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October 19 2016

Airbnb Has a Growing List of Enemies

Patrice L. Onwuka

Senator Elizabeth Warren (D-MA) has company in her crusade against innovation in the hotel industry. A group of big-city mayors joined the anti-Airbnb bandwagon, but their efforts against innovation will likely be futile.

Last week, two dozen mayors and elected officials including from Seattle, San Francisco, Portland, and New York along with 17 community groups sent a letter to the chairman of the Federal Trade Commission to pressure federal officials into collecting data on Airbnb listings and the revenue they generate.

This is the first step toward reining in an emerging market that’s challenging the hotel industry and transforming the way Americans travel. This veiled attempt at transparency is an effort to tap a new revenue stream and a precursor for new regulations that will –at best– slow down the growth of the industry by discouraging Americans from renting their spaces, and –at worst– shut down the industry.

In a statement that accompanied the letter, Warren echoed her disdain for Airbnb:

“Technological advances can help create new wealth and increased GDP,” Warren said in a statement accompanying the letter. “But it is policy — rules and regulations — that determines who will have a meaningful opportunity to share in that new wealth.” 

Airbnb is on the offensive according to Market Watch:

“While hotels...have specifically expressed concerns about Airbnb preventing them from charging “gouging rates” and taken credit for lobbying Members of Congress to lobby the FTC, we have participated in meetings with the FTC and discussed how Airbnb fights hotel price gouging and are eager to work with lawmakers and regulators at any level of government who want to learn more about how home sharing helps the middle class,” the spokesman said.

Room sharing or home sharing is akin to ride sharing. Individuals rent out a room or their house to a stranger through an app. This often translates into lower costs for travelers and a more unique stay as they get immersed in communities and experience new ways of life.

The renters benefit as well with families earning thousands on average each year which can help pay the mortgage or make ends meet. Meanwhile, hotels can’t charge ridiculous prices, because there’s a greater supply of rentals.

This latest effort is similar to a letter sent by other progressive senators and Warren’s own calls for more regulation in this area. Recent data that we reported on, already debunked the faulty argument that short-term Airbnb rentals are displacing traditional renters and thereby driving the price of rent higher in major markets. From June 2015 to May 2016 in Airbnb’s largest U.S. markets, 10 percent of Airbnb’s total listings were commercial listings, the kind of listings that concern local lawmakers.

Progressive lawmakers and policy leaders have qualms about the sharing economy and how new companies are disrupting traditional business models and industries. Former secretary of state Hillary Clinton called for cracking down on the sharing economy. Elected officials have used public resources to allow state and local agencies such as the police to even go after Uber drivers.

Local lawmakers may be driven by a desire to fill their piggy banks with new tax revenue or they may be beholden to hotels in the travel industry, which don’t want new competition so that they can keep their prices high. Any way you look at it, cronyism is on full display, but the people who suffer when the free-market place is restricted is us.

We hope the FTC doesn’t heed these calls and decides to allow the industry to develop on its own permitted there is nothing illegal or dangerous occurring with Airbnb. The fight has just begun.

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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