(Yes the services provide liability insurance, but the caps are well below awards that are commonly made in accident cases. Just trawl some websites of ambulance chaser lawyers to see what I mean)
EDIT: NO this cannot be solved with "boilerplate waivers". YES it's a shame. Try to find a lawyer who is willing to share his car over the Internet. You can't. Because they know.
EDIT: As for jurisdictions, I'm referring to the US. California is probably close to worst case.
The difference in price between equivalent quality airBnBs and traditional hotels can be attributed to a few things:
1) Difference in demand due to people being more comfortable in anonymous hotels
2) Inherent efficiency in 'sharing', because the owner was going to own the property whether or not they rent it out.
3) Corruption. Unfair zoning and political influence of hotel industry.
4) The risk that you mention is priced into hotel rooms, but not into airBnBs.
5) External costs. The negative impact on the neighborhood (traffic, noise, damage) caused by high-turnover renters. Hotels pay some of this through extra taxes and regulation, while sharers pay none of it.
Now to the extent the price difference is made up of 1,2, and 3, the sharing economy is great. We are moving towards a more efficient marketplace, with lower prices and better quality for everyone.
The trouble is, the hotel industry is already pretty competitive. So I would guess that a good amount of the price difference actually resides in 4 and 5, in which case the sharing economy is saving travelers money and taking it out of the pocket of the hosts and local communities.
My impression was that the hotel industry is subjected to regulation, as opposed to it wielding power.
In addition to regulation, many states and localities impose significant taxes on hotel stays. For example, the theoretically low-tax Texas has a 6% state hotel tax , but localities also levy taxes on top of that, bringing the total to often 15%.
It really is a shame that litigiousness has become so bad. My folks had to stop letting neighbor kids use their zip-line when they learned they could be sued and lose everything if anyone hurt themselves.
You can never be safe, any waiver saying "I will not sue this land owner for any reason no matter what" is worthless because even if they did sigh it, it would be deemed illegal.
An other thing I think : US certainly won't stay behind if it becomes a sufficient economical force in the rest of the world. They will adapt their laws.
However, what seems to be broken is the legal system in the place you live.
BUT (there's always a 'but' isn't there). I'm skeptical. On two fronts:
First, it's becoming increasingly difficult to make reservations as a guest in a nice place unless you're planning 4-6 months ahead of time. Some people have the luxury of doing that, many do not. I've just taken reservations for both Xmas and New Year's eve at my place in NYC and it's barely the end of July.
As a guest, this irks me. I spent 3 weeks in London recently, booked the trip about a month in advance, and tried to no avail to find a place on AirBNB -- nada. All the nice places had been snapped up months ago, and the ones that were left were either shady brokers or absolute crap (it makes sense -- I wanted a 3 week booking. If a nice place had even a 1-day booking in that window, the whole place was unavailable). I ended up booking on HomeAway or FlipKey or one of their competitors.
Second, I feel in some sense, the tide is turning the other way on the regulation front. I've been lucky with my place in NYC in that I'm in an AirBNB-friendly building and I've had extremely good luck in getting terrific guests. But the regulatory environment is not AirBNB-friendly and it's getting less so. Several people who used to host in NYC have stopped doing so for fear (irrational or otherwise) of running afoul of the law.
I tried to host w/ my apartment in SF and within 72 hours of posting the listing, I received a very strongly-worded C&D letter from the building's management company staff attorney. They had someone in the office who constantly scanned for listings on AirBNB and came down hard and fast. Others have reported similar stories from HOAs and management companies.
So of course I want nothing but the best for AirBNB - I've a happy customer on both sides. But I don't think it's such a slam dunk as many seem to think it is...
Not to start a flame war, but I think this discussion is pretty prevalent with things like Uber and other 'disruptive' services:
should we spend time thinking about why regulations are in place? I'm pretty sure a lot of the rules in leases about not doing airbnb is because most people don't want their neighbors running a hotel and it can cause prices to go up for people looking to live in an area (because of people potentially running a whole "network" of these).
It's good to hear you're getting terrific guests, but I think it's important to acknowledge that some of the rules are there for a reason too( not saying you don't think so).
Does something like that already exist?
