From the consumer’s side, the sharing economy is pretty fucking rad. Anyone who grew up riding in taxis and then suddenly switched to Uber knows why: getting into a cab used to be like stepping into a scene from Mad Max: Fury Road, with drivers who were very frequently about as sane as the War Boys.
Uber drivers, however, depend on good ratings from those riding with them, and as such, have an incentive to not drive like lunatics. Likewise, you as the consumer get rated, so you have an incentive to be on your best behavior.
Consumers get the same sort of benefit with Airbnb: it’s not free, like traveler favorite Couchsurfing, so it doesn’t have the same sketchy feel, and it grants customers the opportunity to stay in actual homes in the neighborhoods they’re visiting, rather than in a generic hotel room.
The problem is that the “sharing economy” manages to conveniently undercut decades of labor laws, housing laws, and civil rights laws in ways that the legal system hasn’t caught up to just yet, which is causing some pretty ugly side effects. Uber deserves attention — it dodges and fights regulations that would apply to other cab companies, underpays its drivers, and leave cities that set a higher standard for them — but for now, we’re just going to focus on Airbnb.
What’s wrong with Airbnb?
Airbnb has two really big problems with it that ultimately stem from the same issue. And to be fair, these aren’t necessarily issues that were created by Airbnb, so much as they are issues that stem from the entire concept of the “sharing economy.”
1. Airbnb is playing by a different set of rules.
I live in the seaside town of Asbury Park, New Jersey, and Airbnb is a thing here: a lot of people will rent out their homes for a weekend to get some extra money, and Airbnb and its competitor VRBO are the simplest ways to do it. This is a tourist town, so the town encourages people to invite tourists into their homes. But some of the larger businesses in town are hotels, and there’s a good number of boutique hotels and BnB’s as well. And while they are large for the town, they aren’t mega-conglomerates like Hilton or Marriott. They’re small businesses. So it’s easy for them to be undercut by Airbnb. A homeowner’s profit margin doesn’t need to be as big as a hotelier’s — they aren’t running a full operation, they’re just trying to make some extra cash.
All of this would be fine — competition makes the market work, etc., etc. But users of websites like Airbnb and VRBO often don’t submit to fire safety and coding regulations that would be required of hotels and regular BnB’s, despite being legally required to. It’s also relatively easy for the Airbnb hosts to dodge paying their taxes, as they’re small enough to fly under the radar. This puts the Airbnb users at an unfair advantage, and it pisses a lot of hotel and BnB owners off.
Airbnb presents themselves as scrappy underdogs fighting big mean corporate hotel chains. When New York hoteliers claimed Airbnb was cutting into their business, Nick Papas, an Airbnb spokesperson told Bloomberg News:
“In fact, without Airbnb many of these travelers wouldn’t be able to visit New York City at all or would have cut their trip short. While the big hotels have been clear that they are concerned about losing the opportunity to price gouge consumers, we hope they will disclose the percent of their profits that stay in New York City and the percent they send to corporate headquarters outside of New York and, even, outside of the country.”
But Airbnb is not an underdog — last year, it was valued at $20 billion. That’s in the same league as Hilton ($27.8 billion) and Marriott ($22.9 billion). Since Airbnb isn’t responsible for making sure it’s users are paying taxes and are up to code, it’s basically just playing with the bumpers up.
By presenting themselves as a mere platform connecting people in the “sharing economy,” rather than as the manager of a huge network of small vendors, Airbnb is skirting regulations and making out like bandits.
2. Airbnb may be the reason “the rent is too damn high.”
The publication Grist explained the basics of this problem in a recent article, using the example of Tarin Towers, a resident of a rent-controlled building in San Francisco. Her building was bought by a real estate developer who wanted to charge way more for the rooms, so he offered the residents buyouts. Towers did the math and realized that even with the buyout, she wouldn’t be able to afford a new apartment in the city’s absurdly inflated rental market. From Grist:
“Towers held out as her old neighbors left and new tenants started moving in. Unlike the old neighbors, these new people were young, mobile, transient. And there were a lot of them. [Her landlord] O’Sullivan, it turned out, had leased the building to a startup called the Vinyasa Homes Project. Towers soon discovered that Vinyasa had listed her building on Airbnb, advertising it as a ‘co-creative house.’ The listing made it sound almost like a commune. ‘You want to join a community of like-minded peers who are doing inspirational things?’ it read. ‘This is the place for you.’ Unlike in the communes of yesteryear, however, each bed is going for more than $1,500 a month — and these are bunk beds in shared rooms. That means each apartment could now be bringing in $10,000 a month in rent.”
Towers eventually was forced out of her apartment, and took the buyout. She can’t afford a new rental in the city, so she’s housesitting until she figures something out.
This is a problem everywhere, though: in Barcelona, in Berlin, in New York, in New Orleans. It’s particularly tragic in the Big Easy, as it’s forcing out the last long-term residents who held on in neighborhoods devastated by Hurricane Katrina.
It’s the worst for cities with tight housing markets and a heavy flow of tourists. Remember the New York City mayoral candidate whose platform was “the rent is too damn high”? It may have gotten that high in part because of services like Airbnb — it’s way easier to wait for someone who will pay $2 grand a month for an apartment when you can rent the apartment out for exorbitant prices to travelers in the short term.
