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Comment by randomacct3847 | Hacker News Reader

It’s crazy to me that Airbnb is this massive company that derives most of their revenue from illegal services. What other multi-billion dollar co is remotely comparable?

Agree last thing I want to deal with is this feeling I’m not supposed to be there when I enter a random condo complex in a new city.

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I wouldn't say they derive most of their revenue illegally without more data, but regardless it's hardly alone. The ride-sharing services were the first of the modern companies push this model of "implement first, work out legalities later". Many of the scooter- and bike-rental outfits have operated on similar profiles.

Arguably the granddaddy of all of them was PayPal, which substantially strayed into banking territory without ever getting the appropriate accreditation.

Honestly, it seems to me the way much of this legislation moves forward. I don't know that I love companies flouting laws, but when those laws are kept in place against public interest (thinking especially of the state protection of taxi services), it can be hard to muster any serious antipathy towards them.

Uber and Airbnb are completely different beasts. At least rideshare benefits both residents and visitors alike and taxis are universally hated for high rates and fees.

How does Airbnb benefits residents of a city outside of landlords/slumlords? In markets with low housing supply they crowd out housing for permanent residents and create safety issues for neighbors. I would be pissed if I lived in an apartment complex with a steady stream of random strangers coming in and out because my neighbor rented it out on Airbnb.

Residential zoning laws are in the public interest. A city that made it legal for any home, apartment, or condo to be turned into a mini hotel does not benefit the people that live there at all.

I'm not defending AirBNB, nor castigating it. I haven't thought enough about the consequences of their behaviour to have a strong opinion.

You asked if there were other companies who operated substantially illegally,* not if there were other companies who operated substantially illegally and also weren't in the public interest. I offered examples.

Perhaps my musing at the end isn't widely applicable, the only one of the services listed I've substantially used is Uber, but nevertheless AirBNB certainly isn't alone in their behaviour.

* You said mostly illegally, but I don't know that that's even true of AirBNB.

They benefit their customers (who have a much wider and often cheaper selection available than the old hotel industry) and their hosts (many of whom keep their finances afloat through AirBnB revenue, or have been able to enjoy life-changing increases in their standard of living - like sending the kids to college - because of it). It's detrimental to the neighbors, who have to put up with a stream of transients, parties, noise, etc; and of course to the existing hotel industry (though many of them are adopting AirBnB as a booking platform).

Similarly, zoning laws are beneficial to resident homeowners and detrimental to renters, potential startups, real estate speculators.

There is no uniform "public interest". Any significant policy will have some people it helps and some people it hurts.

When I look at Airbnbs in SF, NY etc they are regularly more expensive than hotels with none of the benefits of a hotel.

Why should a city prioritize the needs of landlords and visitors over most of their constituents? Would love to see the number of mayors who love Airbnb. I can’t imagine there are many, if any.

I don't use AirBnB for staying in SF or NYC (although I highly doubt that's the case for SF - a hotel runs you $200+/night here, but you can get quite decent AirBnBs for $70-80/night).

I've used them for staying in Kirkland, WA; Amherst, MA; Santa Cruz, CA; Redding, CA; Gualala, CA; Carmel, CA; Morro Bay, CA; Kihei, Hawaii; Croatia; Sarajevo; and several other places. They're an absolute lifesaver there: in some of those locations, there are literally 1-2 hotels in the whole town, they are frequently fully booked, and they cost 2-3x an AirBnB.

And I'd also doubt very many mayors like AirBnB all that much. My point is that interests diverge - there are some people who derive a lot of benefit from AirBnB, and there are other people who have good reason to hate it.

I’m surprised Kirkland even has Airbnb’s. They seem to be almost illegal in next door Bellevue, but then again Bellevue has plenty of hotels.

They do, although selection was limited. A quick search just now turned up about 30 results.

East siders (police and residents) are wicked famous for not putting up with what they call quality life abuses. They are the exact opposite of Seattle in this regard.

They can’t be more expensive than hotels, worse than hotels, and still get booked without offering something of value, unless they’re just a bait and switch operation.

I suspect there are a group of Airbnb users who never look at hotels at all because "they're more expensive" and so higher price worse units can and probably do get sold.

Of course they can be. The fees on Airbnb add up e.g. service fee + cleaning fee + hotel occupancy taxes etc. You pay the same taxes as a regular hotel + at least two more fees (at least in places where Airbnb has agreed to collect hotel taxes on stays).

