Image: Adam Soften/Flickr
The legal spat between AirBnb and New York keeps getting stickier, and hanging in the balance is the nice little side hustle hundreds of New Yorkers have going on to shave a few bucks off their astronomical rents.
But—and this is a “but” worth listening to for the sharing economy-loving technocrati—just because AirBnb has been a welcome innovation for frequent travelers and cash-strapped city-dwellers doesn’t mean the Silicon Valley startup isn’t breaking laws in the Big Apple. It is, and it’s admitted as much.
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To sniff out the extent of the wrong-doing, the New York Attorney General subpoenaed AirBnb in October to hand over a trove of private information about its users, which the company went to court yesterday to try and squash, claiming it’s a major overreach, invasion of privacy, attack on everyday New Yorkers, and anti-innovation.
Meanwhile, the state attorney argues the private user data is necessary to crack down on the “bad actor” hosts exploiting the site by operating illegal hotels, racking up complaints from unhappy neighbors, and violating regulations.
The two sides faced off at the New York Supreme Court in Albany to share their first oral arguments in front of judge yesterday, and now await the court’s decision. How did we get here, and are we all about to get in trouble with the law for posting our spacious, bright one bedroom right off the L train next time we go on vacation?
At the crux of Attorney General Eric Schniederman’s AirBnb crackdown is the city’s zoning law for short-term rentals, which forbids renting out your entire apartment for less than 30 days. The point of the subpoena was to weed out just how many listings fall under that category.
Over 1,800 hosts had more than one apartment listing under their name—the top offender had 80 different apartments out for rent.
But while the company stood its ground and refused to hand over its user information, the market research firm Skift took it upon itself to pull the publicly available info on the AirBnb website and crunch the numbers. It used data extraction firm Connotate to do so, and inspired by that DIY effort, the state attorney’s office did the same.
The AG filed an affidavit yesterday with this new damning information, which revealed two-thirds of NYC listings on the site violate the law. What’s more, over 1,800 hosts had more than one apartment listing under their name—the top offender had 80 different apartments out for rent. The AG’s office distributed a list of the 17 largest users on the site with at least one “illegal listing,” and all of them had at least 15 listings on the site.
“That’s not your average starving artist,” Matt Mittenthal, spokesperson for the attorney general told me.
AirBnb has started scrubbing the offending listings and blocking the hosts, as David Hantman, AirBnb’s head of global public policy, wrote on the company’s blog.
Maybe it was to show it’s willing to police itself, or maybe it was to cover its ass before the court date—it’s true the company has some dirt to clean up in the big city. According to the AG’s brief, legislators and city officials have been getting a “growing numbers of complaints” about AirBnb rentals: overcrowded rooms, puddles of vomit and baggage in the halls, pest infestation, loud parties and blasting music. And a recent report showed prostitutes are now using the site to advertise their services.
“People should have a right to know that their neighbor in apartment 2A is not running an illegal brothel. They should have a right to know that the folks in apartment 5C are not dealing drugs,” New York Assemblyman Keith Wright said in a news conference yesterday, according to the New York Post.
But AirBnb points out these are just a handful of nefarious hosts giving the whole operation a bad name, which is just about impossible to avoid in any crowdsourced website. (The smut and scams that plague Craigslist are one of the reasons AirBnb’s sublet listings sprung up with such success.)
The company argued on its blog that most hosts are just average New Yorkers happy to share their space with travelers or are looking for some relief from sky-high rents. It says it’s been quite a boost to NYC’s economy—to the tune of $768 million in economic activity in New York this year, according to a consultancy hired by the company. It points out it’s been a financial boon to other cities around the world, too, and you don’t see them acting like a bunch of Luddites, the company says.
We strongly support innovation. But being innovative is not a defense to breaking the law.
“Cities like Paris, Amsterdam and Hamburg are embracing the sharing economy and New York shouldn’t be stuck playing catch-up,” AirBnb wrote in a statement after the hearing.
Mittenthal accused AirBnb of complicating the issue with name-calling and PR tactics, and it’s true AirBnb’s slinging a fair amount of dirt at the state. “The government will accuse Airbnb hosts of being bad neighbors and bad citizens. They’ll call us slumlords and tax cheats. They might even say we all faked the moon landing,” the company wrote on its blog, saying the AG “is determined to fight innovation and attack regular people.”
“We strongly support innovation,” Mittenthal responded. “But being innovative is not a defense to breaking the law.”
You can’t blame the company for fighting tooth and nail against the state investigation into its business practices and snooping around its user data. The request includes a host of sensitive info: name, physical address including apartment number, email address, other contact information; dates and duration of guest stay and the rates charged, method of payment to host including account information, the total gross revenue per host, and even certain tax documents.
“If you’re one of the thousands of New Yorkers who has ever rented out your place while you were away for a weekend, the Attorney General still wants to know who you are and where you live,” AirBnb wrote.
Though the AG court brief states it’s only interested in information on illegal activity, it’d still be scooping up personal data on thousands of everyday New Yorkers. On the privacy point, internet advocacy groups like the Electronic Frontier Foundation and the Center for Democracy & Technology have jumped in to support AirBnb. In an amicus brief, EFF wrote:
AirBnb have become custodians of increasingly voluminous records of such user transactions. And not surprisingly, such providers have become increasingly tempting targets for those wishing to obtain information about those users’ activities through the use of subpoenas and other legal processes … Legal processes targeting online intermediaries as a means to get to information about their users en masse raise pronounced privacy concerns. User information in the hands of of such providers can be extraordinarily revealing.
Like other collaborative consumption startups threatening the status quo, it’s not a cut-and-dried case, because the laws in question were written before the tech company came along and shook up the established ecosystem. New York’s powerful hotel lobby is also not at all happy with its new competitor, as you’d imagine; AirBnb calls the hotel law “unconstitutionally vague.”
But, the issue at hand isn’t whether it should be the law. It’s whether the law—antiquated and irrelevant as it may be in the changing urban economy—is being broken, and whether that possibility is enough cause for the state of New York to dig around in its residents’ private business.
This is what makes the legal saga interesting. AirBnb is a quintessential sharing economy disruption story, and New York, a mecca of US tourism, is ground zero for the battle. Skift called the case “the defining fight of the sharing economy.” The devils in the details could determine how, and if, the law changes as urban living evolves.
