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Economy

How Airbnb Misled the Public and the Press

The 'sharing economy' favorite provided a snapshot of its operation. Turns out it was photoshopped.

Airbnb office in Toronto, Canada
Photo Credit: Wikipedia

A new report details how the short-term rental service Airbnb misled the public with a recent "transparency initiative" and removed 1000 potentially illegal housing listings before opening its books.

Murray Cox, founder of the website Inside Airbnb and Tom Slee, author of a recent book on the sharing economy, have released a report titled, “How Airbnb’s Data Hid the Facts in New York City” in response to Airbnb’s apparent attempt to be transparent. Cox said he believes the company’s motivation behind the data release “started with elected officials and housing advocates demanding that Airbnb provide data so that the city can understand the impact on the city, rather than relying on corporate marketing and lobbying."

Airbnb billed the data release as “the first time Airbnb has voluntarily shared...data on a wide scale on how its hosts use the online platform,” but the new report shows that the company carried out a purge of over 1,000 listings in the first three weeks of November and pretended the one-time purge represented some kind of trend. Those purged listings were for entire homes and were being rented out by users with at least two sites available. These details would be a major red flag for regulators tasked with preventing the rise of a pseudo-hotel industry.

"In New York State, it is also illegal to rent out entire homes for less than 30 days at a time,” Cox told me, “which is impossible with this category of Airbnb rental. There are also zoning and residential use laws that are being broken.”

A summary of the report at Tom Slee's website lists these major findings:

  • Airbnb purged over 1,000 “Entire Home” listings from its site just days before it prepared a data snapshot of its business.

  • Airbnb used the data snapshot to paint a misleading picture of its business:

    • Airbnb’s message was that only 10% of Entire Homes listings belonged to hosts with multiple listings. The true number had been close to 19% for all of 2015.

    • Airbnb’s message was that “95% of our entire home hosts share only one listing.” The claim was true for less than two weeks of the year.

    • Airbnb’s rosy projections about the future of its business were not objective analyses based on historical trends. The company extrapolated from an artificial and unrepresentative one-time event.

  • Airbnb’s one-time purge was a PR effort, and does not indicate a change of heart:

    • No similar event took place in other cities in North America or elsewhere.

    • Contrary to Airbnb projections, levels of multiple-listing entire homes have already jumped back to 13% of the total, only two months after the purge.

    • Despite claiming it wants to “work with cities,” Airbnb carried out its purge without disclosure or consultation. Airbnb did not kick illegal hosts off the site; many commercial hosts still have listings on the site, but the purge made them appear, briefly, to be single-listing hosts.

In November 2015, New York City Mayor Bill de Blasio announced that his administration would spend $10 million, over the course of three years, in an effort to rid the city of illegal hotels.

“I see Airbnb's focus on ‘transparency,’ or the appearance of it, is to try and take back control of the conversation, and use data for their own means,” says Cox. “They're also trying to give a little (and I would argue, give nothing) to try and make a push for less regulation (or no regulation). There are already more than 19,000 Entire Home listings in NYC and the majority are illegal; we've just focused our report on the most commercial abusers, and a category that Airbnb appears to have manipulated for a one-off PR event.”

The entire report is available online.

Michael Arria is an associate editor at AlterNet and AlterNet's labor editorFollow @MichaelArria on Twitter.

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