NY Attorney General Admits He's Targeting AirBnB To Protect The Big NY Hotels That Are Being Disrupted

from the protectionism-against-disruption dept

Wed, Apr 30th 2014 12:08pm — Mike Masnick

Over and over again in talking about innovative disruption, we talk about how incumbents turn to regulators and politicians to kill off that disruption. Usually, they don't admit it directly -- preferring to couch their language in talk about "safety" and protecting consumers -- even though many of these disruptive systems actually appear to be better for consumers. However, sometimes politicians are willing to just flat out admit that they're trying to protect incumbents from innovative upstarts. And that's what's now happened with NY's Attorney General, Eric Schneiderman.

Last fall, we wrote about how Schneiderman was demanding information on 15,000 AirBnB users in NY, claiming that he was hunting down "long-term illegal rentals." In a NY Times article highlighting how AirBnB users (from both sides of the market) are pushing back against Schneiderman's crusade against AirBnB, Schneiderman finally admits what everyone has known all along. He's doing this to protect the big NY hotels from getting disrupted. And yes, he sandwiches the claim between claims of "just enforcing the law" and "protecting" people, but the message is pretty clear. This is about protecting the incumbent hotels:

First he said that “we have a well-regulated and extraordinarily successful hotel sector” that is “one of our finest industries and contributes a lot to the economy.” Then, a bit later, he added, “We’re just looking in New York to enforce New York law, and also, frankly, to protect our hospitality industry that goes through a lot of trouble to have great hotels, to protect tourists, to provide services, and to protect the people in our residential housing.”

It is true that NY law prevents short-term apartment rentals (basically anything less than 30 days). But to pretend this is about protecting the public is just ridiculous. I've stayed at many hotels in NY and a few AirBnB places -- including some that likely fit Schneiderman's definition of an "illegal hotel." And, without question, the AirBnB experience every single time has been vastly superior to the hotel experience. It's not even close. Assuming Schneiderman allows it to exist, I'll continue to make use of AirBnB, and it's not just because it's usually cheaper (though it often is), but the overall experience is phenomenal. I get to stay in unique and interesting places in unique and interesting neighborhoods -- usually much more convenient for my travel needs. One AirBnB host I met owns three apartments, living in one (renting out the spare bedroom), but mostly focusing on full time renting out the other two. The service was great -- and much more personalized than any hotel I've ever stayed in.

The last thing I want is for NY's Attorney General to "protect me" from that.

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Filed Under: disruption, eric schneiderman, hospitality, innovation, new york, nyc, protection
Companies: airbnb

30 Comments

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Anonymous Coward, 30 Apr 2014 @ 12:15pm

why is it that when this sort of thing is going on, no one in a position to stop it, takes any notice, yet is all over it like a rash when it's a reverse situation? and, how do these people think that the businesses that are being protecting got to be how they are now? did they just magically manage to give the service wanted or did they have to improve, bit by bit??
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Michael, 30 Apr 2014 @ 12:15pm

We�re just looking in New York to enforce New York law

Well, at least they aren't trying to enforce New York law in Kenya anymore:
https://www.techdirt.com/articles/20140114/10020725870/nypd-sent-two-officers-to-kenyan-mall -shooting-their-findings-are-directly-contradicted-fbis-report.shtml
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Anonymous Coward, 30 Apr 2014 @ 12:20pm

Re:
When you went to vote last time where you...

A. Thinking about the level of corruption of the current politician in power.

B. Voting for the Lesser of 2 evils.

C. Voting your party line.

Almost no one is doing A, most are doing C, and the rest are doing B!
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Michael, 30 Apr 2014 @ 12:23pm

Re: Re:
D. Throwing up a little in your mouth as you chose.
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Anonymous Coward, 30 Apr 2014 @ 12:26pm

Re: Re: Voting for lesser of two evils
The lesser of two evils is still evil.
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mcinsand, 30 Apr 2014 @ 12:53pm

protectionist laws shaft the consumer
>>And, without question, the AirBnB experience every single
>>time has been vastly superior to the hotel experience.

