The short-term rentals that actualized with the creation of Airbnb are under fire from officials in New York City. The New York legislature, with pressure from the hotel industry, just passed a bill Friday that would make it illegal to advertise certain apartment units and homes for rental of less than 30 days.
The bill would fine violators up to $1,000 for the first offense and up to $7,500 for subsequent offenses. The problem with regulating companies so heavily is that it ruins the contracts held between private individuals. Home-sharing services do not deal with multiple renters or multiple properties, so the transaction between individuals would be the same if a friend were renting your extra room for a week. Airbnb has become the platform to match homeowners and renters, and now New York decided that it needed to step in.
The thing is, New York already banned the short-term apartment rental, in efforts to crackdown on illegal hotels. This new bill, however, effectively targets the business model of Airbnb, making many of the properties up for rent from individuals in New York now “illegal hotels.” Rather than allowing Airbnb, as a business, to kick illegal hotel renters off their site, the state took over and now makes the calls on which home-sharing transactions are legitimate.
This even applies to the homeowner who donates his profit from Airbnb to charities fighting cancer.
The complete disregard for responsible Airbnb users is exactly the issue with regulations on such nuanced services. Services like Airbnb and Uber run on a ratings system, which allows for consumers to choose their suppliers based on their rating and reviews. This model weeds out the bad suppliers and incentivizes other users to provide better service.
The services that companies like Airbnb and Uber provide are merely connecting suppliers with consumers. Airbnb itself doesn’t own properties and rent them out. Uber doesn’t have a fleet of cars in every city that people drive for the business. The means of providing the service are completely privately own, so why do governments believe they have the authority to regulate private sharing services between individuals?