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Airbnb gets into the property management business (all-about-airbnb.com)
203 points by matteogamba on Sept 13, 2016 | hide | past | web | favorite | 127 comments

I love Airbnb. It's one of my favourite startups, from both a user's and entrepreneur's point of view.

I really loved the way Brian described it as - this is how it used to be, go to a place and stay with a local. I don't like the formality, isolation, or artificiality of hotels so Airbnb has been a wonderful opportunity.

Recently, though, I've found more and more properties managed by one person. It's hard to be sure I'm staying with a local making some cash off their spare room, rather than someone "farming" a bunch of cheap properties. I wondered if Airbnb were permitting or encouraging this; the article suggests it is the latter.

For me, this ruins the whole point of Airbnb. Long-term it will devalue the experience by turning it into a substandard, impersonal distributed hotel. I really hope they change direction. If not, I expect a new startup to come along providing "what Airbnb was supposed to be."

What I find most puzzling is how such great founders could lose sight of the wonderful vision they had.

But this is exactly what's happening. The natural way of progression. Landlords realized that they can earn a lot more through AirBnB vs classic renting out. The only problem was the management of the places getting more annoying.

The next step was then to have companies take over this missing segment. Landlords can now give their property to a AirBnB management company that makes sure it always get reposted, the key given to the right person and so on. Profit is still higher than what the landlord would make through normal renting out.

I worked for a real estate startup and we had A LOT of overseas investors solely wanting to buy properties for renting them out on AirBnB.

In the past I also ended up in one of these managed places by accident once. It was a big house with a bunch of walls put in between rooms to rent out each little part of the house as a separate AirBnB room. The avatar and description made it look like it's the house of a young woman trying to make an extra buck.

I don't like it either and think it's a little bit sad that things progress this way, but it was unavoidable. I'm crossing my fingers that this won't harm the normal renting and guesthouse/hostel market too much.

AirBnB shouldn't be a machine too make rich people even richer and the apartment search for the normal guy harder and harder.

Not sure how your fifth paragraph follows.

First, it is at least somewhat avoidable. Banning management companies would be one solution. Only allowing users to post their homes for a fraction of a rolling 12 month period would be another. Only allowing users to have 1 or 2 simultaneous postings with different street addresses would be another. These are the things Airbnb should do and doing so honestly probably would have prevented them from getting totally screwed by NYS/NYC legislatures, which leads to my second point.

Of course it harms the normal rental market. What else could it possibly do besides that? Not only that, but the backlash against the system harms those of us who do wish to actually legitimately rent out our homes while we're not in them. Airbnb should've been more proactive about this from the get go, but I don't think it's necessarily too late. With this news, though, it seems they don't even think this is a problem despite getting them outlawed in the largest city in the US.

It's really a bummer, but it's not unavoidable and not unfixable.

>Landlords realized that they can earn a lot more through AirBnB vs classic renting out.

In many cases by circumventing hotel regulation. We seem to like flouting the law, provided it happens in Silicon Valley and not Wall Street.

AirBnB is no longer my go-to; it's just another place I check along with travel and hotel aggregator sites. But at least with hotels I know what I'm getting.

"we had A LOT of overseas investors solely wanting to buy properties for renting them out on AirBnB."

Wow, so people who don't even live in the country are buying housing to rent to other people that don'e live in the country or city.

Meanwhile people who live, work and pay taxes increasingly can't afford rents in their hometowns.

This is essentially what happened to eBay, for example - at first it was a marketplace to connect individual buyers and sellers, but over time shifted to favour the bulk sellers. When the internet was young there was a lot of excitement about it being used to disintermediate the big corporations, but what seems to be happening is the "reintermediation" of big new internet companies.

It's the classic problem of regulatory capture applied to a privatized industry: the entities that are most engaged with the regulator (the regulator, in this case, being a site like eBay or Airbnb) are most likely professionals. Because their voices are louder and more coordinated, they are more likely to be listened to than a relatively low volume of one-off complaints from end users.

In general, look and see who is making the money off of a service. They are the ones who will be listened to -- not because of any evil on the part of the company, but simply because they have a greater incentive to scream louder and coordinate.

I'm not sure it's so much better coordination on the part of the professional customers or even screaming louder. It's more that these VC-backed marketplaces all have a business model that can be simplistically described as taking a cut of every transaction.

