This is a fight Airbnb has to win, which is why they're spending $10 million to do so.
When Airbnb Inc. hired a Clinton-era political operative in August, it was a signal that the embattled lodging website was going on the offensive.
Chris Lehane, a former White House crisis manager known as the “master of disaster,” holds the bland title of global policy chief. But he’s already enmeshed in a regulatory dustup in Airbnb’s hometown of San Francisco. On Nov. 3, voters will be asked to approve Proposition F, which among other things would impose a 75-day-per-year limit on Airbnb rentals and force hosts to register with the city.
From Airbnb’s headquarters in the startup-studded South of Market district, Lehane is helping orchestrate an $8 million campaign to defeat the ballot initiative. He’s up against deeply committed opponents, who see Prop F as a proxy battle in a wider war against the perceived arrogance of the tech industry, which has been accused of turning San Francisco into a gated community. In recent days, Airbnb played into that stereotype with ads exhorting the city to use money it pays in taxes to improve services — a message some voters found patronizing.
Lehane, a veteran of Washington politics, long ago learned not to take anything for granted in an election — especially a ballot initiative entwined with the hot-button issue of economic inequality.
“I feel like we have some real momentum, ” Lehane says. “But I’ve also lived through a number of elections, and I learned a long time ago that you always sleep with both eyes open in an election.”
For years, Airbnb has mostly gotten along with municipal officials. The company has struck deals with Paris, Chicago, San Francisco, Portland, Oregon, and others to collect taxes on behalf of the hosts using its platform.
Uber Technologies Inc. has taken a more forceful approach, most recently running attack ads against the administration of New York Mayor Bill de Blasio and successfully defeating the city’s efforts to slow Uber’s growth. Last year, Uber hired former Obama strategist David Plouffe as a senior vice president of policy and strategy (he has since become the hailing service’s chief adviser and joined the board).
Now that Airbnb is under attack in its hometown, the company has recruited its own political operative. In former Clinton strategist Lehane, Airbnb got a Harvard-trained lawyer who tried to contain the Monica Lewinsky scandal and later defended Goldman Sachs during the 2008 financial crisis. In recent years, he has worked with various tech players; Lehane helped former Microsoft CEO Steve Ballmer buy the Los Angeles Clippers and guided hedge fund manager Tom Steyer’s efforts to elect environmentally conscious politicians.
Since joining Airbnb, Lehane has met with Washington lawmakers, spent a few weeks overseas and plans to testify before the New York City Council on Friday. Right now, however, he’s largely focused on beating back Proposition F, which observers say has a decent chance of passing in this political environment.
“At the end of the day,” Lehane says, “the opposition has effectively tried to frame this as an up or down vote on Airbnb.”
The company’s anti-Prop F effort has been designed to appear arms-length. The “SF for Everyone Campaign” is technically run independently of Airbnb and the company’s name is hard to find on “No on Prop F” mailers. Yet Airbnb is the main financial backer and its employees — including Lehane — are regularly consulted on strategy.
On any given weekday paid workers go door-to-door, urging likely voters to sign cards pledging support. The campaign has knocked on more than 150,000 doors, spoken with 62,000 voters and won endorsements from the San Francisco Chronicle and the city’s largest Chinese-language publication.
The campaign has shrewdly made Airbnb hosts, not the company, the face of its defense. Karen Cancino, who rented a room in her Western Addition neighborhood home through Airbnb 266 times last year, has appeared in campaign commercials, made phone calls, attended hearings and plans to help monitor the polls on election day. The 75-year-old former social worker says Prof F is “just too draconian, too extreme.”
Backers of Prop F blame Airbnb for exacerbating San Francisco’s housing crisis because homes used as hotels aren’t available for long-term renters. Opponents including Mayor Ed Lee say the ability to rent out apartments helps people pay their bills. The Airbnb campaign picks at perceived flaws in the proposal, arguing that propositions are hard to repeal and that this one would empower people to sue neighbors over illegal Airbnb units.
Of course, both sides say they’ll win. Internal Airbnb polls show it coming out ahead with more support than when the campaign began. But that was before the company rolled out the alienating ads — a move even Airbnb supporters deem a major unforced error.
One of the ads, which originated with the company, not the campaign, read: “Dear Public Library System, We hope you use some of the $12 million in hotel taxes to keep the library open later. Love, Airbnb.” Condemnation was fierce, and one online critic suggested that the $8 million being lavished on the anti- Prop F campaign could be used as a block grant for the library system. The company apologized, but by then the ads had been plastered at bus stations all over the city. Airbnb says the ads will come down.
The stakes are high for Airbnb, last valued at $25.5 billion and widely expected to go public in the coming years. Losing the ballot could encourage political activists in other cities to push for similar restrictions. In the dying days of the campaign, the Hotel Association of New York City Inc. contributed more than $250,000 to the pro-proposition ShareBetter SF, according to an Oct. 23 filing.
“It’s the first public referendum on Airbnb in the country, if not the world,” says Doug Engmann, a former San Francisco city planning commissioner, Airbnb antagonist and an author of Proposition F. “They want to make sure they win that referendum.”
This article was written by Eric Newcomer from Bloomberg and was legally licensed through the NewsCred publisher network.
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Photo Credit: Portrait of Chris Lehane. Pupkin8r / Wikimedia Commons
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