Airbnb is rapidly becoming one of those brilliant ideas gone bad. Growing concerns that the "sharing economy" company upsets the natural order of the housing market has spurred lawmakers to curtail the Silicon Valley startup wonder's growth. Now other cities are looking at banning, or limiting Aibnb and other similar companies from disrupting housing markets and neighborhoods.

When Berlin ceremoniously banned the short-term leasing of flats in the city, it seemed only a matter of time until the floodgates of housing authority discontent would burst. The bottom line is, if the "Berlin trend" continues, Airbnb may be in big trouble. The rub for Berlin was that real estate investors were snatching up properties and renting them only to visitors, which caused in turn an acute housing shortage, and escalation of prices. Now London, another large European city plagued with a scarcity of inexpensive properties, is on the threshold of banning or limiting Aibnb operations. This article via the Independent goes so far as to call for it. Author Kisrty Major tells readers:

"Rather than facilitating peer-to-peer sharing, Airbnb has become a platform for professional landlords and buy-to-let investors."

The author goes on to point out that the majority of Airbnb's listings inside the city of London are entire properties, and that over half of all property listings show multiple properties. Many of the listing are, in fact, unregistered hotels, and according to the Independent piece, rules governing Airbnb's listings there have been loosened, rather than strengthened, further exacerbating a growing problem. In the end, officials are left with no feasible way to regulate these listing, which threatens to turn topsy-turvy a London affordable housing market. Meanwhile, in Los Angeles, officials are eyeing regulatory actions to solve similar problems. The LA Office of Finance will require the home-sharing platform to hold on to three years' worth of information about who rented a property, for how long, and at what price, should the law pass.

Airbnb was founded on the notion that home owners could host guests in their spare rooms, or within their entire properties for vacation. The ultra-popular service quickly became a standalone booking channel, as well as part of the socio-economic ecosystem surrounding the shared economy. Airbnb represents not only a booking outlet for tens of thousands of homes, villas, and apartments, but, in a very real way, it is a separate online travel agency (OTA). Hotels hate Airbnb for the obvious lost bookings; housing commissions hate Airbnb for the reasons described above; and neighborhoods hate the service for destroying neighborhoods.

From the perspective of a public relations professional, it is fairly easy to see Airbnb is already attempting to mitigate some of the negative media effect, with offsetting positive dialogue. And it is true that substantial support from influential investors and other interests back the Airbnb play. Even still, the questions as to whether or not "sharing economy" companies being regulated like many others stand. Consumers gain a substantial value many times in renting Airbnb properties, but sometimes the greater good is not served when practices are not kept in check. A kind of "range" war is in its early stages as far as I can see, a war where traditional property structures are being assaulted by an idea. But the idea of Airbnb seems to have metastasized into a kind of "business as usual" monopolization scheme for me.

Publicity ploys, PR, and a kind of marketing avarice seems to have seized a company with untold potential. As a media specialist, scanning Google News reveals the company's content lobbying. This Home & Property section piece on New Zealand's Stuff pitches Airbnb community value HARD. This piece, came on the heels of a viral story of an Airbnb host stealing someone's husband, and this story of quality control concerns over Airbnb saturating the New Zealand market. There's no doubt in my mind, Airbnb is now in an unparalleled PR apocalypse. My attention to the company's fight actually came about when I approached them about co-branding alongside one of their hosts in Greece (a massively positive win-win). At first, I wrote of Airbnb's seeming obtuseness as arrogance or foolishness, but now I see their PR people are tasked like beasts of burden. And the Silicon Valley company's battle is not going to get easier.

News Airbnb competition is bashing Swiss hoteliers and independents may seem like a positive for some, but as hotels feel the pressure more, so too will Airbnb's legal and marketing teams. A startup I was originally enamored with. for the obvious value. has gone "corporate" in a big way. Growing pains, scale, and the lack of real profits, may well take the wind out of Airbnb soon. The team behind Airbnb is going to have to develop a strategy engine, rather than running to catch up using a growth metric alone. The company will not be able to market its way out of too many more horror stories like this UK subletting catastrophe brought to light by Property Wire. In Italy, the Airbnb killer may have been awakened. According to ZDNet, back in March regulators introduced a bill to systematically address all the issues surrounding share economy companies like Airbnb. The bill includes regulations on competition, consumer protection, and most potently, fiscal policy. The Shared Economy Act (here), talks a lot about reducing barriers and the potential of shared economy initiative, but in the end Airbnb's current model loses stimulus big time if it is passed. The Italians have created a conversation around this legislation in the true spirit of "shared ecosystems," but, in the end, tax avoidance and the government's piece of this enormous new economic pie loom. This is best reflected with a section from the text:

"The main task that the legislator has to fulfill is to ensure fairness and transparency, especially in terms of the rules, and taxation, among those who work in the field of the sharing economy and economic operators, traditional and to protect consumers, in particular as regards the aspects related to the safety, health, privacy, and transparency on the conditions that are the basis of the service or the good used."

Reading the proposed legislation, it is evident Airbnb and other shared economy endeavors are not going to simply slide past new regulations and regulatory agencies that are now being created. Even straight barter systems have always fallen under the spells of traditional economic systems. Airbnb runs on money, and nobody is going to invest in an IPO that helps people swap chickens. This is the final rub for the team at Airbnb too, if the company cannot launch a successful IPO, future funding rounds will not even be feasible. The shared economy may well go on, but it may go one with its biggest new member to TechCrunch'd Dead Pool. Remember, we all thought MySpace was forever too, Airbnb's "Facebook" may have regulations built in from the start.

Phil Butler
Senior Partner
Pamil Visions PR