Airbnb's new problem
Investors salivating over the upcoming IPOs of the LUA stocks (Lyft, Uber, Airbnb) may soon find these companies facing an onslaught of regulatory battles.
Details: Uber has been banned outright in multiple countries and a number of U.S. cities and states, and faces partial bans in others as local governments seek to mollify taxi drivers and other unions. Lyft and Uber may also face restrictions like advertising bans, as has been proposed in Los Angeles.
The big picture: The biggest battle may be coming for Airbnb, which is taking on the hotel industry as well as a growing chorus of angry residents who don't want vacation rentals in their neighborhoods.
The New York Times' Tariro Mzezewa reports that recently Miami has cracked down on Airbnb renters, going so far as to kick them out of what are technically illegal short-term rentals in the middle of their stays.
- "We have residential areas in our community and we have zoned them so when people purchase a home they know they are in a residential community," Mayor Dan Gelber of Miami Beach told the Times, saying that Airbnb was knowingly flouting the law.
The cops are being called by local residents who are sick of "the seemingly endless sound of suitcases rolling ... at all hours."
- "Then there's the loud music that residents said awakens them at night, typically blasting from Ubers, Lyfts and cabs depositing drunk young guests at their rentals, or from the homes themselves."
- Building owners are being fined as much as $40,000, Mzeewa reports, and Airbnb is now suing the city.
The bottom line: In addition to the legal costs and headaches of having to battle cities like New York and Miami that are cracking down on listings, this could end up being a major image problem for Airbnb right as it tries to woo investors for an IPO.