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In its lawsuit against the City of San Francisco, short-term rental site HomeAway alleges that Airbnb board members Reid Hoffman, the co-founder of LinkedIn, and Silicon Valley super-angel Ron Conway basically bought the good graces of the president of the San Francisco board of supervisors through $674,000 in contributions to a supportive political action committee.
And Conway’s wife, Gail Conway, chipped in another $49,000 to the same PAC supporting the California Assembly campaign of David Chiu, the board of supervisors president and the sponsor of the short-term rental law that goes into effect November 26, HomeAway alleges.
Vacation rental leader HomeAway sued the city over the new short-term rental law, alleging it was almost handwritten by Airbnb as it bars all business models other than Airbnb’s agency model, in which Airbnb is the merchant of record and collects a fee from renters, and also shuts out HomeAway and others because it precludes short-term rentals unless the owner is a San Francisco resident.
Under HomeAway’s business model, it sees itself as a marketplace and not the merchant of record. HomeAway charges subscription fees or commissions to owners, but doesn’t collect a fee from vacation rental guests.
As Airbnb and other short-term rental sites battle local regulations in inhospitable jurisdictions around the world, the HomeAway lawsuit — if the allegations are true — lays bare some of the tools that Airbnb is utilizing.
In a formal sense, in this case it is Airbnb board members and the wife of an Airbnb board member who made the campaign contributions and not Airbnb itself, but lobbyists for Airbnb were heavily involved in creating the law, according to HomeAway.
But, if you believe that Airbnb and its lobbyists didn’t have a role in the campaign contributions, then we hear the Golden Gate Bridge is for rent (it isn’t, but the Bay Bridge is being recycled as an Airbnb rental).
HomeAway alleges that Airbnb lobbyists met with board supervisor Chiu more than 30 times in the year leading up to the introduction of the short-term rental law in April 2014, and another four times in September 2014, a month before the ordinance was adopted in a 7-4 vote.
HomeAway Got the Cold Shoulder
At the same time, HomeAway corresponded with Chiu but its “input was neither solicited nor accepted,” the lawsuit alleges.
Although the City of San Francisco requested in a phone conversation that HomeAway send a letter detailing its business model and HomeAway complied, “the City never responded to the letter and the dialogue ended,” the lawsuits states.
HomeAway alleges that Airbnb bought its influence in crafting the law because:
- Airbnb board member Reid Hoffman, whose Greylock venture capital fund invested in the short-term rental site, contributed $200,000 in May 2014 to a PAC attacking Chiu’s opponent in the Assembly election campaign, gave another $300,000 to Chiu’s PAC in September 2014, and topped it off with another $100,000 in October 2014.
- Ron Conway, an Airbnb board member and Silicon Valley angel investor, sent $49,900 to Chiu’s PAC in September 2014, and supplemented it with an additional $25,000 in October 2014.
- Conway’s wife, Gail Conway, contributed $49,900 to the PAC in May 2014.
Airbnb and HomeAway ostensibly are allies in the Short Term Rental Advocacy Center, which lobbies to loosen short-term rental laws in jurisdictions fighting the proliferation of short-term apartment rentals and vacation home stays.
Airbnb, though, apparently didn’t get the memo about crafting a law that was mutually beneficial in San Francisco, and apparently used its influence to shut HomeAway out.