs neighbor who had transformed one of the property’s units to an Airbnb rental while they left the U.S. for a year. She said that the quality of life in her building had declined since the by-the-night renters moved in. She said “I love Airbnb when I use it, but living in a space where I have to deal with it every day I don’t love it.” She added “I don’t feel 100% comfortable in my own home any more.”
Airbnb told the media and its users yesterday that it would not comply with the Attorney General’s request, and there is no word yet on whether or not the company met the Monday night deadline the Daily News said was part of the demand.
The Attorney General has remained quiet since news of the subpoena broke, but news has trickled out about the office’s intentions. WNYC’s Herbin said that according to sources he had spoken with, “the attorney general thinks the law works fine as it is.”
Websites have speculated about the reasoning behind the AG’s actions. Is it to weed out a few bad apples, find tax cheats, or strong-arm the service into making users comply with the state law.
PJ Vogt at On the Media speculated that it could be something else: “[I]f they wanted to intimidate Airbnb into cooperating by freaking out their users, then asking for all the data would be a pretty good strategy.”
For a site that has grown largely because of the much-copied way it connects hosts and renters in a very transparent way, anything that looks like a breach of trust is damaging, especially to the small players who rent out the places they live in and Airbnb likes to promote as the prototypical users.
Older players in the vacation rental space aren’t as concerned about the crackdown.
At Gothamist, Christopher Robbins quoted Marie Reine Jezequel, the founder and CEO of New York Habitat, “If Airbnb complies with the law, it levels the playing field between small companies like New York Habitat, who are real estate brokers and must abide by state licensing rules and codes of conduct, and companies such as Airbnb and Craigslist, who are not subject to such constraints.”