Airbnb Lawsuit is Just the Tip of the Iceberg


October 12, 2015 4:39PM

The Beacon Center wasted no time challenging Nashville’s Airbnb ordinance once it became law. The couple we are representing, P.J. and Rachel Anderson, were not hard to find since this law impacts a lot of people due to the popularity of Airbnb in Nashville.

Talking to the Andersons was truly an enlightening experience. The more they understood the specifics of the law, the more they wondered if Airbnb was even worth the hassle. Maybe it isn’t. The short-term rental field could wind up vacated by responsible people like the Andersons, leaving it to big businesses and those who ignore the law. Nashville’s law is encouraging all the wrong parties. This is a lesson in stupid market interference, where instead of welcoming the next generation of capitalists, Nashville is discouraging them.

So we had no choice but to challenge the law because the sharing economy is under threat here at home and all across the globe. Technology like Airbnb is a boon to young people who have otherwise gotten pretty mixed results from the new economy. Meanwhile, consumers like you and me get a better product at a cheaper price.

Threats loom. Look for example at the Uber executives who face criminal charges for “crimes of entrepreneurship” in France. The FTC is calling for national regulations of Airbnb, and California’s Labor Commission recently issued rules that functionally destroy this entire business model.

When rapid economic change occurs, the existing order is upended. Some stakeholders lose. But that’s because they can’t keep up. The flip side to a better mousetrap is the worse one. Unfortunately, too often the modern tendency is to perceive this as a political problem that requires the government to step in, usually on the side of the guy with the deepest pockets. Airbnb gives consumers an alternative to hotels. Now hotels need to compete. Having government shut down the competition is no one’s idea of honest competition.

All of this progress can go away if we let it. We have barely touched the full potential of sharing technology. Imagine something like Uber hitting healthcare. Or education. If they can quash Airbnb, then this is all fair game.

What if regulators had smothered the internet in the crib? After all, a lot of businesses lost everything as a result of the internet’s rise. (Used a travel agent lately?) But the global internet economy will soon reach $4.2 trillion, and now I can order a Japanese supertoilet if I want a Japanese supertoilet. Let’s let this thing work itself out. We don’t even know what it is yet.