Airbnb, the $25 billion global-hospitality behemoth, may have met its match. And right in its hometown of San Francisco.
On November 3, the voters of San Francisco will vote on Proposition F, the citizens initiative that, if passed, will crack down on Airbnb’s business. In the heart of Silicon Valley, a coalition of homeowners, neighborhood groups and tenant advocates gathered over 20,000 signatures to say “enough is enough.”
I have been an Airbnb host in San Francisco for about nine months. Last January I watched Katie Couric interview Airbnb’s 34-year-old billionaire CEO, Brian Chesky, and that’s when I realized that something didn’t add up.
Testing Airbnb’s claims
Couric asked Chesky if his company inspects its hosts’ homes for safety and fire hazards. Chesky replied, “We want to be a gold standard,” saying that he has 100 employees devoted exclusively to safety and that “hosts verify their IDs by connecting to their social networks and scanning their official ID or confirming personal details.”
So to test Airbnb’s system, I signed up as a host. I took a few photos of my house, inside and out and uploaded them to the Airbnb website, and within 15 minutes my place was “live” as an Airbnb rental. No background check, no verifying my ID, no confirming my personal details, no questions asked. Not even any contact with a real human from their trust and safety team. Nothing.
I could have used photos of my neighbor’s house, or even photos saved from the website of Better Homes and Gardens. Within an hour, I had my first inquiry from a guest. Within a couple of months, I had over a dozen reservation requests that would have netted me at least $4,000 in short-term rental income. This had the makings of a seriously lucrative enterprise.
Indeed, an accidentally leaked memo from huge real-estate developer Coldwell Banker Commercial estimated that a landlord could more than double net annual income by renting to Airbnb tourists than to local residents.
I was impressed and appalled at how easy Airbnb’s website made it.
When Couric asked Chesky about fire safety, instead of outlining his company’s inspection procedures, he replied that Airbnb, a company valued at $25 billion, offers free smoke and carbon-monoxide detectors to its hosts. When Couric pushed a bit further, Chesky talked about their “self-administered” system.
“We want to make sure that the codes and regulations are modernized,” he said. “A lot of the laws are 20th-century laws, or sometimes even 19th-century laws, in the 21st century.”
I decided to take Chesky up on his “gold standard” offer of receiving a free and “self-administered” smoke and carbon-monoxide detector for my Airbnb home. I requested one via the Airbnb website, and my query received the briefest of e-mail responses, directing me to a particular Airbnb webpage. But on that page, instead of offering me a free detector, it offered me a free “Emergency Safety Card,” saying I could use it to “list emergency numbers, exit routes, and other resources” for my guests.
Apparently, the offer for a free smoke detector had expired faster than a Groupon coupon. But the Airbnb representative didn’t mention that, nor did Chesky in his interview with Couric.
Besides the hosts, Airbnb also has no quality control over the types of guests. Neighbors suddenly find themselves living next door to a “hotel” where complete strangers are traipsing in and out, keeping tourist hours, in close proximity to children, seniors, and other vulnerable populations. That’s true of regular hotels as well, but usually they exist in areas that have been zoned for such activity.
Who’s really renting their places out?
All of this revealed to me a “credibility gap” between the company’s public face and reality.
But the biggest gap of all is in how Airbnb portrays “regular people” hosts, those who rent out spare rooms to tourists to make some extra money in these difficult times, as the face of its company. What could be wrong with that?
Here’s what’s wrong: an increasing amount of Airbnb’s commercial activity in cities like New York, San Francisco, and Los Angeles does not come from the listings of “regular people” who are merely renting out a spare room. Instead, it comes from professional landlords who are removing badly needed housing from the local market and making it available exclusively for tourists. Many of these landlords are evicting thousands of people and getting rid of rent-controlled housing.