You could argue that Airbnb isn’t responsible for the misuse of its service. But they aggressively fight any measure that would put the onus of responsibility on them. When San Francisco tried to pass a measure that would restrict the number of nights a year a unit could be used for short-term rentals, Airbnb spent $8 million fighting against it. When San Francisco tried to pass a rule that would force Airbnb to ensure its hosts were up-to-code, they donated hundreds of thousands of dollars to local political campaigns.
Some cities have fought back effectively. Barcelona has seen a population drop in its historic neighborhoods thanks in large part to its tourism industry, and as a result, have started slapping Airbnb with fines for offering apartments that weren’t registered with the city, and Berlin and Paris and even New York have been fighting back as well. But this is a problem that’s far from solved.
3. It’s not totally Airbnb’s fault.
In Airbnb’s defense, there’s no good business reason they would voluntarily take responsibility for policing their users. It’s not a charity, and it would be very expensive for them to check up on every single host. It would be a guaranteed way to decrease profits, which, incidentally isn’t legal — companies are required by to take actions that benefit their shareholders.
But this is why we have regulation. Airbnb isn’t tasked with doing what’s best for the local communities: our governments are. So this is a problem that’s fixed not by Airbnb being benevolent, but with good policies and effective enforcement. Which means it’s a battle that needs to be had on a city-by-city and country-by-country basis.
The problem is that we simply don’t know how serious the problem is yet — there’s been a little bit of research, but it’s far from conclusive, and has possibly been biased against services like Airbnb. There’s no reason to think that good policies couldn’t help solve the problems that Airbnb and its “sharing economy” counterparts cause. But more work needs to be done.
So what can we as travelers do?
Let’s be up front: staying at an Airbnb is a cooler experience than staying at a hotel. I have a friend who stayed in a goddamn castle in Italy. I know people who have stayed in treehouses in Oregon and igloos in Norway. In the Netherlands, you can stay in an honest-to-god windmill. And it’s cool that we’re giving regular people this platform to make some extra money, host out-of-town guests, and maybe try something new. So I won’t say “don’t ever stay at an Airbnb or a VRBO.” This is the future, and the solution to its problems will be through systemic change, not through any single individual’s actions. But it’s also time to call bullshit:
There is no such thing as the sharing economy. It’s just called the economy,and it’s been around for millennia.
Are you trading goods and services for cash? Yeah — that’s the economy. You’re just doing it in a different place. Airbnb and Uber haven’t reinvented the economy, they’ve just used the internet to create a new space in which economic transactions can happen.
So with that in mind, here are a couple of things you can to be a part of the solution:
1. Support fair regulation of Airbnb & VRBO in your hometown.
If your town has a lot of tourists, try to be supportive of government attempts to regulate businesses like Airbnb and VRBO. The companies will do shitty ad campaigns about how your city is turning it’s back on money and innovation, but that’s just a scare tactic. Anyone who has lived in a tourist town knows that, even if the economy is dependent on tourist dollars, what’s good for the tourists isn’t always good for the locals. Try and push your local governments to strike a balance between making money and supporting the local community. Get involved. Get organized. This is pretty much always the best solution to anything.
2. Try to avoid the shitty Airbnb hosts.
You can take steps to avoid giving money to the douchebags who are misusing the service. Think of it as another thing you want to research, along with “safety,” “service,” and “cleanliness.” In short, you want to seek out spots that the current owners actually live in.
Becky Caudill over at Casa Caudill has some great tips for spotting the shitty hosts using the platform itself. Here’s what she suggests looking for when you’re checking out the photos of the location provided by the host:
"Seek out properties that are decorated like you or your friends would decorate your own homes.
Look for plants (not just fresh flowers).
Check out the art. Is everything from Ikea or another mass market supplier? Or are there original prints or photographs on the wall? On shelves? Is there any artwork at all?
Does the kitchen come with basic supplies like salt, pepper, olive oil, etc? People who live somewhere will have these things on hand. (Although maybe not in NYC? It’s my understanding from friends there that people eat out every night and never cook so maybe they don’t need these things?)
Do the owners read? Are there books other than travelogues visible in the pics? (And for goodness sake, if you see hundreds of travel brochures that’s a dead giveaway this place is operated solely as a vacation rental property).
Stay in real neighborhoods, not tourist areas."
It also helps to delve into the comments a bit. Can you get a sense from the comments as to whether this is actually someone’s home, or is it more of an “operation”? Are there big discrepancies between the reports of the rooms? That could be a sign that there are multiple rooms that are lived in by different people in your building, indicating that this is being done by a landlord, not an owner or a tenant.
And of course, if you end up in one of these “operations” in spite of your best efforts, it’s okay: just go onto Airbnb and mention it in the comments. Helping others identify exploitative hosts is as important as helping them identify bigots or creeps. And that’s what the review process is for.
As always, the name of the game is damage control — try your best to support the local communities you’re visiting. Sometimes you’ll fail. Other times you won’t. And don’t assume that all things that are shiny and new are inherently good.
Writer’s note: This article is a work in progress. The story’s changing constantly, and so much new stuff is coming out that it basically took 2 months to write, at which point I was like, “Fuck it, I’m just going to put it up and add to the advice as I come across it.” I even ended up skipping an entire section on racial discrimination within Airbnb’s platform, which is obviously worth discussing. In short — comments and input are welcome, and I will continue to study this issue and report back to you.