A new bill set to be signed covering New York could have a devastating effect on Airbnb.
To say that the companies such as Airbnb and Uber are unpopular with rivals is an understatement. The so called sharing economy may sound all ‘very nice’ but it is seen by many as a threat to jobs. Equally, it is tempting to characterise the fight against the sharing economy as little more than the moaning of old fashioned companies, trying to hold back new technology, like latter day King Canutes.
Now, Andrew Cuomo, New York’s governor, is preparing to sign a bill making it illegal for entire homes or apartments to be available to rent for less than 30 days across New York.
On the face of it, this bill is designed to support the local rental market – whole properties that are being let out for holiday use are not available for private rental – thus restricting the supply of property for residential use and supporting so called gentrification.
Linda Rosenthal who sponsored the bill, said at a conference: “Airbnb’s entire business model is predicated on breaking the law.”
Airbnb has responded with a last minute proposed compromise, offering to remove all entries from hosts who are renting out more than one property.
But this is an odd one.
The whole point about Airbnb, supposedly, is that it makes it possible for travellers to actually ‘live at’ rather than merely visit a location. And for long, Airbnb’s advocates talked about how using it was also a social experience, putting hosts and their paying visitors together as if they are all one big, happy family.
So, on the face of it, banning local hosts from renting out an entire property or apartment should not be contradictory to the ethos of the sharing economy.
But then again, what many people really want is to stop Airbnb competing with the hotel industry.
The sharing economy is meant to be about allowing people to use an asset that they already own, such as their home, car, or even their time, and generating an extra income from it. Such an ethos is indeed a threat to established firms, but frankly trying to stop such practices feels ever so slightly like the ethos of the luddites.
But it may be more of problem when people trying to generate revenue from the sharing economy actually go out and acquire extra assets for the sole purpose of generating an income – then it ceases to be the sharing economy.
So people or companies who buy multiple properties for the purpose of letting them out over Airbnb are not really participating in the sharing economy, at all.