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Tuesday, June 28, 2016

Big Day For Airbnb: Sues City, Seeks Funding at $30 Billion

Posted By on Tue, Jun 28, 2016 at 2:39 PM

click to enlarge One way to announce to someone you're suing. - AIRBNBACTION
  • Airbnbaction
  • One way to announce to someone you're suing.

Airbnb is all growed up. The San Francisco-based company — which was a literal air mattress in its co-founders' apartment just a few years ago — is now an international juggernaut offering hotel alternatives in 200 countries (where in at least a few places it's also blamed for exacerbating housing shortages).

The company is currently seeking funding based on a valuation of $30 billion, according to the New York Times, and may even turn a profit (!) as soon as later this year (!!). What might help its profitability? Not having to pay San Francisco $1,000 a day for every illegal listing it offers.

To that end, Airbnb is suing its hometown. In a lawsuit filed Monday, Airbnb is asking a federal judge, as the Times observed, to not enforce a law regulating Airbnb units that Airbnb had a hand in creating.

San Francisco first started regulating Airbnb rentals a little more than two years ago. Earlier this year, report after report revealed the law — the so-called Short Term Rental Ordinance — to be an absolute joke. Very few Airbnb hosts were registering their units on offer via the website, and unregistered units could keep on taking as many guests as they could handle. Meanwhile, Airbnb collected a cut.

Earlier in June, city leaders decided to make Airbnb responsible for enforcing the rules and approved an $1,000-per-day fine for every unregistered listing in San Francisco offered on the site. It's that latest wrinkle — making Airbnb responsible for the rules — that Airbnb cannot abide, the company announced Monday.

"Unfortunately, the rules do not work," the company wrote in a blog post. "There is broad agreement that the current registration process in the City is broken."

According to the company, laws like the Communications Decency Act specifically exempt Airbnb for any information published by third parties on its site.

Essentially, Airbnb is saying that it is in no way responsible for the misbehavior of its hosts as it relates to following local laws — that "people who use the internet are held responsible for the online content they publish, not platforms that host it," as the company put it.

And that's why Bloomberg, at least, thinks San Francisco is screwed. The Communications Decency Act is the same law that allows Google to escape culpability for search results and for eBay and Amazon to deny responsibility for items sold by its users.

In the same way, Airbnb wants to foist penalties onto its users, as it says in its suit. All grown up, indeed.

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About The Author

Chris Roberts

Chris Roberts has spent most of his adult life working in San Francisco news media, which is to say he's still a teenager in Middle American years. He has covered marijuana, drug policy, and politics for SF Weekly since 2009.

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