Victor Hugo had a saying: You cannot kill an idea whose time has come. And our time has come.
—Brian Chesky1
A few months before Uber moved to its mood-lit offices on Market Street, Airbnb left its own comfortable nest, exchanging its Potrero Hill space for swank new headquarters a five-minute walk away in a hundred-year-old warehouse on 888 Brannan Street. Brian Chesky and Joe Gebbia unleashed their design talents on a building that had served at various times over the years as a wholesale jewelry market and a battery factory. They installed a light-dappled atrium with a twelve-hundred-square-foot vertical “green wall,” made up of hundreds of plants spanning three floors, and outfitted a dozen conference rooms to look like Airbnb listings in Milan, Paris, Denmark, and elsewhere. Another conference room was modeled after the founder’s original apartment on Rausch Street, while a larger meeting space was converted into an exact replica of the war room in the Stanley Kubrick film Dr. Strangelove, complete with a circular table under a ring of Cold War–era overhead lighting.
No expense was spared in Airbnb’s new office. There were pricey aluminum Emeco chairs, gold-plated tableware from a local ceramics boutique, and a gourmet kitchen that served three meals a day, seven days a week. The company says it spent more than $50 million on the renovation and $110 million on a ten-year lease (a deal that would look good as city rents soared).
At a board meeting, according to a person who was there, venture capitalist Marc Andreessen expressed concern over the company’s exorbitant burn rate. Another board member, Sequoia Capital’s Alfred Lin, who had replaced his former partner Greg McAdoo on the Airbnb board, confirmed there were discussions about profligate spending but said they were overshadowed by the company’s remarkable performance. “Growth covers a lot of sins, and the growth of the company was spectacular,” Lin says.
The new headquarters wasn’t designed merely as an office but also as a shrine to an idea—that Airbnb could bring people together, erase their differences, and, in the earnest spirit of so many Silicon Valley satires, make the world a better place. On the third floor, near the visitor check-in desk, a street sign gifted to the company by the director Spike Lee identified the foyer as “Do the Right Thing Way.” The walls of the office were covered with inspirational phrases, such as AIRBNB LOVE and BELONG ANYWHERE. The latter was the company’s new slogan, introduced with much fanfare in 2014 along with its new curlicue logo, the Belo, which was widely interpreted as an abstract representation of part of the female anatomy.2
Such was Airbnb’s grandiose sense of its own importance that in his keynote at the Airbnb Open, a gathering of hosts held for the first time in San Francisco in November 2014, Chesky recalled how his new head of global hospitality, Chip Conley—the only Airbnb exec better than the founders at slinging company agitprop—had predicted that the Airbnb community could win the Nobel Peace Prize within the decade. “I kind of laughed. I thought he was out of his mind,” Chesky said in his speech. “And then suddenly you hear stories and you’re like, ‘We are not completely that crazy after all.’”3
Just like Uber, Airbnb was thoroughly infused with its founders’ ambition and idealism, along with a generous seasoning of naïveté about how such musings might sound to the public. And like Uber, Airbnb in 2014 was a sponge for the optimism booming across Silicon Valley at the time. A few months before Uber raised its massive $1.2 billion Series D, Airbnb raised half a billion dollars from a group that included T. Rowe Price and two investors who had backed Uber, the private equity firm TPG, and Shervin Pishevar’s new private VC fund, Sherpa Capital.
The astounding new valuation of the six-year-old company: $10 billion.
With 15 percent ownership stakes, Brian Chesky, Joe Gebbia, and Nathan Blecharczyk were each worth $1.5 billion on paper and joined the Forbes billionaires list the same year as Travis Kalanick, Garrett Camp, and Ryan Graves from Uber.4 They were all in their thirties.
There was another, more unfortunate parallel between the companies. Like Uber, Airbnb was seemingly unprepared for the kinds of tragic events that were not only possible on its service, which discarded the safety protections found in conventional hotel rooms, but probably inevitable.
On December 30, 2013, only a day before young Sophia Liu was hit and killed by an Uber driver in San Francisco, Elizabeth Eun-chung Yuh, a thirty-five-year-old South Korean native from Ontario, Canada, died of carbon monoxide poisoning at an Airbnb in Taipei. She had traveled there with friends for a wedding and checked into an apartment downtown, where the landlord had recently enclosed an outdoor porch without properly venting the water heater or installing a carbon monoxide alarm.
According to a report in the China Post, her four friends in adjacent rooms were admitted to a local hospital and treated for carbon monoxide inhalation, but Yuh was found dead at the scene.5 A few weeks later, her father, Deh-Chong Yuh, Tweeted at Brian Chesky:
Our daughter Elizabeth passed away in Taipei, Taiwan at a Airbnb arranged apartment from carbon monoxide inhalation on 30 Dec. 2013.6
Unlike the Sophia Liu tragedy, the incident received no attention in the Western media. When I later asked Airbnb about it, a spokesperson e-mailed me a statement: “We were extremely dismayed when we learned about this incident and we immediately reached out to the guest’s family to provide our full support and express our deepest condolences. This was a tragic event and our focus has always been on supporting the family and taking action to help prevent this kind of incident from happening again. Additionally, we permanently removed the host from our community. Out of respect for our community members’ privacy, we generally do not comment on the conversations we have with them.”
