The founders of AirBnB have been in a nice and educational rollercoaster: starting with an air mattress in the living room to an international platform with accommodation in 34,000 cities in 191 countries.
Their strategy was different from that of other disruptive organizations. Where a company like Uber heartlessly attacked the taxi market from day one, for example totally ignoring the current market and its employees, AirBnB chose a seemingly social way. To the outside world in recent years it seems to be a great success story that sounds like a optimistic entrepreneurs lecture.
But AirBnB is in trouble. The representatives of the State of New York filed a law that threatens the business model of AirBnb in New York. In the end of next week, Governor Cuomo decides whether to sign or veto the law. In 2010, New York passed a law which prohibits leasing apartment complexes in Manhattan for a period shorter than 30 days. But this is the core activity of Airbnb. The law is therefore not met. Therefore they have proposed an even stricter law: who rents his apartment through Airbnb for short term, will be fined with $ 7,500.
The big success of AirBnB, seems to destroy the company and forces AirBnB to make choices. Most important: short-term exponential growth or long-term sustainable existence. Growth is a conscious choice, but city authorities are not entirely happy with that growth. On the one hand they appreciate the new flow of tourists, but on the other hand they are responsible for defending the interests of the city and its inhabitants.
I think it is really important to think about the interests of the citizens, but cities need to give new developments like AirBnB a place in the current policy. For example policy about the affordability of houses, the occurrence of inconvenience and to make sure the business is fair. Because this kind of companies are the future.
The municipality of Amsterdam conceived as examples three very simple rules: 1. Do not exceed sixty days per year; 2. No more than four people at a time; 3. Not in social housing. Is this verifiable and will new regulations focused on disruptive companies safe AirBnB?
Interesting is to look at the website InsideAirBnB.com, which creates maps of the data from AirBnB.
When we take a look of the map of Amsterdam (sorry it’s my hometown and the site doesn’t contain a map of Rotterdam) we see that a solution for this conflict of interests is needed!
http://insideairbnb.com/amsterdam/
https://www.nrc.nl/nieuws/2016/10/20/new-york-bindt-strijd-aan-met-airbnb-4914291-a1527622https://
www.nrc.nl/nieuws/2016/08/29/airbnb-moet-zelf-de-regels-handhaven-4048140-a1518490https://
www.nrc.nl/nieuws/2016/10/20/new-york-vs-airbnb-strijd-om-toekomst-van-verhuursite-4902724-a1527496
Hi Fenna, such a relevant article for many start ups. As a German citizen, I can’t help but compare this hurdle for AirBnB with Uber’s struggles to enter the German market. Their legal battles in 2015 due to a ban on unlicensed cab drivers began because they thought “they’d give it a try anyways”. It seems that certain local laws are keeping these unicorns from going full global. It will be interesting to watch the power struggle – will local authorities give in to give way to new trends (I think yes, they will have no choice), or will they continue to be stubborn in adapting new legislation to accommodate new business models. Efforts to protect local players will damage cities more than it will help them, in my personal opinion, but I guess only time will tell 🙂
It is very interesting to see that a companies own success can eventually backfire and might threaten its very existence. However, since Airbnb is a multinational company I do not think that laws proposed by a few local municipalities could mean the end of Airbnb. Are these cities you mentioned the only cities proposing these laws, or is it a general trend?
Heey Luuk! Thanks for your reaction 🙂 It is actually a trend, more and more cities are doubting about new laws to protect their citizens. So if New York accepts the law, this can be a big example for other cities around the world who are also struggling.
Thank you for your post Fenna. I believe it is very important for AirBnB to work together with the local law enforcement to show the added value that the company has for the tourist sector in the city. One of the main advantages that AirBnB provides for the city is the relocation of tourists across the entire city instead of only focusing on the city center. An example is Amsterdam where tourists were more divided across the entire city instead of only staying in hotels in the city center. This will help the local economy because tourists will buy more local products and the money will not flow to the big international hotels.
http://www.volkskrant.nl/opinie/airbnb-is-zegen-voor-amsterdams-toerisme~a4311100/
Hey René that’s a really good point indeed, thanks for adding!
Hi Fenna,
Interesting blog you have posted! Yesterday i read the exact same article and I think it is interesting to think about possible agreements AirBNB can make with the cities to create stability.
I don’t think shutting down the platform for some kind of cities will actual be a good solution. I think AirBNB is a really nice innovation and a lot of people enjoy it. Altough I understand it is a problem, since there are a lot who are actually use the platform to rent more houses, which more look like professionals than only private renters. In the article AirBNB suggest to cut off all the people who are renting more than 1 house. I think this will be already one small step to a solution. I think in combination with the rules of Amsterdam they can already cut off a lot of professionals and create more stability.