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The Problem With Airbnb

Opinion · November 2, 2015

I love Airbnb. When I travelled to the US and Canada last year for my twiddy vacation on a beach house in the USA, everywhere in Canada we stayed in Airbnb places. The experience of booking is made a lot easier than reserving a room in a hotel or motel.

But there is a problem with Airbnb. Baked into its very DNA, Airbnb has become such a large enterprise they have lost touch with their customers. For you see Airbnb is destroying property markets everywhere, especially in its hometown of San Francisco.

Investors are buying properties and renting them out on Airbnb because they can get more than long-term rentals to locals. This poses a problem for an area like San Francisco where finding somewhere to live is not only difficult, but prohibitively expensive.

But more properties on Airbnb means more choice, and more choice means lower prices, right? In theory yes, this is true. As more properties become available in a locale, the price will drive itself down. This is how a free market works.

A little story about Canada

Interestingly when we stayed in Canada, a little uptown area called Yaletown where everyone had nice hair and drove sports cars I noticed something.

The guy who owned the place we were staying at, “Andrew” was not there to greet us. However, his assistant was to give us the keys and run us through the place.

This was a massive twenty-something story apartment building. I started speaking to her about Airbnb and if they found success with it, etc. She mentioned to me that the owner owns 10 apartments in this building scattered throughout the various floors of the building.

This guy owns 10 apartments and he was renting them all out on Airbnb. But this isn’t where the story ends.

The assistant mentioned to us that if anyone asks who we are, we are friends of Andrew’s visiting Canada for the week. This guy was obviously hiding the fact he was renting his properties on Airbnb because presumably it is against the rules of the building (and perhaps local government).

Now we were being asked to play a part in this elaborate and potentially illegal lie. The property itself was beautiful, they had a massive flat-screen, full kitchen and provided free Netflix for all of the guests.

This kind of made us uncomfortable to say the least. We still enjoyed ourselves, but we lived in fear the building manager would know we were renting through Airbnb and ask us to leave (perhaps a worrying exaggeration at the time).

While my experience has been generally positive, I know a lot of people who have had the exact opposite experience. Showing up to places where the hot water didn’t work, dusty interiors, missing curtains, broken windows and unsafe environments.

Dominated platform

The problem with Airbnb is that it has grown too quickly. It has become this monolith, it has become as big as the hotel industry it supposedly prides itself on not being.

Back when Airbnb was still this small service flying under the radar, they had more to lose and prove. The service was great, you hardly heard anyone complaining and their customer service actually meant something.

Once upon a time you could find solace in knowing you were renting a property from a real person, now a lot of the properties on Airbnb are being operated by investors looking to make a quick dollar.

You are also helping continue the cycle. Every time you rent a property from an investor on the platform, you’re making one less property available to the local market.

All Airbnb has managed to do is undercut the hotels, destabilise rental property markets and put their customers in potentially unsafe environments due to their “verification process” being broken.

I am one of Airbnb’s biggest supporters, but they have made it clear they don’t care that their platform is making things worse for locals and easier for tourists. In the end, who is more important? Betray your hometown or do something and address the flaws in your service.

Dwayne

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dev
dev
7 years ago

That’s problem with start-ups that rise too quickly (ex. Uber)

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