So they naturally gravitate toward transaction types which create the greatest volume. Which tend toward the repeatable, industrialized, consistent, etc. In other words, the opposite of selling handmade goods, renting a spare bedroom by an owner who is only around between 3pm-4pm, or doing a one-off attic decluttering.

There's some truth to that as well, but I often feel that the large, organized sellers/renters are better able to articulate what they want in a way that individuals cannot. They know the market better, they know what people want to buy, and can leverage economies of scale to craft their marketing message to co-opt the successful one-off sellers.

Power law distribution of attention leads to preferential selection.

It looks light a great business opportunity for someone with money.

I imagine, right now, there are many wealthy people, companies/REIT's buying up residential properties; and using Airbnb to making a healthy ROI. If I had the means, I would probally join the money making hootenanny.

It kinda bothers me because essentilly all these low interest loans are going to wealthy people, with assets. In my warped world, I still think homes should be available to the middle class, and even the working poor. I just heard today it's practically impossible to get a loan if you're self-employed. Sorry, if I sound bitter--I am. I really wish they would raise interest rates. I only see the wealthy benefitting from this historically low interest rates. And to be honest, I don't want to have a bunch of random Airbnb people as temporary neighbors. Sorry about the rant. Oh yea, I just got a cc offer for 29 percent today--yea! I'm just in a bad mood today.

A lot of European cities are trying to crackdown on Airbnb used in housing without permission:


It's a big problem where I'm at:


Even normal folks making thousands of Euro from their flat, making housing unreasonably expensive as speculators snap up any reasonably priced real estate.

This is a problem to be address by user reviews, possibly formalized as some sort of "authenticity/personal metric".

You are searching for a certain feel or experience, which is fine. Personally, I'm more interested in just saving money, a savings which arises from the taking advantage of previously un-rented space and the part-time labor of folks who aren't able to work full time for hotels. Both of us can co-exist on AirBnB. Just read the reviews, and perhaps petition for AirBnB to include a formal metric (or prompt reviewers more for their opinion on the personal feel, etc.).

A full-time AirBnB landlord doesn't ruin the whole point or lose sign of any wonderful vision. I want a "substandard, impersonal distributed hotel", because I don't want to spend on money things I don't care about.

The problem is that you are not taking advantage of previously unrented space, such as a spare room would be. You are forcing people that live in the city out so you can rent their room.

That's the "part-time labor" section of my post is about. And, at its current level of detail, your criticism could be applied any time someone finds a more economically value use for something and "forces out" (i.e., out bids) the previous buyer.

The problem is the spare bedroom, the lovingly handmade shawls, the selling off of those attic knickknacks doesn't scale. So you end up with things that look a lot like hotels, mass produced crap, and more mass produced crap.

That's an exaggeration but not much of one.

Or you recognize that destroying your product offering in the name of "scale" is in fact destroying your product, not scaling it.

And they don't care so long as it makes more money--and is more or less required by the investment model.

By way of analogy, I know some tech events that the organizers keep deliberately small to maintain the feel of the event. But it's a lot easier to do that when you don't have investors looking for hypergrowth.

The “I need accommodation” crowd is bigger than the “I need accommodation and want to live among locals” crowd. They cater to the bigger crowd.

>>I love Airbnb. It's one of my favourite startups, from both a user's and entrepreneur's point of view.

Until that one time when you encounter a problem with an Airbnber, Airbnb customer service try to help, give you hope, then completely pull the rug out from under you. Terrible experience overall.

If there are any Airbnb employees on here who care about customer service and could help, please drop me a line?


I guess not ...

> It's hard to be sure I'm staying with a local making some cash off their spare room, rather than someone "farming" a bunch of cheap properties.

The big problem in a lot of places is that these properties are far from cheap.

I live in Stuttgart, one of the most expensive real estate markets in Germany (and maybe Europe?). House/apartment prices continue to climb past the level of absurdity for most residents, and when new "cheap" properties, for the low price of 250-350,000 Eur, hit the market, they're often recently snapped up by wealthy property speculators in the city who turn them around and run them as Airbnb properties at 150-300 Eur/night. It prices folks with middle class incomes right out of the city.