The Yuh family, which did not respond to my attempts to reach them, contacted San Francisco personal injury attorney William B. Smith, who advised them to file a wrongful death suit and challenge Airbnb’s fourteen-page terms-of-service agreement, which stated that hosts and guests assumed all risks and were responsible for adhering to local laws. But soon after, Smith told me, the Yuh family informed him that Airbnb had offered them two million dollars to resolve the matter. They decided to accept instead of filing a lawsuit.
According to a legal paper Smith later published on his law firm’s website, Airbnb denied liability for the incident and specified that the settlement was “offered only for humanitarian reasons.”7 One attorney who worked for Airbnb later told me that Airbnb didn’t have to settle the case but that, in such situations, Chesky focused intently on the right thing to do. To Smith, though, any hint of benevolence rang false. “People might pay money for humanitarian reasons, but corporations don’t. They pay because of legal liabilities,” he says.
Nearly two years later, journalist Zak Stone chronicled Yuh’s death in a story about his own father’s death at an Airbnb, which occurred when a tree branch attached to a tire swing fell on his head.
In a joint interview with all three Airbnb co-founders, I asked about such tragedies. “There is a certain statistical probability that extremely unlikely things will happen from time to time, given enough scale,” Nate Blecharczyk answered. “It can be an opportunity actually to come out stronger. When something bad happens, we really look deep within and try to think hard about… what it is we can do going forward to make the service better.”
Indeed, in the United States in 2014, Airbnb started giving away carbon monoxide detectors as well as first-aid kits, smoke detectors, and safety cards that advised hosts on emergency preparedness.8 It also said that by the end of the year, hosts had to have smoke and carbon monoxide detectors in their homes, though there was no way to determine whether the hosts had actually installed them.
The Yuh tragedy epitomized the dueling realities facing Airbnb at the start of 2014. It wanted to be seen as an innovative hospitality brand bringing strangers together and providing authentic, intimate travel experiences. But it was also an internet marketplace that, like all such marketplaces, could not fully guarantee the scrupulous behavior of its hosts or the actual conditions its guests encountered.
The reality people saw often depended on where their sympathies lay. Regulators, left-wing politicians, hotel CEOs, union leaders, affordable housing advocates, and angry neighbors tired of carousing guests saw Airbnb as nothing but a rule breaker from the far-away land of arrogant, entitled billionaires. Investors, hosts, property owners struggling to make their monthly mortgage payments, travel-discount shoppers, and high-tech aficionados tended to believe in the startup with good intentions that was disrupting the stultified hospitality industry.
But despite its humble origins and more empathetic CEO, Airbnb was about to become every bit as controversial as Uber.
Steve Unger moved to Portland, Oregon, back in 2002 after losing his Silicon Valley job in the dot-com bust. With his husband, Dusty, he reinvented himself as the proprietor of the Lion and the Rose, a stately one-hundred-year-old Victorian inn with eight bedrooms, arched windows, a wraparound porch, and a turret on the third floor. In a good year, Unger catered to two thousand guests.
To register as a proprietor of a traditional bed-and-breakfast in Portland, Unger had to get a city permit that cost four thousand dollars, part of an ordinance that had been put into place to protect residential neighborhoods from too much commercial activity. So Unger was among those inclined to look askance when unlicensed Airbnbs started popping up across Portland, particularly since his business remained curiously slow even after the city emerged from the recession in 2012.
By the beginning of 2014, local hosts were imploring the city to reduce its B and B registration fees and stop the inconsistent, piecemeal enforcement of zoning laws that were shutting some Airbnb hosts down whenever neighbors complained to the city. Unger attended city council meetings on the issue and saw that Airbnb and its lobbyists were deeply involved in the debate. He marveled at the hosts that Airbnb reliably corralled to argue on its behalf. They offered sympathetic testimony about how renting out their spare rooms or in-law apartments on Airbnb allowed them to earn enough extra money to stay in their homes. Unger started calling this kind of arrangement “the good Airbnb.” The bad Airbnb was made up of hosts with multiple properties and owners who didn’t actually live in their homes for much of the year but rented them out online, keeping them off the housing market. These types of hosts weren’t asked to testify at the meetings.
Despite resistance from neighborhood groups, Airbnb and its hosts succeeded in changing the law. Over the summer of 2014, Portland became the first city in the country to strike a deal with the company. The arrangement legalized short-term rentals in primary residences but limited unhosted rentals—that is, when the host was not present—to ninety days a year.9 Registration fees were reduced from $4,000 to $180 and hosts were required to conduct a safety inspection of their homes, notify their neighbors, and register with the city. In return, Airbnb agreed to collect the 11.5 percent lodging tax on behalf of its hosts and send the revenue to the city (without including hosts’ names and addresses).10 The company also opened a customer-service call center in town.
There was peace in Portland, but Steve Unger didn’t like it. “I believed that the ninety nights a year would be almost impossible to enforce unless Airbnb helped, and they never said they would,” he told me. “They said it was critical to have ninety nights a year as one of the conditions of the agreement. They wanted people to go away on vacation and be able to rent their houses. And they make more money on entire place rentals.”
