The war between New York City and Airbnb is raging on, and the future of the hospitality business hangs in the balance.
The city is fighting the startup for breaking local laws against operating an illegal hotel out of your home, worried that hustlers are abusing the online service to turn a profit. To that end, New York Attorney General Eric Schneiderman just slapped the company with a subpoena to hand over the user data of all New Yorkers who've listed their apartment on the site, the New York Daily News reported today. That's about 225,000 users.
Though the report didn't go into detail about just how much or what kind of data the government’s after, we know that Airbnb users offer up a lot of sensitive personal information on the site, including details that could determine which listings are breaking the law—which about half currently are.
With anger mounting over US dragnet online surveillance and data collection, the request is falling on particularly unsympathetic ears. Airbnb hasn't responded yet to the subpoena, but did say in a statement to the Daily News, “We are concerned that this is an unreasonably broad government demand for user data and we remain committed to protecting our users' privacy."
It's just the latest move in the legal tug-of-war between the booming startup and the Big Apple. Airbnb has blown up in New York, one of its first cities and definitely the biggest it's taken hold in—and one with a $34.5 billion tourism industry. If things keep going in this direction, it could overtake the hotel industry. That is, unless it's found to be illegal.
On that front, the startup scored an important victory recently when a New York appeals board reversed a fine against an Airbnb host who was slapped with a $2,400 charge for renting out his room on the site. The board ruled in late September that the user did not violate the state's illegal hotels law, because he was home at the time of the rental.
A week later, its back sufficiently scratched, Airbnb decided to throw a bone to the city, agreeing to require that Airbnb hosts in New York pay the local hotel occupancy tax—$2 per day, and nearly 6 percent of the total rent for rooms that cost more than $40 a day.
Days after that, the AG responded with the subpoena. So what would the city do with all that data? It claims it's trying to weed out "bad" hosts—crooks using the service to run an illegal business. For instance, the Daily News reported that some landlords have been evicting tenants from their rent-controlled apartments so they could list the units online for more money.
But according to Airbnb CEO Brian Chesky, 87 percent of hosts in New York are just renting out rooms in their homes, not running a sketchy operation. "We all agree that illegal hotels are bad for New York, but that is not our community. Our community is made up of thousands of amazing people with kind hearts," he wrote in a blog post this week.
For its part, Airbnb hopes to find a legal middle ground where it can operate legally and set a new precedent for the sharing economy. "This will be a city where tens of thousand of jobs for people like photographers, tour guides, and chefs will be created to support this thriving new ecosystem,” Chesky wrote. “We believe regular people renting out their own homes should be able to do so, and we need a new law that makes this clear.”