I'm talking about present things, though -- if someone is actively subletting your property or using it as a hotel, or actively using it to run a drug retail business, etc. Knowing current restraining orders could be useful for security (although arguably the tenant should report those if it's a multi-unit complex) -- there's less of an argument for that. There probably would be for things like the sex offender list, though.
So yeah, it's kinda a bad deal for those who always pay on time - they're measured against the same risk as a rando off the street, which is why a rental application today can involve a background check and employment reference.
Of course, Prop 13 screws the same people -- a 55 year old state worker who has lived in his house for 25 years pays ~nothing in property taxes, where a startup person (or really any 23 year old without family property) either pays inflated property tax rates (on a recent purchase; both the percentage rate and dollar value of property are high) directly, or pays them in rent (a person who has owned a house for 40 years can still rent it on the market at the prevailing rate, which is high due to supply constraint and any new supply needing to reflect current purchase and thus tax levels).
I'm all for tenants, in general, vs. landlords, and generally for people beginning their careers vs. incumbents, but rent control doesn't help new households.
Under Prop 13, property tax rates in California are limited to 1% of assessed value. Its true that a new purchaser will pay this on something like the actual current value, unlike someone who has owned for a long time with real appreciation faster than the limited rate of increase of assessed value, but the rate won't be any higher for the recent purchaser.
I own a home (remote, long story). I hope my property manager monitors my realestate in this fashion. Legally, I'm on the hook for all sorts of eventualities and insurance related to the property (eg. fire and perhaps even injury). I'm not willing to foot the extra risk (or bills!) of having a tenant inviting itinerant AirBnB visitors -- that's why subleasing is not permitted by my contract with the leasee.
Would I be happy with an alternative that yields higher net returns than a property manager? Absolutely. Do I want it done on my property against my permission? Hell no.
Great idea btw :)
If a business makes sense, and consumers get a taste of it and have positive experiences, it's very hard to stop. Institutional inefficiencies usually only last when better solutions are adequately hidden from consumers.
I was pretty skeptical of AirBnb a while ago because I underestimated the effectiveness of trust and rating systems. I thought that the initial excitement was really just because the system masked the risks people were taking. I should have known from eBay that it can be done.
If they do have the trust thing worked out pretty well, then it's a very solid business model. Net travel from any one city is generally close to zero, so having a ton of hotels is pretty inefficient.
(I'm not an airbnb user, but I see why it's appealing.)
 It could really only be stopped if airbnb were somehow vilified. For instance, if newspapers started running stories like "downtown overrun by out-of-town vandals using airbnb" (just to give an absurd example).
 It varies seasonally, of course, which might mean that there are more people in tourist areas in the summer, causing a need for things like hotels. But many tourist destinations are also major cities, with their own residents leaving on holiday as well.
By setting up a "HOA", the real estate developer gets certain privileges that easies their exit and transferring of the property to the residents.
Of course, there are some details that might cause problems. A landlord might expect more headaches and confusion from someone subletting the place, and may want to raise the rent to compensate.
Also, just because it's inefficient doesn't mean that it's easy to solve. Copyright is obviously inefficient, but not easy to solve.
Have you heard about supply and demand...
I, for one, welcome it. It's time the market voiced their opinion over how much value these groups provide.
For example, take internet. Right now everyone can get cable/dsl but in many contracts it is against their terms to share it. I understand why because a lot of their #s are based around utilization. But I still feel in some way taken advantage of.
I can get the hate for taxi commissions but last I checked hotels are a pretty good service.
Maybe Tesla has found a way of profitably selling cars and servicing them without a dealer network and the law should be changed. Or, maybe Tesla just isn't big enough to have had that problem yet.
- Anatole France, Le Lys Rouge [The Red Lily] (1894), ch. 7
I'm 27. Most people I know have not stayed in an Airbnb rental, or considered becoming hosts. They haven't heard of it, or they're reluctant to stay with a stranger.
Eventually, positive word of mouth will convince them to try. They just have to like it once and they'll do it again.
Friedman tried to paint Airbnb as massive, but all I can think about it how tiny it still is compared to the global hotel industry.
You may say that for use case X, a hotel would be better. Fine. But I'd estimate 80% of the market hasn't tried Airbnb, and X% of them will switch once they do.