It's to the point that the state is planning laws that would prohibit short-term leasing schemes for whole flats if the flat isn't zoned as commercial property. People will still be able to rent out a room in their flat, but it will have to be a place where they live.

New York State has laws like that. They're awfully clumsy, as laws tend to be, and prevent me from posting my entire apartment while I'm in Europe for two weeks. I think there are more specific ways to tackle this problem legislatively like limiting to a certain number of nights rented per rolling 6-12 month period.

Clumsy laws require less intrusion to enforce. A flat ban on short term rentals means they can run through airbnb listings and see who is breaking the law. A rolling 12 month period requires that they track each night you rented your place out.

Or Airbnb can save its business model by cooperating with the law and with common sense and simply forbid people from renting beyond that?

The regulatory compliance costs would put an undue burden on smaller players to the market though and end up stifling new entrants.

If you were satisfied with only enforcing it against people renting solely on airbnb, then sure. Seems like it would be easy to work around though.

Or they simply have the law as they do now such that it'd be illegal to rent your apartment out through a service that doesn't cooperate in this way.

They changed the laws to that in a lot of places and airbnb aided new york in removing people renting entire blocks to turn into ghetto hotels.

What you're describing is essentially where Couchsurfing stands in the market.

I personally love the fact there is no money exchanged on there and that people participate for the conversations/experiences.

I don't see the problem of owners outsourcing the management. For me the most important thing about airbnb is, that it allows better utilization of resources. I don't care about the other details that much, I still choose my accommodation based on excepted quality/price. Now I just have more choices, thanks to airbnb.

Other companies were offering this service anyway. It's only natural AirBnB would want to provide that service themselves and take a cut.

You're complaining about how things scale. If there's an opportunity to make money by doing more of something, people will pile in and do more of it. That's how markets work.

I Love the idea behind Airbnb, but I hate what they are doing recently. They are deregulating the market and making it worse for everybody except the tourists.

Thanks to them it will be harder for you to rent or buy a place to live. At the same time they are putting registered businesses out of business thanks to the marketing of "sharing" economy, which is a huge sham (see Uber).

I hope that countries protect the regular Joe's living in cities and demand payment for professional renting services, just like any regular apartement / hotel.

Thanks for ruining it for everybody else, so you can make a boatload of money.

> What I find most puzzling is how such great founders could lose sight of the wonderful vision they had.

I think it's a lot of naiveté about the nature of financial markets. If you find something that is truly better, the "no arbitrage" principle pops up. First, it's small players renting out a small number of apartments, but once they prove that the business model works, big money in the form of hundred-billion dollar REITs step in and blow everyone away with scale. These REITs already existed; but they were primarily focused on commercial and multi-tenant buildings where hiring a professional management company scales well. Guess what? Airbnb made it scale well to individual properties.

I'll put it this way -- I have significant holdings in various REITs because of Airbnb. At a minimum, they will drive property prices in an area up, which is the entire point of an REIT (find an undervalued area, invest like hell and bring property values in the whole area up). It's just that they can now have very low management fees because of all the ROI they're seeing from Airbnb rentals. It's a great investment if you can find the right local markets. Even locally where I live, there are at least 3 Chinese REITs snapping up dilapidated houses on the cheap, renovating them, and putting them on Airbnb.

A big problem with wealth is that you can't just let it sit in a bank account. You're losing literally millions of dollars a day that way, so you have to find some way to invest that money into assets with growth. Real estate (I'm not talking mortgage-backed securities, but literally owning a large, diversified portfolio of land) has traditionally been considered "safe" -- you're unlikely to totally lose your ass on the property value alone, and any rental income you get covers upkeep of the property and offsets the interest rates on the loans (REITs are in the game for capital asset growth; not operational income).

Airbnb is, in my opinion, a real-estate investment site first and foremost. It provides management (until recently through a network of local management companies, though this article shows airbnb getting into the game themselves) and rental services to investors.

I don't see any way to allow the original vision of "what Airbnb was supposed to be" without also allowing the real estate investment crowd in. The only way would be extensive screening of rentals to ensure they're actually what they say they are -- and this would need to be provided by Airbnb because property managers are really good at deceiving short-term renters. And that would totally break their business model.

