Thursday, April 5, 2012

Hey, Airbnb: you're big dogs now.

Whaddayaknow, San Francisco's city tax collector has slapped a 14 percent hotel tax on the Airbnb rental booking site. Which is the kind of thing that happens to a company when it gets really big.

As I mentioned in September, we met some of those guys when they were a startup in a condo on our block South of Market. They threw an open house one night, to which J. got invited through a programming connection. Their condo roof had a grand view across SoMa to the Bay Bridge. We chatted for a while up there with a bright young man from the company. The bright young man expressed a startling, thought-provoking ignorance of California landlord-tenant law. He appeared to regard the legalities of short-term renting as someone else's problem.

We didn't learn, or anyway didn't remember, the name or position of the guy we talked to, and for all we know he wasn't representative of the company. But I do think Airbnb's starting business model included a fair dose of brassy calculated ignorance regarding local requirements. The Web site's small-time customers (that is, its content-providers) had to carry a lot of the risk of deciding how far to comply with little-people impediments like hotel taxes, zoning ordinances or lease terms.

That kind of thing works OK, I guess, while you're under the radar. But when you start picking up venture capital in nine-figure quantities, you are, excuse me, above the radar.

Now, I'm not thinking this week's San Francisco hotel tax bill is necessarily going to stick, given this bit of news in the Bay Citizen story: "The tax rule is of particular interest to technology investor Ron Conway, an Airbnb backer who led a $600,000 independent expenditure campaign to elect Lee to a full term as mayor in 2011."

But a local hotel tax bill is an example of the ways in which a company does get noticed, and does have to play certain kinds of ball, when it gets big. If you want the grownup kind of money, you get to face formal requirements and pay your share of the civic upkeep as grownups do.

Or rather, that's how it should be. I do realize we're emerging from a low dishonest decade characterized by the collapse of this very rule.

Maybe I really mean that Airbnb is big enough to get noticed but not big enough to break the rules on sheer 900-pound-gorilla factor. Since, for example, Wal-Mart has a history of saving money by pressuring their underpaid staff to get things done however they can, in that seat-of-the-pants way you'd expect in a very small business, and they frequently do get away with it.

Strange to think of local tax collectors as outsiders challenging power. Maybe that's what they're becoming.

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