I used to work for a hotel company. When I moved to NYC, I had the option of getting the employee rate for my rooms while I was getting settled. For the same price, I got an Airbnb that was walking distance from the office.

The host had soft partitioned her apartment and was renting out the bedroom. Because it was “owner occupied” I don’t believe it is illegal. By being present, she could ensure I kept to the social norms of the building.

Airbnb in NYC isn’t just tourists having raves in quiet apartments. There are socially acceptable use cases that don’t result in housing shortages or significant downsides to current residents. I wish more people could accept nuance in the debate.

>They benefit their customers

While making it a nuisance for people actually living in the city. I live in a condo in downtown Toronto, and every tenant in my building unanimously hates airbnb residents. There are weekends when people who airbnb and come for the sole reason to party throw liquor bottles and garbage in the lobby, destroy elevator buttons because they can't access their floor with the fob, puke in the hallway/elevator when they come back from a night out at 3am. The list goes on. While it definitely does benefit people who actually want to travel and are respectful of the building, not everyone is like that.

>their hosts (many of whom keep their finances afloat through AirBnB revenue, or have been able to enjoy life-changing increases in their standard of living

Agreed, but this is when Airbnb is actually used how it is supposed to. Either the host lists it as a short term rental for a one off weekend, or a spare bedroom in their apartment. What ends up happening for a majority of units is, that a lot of rich people end up 1+xth property just for the sole reason of Airbnbing it full time and thus decreasing the supply of long term rental units for people in the city. You know what this leads to.

If airbnb actually cared, they would have more checks before a host can sign up, work the city to give them names of owners who list their unit for more than allowed days (a lot of European cities actually allow 90 days of rental or something similar), work with condo-boards to ban the building if it's against the building policy, etc.

> How does Airbnb benefits residents of a city outside of landlords/slumlords?

When I moved to Seattle a few years ago after college, I wanted to explore different neighborhoods to find out where I wanted to live. I found an Airbnb that let me rent out a persons mother-in-law house for $1000 for a month which is like 1/3rd of hotel rates and way more spacious because the alternative is that they would just let that space sit empty.

> mini hotel does not benefit the people that live there at all.

Become their drug dealer!

Nope. Porn industry was first. Online porn sales bypassed thousands of local rules re when and where it could be sold. That was long before paypal airbnb or even google.

Amazon.com as well. In the beginning one of their biggest competitive advantages was that they didn't charge sales tax.

Outside of tech - the history of Las Vegas is fascinating. It's a whole city built on nurturing industries that are illegal everywhere else. Many of the early casinos (1920s-ish) were also built by the Mafia with funding from the Mormon Church - there's one good example of capitalism allowing a group to reap the profits of sin without engaging in sin themselves. And of course, the modern Las Vegas Strip is actually built just outside of city limits because they didn't want to pay taxes to the city.

> Amazon.com as well. In the beginning one of their biggest competitive advantages was that they didn't charge sales tax.

Wasn't that basically the law of the land (until this year, due to Wayfair), based on the Quill SCOTUS decision?

My recollection was that Amazon started collecting sales tax many years ago, but apparently it was much more recent than that. They started collecting sales tax around 2011-2014 because many states passed explicit state legislation requiring them to.

https://en.wikipedia.org/wiki/Amazon_tax

As of mid-2018, just about all retailers have to collect sales taxes on their out-of-state shipments, presence or not.

Funny how the law that allowed Amazon to grow so much has been unwound just as it stops benefitting Amazon...

https://www.nytimes.com/2018/06/21/us/politics/supreme-court...

of their biggest competitive advantages was that they didn't charge sales tax

absolutely untrue. in the beginning, Amazon was not required to collect sales taxes (in the USA, can't speak to other countries policies) and did not grow into what it has become because it saved people a measly 8-10% off the purchase price.

> absolutely untrue. in the beginning, Amazon was not required to collect sales taxes

You are correct in that Amazon wasn't required to collect sales tax. What you are omitting is that the buyer was supposed to submit the sales tax. Of course, no buyer ever did so.

So, what Amazon did was aid and abet tax fraud on a massive scale that effectively gave them an 8-10% discount on everything they sold until legislation caught up.

This absolutely murdered my favorite local technical bookstores. I'm sure other people have other stores that they know took a beating from that.