IMO it's yet another case of a tech Animal Farm -- we strip an industry down to its core components in an attempt to simplify, but once you try to scale it up you see why the original iteration of the industry had the rules it did: often to protect unsophisticated customers from slimy professionals who cut corners to increase their margins. In some cases, local regulation / corruption was a real issue (see Uber) but in others I'm not sure there really was much of a problem to begin with (Airbnb in most places outside major cities with artificially restricted hotel capacity).

tbh I don't think the founders had many alternatives if they wanted to justify a valuation significantly greater than than Sabre plc (who have a larger, higher-end room inventory and that's only one division of their business). AirBnB had to find new revenue streams and opportunities to scale up their inventory growth somewhere. It's certainly a risky doubling-down on the very sound business they've built though: I have a feeling they're going to need a few more lawyers.

One group I haven't seen mentioned yet are the various startups aiming to offer property management services to AirBnB customers - yet another example of why building on someone else's ecosystem is always a potential gamble.

Thought for discussion: Does the "gig economy" fundamentally encompass economic forces that make the gig arranger ultimately disintermediate their own suppliers? If so, are the "gig economy" businesses ultimately just very fancy wedges into existing markets with players too entrenched to come at directly, and little more? If it weren't probably impossible due to regulation and the business model probably not working out, would AirBNB ultimately just want to run their own facilities entirely?

(Honest questions for thought. To the extent they're a bit leading, it's to make them interesting enough to think about.)

Is there some other highly-entrenched market that could be cracked this way that nobody's considered?

> If so, are the "gig economy" businesses ultimately just very fancy wedges into existing markets with players too entrenched to come at directly, and little more?

The "gig economy" as exemplified by Uber and AirBNB primarily seems to be a way for businesses to circumvent the regulations on existing markets, giving them a competitive advantage over 'traditional' players.

Uber wouldn't be investing in self-driving cars if they thought they were going to have to buy taxi medallions for them and offer fixed fare prices, the way legitimate taxis do. If there were a way for AirBNB to just run hotels without having to comply with the usual hospitality laws, they'd be doing that instead of crowdsourcing.

Uber end game is self driving cars. Why wouldn't air bnb end game be hotels?

There is a reason we gave had hotels for 100 years. Kinda nice to get consistent quality with no big process to find a room.

Because the point of the gig economy is to profit off the capital owned by the working class.

Uber would have never gotten off the ground if it had to finance ownership of its own cars. AirBnB wouldn't be profitable (Or, more specifically, would be in an extremely risky line of business) if it had to own all the property it rents. They both capitalize on inefficiencies in driver/host use of their vehicles/homes, essentially borrowing them at a discount, compared to owning the asset + paying their own employee to drive/host.

I can already get consistent quality with no big process to find a room. I go to any hotel's website, and book a reservation.

Said hotel will also let me check in at 3 AM, will happily extend my stay, and will assist me with any travel emergencies.

You're being generous when you say they're capitalizing on inefficiencies; they are straight up freeloading, having platform users shoulder the capital costs.

The users are shouldering the costs and getting most of the money. How is that in any way freeloading?

That claim is even more absurd in the case of Airbnb, which is a pure marketplace. They are no more "freeloading" than your local newspaper is/was freeloading on the posters of classified ads for renting.

I think it would be considered "freeloading" if they person who was the AirBnB host was renting the property from an actual owner(the landlord) no?

The point of the gig economy is not to profit from capital owned by the working class.

The point of the gig economy is to circumvent regulations both on existing industries and the hiring of labor that reduce the returns to capital (in the latter case by providing greater security and returns to labor).

Now, allowing the working class to think that they are being made able to better leverage their meager capital is part of the leading wedge and marketing image of many gig economy ventures, but even there the trend is to transition away from use of working-class-owned capital to capitalist-class-owned capital. Which is really the only way ventures can scale, because of the working class had the kind of capital to support scaling ventures up, then we wouldn't call them "working class".

You see this transition to capitalist-owned-capital in the trend discussed with AirBnB increasingly listing big and multiple property owners, not extra rooms in some working-class person's home, in Uber moving to offer vehicle leases to drivers, to move beyond driver-owned vehicles, etc.

I don't disagree with you but I could see a hybrid model working for AirBnb.

Say they own an apartment complex and allow people to either purchase units or lease long-term, with the option to rent out their place to short-term AirBnb users when they aren't there.

