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Airbnb looks to rally support as regulators scrutinize business

November 12, 2013|By Jessica Guynn
  • Airbnb put on a press conference at its new San Francisco headquarters on Tuesday morning.
Airbnb put on a press conference at its new San Francisco headquarters on… (Jessica Guynn / Los Angeles…)

SAN FRANCISCO -- Facing growing regulatory challenges, Airbnb rolled out the red carpet on Tuesday morning, welcoming hundreds of Airbnb hosts and the media horde to a press conference at its splashy new San Francisco headquarters.

It was a move designed to draw positive attention to the so-called “sharing” economy. Airbnb is battling regulators in New York and other cities that say it is illegal for tenants to sublet their homes.

New York’s attorney general Eric Schneiderman has filed a subpoena seeking the records of 15,000 of its hosts.

Airbnb is looking to put pressure on Schneiderman by getting people to sign an online petition that has so far received more than 160,000 signatures.

Airbnb is also facing challenges over tax payments from booking fees.

Airbnb co-founder and chief executive Brian Chesky said Airbnb customers had spent $630 million in New York in the past year.

"This is a new economy, the sharing economy,” Chesky told the audience at Airbnb headquarters. “It's actually starting to feel like a revolution."

The issue, he said: “There are laws for people and there are laws for business, but you are a new category, a third category, people as businesses. As hosts, you are micro-entrepreneurs and there are no laws written for micro-entrepreneurs.”

In talking to reporters after the event, Chesky said he was “incredibly optimistic” that Airbnb could reach a deal with Schneiderman.

He said cities around the world had become more more receptive to Airbnb. Airbnb operates in 34,000 cities around the world.

“A lot of people want to find a way to make Airbnb work,” he said.

To better compete with nice hotels and other cushy accommodations, Airbnb is looking to get all of its 350,000 hosts up to snuff on hospitality standards.

The company also launched updated Airbnb apps for iPhone and Android devices.

“We have two goals. By the end of the year we wanted this to be primarily a mobile company and secondly, we wanted to be a leader in hospitality,” Airbnb Chief Executive Brian Chesky said.

Getting more people to use the mobile app will help hosts be more responsive to guests, Chesky said. The company is contemplating different options to finance phones for hosts to help them afford the cost of the phone or the plan.

“In 2014, I think the majority of our business will be mobile,” he said.

As for making guests feel more welcome, “hospitality standards are so important,” Chesky said.

“We don’t control the entire experience. We only influence the experience,” he said.

One major step Chesky took was hiring Chip Conley, founder of boutique hotel chain Joie de Vivre, as Airbnb’s head of global hospitality. Conley has been traveling the world teaching hosts to treat guests more like hotels do.

Airbnb is also working to improve its reviews to give travelers more details such as cleanliness and availability.

Airbnb is one in a new wave of hot Internet companies to come out of San Francisco. Another one, Twitter, had a successful IPO last week.

“We don’t have any immediate plans for an IPO,” Chesky said in an interview after the event. “We are really, really happy to stay private and be independent for the foreseeable future.”

Chesky described an IPO as a “moment in time when you have a really good reason to go public.”

He also said the company had no “immediate” plans to raise money, barring “an insane, awesome idea that requires massive investment.”

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