Earlier this month London Mayor Sadiq Khan wrote to MPs to say a change in the law may be required regarding how short-term rental services impact the availability of long-term rentals in London. He wrote “I support the right of people to benefit from renting out their homes for short periods, but this must be balanced against the need to ensure that Londoners are not adversely affected”.
The Londoners to which Khan refers would no doubt support his view.
Airbnb (who are not alone in the short-term rental sector but certainly are the market leader) offer consumers a cheaper, often more comfortable alternative to hotels. They also offer homeowners the opportunity to make some serious side income or rent their properties as lucrative holiday lettings rather than a regular long-term rental.
But with every winner there is a loser. Now Londoners face a shortage of long-term rental options and even higher prices when they do find somewhere appropriate.
This is clearly a problem and will only get worse if changes are not made. But what will be the compromise?
Airbnb is no stranger to lawsuits and enforced regulations, so they must be getting used to it by now. But at the end of the day, what have they done wrong? They haven’t broken any laws. They have simply developed a ingenious business idea designed to benefit the consumer. They have disrupted an industry and this is the chaos that ensues.
The shift to short-term rentals is affecting communities too. London boroughs thrive on community and long-term rentals are needed to sustain one. If Airbnb continues to expand the way it does, it won’t be long before towns and boroughs are inundated with selfie-stick wielding tourists and residents are forced out because prices are too high. Then a community vanishes.
On the one hand, it’s as though something is being punished for being too clever. On the other, it feels like a giant unstoppable monster going around wrecking businesses and devouring communities and people’s money, even if it doesn’t mean to. Like the Incredible Hulk. He wants to do good but doesn’t know his own strength.
The Disruptors become the disrupted
And of course Airbnb isn’t the only disruptive, pro-consumer enterprise under constant pressure. Uber is always under the spotlight, either because they are preparing to displace drivers with driverless cars or make them work around the clock because they are “self-employed”. Last month they lost the right to classify UK drivers as self-employed and now face the prospect of having to pay their drivers the national living wage, including holiday pay, pension pay and national insurance contributions.
Uber argued that it is “a technology firm not a transport business and that its drivers are independent self-employed contractors who can choose where and when they work”. The $50 billion valued company have appealed the court’s decision but an overrule is unlikely. Uber may not like it but a compromise – at least in the UK – appears to have been reached.
So, with Airbnb’s grasp on the London rentals market potentially under threat, could there be a significant change on the horizon for them too? Could the disruptors become the disrupted?
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