The problem with the sharing economy

Airbnb seemed so simple — but collaborative consumption can raise complex issues


Catbird turned me onto Airbnb almost two years ago, long before I'd ever heard of the "sharing economy" or "collaborative consumption," terms the tech industry is now using for companies that facilitate peer-to-peer rentals or otherwise take transactions once done through Craigslist to a glitzy new commercial level.

We were working together to build the Temple of Flux for Burning Man 2010 and chatting in the shop one evening. I mentioned wanting to find someone to sublet my apartment for the nearly three weeks that I was to spend on the playa that year, and she sang the praises of Airbnb, which she had recently started using to make some extra cash by renting out a room in the house she owns on Potrero Hill.

"The reason I decided to do it instead of a full-time roommate is it fits my lifestyle better," Catbird, aka Cathryn Blum, told me recently as we discussed her beloved Airbnb in light of recent controversies over whether such rentals should pay the city's 14 percent hotel tax. Catbird loves to meet visitors from around the world and help show them sides of San Francisco hidden from downtown hotel dwellers, as well as being able to keep her guest room vacant for visiting friends or family.

"Airbnb has been a godsend, and it's invigorated a lot of the neighborhoods that tourists might not come and visit," she said. "We're not competing with the hotels, the hotels don't provide that kind of experience."

That's what she and other Airbnb customers argued last month at a San Francisco Tax Collector's Office hearing on the issue, which resulted in the hotel tax [aka Transient Occupancy Tax] being applied to Airbnb and similar companies.

Airbnb was a godsend for me as well, a simple easing of my economic woes. At the time, I was just getting serious with a new girlfriend and spending most nights at her place. So we moved some of my stuff over there to clear space and protect my valuables, took some photos of my small studio apartment in the Mission, and created an Airbnb listing.

We initially listed my place for $75 per night, which more than covered my rent but was cheaper than most hotels, the sweet spot that would create enough demand that I could pick and choose guests to meet my needs. And it worked perfectly. Not only did I find tenants to fill most of my Burning Man vacancy, but I kept it up periodically throughout the fall, moving in with my girlfriend for days or weeks at a stretch and splitting the proceeds with her.

It seemed too good to be true. And as I began to learn, perhaps it was.



Something Airbnb doesn't tell you when you sign up is that you may be breaking the law and/or your lease (its spokesperson says that warning is in its terms of service, but I never saw it). Frankly, I knew that my lease didn't allow subletters, but my building is big, I really needed the money, and I figured that I wouldn't get caught, a calculation that many thousands of customers of Airbnb and other companies regularly make as well.

Later, well into by first foray as a landlord, thanks to Airbnb, I began to learn about some other complications that this business model creates in big, popular cities like San Francisco and New York that have complicated laws regulating landlord-tenant relations. For example, it's illegal in San Francisco to sublet your apartment out for more than you pay in rent.

I felt a little guilty about that one. In a city where almost two-thirds of residents are renters, yet where property owners wield tremendous economic and political power, there are good reasons for rent control, limits on converting apartments into condominiums, eviction protections, and the whole slew of complicated laws and regulations that govern the often-contentious relationship between landlords and tenants.