AirBnb and its users would benefit from having on-site staff as well as standardized units, reducing unpredictability for everyone involved and making it a hotel-like experience, while still profiting off of capital owned by the working class.

I doubt that short-term apartment owner vacancy rates will be low enough to justify the costs. I could see this working for vacation properties, but this kind of business model already exists - just drive up to Whistler, BC... Or any serious ski resort, really.

Again, I can't really disagree.

What I'm imagining is probably closest to a time-share property but re-branded to lose the stigma and with slightly more standardized units.

I just like the idea of something that allows remote workers to easily move between multiple cities, for varying intervals of time, with similar, predictable accommodations.

No idea if there's actually a viable market or if it's even in the realm of what AirBnb are trying to do.

> I just like the idea of something that allows remote workers to easily move between multiple cities, for varying intervals of time, with similar, predictable accommodations.

As someone who has moved an aweful lot, I always imagined such an option should exist and was always frustrated to know it doesn't.

Barring a large corporation offering a seamless option, I'd like to see hostels tackle this problem by being built to offer several rentals (rooms) per location, perhaps with a 2-3 month limit. In a large enough city, one could just do a search for these types of rooms via Hostelbookers et al. At least such an offering would take care of the "I just moved here and want to figure out the lay of the land first" problem.

But the working class in many(most?) of the desirable areas can't afford to buy or own property. I agree with your point in the context of Uber but am having trouble seeing it in the context of AirBnB.

Can you elaborate?

I agree with this sentiment. I have recently shifted back to preferring hotels versus an airbnb. Hotels are consistent. You know what you are going to get. Believe it or not, but you roll the dice every time you rent an AirBnB.

If a hotel has bedbugs or you find something nasty, it makes the morning news and headlines. There are usually regulations that kick in, procedures that must be followed. The hotel goes out of their way to compensate you, yes probably even prevent you from making a big deal about it by offering you a free booking or two. If something happens on an airbnb, they get a bad review.

I'm done with airbnb after realizing it was similarly priced to hotels but came with a ton more rules. I don't really want a 10pm bedtime when I'm out visiting friends in LA. Thanks though. At least with a hotel you can come and go as you please and not have to stress about getting there by check in time of whatever the host decides.

Airbnb is worth it if it's significantly cheaper than a hotel, but once the prices became similar imo totally not worth the hassle. With a hotel you know what you are getting upfront.

Of course there are Airbnbs in places where there are no hotels for miles. And if you're a group, it's cool to be able to rent a house or apartment including kitchen.

For business trips or similar, yeah, hotels are perfect.

Hotels having bedbugs does not make morning news. In fact, last time my flight was canceled out of Newark they gave me a free hotel room for the night and almost every Yelp review mentioned bedbugs...

I brought up the issue when I was checking in and they claimed they'd never had bedbugs which is clearly a lie.

Airbnb actually has more incentive to fix the issue for you because you'll stay with them again (same as some large hotel chains) whereas in this case I was never coming back to Newark Airport Hotel so they didn't care

I dunno - if I got bed bugs in my suitcase from an AirBnB I would definitely not roll the dice with them again. How would AirBnB fix bedbugs in someone's home?

Either require them to get a bedbug treatment before relisting or provide it.

Details can be worked out by someone other than me.

Did they give you a hotel in a major chain or something local? Probably some local cheap stuff.

I stayed at a best western in the Philippines and it was pristine. I also stayed at local places and quality varied, because who was going to know/care?

The lesson here is that big, reputable places have incentives, whether traditional (best western) or alternative (airBnB).

Best Western apparently sells their name for cheap. I stayed in a "Best Western" in Athens that was a dump. It wasn't really even a hotel, just a bunch of poorly split apartments.

That said, this is the nice thing about Airbnb. The reviews would have warned me.

Reviews aren't an exclusive feature of Airbnb.

> Why wouldn't air bnb end game be hotels

Because many hotel chains don't even do that - they simply franchise. The end goal for many of these things is to become a directed-fund: investors bring money (to buy property), the company adds their secret sauce and takes a significant margin.

Where "secret sauce" is mostly "the brand," which is true for most franchise models.

The secret sauce is the marketplace as much as the brand.

Hotels don't address the supply side of the market.

