Airbnb: Our Way or the Highway

Airbnb butted heads big time with the Chicago Mayor’s office this week, as the fight in the City Council to regulate home sharing got a little uglier.

The Mayor’s team was not pleased with a seven-figure multi-week advertising campaign bankrolled by Internet companies including Airbnb, and a top mayoral aide threatened to cut off negotiations with the company.

City officials were quick to call the ad a ploy by the short-term rental company to protect “their massive $25.5 billion valuation” and play “political games” to deceive Chicagoans.

Airbnb is dealing with a not-so-little illegal hotel problem in Chicago and in cities across the country.  A city report released last month found that more than half of Airbnb’s Chicago-area revenue – almost $29 million – comes from operators who list properties for rent more than half the year. It looks like Airbnb’s attempt to push back on these charges was revealed for what it truly was: smoke and mirrors.

Alderman Michele Smith told CBS earlier this year that what she’s seeing in her ward is “property owners purchasing several condos or purchasing a three-flat and turning it essentially into an unlicensed, mini-hotel.”

This is clearly not the average host renting out a spare bedroom occasionally to make ends meet like Airbnb’s ad campaign tries to show, says Alderman Brendan Reilly, who has been a vocal supporter of stronger regulations.

He told the Chicago Sun Times, “this fight isn’t about helping struggling families,” and said that it was ironic “that a multibillion-dollar company claims to be a champion for the working man, just as they execute a seven-figure advertising buy aimed at bullying Chicago policymakers.”

It’s clear: when Airbnb negotiates with cities, it’s the company’s way or the highway.