For Airbnb, the Portland deal was one of the first steps in a new campaign to bolster its image and calm the mounting regulatory rancor. A blog post by Chesky published in tandem with the Portland announcement introduced a new initiative that the company called Shared Cities. It included Airbnb’s pledge to make cities friendlier and nicer by, for example, helping hosts donate to local causes and matching their donations.11
At the heart of the proposal, Airbnb was offering cities a carrot, in contrast to the sharp stick Uber employed by weaponizing its customer base against its political opponents. Hotel taxes were the reward. Years earlier, Airbnb had said it shouldn’t be responsible for collecting hotel taxes because it operated only as a marketplace.12 Hosts, however, were unlikely to pay hotel taxes voluntarily. Airbnb now saw the advantage of conceding that point and facilitating tax collection itself in return for laws that sanctioned short-term rentals. “We’re offering to cut red tape and to collect and remit taxes to the city of Portland on behalf of our hosts,” Chesky wrote. “This is new for us, and if it works well for our community and cities, we may replicate this project in other U.S. cities.”13
That, it turned out, was foreshadowing. A week later, the company said it planned to start collecting the 14 percent hotel tax (aka the transient occupancy tax) in San Francisco14 and even agreed to pony up tens of millions in unpaid back taxes (it never specified the exact amount).15 Over the next year, it would strike taxes-for-legalization agreements in Chicago,16 Washington, DC,17 Phoenix,18 Philadelphia,19 and elsewhere. Amsterdam became the first city in Europe to sanction short-term rentals, permitting residents to rent their homes for no more than two months a year and only to four people at a time.20 France also legalized short-term rentals of primary homes and empowered its cities to pass additional restrictions on rentals of nonprimary residences.21
Chesky was optimistic that Airbnb had turned the tide when we discussed the issue in 2015. “Every city used to look to New York to figure out what to do,” he told me. “Now I think cities are deciding, we are going to figure out what’s best for us.”
But New York City was still a flash point, and it was here, in one of the company’s largest markets, that Airbnb first underestimated the powerful political forces that were beginning to mobilize in the wake of its success. In the spring of 2014, Airbnb was negotiating with the office of New York attorney general Eric Schneiderman to end the long standoff in New York. The parties came close to reaching a settlement that would resolve the AG’s issues with the company and authorize it to collect taxes on behalf of its hosts, according to three people familiar with the discussions. But then, in an abrupt turnaround, the city refused to finalize the agreement. Almost overnight, Airbnb had somehow become politically radioactive in New York City.
People involved in the discussions say there were two reasons for the reversal. Airbnb had just completed the round of funding that valued it at $10 billion. It was now worth more than major international hotel chains like Hyatt Hotels and Wyndham Worldwide. Jolted by this, these companies suddenly woke up to the looming threat in their midst. Ten days after the news, the American Hotel and Lodging Association, the primary trade group for the 1.9 million employees in the U.S. hospitality industry, released a statement announcing that it would begin tracking Airbnb and other short-term rental sites and drawing attention to issues like taxes, adherence to disability laws, the protection of residential areas, and the preservation of neighborhood parking.22
At the same time, Airbnb had reached out to the New York City chapter of the Service Employees International Union in hopes of giving its hosts access to certified unionized housecleaners who could be summoned on demand. That alienated another hotel union, the powerful Hotel Trades Council, which feared such an agreement could further legitimize Airbnb. It too spun up a campaign to curb short-term rentals, funding the creation of a New York–based lobbying group called Share Better.23
Airbnb now had two significant enemies: hotels and their powerful employee unions. Both were well organized and deep pocketed, and both had strong relationships with local governments. A lawyer working for Airbnb on the attempted settlement in New York City said that within twenty-four hours, the hotel unions and their representatives scuttled any prospective deal, insisting that the city should not do anything to legitimize Airbnb. “At that moment everyone panicked and said, we are not touching this for a while,” this person said.
Airbnb attempted to swing popular opinion to its side but didn’t have the same populist tools as Uber. Hosts who rented out their apartments only a few times a year were unlikely to show up for protests at city hall at three o’clock in the afternoon. So that summer, Airbnb hired Bill Hyers, the manager of de Blasio’s successful campaign for mayor, and he placed ubiquitous ads in New York City subways featuring photos of smiling New Yorkers using the service to make ends meet. (“The good Airbnb,” according to Steve Unger.) NEW YORKERS AGREE: AIRBNB IS GREAT FOR NEW YORK CITY, read the tagline on the subway posters. Many of these posters became the target of graffitied scrawls such as Airbnb accepts NO liability and The shared economy is a lie.24
By the end of 2014, the chances for a political agreement in New York looked dim. As the report that fall by New York attorney general Eric Schneiderman revealed, more than two-thirds of Airbnb rentals in the city violated the draconian Multiple Dwelling Law—the law that Toshi Chan had protested back in 2010 that said New Yorkers couldn’t rent out their homes for less than thirty days. And 6 percent of hosts in the city were renting out multiple units on Airbnb, generating 37 percent of the company’s revenue there.25
Momentum was shifting elsewhere too. The laws passed in the Shared City agreements with cities like Portland were being flouted, just as Steve Unger had feared. They required hosts to register with their cities, but, despite the fanfare that accompanied the deals, few did. In the face of this, Airbnb refused to put in place restrictions to force compliance—for example, requiring hosts enter valid registration numbers or preventing a host from listing multiple properties. In interviews, company executives pointed out that law enforcement was not typically the domain of a private company and complained that the registration process was often too complicated and time-consuming (hosts in San Francisco had to make an appointment and then appear at city hall in person to present valid documents26). But it was also impractical for the cities to police the thousands of anonymous people using the home-sharing site, and Airbnb didn’t seem all that eager to help.