Protectionist laws like this only serve the existing businesses by insulating them from a need to give superior consumer experiences.
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Anonymous Coward, 30 Apr 2014 @ 12:54pm

To me, the concern should be for the other tenants in an NYC apartment building who are being put at risk by having a rotating cast of strangers passing through the shared halls. I lived in a building where someone tried to pull this illegal hotel scheme and it finally ended after a series of robberies and a stabbing in the halls. Good riddance.
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Anonymous Coward, 30 Apr 2014 @ 12:56pm

How often does Schneiderman get a free room in these hotels that he is protecting?
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MrWilson, 30 Apr 2014 @ 1:01pm

When anyone talks about protecting existing businesses and mentions how much those businesses contribute to the economy, I just translate that as saying, "we want these businesses to charge consumers more because that means more tax revenue for the government." Who is protecting the customers from having to pay more money to these businesses when they could be spending that money on other businesses that also contribute to the economy? AirBnB people spend money locally. where do you think the Hilton's are spending their money?
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John Fenderson (profile), 30 Apr 2014 @ 1:35pm

Re:
That concern can easily be remedied by adding terms forbidding such use of the property in the lease. No law is needed.
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Anonymous Coward, 30 Apr 2014 @ 1:49pm

Re:
How does that differ from residents bringing sexual partners back with them?
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Anonymous Coward, 30 Apr 2014 @ 2:09pm

@250+ a nite, NYC hotels are out of touch with reality, and need no protection. There are more issues to this.

I am just waiting for a case, where AirBnB is utilized for grizzly child rape with murder for hire in Upper East Side multimillion dollar condo, bankrutping entire highrise building in the process. Or my imagination is way off?
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Anonymous Coward, 30 Apr 2014 @ 2:36pm

Re: Re:
Well, the resident is there if they are bringing the partner home, so it's a world of difference. I would have the same concerns as the above comment. The increased foot traffic of strangers would just invite an eventual mishap. Strange, I wouldn't mind staying at one but would hate it if my neighbor was utilizing the service.
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Hatfield, 30 Apr 2014 @ 3:36pm

Re:
I agree. Several of the tenants in my building rent out their apartments, one quite often. Luckily so far it seems nothing bad has happened as a result of this but I wonder about when. At least the landlord does some vetting (we hope); I have no doubt my neighbors do none.

One other thing about this: I think (not sure) that renting out your apartment in NYC without permission from the owner is noncurable, meaning if you are caught you can be evicted. That is, you can't promise not to do it again and get out of the problem.
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Anonymous Coward, 30 Apr 2014 @ 3:39pm

That's all the government does these days. Tries to put the little guy in jail, and protect the big guys.
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Mike Masnick (profile), 30 Apr 2014 @ 4:12pm

Re:
To me, the concern should be for the other tenants in an NYC apartment building who are being put at risk by having a rotating cast of strangers passing through the shared halls. I lived in a building where someone tried to pull this illegal hotel scheme and it finally ended after a series of robberies and a stabbing in the halls. Good riddance.

In the last 2 AirBnB places I stayed at in NY, both hosts made sure that all their neighbors (and the building super) were aware of what was being done. In one case, I was even introduced to the building super. There are ways to deal with this -- and, again, if the guests are rowdy and messy, that information can filter back into the reviews, getting those people banned.
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MrWilson, 30 Apr 2014 @ 5:49pm

Re:
Good thing your jurisdiction has laws against robbery and stabbings or those illegal hotel schemers would have gotten away with it!

Laws against AirBnB-style arrangements won't stop them from happening. You just won't have a legitimate business website to subpoena for information when something goes wrong.
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Anonymous Coward, 30 Apr 2014 @ 6:49pm

I list on AirBnB in Australia and I have various sceanarios. I have friends from Overseas stay or local friends as I live in the heart of the city. I also have AirBnB guests but I live in the apartment, so I am there to host the guest.

Apartment buildings will always have differences of opinions with the difference types of people who live there. We have a few apartments that are one bedroom where there is significant overcrowding 8-10 people or International studest staying for a few weeks at a time and changing and their friends coming over. I don't see it being much different than these sceanarios yet neighbours seem to accept some situations and not others, perhaps the monetary value (which is minimal) involved.