You can find this pattern in other markets, like online dating. A lot of people were initially hesitant (and still are), so there are social forces at work. Once the lid comes off that, I think it'll blow up.
I have the urge to box Airbnb into this "paid couch-surfing" category, but that's not really what they are. They positioned their company as something greater than that: all of the services that went along with their experience. Funny enough, the investors didn't buy it because they were tunnel visioned by how big it could be and whether it would scale at the seed stage. Those are the wrong questions to be asking at seed, and actually I don't think many founders could have pulled off starting Airbnb. The team clearly was the overriding factor in Airbnb working, followed by their excitement to be doing that startup.
I liked the Subject: Airbnb "essay" which showed how true this was (http://paulgraham.com/airbnb.html).
Why is it so flatly awesome? My experience was: overpriced room (overpriced because the high airbnb fees get passed on to the person who stays), annoying extra "cleaning/deposit" fees that don't get refunded (and you're not notified that they didn't get refunded), and a quasi-too-personal system of booking where half the listings are by weirdos ("RENT A ROOM IN MAH CAMPER ON THE STREET!") you can't filter out or fake listings nobody responds to.
It's squarely not in my "things that make me happy" column.
I came to Airbnb with prior couchsurfing experience. You learn how to distinguish good listings from bad. Every single one of my Airbnb experiences has been both inexpensive and awesome.
Some markets are tougher though. Manhattan is extremely expensive. Most other cities seem fine.
(Granted, it was something like a fifth-floor walk-up, and the neighborhood was a little gritty, but in the edgy-up-and-coming cool-if-you're-into-that sort of way and not the help-get-me-out-of-here fear-for-your-life drug-dealers-on-the-doorstep kind of way.)
I can only expect that I'd be out another few hundred bucks if I used a traditional hotel.
Irrational exuberance of startups around here tends to get out of hand. I get it. Everybody is the friend of a rich person and you want to promote them because you know them. hi-5's and bropong all around. Great. But they're still delusional. Gotta speak truth to ego-elevating unrestricted happiness. Life is pain, not million dollar post-exit condos in SF.
The cleaning fees had some wording like "if necessary" or "if damage is done," but it was never returned or communicated nothing would be returned.
(Sidenote: There's also no recourse or discount for "weirdness." The lady whose second bedroom I rented had her non-english-speaking mother stay for two weeks (unannounced, unasked--suddenly there was just someone new living there) whose hobbies included power sanding furniture starting about two hours before daylight and taking up the entire kitchen for five hours a day.)
The response rate things are okay, but there are still tons of people who cannot communicate effectively online (or even form coherent thoughts in person most days). It's a crapshoot. (Kinda like trying to sell things on craigslist -- you never realize how many weirdos are out there until you have something they want. "Yoooooo maaan... will you take some pot for tha xbox? we aint got no monay.")
Hell, I'm not comfortable reviewing an air mattress I bought on amazon.
(including, but not limited to: rampant cross-site promotional spam, dead baby jokes, rambling on about how you overcame such adversity all the way from your $40,000/year private high school, follow-the-bouncing-ball upvote rings to promote insiders higher on the front page of Marketing To Nerds and Journalists Daily, and becoming an apologist for other people abusing/lying/cheating/stealing/manipulating things now that they are successful and you're afraid of them politically.)
They're not nice people.
That friend in Illinois was very uncomfortable with the idea of sleeping in some random person's house, and I didn't realize how absurd it sounded until I was listening to myself explain it to him and his very uncertain reaction. The reputation/trust element removes that "randomness." So much so that I won't book with listings that don't have any reviews, and I tell my friends the same thing.
Personally, I think the "weird factor" around AirBNB will probably be harder to erode than the one around online dating. I think the existing hotel industry comes a lot closer to meeting a wide range of people's needs for accommodations than the standard informal "go out to a bar or meet people through mutual friends" thing does, and for someone like me, who travels fairly infrequently, I don't mind spending more once or twice a year to have that extra identity/trust from the known quantity of an actual hotel.
"A lot of people were initially hesitant (and still are)"
Airbnb seems very cool as a user of the service, but I'd almost never even think of being a host.
They just need X% of people who haven't hosted to start hosting.
There's a large amount of people who haven't given the matter as much thought as you have. Some will decide differently.
