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The True Cost Of Being An Airbnb Host

Supporters of Airbnb hold a rally outside City Hall to protest a hearing with New York City lawmakers that aimed to scrutinize the service in early 2015. CREDIT: AP PHOTO/BEBETO MATTHEWS
Supporters of Airbnb hold a rally outside City Hall to protest a hearing with New York City lawmakers that aimed to scrutinize the service in early 2015. CREDIT: AP PHOTO/BEBETO MATTHEWS

In an effort to be more transparent, Airbnb made good on its promise last month to publish data on its hosts and lodging rental listings. The home-sharing company released a summary of anonymized data for its 59,242 New York City listings Tuesday in a memo that may have raised more questions than it answered.

The numbers provide a glimpse into the home-sharing company’s demographics from the last year; for instance, the memo reports that hosts rent their property about 3.5 nights each month on average, with only 16 percent of all hosts renting for more than 121 days a year. The data also reveals that hosts don’t take home very much from renting out their properties, about $5,000 a year, a figure that seems to debunk the company’s claim that it provides economic support for its core customer base — working and middle classes.

Chris Lehane, Airbnb’s global policy and public affairs head, told the New York Times that Tuesday’s data release helps show how the service is largely used as a form of financial relief: “Our hope is that people will understand 99 percent of people on Airbnb in New York City are using it as an economic lifeline,” she said in an interview.

But the typical Airbnb host earns less than $10,000 a year through the company, according to Tuesday’s memo, with many hosts earning a median annual income of $5,110, or roughly $426 for four-day monthly rentals. Take home pay is expected to drop considerably after taxes.

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New York is notorious for its high living costs, making Airbnb and other gig economy jobs particularly appealing. The city and its five boroughs are one of Airbnb’s biggest markets; Manhattan claims 60 percent of active listings for entire-home rentals and 42 percent of shared-space or private room listings, where the average apartment costs up to $4,000 a month. Renting a private room or shared space through Airbnb in New York City (16,001 listings) is almost as common renting the entire home (19,742), according to Airbnb. But those who can afford to rent their entire home — either through travel, bunking with a loved one, or otherwise vacating — are more profitable personally and for the company.

Airbnb earns 75 percent of its revenue from active hosts who share their entire home and have one or two listings, the New York Times reported. The company expects that number to reach 93 percent.

Airbnb has been on a winning streak. The San Francisco-based company was recently valued at nearly $25 billion, secured $100 million in venture financing, and defeated a key lodging proposition in its hometown, which would have added more regulations and limited how many nights Airbnb hosts could use their spaces for short-term rentals. The win caused Airbnb’s Lehane to declare the company was “so big that no army could ever really stop it.”

Tuesday’s memo, however, left reporters and local lawmakers wanting more, saying that many of their questions about the company’s practices have still gone unanswered.

In a joint statement, New York City Council Members Jumaane Williams and Helen Rosenthal, who have criticized Airbnb for allowing people to run “illegal hotels,” called the company’s data glimpse “a useless disclosure that will do nothing to curb illegal hotels and tenant harassment.”

We met with Airbnb today, and they refused to disclose specific, actionable data. Airbnb only provided ‘anonymized’ data of its users who break the law — in other words, a useless disclosure that will do nothing to curb illegal hotels and tenant harassment.

In addition, it’s unfortunate that Airbnb still refuses to accept any responsibility for compliance. There is an alternative: online platforms like Craigslist and Reddit have policies in which they promise to ensure their users obey the law and remove content that disobeys the law. Airbnb could easily do the same — for example, by not allowing users to rent out multiple units.

Airbnb contends the vast majority, 95 percent, of hosts have only one property listing and 99 percent have up to two. A company spokesperson told Recode that Airbnb doesn’t agree with the council members’ criticism. “Rosenthal’s solution would be to fine middle class New Yorkers $10,000 while they are just trying to make ends meet. We think a good policy solution is to try to help regular New Yorkers have an economic lifeline,” the spokesperson said.

But according to the company’s own numbers, for many, that lifeline comes at a cost without a considerable payout.