After notching a victory in the case of host Nigel Warren, locking down the legality of hosting while you’re still on the premises, Airbnb is dealing with another legal challenge from New York Attorney General Eric Schneiderman. He wants data on 15,000 local hosts, saying it’s necessary to determine unpaid hotel taxes and root out illegal hotel operators on the platform. The company is fighting the subpoena as, they say, too broad.
In the meantime, public policy head David Hantman convened a presser at General Assembly to tout how much the startup is contributing to the economy of New York City. Between the sternly upbeat tone and the stack of printed pamphlets, it felt like a visit from the Jehovah’s Witnesses.
It certainly looks like Airbnb commissioned this study, from HR&A Advisors, to have something to throw in the Attorney General’s face. (But with a firmly fixed smile!) Reporters in attendance were handed a heavy booklet titled, “Airbnb’s Support of NYC’s Prosperity Agenda,” as well as a second handout, a colorful “Executive Summary” that proclaimed, “The Airbnb community has become an incredible economic engine for New York City.”
The numbers (salt to taste): The report says Airbnb has generated $632 million in “economic activity” and “supported” 4,580 jobs. Also, the average Airbnb guest spends $760 in the neighborhoods where she stays, generating $105 million for the outer boroughs and outside the big tourist areas. Total spending per visitor for Airbnb visitors is $845, compared to $690 for hotel guests.
The company also trotted out Molly Turner, head of public policy, and David Hantman, head of global public policy, to answer any questions. Mr. Hantman addressed the issue of taxes, one of the A.G.’s sore points, and insisted they want to do right: “We’ve approached a number of different agencies in the city and state, trying to get some grasp on what we can do to help pay those taxes,” he said, projecting nothing but purest willingness to accomodate. (Judging from that subpoena, the A.G. doesn’t seem persuaded.)
Ms. Turner, meanwhile, pointed out that, contrary to worries about hits to the hotel industry, room rates are as high as they’ve ever been, and 85 percent occupancy is basically the same as full-up. Plus, Airbnb is just different, somehow: “We’re finding that the reason people use Airbnb is they want a particular experience in New York.”
But the most effective moment was the testimony of Kimberly Kaye, an LES host who said the service has allowed her to make up the income lost when chronic illness forced her out of the workplace. (She recently wrote an op-ed for the Daily News about it, which we were duly handed upon entering the presser.) In a city of skyrocketing rents, it’s pretty comforting to have a financial backup plan in the form of your fold-out couch.
Our heartstrings well and truly yanked, Ms. Turner painted the problem as one of bad actors. ”I think there is a clear concern about bad actors that we share. We don’t want those bad actors using our services,” said Ms. Turner. “It’s really not our brand.” What exactly Airbnb is willing to do to boot those bad actors, besides “working with lawmakers,” remains unclear.
She also attributed much of the concern among regulators to the newness of what Airbnb is doing: ”Staying in other people’s homes has existed forever, but it’s never been this transparent and at this scale before.” Hence the importance of education.
The A.G.’s office doesn’t sound too keen to be schooled, though. Asked for comment about the study, a spokesman responded: “If AirBnB wants to be a valuable and lawful economic engine for New York, it should support the State’s efforts to recover millions of dollars in unpaid taxes and stop the proliferation of illegal hotels. Until then, AirBnB is simply talking out of both sides of its mouth.”