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AirBnB happened because the founders found a way to skim off short-term rental property taxes, labor taxes, and room taxes into their own pockets as revenue. If

AirBnB happened because the founders found a way to skim off short-term rental property taxes, labor taxes, and room taxes into their own pockets as revenue. If AirBnB property listings were taxed appropriately as short-term rentals in all jurisdictions, with time sheets filled in and paid out to each property operator, their business would have collapsed within a year. They are a very poor example of value creation, and I’m stunned that PG considers them a positive example of anything. Show me a business that creates value that didn’t already exist and praise that and I’ll root from the sidelines. Instead, PG chose a skimming racket.

jdsully 7y ago
The founders found a way to utilize otherwise vacant housing. After they got big people started buying specifically to lease on AirBnB but that would have been considered crazy before they effectively changed the culture around this. It was this cultural change that created value.
- eigenvector 7y ago
  It was considered crazy before because it's largely illegal, and there was no global online platform where you could anonymously advertise and take payment (with credit cards!) for an illegal service. Airbnb solved the trust problem inherent in providing or consuming an illegal service.
- new_realist 7y ago
  Vacant housing existed because of a conscious choice by society to preserve the residential character of non-tourist districts. Tourists are generally well off, because travel is discretionary or paid for by big business. Now that these wealthy travellers are permitted to parachute in anywhere, rents rise and residents lives are made harder. Like your den? Too bad, you'll have to share it with strangers now in order to afford your house. AirBnB is a gift to rich out of towners.
  - jdsully 7y ago
    Just because the value creation goes to the well off does not mean value wasn’t created.
- deleted 7y ago
  [deleted]
eigenvector 7y ago
Airbnb is profitable in the way that running an illegal, unlicensed anything in a highly-regulated market is profitable. Running a casino or liquor store in your basement is also very profitable, because you can tap into a supply-constrained market with none of the cost of regulatory compliance faced by your competitors, while offloading the social costs of your business on the public. There are some 'real' Airbnbs - people renting out a room in their primary residence, or the whole place for a few weeks a year while they're away. I slept on an expat's floor in Yangon for $10 once (via Airbnb). And that is real value creation. Sometimes it's just a good discovery mechanism for legitimate vacation rentals (like beachfront homes in resort developments in Hawaii). But 90+% of it is illegal hostels and hotels in apartments or homes removed from the long-term rental market where the 'value' is just not having to pay taxes, meet fire code or respect restrictions on where hotels can be built.

jdsully 7y ago

The founders found a way to utilize otherwise vacant housing. After they got big people started buying specifically to lease on AirBnB but that would have been considered crazy before they effectively changed the culture around this. It was this cultural change that created value.

eigenvector 7y ago
It was considered crazy before because it's largely illegal, and there was no global online platform where you could anonymously advertise and take payment (with credit cards!) for an illegal service. Airbnb solved the trust problem inherent in providing or consuming an illegal service.
new_realist 7y ago
Vacant housing existed because of a conscious choice by society to preserve the residential character of non-tourist districts. Tourists are generally well off, because travel is discretionary or paid for by big business. Now that these wealthy travellers are permitted to parachute in anywhere, rents rise and residents lives are made harder. Like your den? Too bad, you'll have to share it with strangers now in order to afford your house. AirBnB is a gift to rich out of towners.
- jdsully 7y ago
  Just because the value creation goes to the well off does not mean value wasn’t created.
deleted 7y ago
[deleted]

eigenvector 7y ago

Airbnb is profitable in the way that running an illegal, unlicensed anything in a highly-regulated market is profitable. Running a casino or liquor store in your basement is also very profitable, because you can tap into a supply-constrained market with none of the cost of regulatory compliance faced by your competitors, while offloading the social costs of your business on the public. There are some 'real' Airbnbs - people renting out a room in their primary residence, or the whole place for a few weeks a year while they're away. I slept on an expat's floor in Yangon for $10 once (via Airbnb). And that is real value creation. Sometimes it's just a good discovery mechanism for legitimate vacation rentals (like beachfront homes in resort developments in Hawaii). But 90+% of it is illegal hostels and hotels in apartments or homes removed from the long-term rental market where the 'value' is just not having to pay taxes, meet fire code or respect restrictions on where hotels can be built.