Airbnb and Hotel Industry Fund “Grassroots” Armies in Lobbying Battle: A Challenge to Lawmakers

October 5, 2017

“Sharing economy” businesses, like Airbnb and Uber, typically function by facilitating peer-to-peer transactions and then taking a cut of the exchange. These corporations have been criticized, for years, for using business models that are largely based on evading regulations and taxation. However, others advocate for the businesses because they create new services that consumers enjoy, and provide well-paying flexible jobs. One of the most controversial yet popular “sharing economy” services is Airbnb.
Airbnb is an online platform that provides a marketplace for individuals who want to lease their property as short-term lodging. In 2016, under increased scrutiny from lawmakers, Airbnb significantly increased their lobbying presence in Washington to combat growing criticism from the U.S. hotel industry. Airbnb claimed they were “educat[ing] policymakers about Airbnb and how [their] platform expands the economic pie for ordinary people by helping them earn extra income that they use to pay the bills.” Shortly after, The American Hotel and Lodging Association launched a counter campaign to convince federal lawmakers “that Airbnb rentals drive up housing prices and restrict housing stock.”

Ideally, lawmakers should look beyond the opinions of corporate and industry lobbyists, and seek advice from independent research and the public when considering potential legislation. But, whose voices are the most well-intentioned lawmakers actually hearing as they continue to pass regulations to reign in these corporations?

When large business interests are at stake, the only voice heard may be those of the giants themselves. This appears to be true in the case of regulations over the short-term rental market. The Wall Street Journal recently reported that Airbnb and the hotel industry are influencing and organizing “Grassroots” campaigns behind the scenes. Generally, the term “Grassroots” implies that something is organized or grows from the basic level of society as opposed to a higher or more centralized position of power. With regard to political campaigns, it gives the impression that the supported viewpoint originated at the local community level, and were spurred on by the community’s population to advocate for their best interests. However, in this case the grass’s roots are far from organic, and the little guys aren’t keeping the harvest.
The hotel industry’s lobbying group developed publicity campaigns with neighborhood groups including affordable housing advocates to “sway” policy makers. They also funded AirbnbWatch (who describes “itself as a project of American Family Voice, a communications firm that wants to “fill gaps in the progressive movement’”) to gather rental horror stories to highlight Airbnb’s lack of transparency. Additionally, the lobbyists are developing communication strategies to create “partnerships with ‘groups, think tanks and other credible voices to weigh in on the issue.’” One particularly distasteful attempt at “grassroots” manipulation funded by the hotel industry was when ShareBetter created a video using an actress from New York who pretended she was a local D.C. woman whose neighborhood had been ruined by short-term rentals.
At the same time, Airbnb actively organized their renting users into advocates at local hearings, to “stress how it provides them with crucial supplemental income.” A Los Angeles City Councilman, who will be voting on regulations this fall, stated that “As far as the resources going toward this issue, I’ve never seen anything quite like this.” He further commented, that he was impressed with how Airbnb has organized its renters, who regularly approach him to advocate for Airbnb. Airbnb also helped fund the “Checks and Balances Project, a ‘public watchdog blog’ that has a history of going after the hotel industry by funding research about short-term rentals.” Ironically, after the website agreed to accept funding from Airbnb, they filed an ethics complaint against a professor who accepted funding from the American Hotel & Lodging Association to analyze Airbnb host data; and another professor that “was considering a grant from the hotel association to study safety issues in short-term rental properties.”
These types of activities undermine the legislative process and greatly hinder the general public’s ability to voice their opinion. When businesses coordinate and fund groups who pretend to be spontaneously concerned locals—commonly known as astroturfing—they affectively mute real community concern. When politicians are bombarded by corporate propaganda masked by a local’s hand, are fed curated anecdotes involving select citizens, and read conflicted studies by supposedly disinterested researchers how are they supposed to find a genuine constituents’ opinion?
Some might reason that there is no harm in allowing these entities to duke it out amongst themselves because regardless, both sides of the issue are being heard and more money and resources are being spent on the issue. However, the very reason that billions of dollars of industry (Airbnb alone has a $31 billion valuation) may rely on these regulations is why the public probably won’t win in the end. Ultimately, these corporations are trying to maximize their own interests and minimize their competitors’. This means that regardless of who wins, their end goal is to cripple the competition, which will ultimately cost the public as consumers. The task then, is for law makers to avoid being deafened as they wade through the noise of the lobbyists to find the best result for the public.