Airbnb had said it wanted to talk candidly with cities, to play by the rules, to be a partner. But in the end, there emerged an unavoidable fact: Chesky was every bit the warrior Travis Kalanick was. He believed so much in the promise of his company that he was going to fight for every inch of territory.
In July 2015, I traveled with Chesky and half a dozen of his colleagues to Nairobi, Kenya, for a conference called the Global Entrepreneurship Summit, held annually since 2010 by the U.S. State Department. It was a celebration of innovation and private enterprise, and Chesky, as a Presidential Ambassador for Global Entrepreneurship (PAGE), would be meeting with President Obama, speaking on a panel, and talking to African entrepreneurs. Bonus for Airbnb: it was neutral territory thousands of miles away from Airbnb’s nearest regulatory skirmishes in Europe and the United States.
The trip was long and security in Nairobi was tight. The Airbnb entourage stayed not with one of the city’s 788 Airbnb hosts, as they usually would, but at the Fairmont Hotel, its front driveway ringed by metal gates and security checkpoints. The capital was on lockdown for Obama’s first visit to Kenya since he had become president. Soldiers holding automatic weapons lined the streets from the airport to the city while residents crowded at intersections, straining for a glimpse of Obama or other visiting dignitaries. Billboards everywhere bore his image along with the words WELCOME HOME, PRESIDENT OBAMA!
It was a historic moment but also an opportunity to see Chesky the diplomat, away from the regulatory threats and operational challenges that confronted him at home. His performance was impressive. Few Silicon Valley execs can so effectively phase shift—digging into operational complexities at one moment, negotiating with politicians the next, and then leaving it all behind to speak in relatable tones to students, other startup founders, and the general public. Chesky did this with ease, and it was a reminder of the remarkable personal skills that had propelled his company to such astounding heights.
Chesky and other PAGE ambassadors met with Obama privately on the morning of the conference. Obama, I later heard, gave him a “bro hug” and made a reference to news of a new Airbnb fund-raising round (new valuation: $24 billion). “It looks like you are doing very well,” he said, revealing that even POTUS was watching the upstarts. Later, after Obama’s moving speech about his family’s history in Kenya and the opportunities to spur economic development in Africa, the president advised a local Kenyan founder who had joined him onstage, “We have the founder of Airbnb here. You can talk to him, he’s doing pretty good.” The packed audience laughed.
On a panel later in the day with five other tech-company CEOs, Chesky was easily the most charismatic speaker. He worked from a reliable playbook, mining the early history of Airbnb to offer business lessons and inspiration: “Not too many years ago I was an unemployed aspiring entrepreneur, living in an apartment with my roommate Joe. We couldn’t figure out how to make rent, and one day a design conference came to San Francisco. All the hotels were sold out. We thought, What if we could turn this house into a bed-and-breakfast for the conference? We called it the AirBed and Breakfast.”
All startup stories bend toward fable. Airbnb’s had evolved into an oral history to be recited in keynotes, at new employee orientations, and probably around the campfires at company retreats. “When I started Airbnb with Joe and Nate, I looked at successful entrepreneurs and I did not see myself in them,” Chesky said. “I thought they were put on a pedestal. They seemed smarter than me. More successful.”
The next day we drove to a startup incubator called iHub, twenty miles west of downtown. Even in subtropical Africa, startup founders sought places to cluster, work, and strategize about how to surf the great wave. More than two hundred people had jammed themselves into a common room on the fourth floor, where the air started out humid, moved quickly to sweltering, and then progressed to suffocating. Chesky, wearing a tight gray T-shirt with the Belo logo on the front, didn’t seem affected and spoke for ninety minutes straight. “During the financial crisis, people started using Airbnb to stay in homes. For us, it was a turning point. Fast-forward to today, six years later, we have one point five million homes around the world. That’s as many rooms as Hilton and Marriott combined. This summer on a peak night, we’ll have close to one million people in a single night staying in a home.” The crowd, delighted to be in the presence of Silicon Valley royalty, erupted in rapturous applause.
There were many questions. A Kenyan in a yellow jacket stood up and asked about Airbnb’s regulatory issues. Apparently Nairobi wasn’t that far from the company’s legal scrums after all.
Chesky’s answer was revealing and optimistic—perhaps overly so. “When there’s a cool new business on the internet, that’s great,” he said. “But when the internet moves into your neighborhood, into your apartment building, and you don’t know anything about it, suddenly people assume the worst and they have a lot of fears.
“So there’s a couple of things you need to do. The first thing you need to do is grow really, really fast. You either want to be below the radar or big enough that you are an institution. The worst is being somewhere in between. All your opposition knows about you but you are not a big enough community that people will listen to you yet.
“You have to get to what I guess I’d call escape velocity. If a rocket takes off, there’s a bumpy ride before you get to orbit, and then there’s a little bit more stillness.
“The second thing is you need to be willing to partner with cities and tell your story. We found the most important thing to do is to go and meet city officials. If people dislike you or if people hate you, it’s often normal to ignore them, to avoid them or to hate them back. The only real solution is to meet the people that hate you. There’s an old saying that it’s hard to hate up close. I have found that. It’s really hard to hate somebody when they are standing right in front of you.”
Two years before the proliferating fights over hotel taxes and host registrations, Peter Kwan started renting out the sunlit spare bedroom on the ground floor of his charming Edwardian home in San Francisco’s North Beach neighborhood. His longtime roommate had just moved to Germany, and Kwan, in midfifties, lived alone with Haley, his excitable West Highland white terrier. He was semiretired from teaching constitutional law and eager to meet new people and keep his house—the spare room was great to have available for visits by his sister and nephew. So he decided to give Airbnb a try.