Point is in support of parent comment here - this isn't brand new thinking and so anyone writing it as such is bandwagon jumping.
My guess is that it's because he's not a doctrinaire liberal, plus probably the whole Iraq thing.
Sounds like any number of journalists/writers to me.
Do you really feel that he has an attribution issue? He seems to always put the focus on people at the forefront of the change he describes (for example, in this article the focus is on Chesky.) It's not like his articles are some TED like exercise, where he portrays himself as being at the center of making all of these new things happen.
Not all Friedman books are like that. "From Beirut to Jerusalem" was excellent and should be mandatory reading for anyone who wants to get a better grasp of the conflicts in the middle east.
Long version: http://www.eschatonblog.com/2012/04/one-true-wanker-of-decad...
I do think it would be more appropriate to call it the
'renting economy' or the 'ending economy,' however. Sharing implies something more equitable than a straight business transaction.
What are some other sharing ideas that are out there?
I think women's fashion could benefit from something like this, sharing shoes - dresses, gowns etc. Think of all the money that is spent on weddings, proms, etc.
For the typical man, power tools and machinery. The one guy in town with the Bridgeport will make out like a bandit.
Neighbours let each other borrow sugar or borrow an egg. - There's definitely a location aspect involved in all of this. Vacations are different because you're specifically going to some place far away. Maybe otherwise, you shouldn't focus on a single type of item, and simply connect the nearby community with a focus on sharing any and everything.
There's a startup in the current batch doing Netflix for women's fashion: http://letote.com. It's quite popular among the women who work for YC.
It also seems like there was a large shift in (or discovery of) the willingness of individuals to participate in the way that makes sharing work. I suspect that many other innovations will be primarily social ones enabled by the internet (the watsi model?), and that these will be just as powerful as, say, graphene or spacex.
The "large shift" was when people started getting paid. People will do anything to get paid, including inconveniencing themselves by illegally renting out rooms in their apartments.
The ideas in the piece clearly aren't new for most of us on HackerNews, but I would contend they're not really new for many in the general public either.
There have been many mainstream news stories about the sharing economy. And even battles in big cities (SF, NY) over regulation. I would've guessed that this was already on many people's radar.
This usually comes up when I tell them what Ycombinator is.
"Have you heard of Dropbox? Airbnb? Reddit?"
Usually one of those three works, but a surprising amount of people don't know what either of the first two are. I even talk to a lot of people who don't know what Reddit is.
They're all obviously mainstream, just not as mainstream as, say, staying in a hotel.
Failure of analysis. The reason why people want to trust each other rather than companies is not some weird cultural shift that doesn't exist WRT anti-mass production, its the death of trust in existing big companies. I want a coffee mug. I don't really care how many other copies exist, I'd just like one not made with lead, where the artwork isn't water soluble, and it hasn't been value engineered to fail rapidly. Because of crony capitalism and consolidation, and the careful cooperation of for-profit media also owned by consolidated crony capitalists (in some situations, the same individuals...), those options are not available in the big company mug market. So a system that rates individuals for their production is going to do well if the big companies are unable to provide what individuals are allowed to provide.
The TLDR is a monopolistic command economy (ours) is inherently inefficient. Computers and tech and stuff can make at least some inefficient things, efficient enough.
I don't really care if I'm sleeping in the most unique bedroom in the world... I'm asleep, what do I care. On the other hand, I'd like it to be reasonably clean, no bed bugs, and no one stealing my stuff. I'd feel more ethical if no illegal aliens were being treated inhumanely as part of my experience. And no customer service script readers. The big corporations simply can no longer provide that experience like they could in the past, too bad. Airbnb can provide some trust in that experience. Guess which is growing?
Anecdotes, good or bad, are as pointless as reading nation wide multi thousand tower cell phone company reviews. "Oh, you're looking for a cell phone company (in LA)? Well let me tell you, (multinational) is (terrible|great) (in NYC)."
Nobody in my condo cluster had a problem with it.
And yes I live in Marin.
And my comment only rose to the top when the essay was quite far down the frontpage.
The link in this post was top or near top at the time this essay was #1, so I imagine they got quite a few visitors quite fast.
I like the idea of something like this, with a local non-monetary exchange currency.