I also own my apartment and if not impeeding on my neighbour I should be able to have friends, AirBnB Guests, relatives etc stay with me, I am paying Owners Corp fees and am on the Owners Corporation Committee and committing considerably more to the building than most residents.
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toyotabedzrock (profile), 30 Apr 2014 @ 8:29pm

While the lower price is great, the man who has 3 apartments is helping drive up housing prices that cause families to be displaced.
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Whatever, 1 May 2014 @ 3:13am

nice quote, but slanted
" flat out admit that they're trying to protect incumbents from innovative upstarts"

By innovative upstart, you mean companies that ignore existing laws, don't require proper inspection for public spaces, don't require collection of taxes, don't require proper liability insurance, and so on. It's innovation by doing none of the things required by the law in the marketplace.

Not paying your taxes is no longer against the law I guess, just innovative!
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Andrew D. Todd, 1 May 2014 @ 7:11am

"No Sublet" Notification.
I had a look at the AirBnB website, and there doesn't seem to be any obvious way for a landlord to notify AirBnB of properties which are covered under "no sublet" clauses. AirBnB's line seems to be that they won't talk to anyone who doesn't first open an account with them. Of course, AirBnB does not want to be told that most apartments are so covered, so as to maintain its official innocence.

I suppose landlords associations will eventually work up a system of en-masse notification, and send a process server to tender a list of a few million apartments with "no sublet" clauses.
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Niall (profile), 1 May 2014 @ 7:31am

Re: Re: Re: Voting for lesser of two evils
Yes, but it's meaningless if all choices are 'evil'. And not voting just makes things worse, unless you have a mass non-voting movement.
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Niall (profile), 1 May 2014 @ 7:37am

Re: nice quote, but slanted
So just like illegally dumping poisonous water into a town's local river? Or polluting the air of th next state over? Or hiring illegals and paying them less than the minimum wage?

Probably a half-way house between more regulation and less blatant protectionism would be ideal.
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Niall (profile), 1 May 2014 @ 7:38am

Re: nice quote, but slanted
Well, hasn't Cliven Bundy already patented that 'innovative' business method?
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Niall (profile), 1 May 2014 @ 7:41am

Re: "No Sublet" Notification.
A variation on DMCA takedowns? "I claim copyright on Appartment 3B of 1234 Philidelphia Avenue..."
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John Fenderson (profile), 1 May 2014 @ 9:07am

Re: "No Sublet" Notification.
The ability to make such a notification could be very handy, but I don't see where they are legally or ethically required to do it.
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nasch (profile), 1 May 2014 @ 9:17am

Re:
I am just waiting for a case, where AirBnB is utilized for grizzly child rape with murder for hire in Upper East Side multimillion dollar condo, bankrutping entire highrise building in the process. Or my imagination is way off?

I would say the idea of someone renting an apartment to rape a grizzly bear cub is pretty imaginative.

Oh... you meant grisly.
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nasch (profile), 1 May 2014 @ 9:20am

Re:
While the lower price is great, the man who has 3 apartments is helping drive up housing prices that cause families to be displaced.

Fundamentally, the demand for hotel space is what's driving this. You can have apartments rented out because of it, or you can have hotels built instead of apartment buildings, but if the demand for hotel rooms is higher than the supply, the issue is not going to go away.
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Pragmatic, 2 May 2014 @ 9:14am

Re: Re: Re: Re: Voting for lesser of two evils
Other parties exist. If you're worried that you might be the only one voting for them, shouldn't you be promoting them on your social media accounts? Shouldn't you be talking about them and their policies to raise awareness of them?

This is WHY we have a two party system and people are afraid to vote for third parties. It stops when we want it to stop.
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nasch (profile), 2 May 2014 @ 9:26am

Re: Re: Re: Re: Re: Voting for lesser of two evils
This is WHY we have a two party system and people are afraid to vote for third parties. It stops when we want it to stop.

No, we have a two party system because of the voting rules.
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