Airbnb exceeded Kwan’s expectations on all counts. Over the years he met travelers from dozens of states and countries and stayed in contact with many of them. Using Airbnb was “better than I ever imagined or hoped for,” he says. “It’s been both satisfying emotionally and rewarding economically.”
But since Kwan was trained as a lawyer, after a few months of hosting, he started to wonder: Did he have liability insurance if a guest got injured? Should he collect the city’s transient occupancy tax? Was all this even legal? He checked the Airbnb website and there were no answers. The startup, he reasoned, would need a sizable law firm to educate hosts about the varying ordinances in all of its thousands of cities and countries. So Kwan did some research himself. Back then the answer to the last question, it seemed, was technically no, at least in San Francisco, since bed-and-breakfast purveyors needed to register and pay various fees, just like they did in Portland. But, of course, the law wasn’t being rigorously enforced.
Kwan decided to gather a group of hosts together to share information and navigate the emerging complexities of the so-called home-sharing economy. He announced the formation of his club on Craigslist and held the very first meeting of the Home Sharers of San Francisco in his living room in 2013. The group would eventually attract twenty-five hundred members. Seeking to avoid any conflicts of interest, Kwan decided the group would not allow Airbnb employees or city or state government workers to join.
Kwan’s group got so large that eventually it had to start gathering in public libraries instead of living rooms. They shared hosting tips, talked about issues like insurance, and swapped stories of nightmare guests (always the most enjoyable discussion). Then things got serious. In the wake of Airbnb’s agreement to collect hotel taxes, the city’s board of supervisors was considering legalizing short-term rentals. The Home Sharers lobbied to keep the names and addresses of hosts private and to maximize the number of nights they could rent out their properties each year.
The bill was written by board president David Chiu, a longtime political ally of Airbnb investors Ron Conway and Reid Hoffman.27 The bill passed in October 2014 and became law the following February. Under the new law, hosts were allowed to rent their homes for under thirty days without restriction when they were present and for ninety nights a year when they were absent. Hosts were also required to register with the city and to carry liability insurance, and the city agreed to create a new Office of Short-Term Rentals to administer and enforce the law.28 Mayor Ed Lee signed the bill, and Airbnb celebrated it in a blog post, commending it for containing “sensible rules of the road” and as “a great victory for everyone who wants to share their home and the city they love.”29
While it might have seemed like a victory, this was actually the beginning of Airbnb’s next fight.
At the time, San Franciscans seemed increasingly conflicted about the technology renaissance in their midst. The city that celebrated its bohemian past and distinctive neighborhoods was at the nexus of several converging trends: the acceleration of the internet economy, the migration of Silicon Valley startups up Highway 101 and into the city, and the infusion of millennials into cities. Home prices in the city were skyrocketing as a result, and gentrification was rapidly changing beloved neighborhoods, such as the predominantly Latino Mission District.
It all produced a kind of poorly articulated rage. The convenient culprits included the street-clogging double-decker company buses that ferried employees to the offices of Google, Facebook, and Apple; the tech companies themselves; and the so-called tech bros, vaguely defined stereotypical males who could be relied on to regularly Tweet or blog something racist, sexist, or generally insensitive, thereby indicting the entire tech industry. “Number 5: the 49ers,” wrote a startup founder named Peter Shih in a much reviled blog post titled “Ten Things I Hate About You, San Francisco Edition.” “No, not the football team, they’re great. I’m referring to all the girls who are obviously 4’s and behave like they are 9’s.”30
Another handy scapegoat was Airbnb, which was having an undefined but real effect on the number of rooms and homes for rent in San Francisco and other cities as landlords like Peter Kwan opted to market their spare bedrooms to tourists instead of renting them or selling their homes to permanent residents.
The issues facing San Francisco pitted new residents against old, techies against nontechies, and centrist Democrats against progressives. Airbnb was a tempting wedge issue in this fight, a way to muster opposition to the tide of gentrification under the banner of a universally appealing word: affordability. Even though the new Airbnb law was only a few months old, opponents tried to get the legislature to strengthen its restrictions. When that failed, they got fifteen thousand signatures to put a new initiative, called Proposition F, on the ballot in the fall 2015 elections, when progressives were looking to recapture the board of supervisors and unseat Ed Lee, the moderate Democratic mayor.
Prop F attempted to reduce the number of rentable host-absent days a year from ninety to seventy-five, to make renting out entire in-law apartments illegal, and to allow citizens to sue neighbors who lived within one hundred feet and were violating the law.31 These were tough measures that threatened to swamp the city in a caustic volley of lawsuits between neighbors. The initiative’s proponents, a trio of local activists backed by the city’s tenants’ union and apartment association, argued that the original law had no teeth, in part because hosts were unlikely to voluntarily register and the city did not have the resources to make them do so.
Peter Kwan and his fellow hosts mobilized against Prop F. They started a separate group, called the Home Sharers Democratic Club, to give hosts a political voice in the fray, convened press conferences, and organized phone campaigns to educate the citizenry on the folly of the initiative. “We were made a scapegoat for the housing crisis,” Kwan told me over home-cooked Singapore-style noodles in his dining room that year, which I ate while Haley nipped at my ankles. “Yes, we do have a severe housing shortage and affordability problem, and yes, home sharing probably does play some part in contributing to the severity, but I don’t think anybody really knows the degree of the contribution.”
