6 ms·

Good thing they got all of their growth and massive valuation stuff out of the way first, before worrying about pesky details like calculating hotel taxes or kn

by skuhn 12y ago

Good thing they got all of their growth and massive valuation stuff out of the way first, before worrying about pesky details like calculating hotel taxes or knowing about residency laws. I guess the lesson for startups is to break the law until you get big enough until the hit from abiding by the law becomes inconsequential, and make sure to salt the earth behind you so that your competitors can't follow your path to success.

dmix 12y ago
This is new technology entering the market. Of course neither the startups nor the slow moving legal systems are well prepared to operate in sequence. Why be critical of either? I don't expect existing laws to be instantly relevant to new industry. The typical approach of trying to hammer old regulation down a new hole is dangerous and non-productive to society. There wouldn't be AirBnBs if we constantly crippled every new business with old regulation before we fully understood its worth and risks.
- kenko 12y ago
  "This is new technology entering the market. Of course neither the startups nor the slow moving legal systems are well prepared to operate in sequence. Why be critical of either?" I feel pretty comfortable being critical of the startup that's breaking the law, in this case. I mean, shouldn't there be a pretty strong presumption in favor of working within the law, even if it is "slow-moving" (heavens forfend! and perhaps it's good to have things like that move somewhat slowly)? A presumption that "but I want to make money now" doesn't quite overpower?
- skuhn 12y ago
  I don't see how anything has been adapted here. This isn't Uber getting some different deal versus existing taxi companies. Airbnb always owed hotel tax, and now they are getting around to collecting it. They played the "oh, our users will pay taxes on their own" card, which obviously did not actually happen if this change is expected to increase SF revenue by $11mm a year. Airbnb was also always subject to the residency laws of the places it operated in, but apparently didn't know that if you let someone book a place for 30 days in California they establish residency and cannot easily be gotten rid of. Despite that being sort of their entire business -- to be the knowledgable middleman that facilitates a housing rental between two parties that don't do this for a living.
- kenko 12y ago
  And it's hard to see how this is "new technology". For one thing, we already had vrbo and couchsurfing, didn't we? What's the new tech here? And who cares if it's new technology? Is new technology in itself good?
  - saalweachter 12y ago
    I look forward to the day when people stop regarding businesses which operate online as "technology businesses" just because they have a webpage or an app.
    - dmix 12y ago
      Then you have a poor understanding of what technology means. AirBnB wasn't simply a webpage.
- tptacek 12y ago
  That doesn't make sense. The technology is new. The laws aren't. Residency requirements and hotel licensing rules are something any small-town lawyer billing $150 an hour could educate a startup on.
  - dmix 12y ago
    Right but was the small-town lawyer prepared to work with hotels or the result of thousands of home-owners with an extra bedroom?
- rgbrenner 12y ago
  > This is new technology entering the market. Just to be clear: we're talking about a 6 year old company, and new technology that entered the market 6 years ago. At this point, it's worth asking: in your opinion, how long is a company permitted to break the law after introducing new technology?
  - dmix 12y ago
    I didn't say it was new technology at the moment? I was talking about when it entered the market and started to grow... At that time it was unclear whether or not the homeowners should have tax liability or AirBnB. And it's a global service, the tax law is different everywhere.
    - rgbrenner 12y ago
      > At that time it was unclear whether or not the homeowners should have tax liability or AirBnB. And it takes 6 years to figure that out? Do you seriously believe their lawyers that incapable?
      - dmix 12y ago
        Lawyers? You mean lawmakers. And yes, it almost always does take that long unless its politically popular. Which it typically isn't popular until startups employing the new technology reach scale and become wealthy. As we're witnessing now. Same with Uber. No one cared when they were blossoming. Rational choice theory.
        rgbrenner 12y ago
        Claiming ignorance or lack of clarity is not a fair statement, at this point in time. In early 2012, the San Francisco Tax Collector’s Office held public hearings, which AirBNB participated in and lobbied... those hearing decided that AirBnb needed to pay the tax, and AirBnb outright refused to comply with the law. It has now been 2.5 years since that hearing. And that isn't the only case.. in 2010 there was a NY case, where someone was sued and had to pay $100k+. Any claim that AirBnb is unaware of their responsibilities under the law is no longer a fair or truthful statement of the situation. Best case, they KNEW that they've been operating illegally for 2.5 years. So back to my original question: in your opinion, how long is AirBnb immune from laws for graciously introducing new technology?
- krschultz 12y ago
  Is it really new technology? VRBO has existed for how long? I remember one of the first web sites I made for money was a vacation rental listing website in the 90s, blinking gifs and all. Your average tax accountant can talk you through all of this stuff without issue. The part that AirBnB differed on was aiming for big cities rather than mountains and beaches, and seeking out empty 2nd bedrooms rather than dedicated vacation rentals.