If I as a person own a house, and I want to rent to out to other people when I am away, how do I do this in an easy way?

This is free supply that SHOULD be on the market, but wasn't until airbnb came along. Sure there was craigslist, ect, but airbnb really made the process much easier.

Well, to be fair VRBO predates Airbnb by more than a decade.

No, since AirBnb or Uber do not want to own anything, only their code and servers, much like eBay does not own/stock merchandise.

Most hotels do not own their own real estate.

Yes, they follow the franchise model. What differentiator would an AirBnB hotel franchise bring to that table? Their brand?

There's no particular reason that wouldn't be successful, but it makes about as much sense as them branching out into the ketchup-making business.

Part of being a franchisee means access to their software/booking system.

Being a Marriott hotel means you have access to Marriott customers on Marriott.com and other sites through their systems. That's not much different than AirBnB.

Of course! My point is that AirBnB's private rental business would give it no significant competitive advantage to Mariott in the franchised hotel industry. At best, it would give them a cross-product marketing channel... While marrying themselves to a lot of financial, and brand risk.

They may as well take that money, and invest it into <Insert non-core competency of AirBnB>. Or, alternatively, partner with an existing hotel franchise.

Managing other people's properties, on the other hand, is a natural extension of their core business.

Is this true? Sorry I need a little more proof than one sentence.

Yep, definitely. Here's a quick look at Marriott's ownership structure, which is an operating model shared by many other global hotel brands:


Here's the big hotel operator in Austin. One operator, all of the hotel brands: http://www.whitelodging.com/portfolio/hotels

Check the lobby and surrounding area next time you're staying at a big hotel chain. Oftentimes you'll find a plaque that mentions the operating company name. Certainly the case with the Palo alto Sheraton I frequent.

What'll someone's happen is that the building and management don't change, yet the hotel brand will change.

In the eyes of Uber, a self-driving is nothing but a server with wheels and a seat attached to it. :D

Actually airbnb does not even own its servers apparently: it's on AWS/Akamai.

> a self-driving car is nothing but a server with wheels and a seat

and liability

"Why wouldn't air bnb end game be hotels?"

Well, the end game could also be apartment/house/hotel market, rolled into one.

IE, the unification of the short and long term housing markets. With each person having an opportunity to monetize ancillary tasks - cleaners, arranger, cooks and so-forth all could be available on the market.

If hotels have some amount of inefficiencies/fraction in their markets, apartment rent and home buying has much, much more. All for somewhat logical reasons but sharing-economy is pretty much a stampede to price everything at market value, externalities be damned.

If might be a bit inconvenient to have to decide on a weekly or daily basis whether you could afford your current digs but hypothetically you could take comfort in getting the best deal possible, I suppose unless you wind-up the sidewalk, a location of limited comfort.

It depends on the level of commoditization of the asset or labor that the "suppliers" are providing. Etsy, for example, is unlikely to be subject to the same forces.

Finance. The world doesn't need the SEC and SOX and the rest of their unnecessary services. Human organization doesn't begin when you qualify for Reg D therefore everything related to financial instruments is about to be codified into open protocols (equities, bonds, futures, contracts, etc). Much like the Airbnb and uber scenario the entrenched interests will lobby to maintain the status quo but ultimately the value derived from frictionless organization is too valuable to keep monopolized by those with opposing interests of the public.

There should be a service for those that believe this: "Battle an Underwriter". You walk into a room and write a financial contract with a pro; "I gave you a deposit today and you sell me your bike tonorrow" or some such. See who wins...

I have no idea what you're talking about..

The SEC regulates public companies and ensures they disclose accurate financial information, who leads the company, etc to the public. How does an open protocol solve that problem?

Take TheDAO for example. The operating agreement and equity distribution is codified on the ethereum blockchain. "Who leads the company" is a global set of public key holders that can direct the contract in real time.

Now, this isn't to say an investment is safe because it's accountable and transparent -- but the mechanics that govern the organization is now something that can be put on autopilot without human intervention.

The only thing that reduces risk is proper due diligence. Relying on the SEC would be a mistake and I expect this market to be filled by some kind of prediction market (see augur).

Given what actually happened with the DAO, I'm not sure that's a good example.

Some people aren't capable of reasoning in principle. I'm not appealing to them.

