Airbnb Tries To Be a Model Corporate Citizen With Shared City
BY Sam Roudman | Thursday, March 27 2014
Yesterday in a post on Medium, Brian Chesky, the CEO of short term rental platform Airbnb announced a new city based company initiative in Portland, Oregon called “Shared City.” The initiative is an an effort by Airbnb to become a model corporate citizen, and also to atone for subverting civic regulations which helped grow the company into the $10 billion goliath it is today.
In the post, after a series of ponderous, picture aided vision-statements –“Cities are the original sharing platforms” after all– Chesky describes just what “Shared City” might mean:
“Shared City is our initiative to help civic leaders and our community create more shareable, more livable cities through relevant, concrete actions and partnerships.”
He then lists a series of pro-social corporate policies to make the “Shared City” in Portland a reality. These include: helping Portland hosts donate to local causes, and matching those donations; providing free smoke and carbon detectors; promoting the city as a tourist destination; assisting hosts in paying taxes to the city; and cracking down on property managers abusing the platform who “hurt the city’s housing stock.”
The first two ideas in this list are nice ideas. It’s hard to argue against local donations or less Airbnb guests choking on carbon monoxide (a small number probably, but still– good). The third idea to promote tourism in Portland is something that Airbnb, a company which depends in no small part on tourism, should not be earning any applause for. The final two propositions are the most interesting though, and they represent an implicit mea culpa from Airbnb that maybe, kinda, the platform hasn’t always been the best for the cities it purports to hold so dear, choosing profits over civic welfare.
The issue of taxes has been fraught for Airbnb. The company’s lack of effort to make hosts pay taxes led to New York Attorney General Eric Schneiderman suing the company for renter information last fall. The company said they’d like to help renters pay the taxes, sure, but that they wouldn’t give up all that information, and also, the short term rental law in New York is bad. Chesky came out in favor of Airbnb hosts in New York paying local taxes. But efforts to actually help if not compel hosts to pay occupancy taxes is good business for Airbnb. It gives the company an unfair leg-up over the stodgy, law following, hotel industry. It also starves cities of revenue they can’t do without. For Airbnb to forego this advantage would be a significant step towards doing right by cities, and its own stated values.
“[Helping our hosts pay the taxes they owe from using out platform] is new for us,” reads the post, “and if it works well for our community and cities, we may replicate this project in other U.S. cities.” Let’s hope the grim specter of lawful taxation doesn’t scare off too many hosts in Portland to stop Airbnb from playing by the rules elsewhere.
Potentially even more encouraging is Airbnb saying it will crackdown on “Corporate property managers who abuse our platform, hurt the city’s housing stock and give guests a bad experience.” Airbnb presents itself helping “micro entrepreneurs” rent out an extra room in their urban apartment to make ends meet in tough economic times. The truth is that hosts who run more than one listing constitute a big chunk of the company’s total. In New York one estimate says 30 percent of all listings are operated by hosts who list multiple properties, another from Tom Slee says almost half of all the company’s business in the city is.
Hosts with multiple listing are the ones Airbnb makes the most money from, but they’re also the ones that put the lie to Airbnb’s mythos of the Yeoman Micro-preneur. Hosts that rent multiple dwellings distort the real estate market, taking rentals out of the housing stock, and putting upward pressure on the rents for everyone else, make it more difficult for the hosts and renters just getting by, i.e. the ones Airbnb claims to support. If Airbnb were actually to cutdown on hosts with multiple rentals (and saying they’ll take on “corporate property managers” isn’t exactly the most reassuring frame), they’d be taking a financial hit and making a giant step towards reducing their own hypocrisy. Now that would be sharing.