Airbnb: we're here to stay, says billionaire as rental website is accused of evading rules and tax

Airbnb: we're here to stay, says billionaire as rental website is accused of evading rules and tax

Nathan Blecharczyk, co-founder of controversial global lodging startup, insists company is a force for good and wants to help authorities adapt to its new technology

Rory Carroll in San Francisco

 The Observer, Saturday 21 June 2014 / http://www.theguardian.com/technology/2014/jun/21/airbnb-rentals-rooms-hotels-technology

It is the simple, ingenious concept that lets you rent out a spare room or book cheap lodgings almost anywhere on the planet from the comfort of your laptop.

Airbnb's website has upended the travel industry, with the promise of connecting ordinary people in a new, more personal way of doing business that bypasses corporations. But now the San Francisco-based company is being forced to defend itself from accusations of being just another voracious internet behemoth that flouts regulations, evades taxation and enriches the unscrupulous.

Nathan Blecharczyk, a co-founder of Airbnb who is also one of the world's youngest, newest billionaires, said that the company was a force for good – and was here to stay.

Airbnb would ride out the backlash from regulators and critics because its business model has spread around the world and the genie could not be "put back in the bottle", he said. "There are millions of people who have experienced something that they feel very passionate about and want," he said. "There is no erasing that knowledge. And there are, frankly, many other websites where you can do exactly the same thing. And many more that will come along in the future. So I don't think there's any way to put it back in the bottle."

Seated in Airbnb's new downtown headquarters, a sunlit atrium with a coffee bar and skateboards for the staff of mostly twentysomethings, Blecharczyk, 30, said authorities would have to recognise that this part of the "sharing economy" was sprouting deep roots. Airbnb, which is now valued at $10bn, offers accommodation in more than 40,000 cities in more than 160 countries. A guest checks in somewhere using Airbnb every two seconds.

"Step one is to speak to the times," said Blecharczyk, a lanky and affable figure who co-founded the company in 2008, along with Brian Chesky and Joe Gebbia.

"There is this thing that's happening and clearly it's providing a lot of value to guests and hosts. It's a trend that's not going to go away."

However, authorities and commentators in the United States and Europe have accused the startup of avoiding taxes and violating local codes about rented accommodation – the latest in a spate of similar critiques of Amazon, Google, Uber and other internet giants.

Blecharczyk, who oversees Airbnb's technical strategy, said existing policies had been around for a long time and the company wished to help authorities adapt to what he portrayed as a disruptive but nevertheless welcome new technology.

"A lot of good questions are being asked. We need to come up with some sensible policies, some modern policies, to balance the legitimate concerns with the legitimate benefits that this new activity provides." Each city had different rules and tax codes about renting, some varying according to whether a host served breakfast, rented just a couch, a room or an entire property, said Blecharczyk. "The last thing we want is 40,000 different policies. We'd like to establish a model or template that cities can tweak a bit." He said Asia was the next big growth area.

Even if Airbnb shut down tomorrow, said the co-founder, authorities would face the same problem. "Everyone is talking about Airbnb, but there are other websites where you can do the same activity."

New York's attorney general, Eric Schneiderman, has suggested that almost two thirds of Airbnb listings in New York were illegal and demanded user data on 15,000 hosts. A key point is a local ordinance that requires permanent residents to be present in a property if they sublet it for a period of less than 30 days. Airbnb has now removed about 2,000 listings in New York that appeared to be illegal hotels and said that it also wanted to change a law that prevented it from paying taxes.

Airbnb has depicted the vast majority of hosts as "regular people" who rent out only one room and interact with guests. But last month a study of 90,000 hosts in 18 cities found that 40% had multiple listings. A separate data analysis of Airbnb's operations in San Francisco, commissioned by the San Francisco Chronicle newspaper and published last week, further challenged the company's description of its hosts. It found that two thirds of the city's 4,798 listings were for entire apartments or houses. "In a city that has chronic housing shortages, the number of Airbnb homes that appear to not be available on the rental market is significant," said Laura Teller, chief strategy officer of Connotate, a data extraction firm that did the analysis.

Critics in the company's home city have also cited cases of landlords evicting long-term tenants to turn properties into Airbnb listings.

Blecharczyk acknowledged that it was happening, but said landlords had a history of evicting tenants to raise rents and that Airbnb backed the city's efforts to curb the practice. "Airbnb is not the problem. It's just one of the very many symptoms of the root problem."

The billionaire said that for both work trips and holidays he himself used Airbnb rather than hotels. He recently spent three nights in Latvia with a host who rented out his own bedroom and acted as a tour guide.

"It was all about local connections. He knew everyone around town." Blecharczyk paid $25 a night – part of a pattern of frugality by the co-founder despite his now enormous wealth. The bike he cycles on to work is new only because he had to replace a stolen one, he said. "I don't like spending money. I like to keep things simple."

Blecharczyk and his wife plan to rent out a room in their newly bought house. It has one advantage that is not available to all Airbnb hosts: a separate entrance, maintaining a degree of distance from guests.