US courts have decided not to honor the New York attorney general’s subpoena for customer information from Airbnb. According to the AG Eric Schneiderman, Airbnb, the unique non-hotel accommodation listings app, is operating an illegal business.
However, before the judge dismissed the subpoena for records of Airbnb hosts, he stated that there was sufficient evidence of illegal activity in Airbnb’s operation. This battle may be over but the war is far from won.
So what exactly is New York’s problem with the innovative and hugely successful tech company and is Airbnb actually illegal? First up a reminder of Airbnb and the services it provides…
What is Airbnb?
Put simply it is an online listings database that allows you to upload details of your place of residence as a rental. Imagine you are going on holidays for a week or have a spare room for a month you can host your place or room to rent up on Airbnb and find a person to rent it.
It provides a great, affordable and social accommodation service for backpackers and travelers in general. Complete with host profiles, top quality photographs and detailed reviews it is a fun and practical service that prides itself on being reliant and convenient. The company has only been operating for six years and is worth a whopping $10 billion. People have embraced the Airbnb concept wholeheartedly it seems!
Why is the New York Attorney General after Airbnb?
The state of New York claims that the tech start up is breaching the law by not handing over records of Airbnb hosts who rent their homes in the Big Apple. Airbnb fear that by disclosing such information to the authorities they will negatively impact their business, who would trust and use Airbnb if they thought their information would be passed on?
New York law states that owners or renters of apartments in the city cannot rent them out to someone for less than 30 days, unless they themselves are also present. This means that if you decide to rent a room in your New York flat for a weekend through Airbnb you are technically breaking the law.
According to a survey carried about by the state of New York about two-thirds of Airbnb’s rentals in the city are this type.
Eric Schneiderman, the attorney general, claims that people renting places like this are in fact operating “illegal hotels”. Due to local taxes that are placed on the rental of homes the AG says that by operating in the city Airbnb customers are avoiding paying taxes while receiving rent payments.
Although this may initially appear like an issue that only affects the New York area of the company’s listing the ramifications for this in America and worldwide could be detrimental to Airbnb’s service.
Airbnb may have claimed victory in court recently but the judges comments plus the gusto with which Schneiderman and co are pursuing the company means that it is highly unlikely that this will be the end. To be continued…
If you are still interested in Airbnb, despite all the controversy, and would like to browse through its listings? Download the app for Android from Eazel now! Airbnb.