If the facts are out of line with the theory, it's not the facts that are flawed.

> Now, this isn't to say an investment is safe because it's accountable and transparent

Troll somewhere else bro. You add nothing to the discussion. Write a fortune cookie or something.

The problem with the DAO is that despite the theory, it was not "accountable and transparent".

It seems you're willfully conflating an implementation with the theory. The success or failures of the DAO has no bearing on the idea of digitizing and decentralizing financial services.

The gig economy is simply an end-run around the rules.

Third party property management is generally done by a licensed real estate agent or their proxy where allowed. I am not allowed to provide property management services for my neighbor's house unless I'm licensed to do so.

This is yet another area where Airbnb seems to be skirting close to breaking the rules.

Wrong. This is true for long term rentals, but not for vacation rentals. I.e. - anyone can manage a vacation rental, but you need to be a broker to manage an apartment that is leased for 12 months.

Eh, sort of. In my state (and many US states), the first rule that dictates short-term is whether a transient/occupany tax is paid (which it generally is, by Airbnb for their hosts: https://www.airbnb.com/help/article/653/in-what-areas-is-occ...).

But many states are cracking down on what "short-term rentals" mean and who falls into this transient tax category. Here in CA, the DRE recently released the following:

>>>First, while the Code refers to “transient occupancies”, the language that is most often used with reference to such occupancies refers to “short term rentals” and “vacation rentals”. As mentioned above, the maximum time period of such rentals cannot exceed 30 days.

>>>Second, the exemption refers to those who handle transient occupancies as agents on behalf of “another or others”. It does not refer to what is commonly described as VRBOs or vacation rentals by owner (s).

Source: http://www.dre.ca.gov/files/pdf/adv/LicenseeAlert2016shortte...

And anytime you get local departments of real estate involved, they'll go down kicking and screaming and make it as difficult as possible for Airbnb, VRBO, etc.

The gray area is where an owner engages in serial short term rentals in an attempt to hide the fact that they are basically renting out their property. Airbnb itself has tried to blur whether these guys fall under hospitality rules or not.

Not sure why you're being downvoted, but this is a very good point.

Companies like the National Multifamily Housing Council, National Apartment Association, National Association of Regional Property Managers, and various Realtor affiliated groups spend tens of millions of dollars each year lobbying to pass legislation that makes it incredibly difficult for non-property-owners and non-agents/brokers to do anything involving managing other people's property in many states.

Legitimately curious to know how Airbnb plans to get around this in the US (and several other countries with similar laws).

From the article, they're starting this as a pilot in Japan (and not sure about the laws there), so maybe the short-term only involves more loosely regulated housing markets.

Those lobbies make it hard for anybody who isn't licensed to do provide any services related to real estate.

I didn't see the part about piloting this in Japan, partly because I'm on my phone and the linked article has a terrible layout on my browser. I don't know what laws govern this sort of thing there, so my comment about skirting the law doesn't necessarily apply there.

I guess goverment should change the raw if Airbnb becomes more famous in Japan. In Japan, lots of vested interests exits (same as a another countries) so now "minpaku" is discussed in various places - on the Web, goverment, tenants of the apartment, or somewhere.

Sadly, some Japanese unwelcome to foregin traveler. My friend says everyday "Oh, lots of Chinese!" at Akihabara. However, he never complains to white and blacks. It's a real Japanese attitude(not my own).

If more Chinese come to Japan with Airbnb, Japanese will hold a serious discussions on Airbnb.

I think they're asking for a lot of the same trouble they've already had with government regulations, only this time they're without the "it's just people renting out their own spare room" defense.

I have still not understood how legal Airbnb is. If I own a house, can I just let it out for rent for $$ with no consequences? What is difference between this and running a hotel? (I assume you cannot sublet in most places even though I have seen people do this :/ )

It depends heavily on your location. Some jurisdictions levy taxes that you are supposed to pay when you rent out your house for a short time ('hotel taxes'). Some areas have private groups which control a block of houses ("Home Ownership Associations" in the US) which might have a rule saying you can't rent out the house at all, even though you own it. Some cities have laws saying that a building must be either built for the purpose of being a hotel (with extra requirements for fire codes, etc) or you can't rent it for short periods. Some say you can rent out your house but must register as a business (San Francisco). Some say that if the place you own is inside an apartment building then you may not rent it out for short periods unless you live there while the renter lives there (this is the law in NYC).

