Airbnb’s tax ads in San Francisco lost it the nice-guy edge in the sharing economy.

Airbnb Just Lost Its Most Valuable Edge in the Sharing Economy

Airbnb Just Lost Its Most Valuable Edge in the Sharing Economy

A blog about business and economics.
Oct. 22 2015 7:55 PM

Airbnb Just Threw Away Its Most Valuable Card in the Sharing Economy

Dear Airbnb: Oops.

Photo by Martha Kenney via Facebook

Over the past 24 hours, Airbnb has swung through the full cycle of Internet outrage. It began on Wednesday in response to a series of ads that the home-sharing company had posted around San Francisco. The posters and billboards, each the color of a watermelon Jolly Rancher, bore short messages in which Airbnb advised the city on how to use the $12 million it had paid in hotel taxes. Here are a few examples:

It’s unclear how Airbnb’s marketing team intended these ads to come off, but to many in San Francisco they registered as tone deaf. One woman, Martha Kenney, took to Facebook to voice her displeasure. “Dear Airbnb,” she wrote. “I'm happy to hear that you paid your taxes this year. I did too! Isn't it awesome?” However, she added:

I’ve crunched some numbers and I have some bad news for you. Out of your $12 mil of hotel tax, only 1.4 percent goes to the SF Public Libraries. So that’s $168,000. Divided by the 868 library staff, we have $193 per person. Assuming each employee works 5 days per week minus holidays, this is $0.78 per employee per day. Since that’s significantly under San Francisco minimum wage ($12.25/hr), I doubt that your hotel tax can keep the libraries open more than a minute or two later. 

When SF Weekly reached out to Airbnb spokesman Christopher Nulty to ask whether the library ad described by Kenney was real, he initially responded “as opposed to a fake one :)” and then, when asked again, “Are you seriously writing on this?” Nulty has since gotten a resounding answer to that, with not just SF Weekly but everyone from Business Insider to the New York Times weighing in.

By Thursday morning the Internet was thoroughly scandalized, and Airbnb thoroughly chastised. “The intent was to show the hotel tax contribution from our hosts and guests, which is roughly $1 million per month. It was the wrong tone and we apologize to anyone who was offended. These ads are being taken down immediately,” the company said in a statement. On Thursday afternoon, it emphasized much the same on Twitter:

I don’t want to debate here whether these ads were actually the worst thing ever, or whether people dramatically overreacted. They are dumb ads, but whether they are as bad and offensive as people seem to think is a matter of opinion. Lodging and occupancy taxes, more commonly known as hotel taxes, are also a peculiar and fraught issue for Airbnb. It pays them in 16 cities in the United States, of which San Francisco is one. Sometimes the city has battled to be able to collect those taxes; in other cases, Airbnb has fought for the right to pay them.

In San Francisco, Airbnb is currently lobbying against a proposed ordinance that would severely restrict the short-term rentals that are fundamental to its platform. According to campaign contribution filings, the company has put more than $8 million toward the effort; one of its main arguments against the ordinance is that cracking down on Airbnb rentals would hurt the city by diminishing the amount of revenue it gets from Airbnb in hotel taxes.

The problem is that instead of saying that in straightforward language, Airbnb had to be snarky and condescending about it. And that’s where the company went so wrong. Up until now, more than any other super-rich “sharing” economy startup, Airbnb has managed to maintain a friendly image. Despite local flare-ups, Airbnb has mostly positioned itself as an ally of the cities in which it operates. It talks about bringing visitors in touch with local communities and promotes the feel-good slogan, “belong anywhere.” Next to Uber, which hardly gets through a week without a new regulatory confrontation, Airbnb looks like a gentle giant.

Uber long ago embraced its persona of the brash revolutionary. Aggressive campaigns from the company—like its “de Blasio mode” blitz in New York this summer—no longer shock us, and that’s OK. The central promise of Uber is not a friendly, welcoming service but a reliable and competitively priced ride, something borne of ruthless efficiency. Airbnb, on the other hand, is in the business of hospitality and so has built its reputation on qualities that are quite different: being genial, responsible, a good corporate citizen. Even if you didn’t think Airbnb really had the best interests of a city at heart, it was hard to make the case, because the company’s branding was so consistently benign and neighborly. That’s a valuable card to hold. And flippant, sarcastic ads? That’s a great way to throw it out.

Alison Griswold is a Slate staff writer covering business and economics.