Airbnb also mobilized against the initiative. San Francisco contributed only a small percentage to its growing global business but as the place of its birth and its hometown, Airbnb felt the symbolic stakes were high. It backed an organization called San Francisco for Everyone and contributed more than eight million dollars to the campaign. That fall the group plastered the city with NO ON F posters, outdoor billboards (WHICH NEIGHBOR IS GOING TO SNITCH ON YOU?), and ubiquitous radio and TV ads featuring members of “the good Airbnb,” like an elderly couple who lived on a fixed income and testified sweetly that “home sharing is helping us stay here.”
Meanwhile, the pro–Prop F forces trotted out tenants who had been booted from their homes by avaricious landlords eager to use short-term rentals to boost their earnings (“the bad Airbnb”)32 and plastered posters around town that said FIX THE AIRBNB MESS. A few days before the vote, seventy-five protesters banging drums, blaring horns, and chanting “No more displacement in this city!” occupied the atrium in Airbnb’s swank headquarters. They spent ninety minutes there, delivering angry speeches and releasing clusters of black helium balloons that carried posters with words like evictions and deregulation to the atrium ceiling. Airbnb employees watching the commotion from the third-floor balcony got a good look.33
The polling data showed a tight race, with the pro-Airbnb forces commanding a narrow lead. Chesky stayed away from the scrum but later discussed the stakes for the company. “You can win ten cities in Europe but you lose your home city and it basically just seems like you’re losing ground completely,” he said on a technology podcast. “This was a big, big-time fight.”34
Peter Kwan felt the outcome was in doubt until Election Day, November 3, when voters rejected the proposition by a surprisingly wide margin, 55 to 45 percent.35 Airbnb had won. Kwan and other members of the Home Sharers gathered at the Oasis Nightclub to revel in their victory, but for several reasons, Airbnb itself wasn’t exactly exulting in the moment.
A few weeks before Election Day, Airbnb advertisements appeared on billboards and at bus stops around the city bragging in a cheeky tone about the impact of its tax-collection efforts. DEAR PUBLIC LIBRARY SYSTEM: WE HOPE YOU USE SOME OF THE $12 MILLION IN HOTEL TAXES TO KEEP THE LIBRARY OPEN LATER, read one. Suggested another: DEAR BOARD OF EDUCATION: PLEASE USE SOME OF THE $12 MILLION IN HOTEL TAXES TO KEEP MUSIC IN SCHOOLS.
The advertising agency TBWA\Chiat\Day had been hired by Airbnb to promote its tax-collection efforts, but the campaign they came up with was widely ridiculed on Facebook, on Twitter, and in the national media for being patronizing, ill timed, and just plain baffling. Airbnb appeared to be arrogantly patting itself on the back for something it should have been doing regardless. After the backlash, Airbnb quickly pulled the campaign and apologized for it. Chesky later said that he had not seen or approved the ads. But the damage was done. With Proposition F, Airbnb had been fitted for the black hat. Though it won the battle, in an act of inexplicable self-sabotage, it had slipped the hat on itself.
After the vote, Chesky called an all-hands meeting and invited select hosts from around the city to attend. Peter Kwan was there, with Haley in tow. Employees and guests gathered in the fifth-floor cafeteria. Chesky and Gebbia spoke, as did Jonathan Mildenhall, the chief marketing officer, who took responsibility for the ads and apologized to the company. Kwan recalls that some employees were close to tears, upset not just by the ads but by all the rancor over Prop F and the way the company had been portrayed in the media. “I think there was a certain sense of betrayal,” he told me. “The whole Prop F debate made a lot of people feel uncomfortable about what they were doing. It came at this time of constant barrage of criticism of the company that just opened up the floodgates of emotion.” Chesky, looking distressed, “didn’t pull punches. He said, ‘We screwed up,’” Kwan recalls.
Airbnb staggered away from its costly Prop F victory in other ways as well. Mayor Ed Lee had won reelection and Proposition F had been defeated, but progressive Democrats took control of the board of supervisors and would pass even more draconian anti-Airbnb legislation in 2016.
San Francisco had been a harbinger, a taste of things to come in other cities in the country and around the world. The unlikely political coalition forged to counter Airbnb in its hometown was taking shape in Portland, Los Angeles, Chicago, Boston—and on and on. Anticipating this, Chris Lehane, once a hardball political operative for President Bill Clinton and Vice President Al Gore and now Airbnb’s new head of global policy and communications, held a press conference after the election. He announced Airbnb would finance the creation of a hundred grassroots political clubs to advocate for home-sharing. “We’re going to use the momentum of what took place here to do what we did in San Francisco around the world,” Lehane said.
Airbnb had not, as Chesky had hoped in Kenya, achieved any kind of “escape velocity.” In fact, it was looking like the company had unleashed political forces that were not going away anytime soon.
Less than a week after the Prop F vote, Chesky and six hundred of his employees traveled to Paris for the second Airbnb Open, held in the cast-iron-and-glass Grande Halle at the Parc de la Villette, a picturesque park lined with canals in the nineteenth arrondissement. Here was another abrupt shift between the company’s dueling realities. Within the span of just a few days, it had moved from navigating the muddy trenches of local politics to the happy self-absorption of its annual community festival.
