The appeal of Airbnb is grounded in its appetite for quality control. It's not a laissez-faire bastion of sell-whatever-you-want, like Craigslist. The platform is a curated gallery of memorable experiences and cherished friendships around the globe. On its About page, Airbnb describes itself as a "trusted community marketplace" with "world-class customer service." 

But you wouldn't guess that from the lawsuit the company filed on Monday against its hometown of San Francisco. No, according to that lawsuit, Airbnb is just a platform hosting whatever it is people post. It "is a provider of an interactive computer service," as defined under federal law, "because it operates the interactive online platform Airbnb.com" and "provides information to multiple users by giving them computer access to a computer server."

You know, it's just a website. It's just Airbnb dot com. It's no more responsible for its listings than a site like Craigslist is for the content of its classifieds, or as a blog is for reader comments, the company claims.

Understandably, startups like Airbnb strive to be all things to users. The trouble is, doing so can create expectations for consumers. If, for instance, you operate a website that just hosts profiles, no one can reasonably expect more from you. If you host a site that instead curates and helps structure postings, well, you're more than just a platform on which others can post--and you may be expected to manage your site accordingly. 

The Argument

That, in part, is what's behind the latest debacle encircling the billion-dollar startup. The company's lawsuit is a response to a new ordinance passed in San Francisco requiring home-sharing platforms like Airbnb to publish proof of registration of city properties listed on the website, in the form of registration numbers. The ordinance "imposes criminal and civil liability for Airbnb's publication of third-party rental advertisements," reads the lawsuit. That's a violation of federal law, Airbnb asserts. The company cites a section of law famed and credited for preserving free speech on the internet: Section 230 of the 1996 Communications Decency Act.

The ordinance builds on a law Airbnb helped draft, effective as of February 2015, which put a cap on the number of short-term rentals of entire homes that can be listed on the site and requires those listed to register with the city. 

Whether Airbnb's argument winds up shielding it from being liable for what users post will be worked out in court. There's still an irony to Airbnb's argument beyond the fact that it's fighting a law the company itself helped create.

Here are various ways Airbnb tries to control the fine details of its offerings:

  • The company has handled reports of discriminatory behavior by banning users who engage in it. (Some say the company needs to go further in confronting users who make the site feel unaccommodating for minorities.)
  • Not a great photographer? Airbnb offers free professional photography to eligible hosts so they can better showcase those listings for which Airbnb is not liable. 
  • Hosts that have gone through Airbnb's Verified Identity process are permitted to require guests go through the same process. 
  • Wanna know which listings Airbnb likes best? Good news: They keep a list. They also run profiles of some of their favorite hosts. 
  • Airbnb now allows multi-party reviews, so hosts can review not just the guests who booked the Airbnb but also the guests they brought with them. Airbnb wants to be transparent about everything, just not about the legality of its listings. 
  • Airbnb unveiled updates to its app in April, aimed at helping you "live like a local when you travel." Among other search options, "Live There" features make it so that "you can choose your property type--apartment, castle, bungalow--and neighborhood type--scenic, hip, quiet."

As you can see Airbnb, seems only too keen to help you fine tune your travel accommodations. Yet in the same breath, here's Airbnb saying you can't count on it to control the quality of posts. 

The Implications 

The inconsistency has significant consequences in San Francisco, a city known for rising rents, shady evictions and high levels of homelessness. The San Francisco Chronicle reported in 2015 that "350 entire homes listed on Airbnb appear to be full-time vacation rentals." That's a wide margin for a city known more for small, single-family homes than skyscrapers.

There is a clear incentive for the city to attempt to reign in short-term rentals of single family homes, and to use what legal resources it can to enforce limitations. San Francisco Supervisor David Campos tells the New York Times only 20 percent of roughly 7,000 listings required to register have done so. He adds that Airbnb is not removing those who fail to meet the legal requirement.

There is also clear incentive for Airbnb to let hosts be. These aren't just potentially illegal listings in some city where Airbnb happens to be operating: They're listings in an influential market for Airbnb.

The number of listings in San Francisco, at around 5,000, trails behind the more populous U.S. Airbnb destination New York City, which has 34,000 listings. Yet analytics startup Statistica reports San Francisco has more than twice as many listings per capita as New York: 9.8 listings per thousand San Franciscans, compared to 4.3 listings per thousand inhabitants of New York.

In response to questions about whether arguing against its liability for listings might contradict the company's mission, Airbnb's attorney John Spiegel at Munger, Tolles & Olson LLP directed me to Airbnb's press team team. Airbnb communications directed me to the text of the complaint filed in court on Monday and the company's blog post about the lawsuit. It also encouraged me to speak with certain experts on the Communications Decency Act.

I did. The upshot? Airbnb positions itself as capable of finely filtering the quality of dwellings listed on its site, while forsaking liability for the legality of postings. That defense holds water, according to Lee Tien, senior staff attorney with civil liberties defense nonprofit Electronic Frontier Foundation, one of the organizations Airbnb recommended contacting. Companies as varied as MySpace, Lycos, Amazon, eBay and StubHub have all successfully used the 230 provision.

Legal arguments aside, the home-sharing startup giant is cherry-picking its responsibilities--and that's putting its reputation at risk.

Published on: Jun 30, 2016