Why focus on Airbnb? What about Craigslist. Or classified ads in the newspaper.

Are these all "illegal hotels"?

People have been renting out spare bedrooms in their house for centuries.

People have been using paper to commit fraud for centuries, but nobody goes after the paper manufacturers.

They will go after the guy running a forgery-on-demand service, though.

Craigslist is a general classified service. It's at about five arms lengths' away from property-related transactions. AirBnB, on the other hand, is very intimately involved in these transactions. Courts aren't stupid, and they will interpret the two situations quite differently.

What about the introducer of said forgert-service ?

I can't possibly be breaking the law if all I'm doing is introducing people to each other.

I think that's the same line of reasoning used by the Assasinat.io startup - making introductions between sets of three people (One of whom happens to be heavily armed, one of whom happens to be fairly wealthy, and one who happens to be wanted dead by the second.)

Since courts aren't stupid, I don't think it would pass muster either. Even if it did have a karma system, and a sweet app.

There's a word for that. It's called Conspiracy.


A question I never see being brought up: do people pay their due taxes from their AirBnB earnings?

Surprisingly, AirBNB only reports your host income if you have over $20,000 in earnings and 200+ bookings [1]. (These thresholds are set by statute)

Sounds like a legal fix is in order to get that down to a $600 threshold as applies to traditional 1099 reporting, but I'll assume a fix won't be made as the threshold was most likely set high as a compromise to enable such reporting to occur.

Luckily, AirBnB will collect occupancy taxes and can remit them to taxing authorities directly.

[1] https://www.airbnb.com/help/article/481/how-do-taxes-work-fo...

The federal threshold for reporting payments of income is $600, and there is no federal statutory threshold with respect to the number of bookings before reporting is required.

Curious that a technology company can't manage something that low-tech property management companies can handle without issue. This type of tax reporting is very easily automated, so AirBnB doesn't really have any excuse not to do it properly.

IRS guidelines (1099-K instructions) state the thresholds I stated; if they're not defined in law, the IRS is dictating the thresholds themselves.

Airbnb does a terrible job with occupancy tax. They only cover a few cities and do not provide any tools to collect tax at the time of booking.

VRBO/Homeaway does collect tax for you.

So I pay the tax out of my own airbnb earnings (it is regulated here so I have a license).

Which sucks because hotels can add the tax, after their daily rate. I just earn 10% less.

AirBnB files an income statement with the IRS, so at the very least that avenue is covered.

Proof: https://www.airbnb.com/help/article/414/should-i-expect-to-r...

It could be very different in other countries or across borders though.

In some places, e.g. Amsterdam AirBnB will add tax directly to your bill.

In addition to the answer given, your insurance company may not cover you if there is a problem when you rented your place out.

Airbnb provides insurance when you rent out your space.

The result is that you don't have to worry about your homeowners insurance covering damage as its already covered.

Just make sure they don't find out.

Scale is the biggest difference.

Usually a hotel has many guests at a time, and multiple employees.

Airbnb operators are usually run by the host, and typically only have a single spare room.

At some point, these superhosts provide hotel services in a distributed, piecemeal way.

There's going to be a watershed moment where a "host" offering 10-20+ properties is going to get the hammer of the law on them for running an unlicensed hotel and quite probably for some form of tax fraud as well (hotels often have many extra taxes.)

Great; what we need is less affordable housing and more companies siphoning money off the real estate market.

Airbnb needs to provide an easier way to differentiate between a host company and a host person.

I still prefer staying at airbnb, even when its more of a company than an individual. Its still much better than a typical hotel.

Super host here.

This is fascinating. I wonder how one becomes involved...

I hate Airbnb for a lot of reasons, but I'm on their side when they're facing the State regulations.

That's an odd statement. Are all state regulations inherently bad?

Inherently, no. But typically congress does a bad job when it comes to promoting new comers into an established market. Google Fiber, Tesla dealerships, etc.

Congress shouldn't be promoting newcomers (or incumbents -- perhaps that's your complaint?). And FWIW the barriers faced by GF and Tesla are at the state level, not congress.

Yes, of course.

reasons like...

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