> So, what Amazon did was aid and abet tax fraud...

I don't see how Amazon can be held responsible for its customers' failing to pay use tax. It wasn't Amazon's obligation to ensure it was paid or even to inform their customers of the requirement to pay it.

It's very much analogous to AirBnB, though, which is the point of this thread. AirBnB has no contract with your landlord or condo association; they are breaking no agreement. They also do not reside within the bounds of the municipalities whose laws they are supposedly breaking, and so are not subject to their jurisdiction.

They, however, enable large-scale lawbreaking on the part of their hosts. Technically, it's the host's obligation to ensure that they comply with all applicable laws, contracts, and regulations. AirBnB has boilerplate terms to that effect. In practice, a significant number of them don't. AirBnB looks the other way because they gain a competitive advantage from it. Enforcement is difficult.

It's quite similar from Amazon gaining a competitive advantage because their customers are supposed to pay sales tax on their own (but don't).

That’s like saying that car dealers abet drunk driving.

In the UK, they and a few other companies pioneered shipping CDs from Jersey to avoid VAT (which was 15 or 17.5% at the time).

ugh, uber? Not to mention, big pharma, alcohol, tobacco, pay day loans, pretty much all forms of loan sharking, gambling, insurance, financial industry, banking.

I mean you can argue each of those til the cows come home but it's relatively equivalent, there are a lot of industries that solely thrive on the exploitation and subsequent legalisation of things that are quite arguably things that should be outlawed or at least regulated very differently than they are today or would be if they kept their lobbyists out of it.

I'm not saying I think any of those things should be illegal either, just saying that the world is full of thes things. Airbnb and uber are just the latest who also happen to be silicon valley darlings.

The issue is that AirBnB (and Uber and Lyft and ...) make the vast majority of their money in the very biggest markets--New York, San Francisco, etc. So, until those cities get sufficiently aggressive and simply stomp AirBnB flat, this kind of misbehavior will continue.

Generally the secondary or below markets are ecstatic to have AirBnB and Uber, et al. as they are underserved by hotels and cabs and other things.

However, you won't become a unicorn serving Urbana-Champaign, Harrisburg, Lubbock, Columbiana, etc. so the VC's are happy to keep turning a blind eye to the misbehavior.

I don’t even think it would take a new law. A sufficiently ambitious prosecutor could make the case that AirBnB is the lead conspirator in a RICO, with wire fraud as the predicate offenses. The recent college bribery indictments were brought under that act.

> What other multi-billion dollar co is remotely comparable?

Uber

Uber was for awhile, but would argue now it’s become mostly regulated...drivers have to get the right TIC licenses, airports have official signage for rideshare.

Airbnb to me still feels like the Wild Wild West (Uber circa 2013) and they take so little responsibility to make sure listings are legal per terms of whatever city it’s located in.

In fact, AirBnB take active efforts to ensure that cities cannot verify that their listings are legal. They actively resist giving cities information about landlords using their platform.

It's not like the city can't factor the info about the owner from the address. They pay property taxes to the city, right? If a city council wanted a crackdown on illegal AirBnBs, they could compile a lust of properties every month and fine the landlords based on zoning regulation. They could also provide some kind of report form or telephone number.

Airbnb listings don’t provide addresses, which aren’t seen until they are long booked. You couldn’t just scrape them, you’d have to actually order and pay for each one whose address you wanted.

There’s nothing preventing a host from giving an incorrect street address. So even if an aggregator were to book rooms to find them, there’s no guarantee that the address would net them something.

It isn't. They're still very much illegal in Hong Kong and other cities around the world and very much still don't care and still operate.

It depends on the market, and in its most mature markets the company has worked with cities to make it legal and regulated. Uber has a tiny prescence in Asia at this point outside India having sold most of their biz to Grab.

The biggest turnaround I’ve seen is Las Vegas. Up until 2016 or so they were the most aggressive as far as arresting drivers and the company shut down operations for years. Then a year later the airport has a dedicated floor to pickups, official signage everywhere, all hotels have dedicated pickup/drop off.

What other multi-billion dollar co is remotely comparable?

Uber? Bird? Lime? Lyft?

You’re just seeing them at a unique point in their history where they haven’t yet bought enough lawmakers to make their revenue streams legal. Plenty of much bigger companies are well past this point.

Uber?

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