by skuhn 12y ago

dmix 12y ago

This is new technology entering the market. Of course neither the startups nor the slow moving legal systems are well prepared to operate in sequence. Why be critical of either? I don't expect existing laws to be instantly relevant to new industry. The typical approach of trying to hammer old regulation down a new hole is dangerous and non-productive to society. There wouldn't be AirBnBs if we constantly crippled every new business with old regulation before we fully understood its worth and risks.

kenko 12y ago
"This is new technology entering the market. Of course neither the startups nor the slow moving legal systems are well prepared to operate in sequence. Why be critical of either?" I feel pretty comfortable being critical of the startup that's breaking the law, in this case. I mean, shouldn't there be a pretty strong presumption in favor of working within the law, even if it is "slow-moving" (heavens forfend! and perhaps it's good to have things like that move somewhat slowly)? A presumption that "but I want to make money now" doesn't quite overpower?
skuhn 12y ago
I don't see how anything has been adapted here. This isn't Uber getting some different deal versus existing taxi companies. Airbnb always owed hotel tax, and now they are getting around to collecting it. They played the "oh, our users will pay taxes on their own" card, which obviously did not actually happen if this change is expected to increase SF revenue by $11mm a year. Airbnb was also always subject to the residency laws of the places it operated in, but apparently didn't know that if you let someone book a place for 30 days in California they establish residency and cannot easily be gotten rid of. Despite that being sort of their entire business -- to be the knowledgable middleman that facilitates a housing rental between two parties that don't do this for a living.
kenko 12y ago
And it's hard to see how this is "new technology". For one thing, we already had vrbo and couchsurfing, didn't we? What's the new tech here? And who cares if it's new technology? Is new technology in itself good?
- saalweachter 12y ago
  I look forward to the day when people stop regarding businesses which operate online as "technology businesses" just because they have a webpage or an app.
  - dmix 12y ago
    Then you have a poor understanding of what technology means. AirBnB wasn't simply a webpage.
tptacek 12y ago
That doesn't make sense. The technology is new. The laws aren't. Residency requirements and hotel licensing rules are something any small-town lawyer billing $150 an hour could educate a startup on.
- dmix 12y ago
  Right but was the small-town lawyer prepared to work with hotels or the result of thousands of home-owners with an extra bedroom?
rgbrenner 12y ago
> This is new technology entering the market. Just to be clear: we're talking about a 6 year old company, and new technology that entered the market 6 years ago. At this point, it's worth asking: in your opinion, how long is a company permitted to break the law after introducing new technology?
- dmix 12y ago
  I didn't say it was new technology at the moment? I was talking about when it entered the market and started to grow... At that time it was unclear whether or not the homeowners should have tax liability or AirBnB. And it's a global service, the tax law is different everywhere.
  - rgbrenner 12y ago
    > At that time it was unclear whether or not the homeowners should have tax liability or AirBnB. And it takes 6 years to figure that out? Do you seriously believe their lawyers that incapable?
    - dmix 12y ago
      Lawyers? You mean lawmakers. And yes, it almost always does take that long unless its politically popular. Which it typically isn't popular until startups employing the new technology reach scale and become wealthy. As we're witnessing now. Same with Uber. No one cared when they were blossoming. Rational choice theory.
      - rgbrenner 12y ago
        Claiming ignorance or lack of clarity is not a fair statement, at this point in time. In early 2012, the San Francisco Tax Collector’s Office held public hearings, which AirBNB participated in and lobbied... those hearing decided that AirBnb needed to pay the tax, and AirBnb outright refused to comply with the law. It has now been 2.5 years since that hearing. And that isn't the only case.. in 2010 there was a NY case, where someone was sued and had to pay $100k+. Any claim that AirBnb is unaware of their responsibilities under the law is no longer a fair or truthful statement of the situation. Best case, they KNEW that they've been operating illegally for 2.5 years. So back to my original question: in your opinion, how long is AirBnb immune from laws for graciously introducing new technology?
krschultz 12y ago
Is it really new technology? VRBO has existed for how long? I remember one of the first web sites I made for money was a vacation rental listing website in the 90s, blinking gifs and all. Your average tax accountant can talk you through all of this stuff without issue. The part that AirBnB differed on was aiming for big cities rather than mountains and beaches, and seeking out empty 2nd bedrooms rather than dedicated vacation rentals.