Five thousand hosts from a hundred and twenty countries paid three hundred dollars a ticket for the three-day event, which was thoroughly infused with the spirit of a tent-revival meeting. Speakers embraced each other onstage and led the crowd in chants and dances. A Cirque du Soleil performer erected an impressive edifice of balancing sticks in her outstretched hands. There were luminaries like Alain de Botton, the Swiss author and philosopher, who said, “Psychological hospitality trumps material hospitality every single time.” The crowd stood and cheered repeatedly during the event, responding to rousing proclamations (“You are truly revolutionaries!”), as if the speakers were blowing dog whistles.
Occasionally the audience was yanked back to the other reality. “This generous idea is growing in Paris,” said Jean-François Martins, deputy mayor in charge of tourism, on the first morning. “But big ideas need some regulation to protect them from people who want to use it in a not very generous way.” Chris Lehane also appeared onstage and spoke to the gathered hosts as if they were infantry in the French marines. “We are going to have more fights and we are going to have more battles in the days, months, and years to come,” he said. “When this community is empowered to be a movement, we cannot be beat.”
In the middle of it all were the three founders, Chesky, Gebbia, and Blecharczyk, now the billionaire gurus of a peculiar internet sect. They spoke together and, in addition, Chesky and Gebbia spoke individually; they answered questions from the crowd and revisited Airbnb’s fabled origins. Gebbia’s speech was the most memorable. He appeared onstage wearing a wool hat, gloves, and a scarf, with two colleagues tossing fake snow on his head. It was an eccentric piece of performance art meant to re-create his early trips to solicit hosts in New York City during the winter of 2009.
During his speech, Chesky announced a new initiative, the Community Compact, the successor to the Shared Cities program from a year before. The compact committed the company to booting illegal hoteliers off the site, paying hotel taxes, and publishing anonymized data in its largest markets, including information on the percentage of Airbnb hosts who were sharing their permanent homes. “It’s not a new commitment but people didn’t believe us so we decided to just say it again and write it down,” Chesky later said.
The abundance of company worship at the Airbnb Open was tough for any hardened journalist to handle. But the hosts themselves, walking around the Grande Halle and attending speeches and seminars with whimsical names like “Hospitality Moments of Truth,” were disarming and inspiring. They were Airbnb’s most persuasive evangelists.
Here was a group that loved the company and what it stood for, demonstrating a kind of loyalty and passion that Uber, for example, would never see from its drivers. Among the hosts I met that week were Tanny Por, a so-called superhost who rents out a spare bedroom in her home in Nuuk, the capital of Greenland. Por moved from Australia to Greenland in 2013 when her husband got a new job. Renting a room in their home was a way to meet people but also a kind of social lifeline, allowing them to stay connected to the cosmopolitan world from the icy shores of the North Atlantic. “We spend a whole lot more time with our guests than everyone else, simply for the fact that there’s not so much to see or do in Nuuk,” she told me.
I also met Julia de la Rosa and Silvio Ortega, part of a small contingent of hosts from Cuba, which, to great fanfare and copious amounts of media attention, Airbnb had recently opened to travelers from the United States. Since they’d lost their jobs in the country’s economic collapse in the early 1990s, Ortega and de la Rosa had run a bed-and-breakfast in Silvio’s ten-bedroom family home in a Havana suburb. Until Airbnb, they could solicit guests only via travel agents and random online bulletin boards. On Airbnb they could see their guests’ profiles and post photos and facts about their home so that visitors weren’t surprised when they arrived.
Since they started listing on Airbnb, the couple had hosted several dozen groups of Americans, including some university students and their professor. The biggest challenge, they found, was that American tourists all wanted to talk to them at length. “They are so friendly and open and just want to understand Cuba. It’s amazing,” Julia said.
There was something authentic and charming about the Airbnb community, I found that week. Maybe I was drinking the Kool-Aid, and certainly Airbnb served up generous amounts of it, but in that context it was difficult not to feel sympathetic toward a service that was allowing people to experience the world through one another’s eyes.
That overarching impression was especially hard to shake after the events of the second night of the conference, November 13, 2015, when terrorists, in a coordinated attack, killed 130 people at a soccer stadium, several cafés, and the Bataclan music theater in Paris and its suburbs. I was dining less than a mile away from the Bataclan when the attacks occurred. Chesky, Gebbia, and Blecharczyk were eating dinner with their families and forty other long-term company employees at a local Airbnb.
Everyone had to stay in place for hours as sirens and frantic activity filled the fall night. Chesky later recalled heading to the master bathroom, seeking privacy so he could coordinate a response with his security team and with Belinda Johnson, who was with another group of employees at a nearby restaurant. Together they made sure the company checked on every employee and host in Paris. Everyone was accounted for. Later that night, the company canceled the third day of the event.
I Ubered home that night to my Airbnb, near the Cathédrale Notre Dame de Paris. Once back, I received a frantic phone call from my worried host, Ivan, whom I had never met in person (he was out of town and had left me the keys) but who wanted to make sure I was okay. The next morning, he e-mailed: “I was relieved to hear you yesterday on the phone. I hope you are well today despite the critical times in Paris.” He invited me to stay for as long as necessary until the travel situation in the city returned to normal.
It was no doubt one of many simple acts of kindness that week and perhaps the sort of unquantifiable variable the founders believe should be considered in the grand political calculation of Airbnb’s impact in a dangerous world.
