Is The Sharing Economy Bad For Business?
The ride-sharing business (Lyft, Uber, Sidecar) boomed during Chicago’s gnarly winter, and it was top-of-mind this week as aldermen delayed a vote on industry regulation. This burgeoning “sharing economy” uses the Internet to connect people with underused assets, The Economist writes, something welcome by consumers and concerning for regulators and more established competitors. The real estate connection: hospitality. Lodging rental startup Airbnb was supposedly worth more than most hotel chains at last valuation. While budget travelers see it as an ideal and often better-located option to cheap hotels, the company has had its share of problems with regulators.
In cities like New York and San Fran, short-term renting is mostly verboten and viewed as turning properties into “unlicensed, untaxed hotels,” the article says. The startup has even gone to court in NYC related to hosts renting more than one property on the website (30% of NYC listings). Given Chicago’s backlash against ride-sharing, we wonder if local controversy is on the way once its number of short-term rentals (from Airbnb and other sites like VRBO) grows. (Airbnb has said it would be willing to collect hotel taxes in NYC, Portland, and San Fran.) Since most recent hotel development has been high-end or ultra-luxury, the service could just be filling a gap. What do you think short-term rental sites mean for the Chicago hotel industry? Tell [email protected]
