Is Airbnb CEO Brian Chesky Telling Us the Truth About His Company?

The following post was excerpted from
RAW DEAL: How the "Uber Economy" and Runaway Capitalism are Screwing American Workers
Reprinted with permission from St. Martin's Press
(c) 2015 by Steven Hill, published on October 20, 2015

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The third actor in this passion play is Mr. Brian Chesky himself, Airbnb's 34 year old CEO and co-founder. A former bodybuilder and graduate of the Rhode Island School of Design, Chesky's rise to the ranks of billionaire hospitality mogul has been remarkable. A video floating around online of Chesky's commencement speech that he gave at his college graduation shows, if nothing else, major amounts of chutzpah. The future Airbnb chief struts on stage in full cap and gown to the throbbing bass line of Michael Jackson's "Billie Jean," and proceeds to rip off his black graduation gown, revealing a white tuxedo underneath. He starts clumsily moonwalking and crotch-grabbing to the beat, egged on by the cheers of his classmates, before delivering his address to the graduates, families and faculty. His speech is more entertaining than profound, mixing quips, funny one-liners and even occasional bodybuilder flexes with a 22-year-old's version of wisdom. The young man in the video is working hard to be liked, is slightly grandiose but also self-aware enough to say that he is uncertain of his future. He is confident enough to relish his moment on the graduation stage, and displays definite leadership qualities, kind of like a head cheerleader urging on his homies at their final big hurrah.

That was in 2004, and now in his new role, the chutzpah, leadership and cheerleading have remained and come to the fore. When Chesky spoke at a hospitality conference sponsored by the University of San Francisco in April 2014, he offered no acknowledgement of the complexities, much less the downsides, of his business model. People like Theresa Flandrich and her elderly and disabled neighbors who are being evicted under the pressures of the assault on the San Francisco housing market, which Airbnb's service has greatly contributed to, are not on his radar. Instead, rather unbelievably, he cast his company into another role in this script--that of the blue helmets saving the world.

"[Airbnb] is like the United Nations at every kitchen table. It's very powerful," said Chesky. In the masthead of his company, Chesky has assumed the role of Ideologist-in-Chief. His early interviews as CEO, viewable on YouTube, show an awkward young man, wide-eyed, hands flailing, who scarcely can believe his and his cofounders' good fortune. He has an "aw shucks" charm. But several years later, as the same old questions become more pointed and specific, Chesky's vague responses come off as evasive.

It's not just that Airbnb refuses to be responsive to the increasingly wide path of destruction it is hewing. It's also that Chesky wraps it all into a New Age-y kind of rap about trust, sharing, community and belonging. In early 2014, Chesky and his cofounders took a deep breath from their incredible success story to reconsider their mission. Chesky posted his thoughts about the newly revamped Airbnb, an 1100-word sermon to his public that, like his college graduation speech, was another revealing moment into this young phenom.

"Joe, Nate, and I did some soul-searching over the last year," wrote Chesky. "We asked ourselves, 'What is our mission? What is the big idea that truly defines Airbnb?' It turns out the answer was right in front of us. People thought Airbnb was about renting houses. But really, we're about home. You see, a house is just a space, but a home is where you belong. And what makes this global community so special is that for the very first time, you can belong anywhere. That is the idea at the core of our company: belonging."

Like that young, slightly presumptuous college speaker holding forth at center stage, Chesky then goes on to wrap his company's growing commercial empire in a grandiose vision that he positions as a solution to a civilization gone awry, indeed as a reaction to the wrongful drift of history.

"We used to take belonging for granted. Cities used to be villages," wrote Chesky. "Everyone knew each other, and everyone knew they had a place to call home. But after the mechanization and Industrial Revolution of the last century, those feelings of trust and belonging were displaced by mass-produced and impersonal travel experiences. We also stopped trusting each other. And in doing so, we lost something essential about what it means to be a community... Belonging is the idea that defines Airbnb. . . Airbnb is returning us to a place where everyone can feel they belong."

Like a newly converted evangelical, Chesky explicitly tries to tap into a rich, red vein filled with the loneliness and isolation of this modern life. He does this as a bid to position his company as more than simply a hospitality business: it's a vehicle for building a global movement, a community of trust and sharing. But not over religion or to provide humanitarian aid, or to end human rights abuses, as previous visionaries have tried to do - no, Chesky is no Albert Schweitzer. Instead, in a sign of the times, his revolutionary act involves. . . a commercial transaction . . . providing short-term rentals to tourists.

