Co-published by Fast Company
As cities struggle to rein in the short-term rental service, a detente in San Francisco may show the way.
The displacement of renters by large-scale operators who turn apartment buildings into de facto hotels has hit urban areas like Greater Los Angeles hard.
After years of pressure from housing advocates and residents, the L.A. City Council is close to limiting short-term property rentals to 120 days a year.
Juan and Manuel Salvador Orozco Cadena, a pair of fishermen from Baja California, Mexico, pushed off from Punta Lobos on the morning of November 4, 2015. Earlier, the Orozcos had repaired the transmission of their outboard motor, but then it broke down again. As night closed in, the brothers floated helplessly in their open panga 30 miles off the Pacific Coast, making intermittent contact by cellphone, before being rescued by the Mexican coast guard.
At the same moment the Orozcos had first pushed off into the sea, Airbnb executives 1,200 miles away were celebrating the defeat of a San Francisco ballot initiative aimed at regulating the short-stay rental titan. What could possibly be the connection between two Mexican fishermen adrift in the ocean and a company valued by Wall Street estimates at $25.5 billion?
The answer is Chip Conley, a good-looking, 55 year-old fit guy with a shaved head and a charismatic smile whose official full-time job is Head of Global Hospitality for Airbnb.
It was 2008 and presidential hopeful Barack Obama was inspiring millions of people with his promise to disrupt politics as usual – and a new startup called Airbnb was turning that enthusiasm for change into millions of dollars. Denver, the site of that year’s Democratic National Convention, was expecting 80,000 people to come watch the senator from Illinois accept his party’s nomination. The city had space for less than half.
“Obama supporters can host other Obama supporters,” is what CEO Brian Chesky recalls thinking to himself. In a profile of the company, the Huffington Post notes how that idea was turned into cash. “Airbnb, which lets users rent out part or all of their homes, blasted bloggers in Denver with company information.” It “sold ‘Obama O’s’ cereal around town,” garnering news coverage as “an innovative solution to the city’s lodging crisis.”
Founded in 2007, Airbnb is today valued at more than $25 billion and the for-profit sharing economy it helped usher in is no longer so new.