There were more battles, small victories, and meaningful setbacks for Airbnb, all adding up to reliable drama. In 2016, the city of Berlin made it illegal to rent entire homes and apartments for short periods and asked citizens to anonymously report violators. Offenses were punishable by fines of up to one hundred thousand euros.36 That same year, Tokyo battled over Airbnb and considered draconian restrictions for the new phenomenon of house rentals, called minpaku in Japanese. In a moment of surprising candor, one lawmaker revealed to Bloomberg’s Yuji Nakamura why the city was considering restricting the twenty-six thousand Airbnb hosts in the country. “The hotel industry had very serious concerns, so we set the minimum number of nights at a level that lowers the chances for competition,” he said.37
In June 2016, San Francisco’s progressive city council passed another ordinance that would fine Airbnb anytime a host violated the local law. Airbnb promptly sued in federal court, arguing that the bill violated an internet statute that protects websites from being held liable for any content posted by their users. When it appeared it would lose the case, Airbnb caved and agreed to make sure hosts register with the city and limit unhosted rentals to 90 nights a year. Also that month, the New York State legislature passed a bill that would slap fines as high as $7,500 on anyone in New York City caught listing an entire property on Airbnb without a host present for less than thirty days. The company argued that it was an indiscriminate bill that lumped the good Airbnb with people trying to exploit the service. On October 21, New York governor Andrew Cuomo signed it into law, and Airbnb filed another lawsuit in federal court against attorney general Eric Schneiderman, Mayor Bill de Blasio, and the City of New York.
If the political tide was turning against Airbnb, Chesky hadn’t seemed worried. “We’re in thirty-four thousand cities, so this experiment is being played out all over the world,” he told me that July. “We have tax agreements with over a hundred and sixty cities around the world, and I think it’s pretty clear that this is an idea that is here to stay.”
As it had promised, Airbnb released reports about the statistical makeup of its community in major cities. Several times, it ousted large groups of hosts who were renting multiple properties from the site. Some saw this as a good-faith effort to tailor its business to the housing realities of big cities. But opponents accused the company of booting illegal hoteliers to create a more favorable picture of its data and they questioned Airbnb’s commitment to dealing candidly with regulators.38 “I haven’t seen them demonstrate anything other than trying to maximize their revenue,” said Murray Cox, a “data activist” and creator of the website Inside Airbnb, which scraped the Airbnb website to collect independent data on hosts.
In May 2016, Gregory Slenden, an African American from Richmond, Virginia, filed a civil rights lawsuit in Washington, DC, against Airbnb for ignoring his complaint that he had been subjected to racial discrimination on its site.39 There was academic backing for his claims; Ben Edelman, an associate professor at the Harvard Business School, had published two studies showing that Airbnb users were statistically less likely to host or stay with minorities.40
Slenden’s charges sparked an uproar. Using the hash tag #Airbnbwhileblack, African Americans took to social media to share their own experiences of encountering prejudice on the home-sharing site. Many testified that rooms would suddenly become unavailable or hosts would simply fail to reply when they tried to book accommodations. The U.S. media dug into the issue (the New York Times: “Does Airbnb Enable Racism?”), and the verdict, for Airbnb, was unfavorable.41
The fracas challenged some of the company’s most sacred ideals. It was supposed to eradicate the biases of the past, not give them new life; user photographs were supposed to help establish trust, not provide an opportunity for racist judgments. For once, Chesky didn’t have an easy answer, since Airbnb had little control over the personal choices of its hosts or guests. Dismayed, he hired former U.S. attorney general Eric Holder and Laura W. Murphy, a former director of the American Civil Liberties Union’s Washington, DC, office, to develop a way to combat discrimination on the service.42 In September 2016, the company released a thirty-two-page plan for addressing the issue; among other things, Airbnb pledged to minimize the prominence of user photographs and asked hosts and guests to agree to a policy of nondiscrimination. “I think we were late to this issue,” he said that summer. “Joe, Nate and I, three white guys—there’s a lot of things we didn’t think about when we designed this platform.”43
Inside Airbnb, life was defined not only by these engrossing external conflicts and controversies but also by the frantic rhythm of relentless growth. On New Year’s Eve 2015, it had booked 550,000 guests; on New Year’s Eve 2016, it was 1 million; and by the middle of 2016, it was booking 1.3 million a night.44 All of its internal graphs bent upward and to the right. The company was warping the gravitational field of the hospitality industry. To keep up with Airbnb, the online travel giant Expedia bought HomeAway, a rival vacation-rental service, for $3.9 billion.45 And in 2016, hotel rates in New York City were the lowest since the great recession. Some industry observers blamed the new competition.46
There were new investors, bigger valuations, more employees. By mid-2016, Airbnb had twenty-six hundred workers. More than half had joined in the previous twelve months. Departments doubled or tripled in size, disrupting any hope employees had of finding a regular rhythm. One Airbnb employee told me her team had been shuffled four separate times and given four different bosses in the course of two years. Meanwhile, Airbnb’s new chief financial officer, Laurence Tosi, the former CFO of the Blackstone Group, imposed new controls on what had been an undisciplined spending culture. For the first time, departments were required to come up with rigorous annual budgets and head-count projections—and to stick to them. Several employees described the company to me in late 2016 as being less fun and entrepreneurial.
These were the unmistakable signs of a startup growing up, shedding its identity as an upstart, and marching toward an eventual IPO. Just like Uber, it would first have to convince public investors that it had resolved its regulatory problems and achieved Chesky’s coveted escape velocity. Beyond that lay the ceaseless drumbeat of corporate adulthood.