Chesky's Hallmark greeting card homily to his public was brilliant, akin to channeling John Lennon's "Imagine" and merging it with a hotel business. It's even more audacious than Nike's "Just Do It" or Apple's "Think Different." In a topsy-turvy world, in which both government and big business have let us down, leading to the most disastrous economic crash since the Great Depression, Chesky's words sound reassuring. He simultaneously attempts to mine feelings of loneliness and isolation, a longing for community, a sense of history and an economy gone off the rails, as well as the desire for travel to exotic places--and merge it all with a real financial need among Airbnb hosts in difficult economic times to use their own homes to earn income. To "monetize" their lives and their loneliness. It is one of the most audacious marketing pitches ever deployed.

Like any true visionary, Brian Chesky seems to sincerely believe his newfound faith. But like so many fundamentalists of one kind or another, he is blinded by it. He deletes from his picture whatever fact or story doesn't fit. In his talk at the University of San Francisco conference, Chesky crowed, "For us to win, no one has to lose," and like that college commencement speaker he championed his "on-message" message with such a boyishly good-natured enthusiasm that audience members keyed into the hipness and coolness of his rosy version of the world. Yet sadly, Chesky has rendered invisible all those people like Theresa Flandrich and so many others across San Francisco--across the world--who in fact are not winning because they are being evicted under the housing pressures that Airbnb has helped unleash. He ignores all the upset neighbors who have some pretty strong feelings about the hotelization of their neighborhoods, with complete strangers and their rollaway luggage now traipsing in and out at all hours. He slickly hides the fact that increasingly "regular people" renting spare rooms are not the core of his business -- instead it comes from professional landlords and multi-property agents, some of whom have converted entire apartment buildings into tourist hotels, even if they have to evict elderly and sick people to do it. Indeed he ignores all the disappearing housing stock and rising rents for local residents, not all of it attributable to Airbnb but his company has become a key catalytic factor.

Brian Chesky and the rest of Airbnb's executives and venture-capitalist backers seem to feel little responsibility for upending so many people's lives. Their company is like a rumbling jetliner that flies low overhead, but doesn't want to be blamed for its noise. They are either oblivious to their impact, or they have rationalized it away as the necessary collateral damage for their "sharing revolution."

Perhaps the biggest tragedy in all this is that at the core of Airbnb is a really good idea-it has cleverly used Web- and app-based technology to bust open a global market that connects tourists with financially strapped homeowners. After interviewing some of Airbnb's "regular-people" hosts, I'm convinced that this service legitimately does help some of them make ends meet. But by taking such a hands-off, laissez-faire attitude toward the professionalization of hosting by greedy commercial landlords and multiproperty agents, Airbnb has become its own worst enemy. As the number of victims piles up, it undermines its own "sharing and trust" ethos.

If Airbnb and Chesky really believed in that ethos, the company could partner with local governments and tenants associations to draft laws that take account of this new business model. Chesky could delist the professional landlords and multi-property agents from the Airbnb site, severely limiting their ability to turn badly needed housing into tourist hotels. He could forbid any professional property agency from managing the listing of another person on the Airbnb site, which would crack down on absentee hosts. He could cooperate with cities like San Francisco and Portland, that require hosts to register with local officials, by delisting any unregistered hosts. Airbnb has the data and knows who all of these violators are.

Chesky's company also could pay hotel taxes in all 34,000 cities in which it operates, or collect it from the hosts and hand it over to local authorities. He could stop refusing to supply the data that cities need to enforce regulations and taxation, including the number of rental nights and rates charged by each host. This is not rocket science, all that's needed is the will.

The clear and simple truth is that Airbnb has drifted very far from its origins, and is no longer simply a platform of "regular people" hosts. It has morphed into a giant loophole for professional real estate operatives, allowing them to evade local laws and taxation, evict long-time tenants and convert entire buildings into tourist hotels. Brian Chesky can preach all he wants about sharing, trust and belonging, but he and his investors have shown no willingness to kill their golden goose, despite the damage that greedy professional landlords and multiproperty agents are causing to the very fabric of the cities where they operate. That's not "sharing," it's just raw, naked capitalism.