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Raz Godelnik headshot

Did Airbnb Win or Lose On Prop F?


Last Tuesday was an election day in the U.S. This is of course off-election year, and therefore this day could be easily ignored unless your kids go to public school and you had to find an alternate arrangement for them -- or you’re Airbnb.

Yes, Airbnb, one of the leading companies in the sharing economy was involved in a fight over Proposition F in San Francisco: “a measure that would have imposed substantial restrictions on Airbnb rentals in the city,” including a reduction of the number of days that Airbnb hosts in the city can rent their places (from 90 to 75 per year).

So, who won? The measure was voted down 56 percent to 44 percent, and Airbnb as you could imagine was extremely happy about the results. "Tonight, in a decisive victory for the middle class, voters stood up for working families' right to share their homes and opposed an extreme, hotel industry-backed measure," Airbnb said in a statement that could easily be used in November 2016 with some light changes by the Clinton campaign, if it will be able to generate similar results.

But did Airbnb actually win? Even though the measure was voted down, and Airbnb wants to export its campaign strategy against the proposition to other cities around the world where it faces similar challenges, I’m not sure the company really won.

Here are five things to consider when answering this question:

Narrative change No. 1: From David to Goliath

With projected revenues of $850 million this year and estimated valuation of $25 billion, Airbnb is no longer a small company by any measure. However, the company has still managed to maintain a narrative celebrating its struggles as a startup: from the many investors that said no to Airbnb (and are probably very sorry about it), to the “Obama O's, the Cereal of Change,” and “Cap’n McCain's, a Maverick in Every Box” cereal boxes that Brian Chesky and Joe Gebbia designed and sold in an effort to keep the company floating in 2008.

Airbnb’s is indeed a classic against-all-the-odds story. Now, however, the fight over Prop F has changed the narrative that Airbnb has so carefully been building: This is no longer just a company started by co-founders who couldn’t afford to pay the rent, but also a company that invested more than $8 million to defeat Prop F, “dramatically outspending the measure’s backers, who raised $482,000.”

Just to give you perspective: In 2014 the American Beverage Industry spent about $8 million to defeat a soda tax proposition in San Francisco. In other words, this campaign puts Airbnb in one list with behemoths like Pepsi and Coke, shifting its public image from a not-too-long-ago struggling startup to a not-too-far-away-in-the-future Fortune 500 company.

Narrative change No. 2: Not the nice guy anymore

If Uber is the ‘bad boy’ of the sharing economy, Airbnb was always the nice guy, “investing significantly in creating community and a feeling of partnership” (in contrast with Uber, which doesn’t seem to invest so much in the user experience of the 'dude driving the car'). This perception is also a reflection of the person leading the company – Brian Chesky – a very nice guy; Travis Kalanick – well, let’s just say that he’s working on it.

However, this perception has taken a hit during the campaign. First, there was the bizarre choice to put ads on Muni bus shelters, like this one, which reads: "Dear Public Library System, We hope you use some of the $12 million in hotel taxes to keep the library open later. Love, Airbnb."

I have no idea what Airbnb was hoping to achieve with this campaign, but unsurprisingly it made many residents angry, and the company quickly recognized this campaign won’t compete for a Clio Award and took the ads down, publicly apologizing for displaying poor judgment.

Second, a day before the elections, activists took over Airbnb’s headquarters to protest against its impact on the housing market in San Francisco, chanting "no more displacement," and floating parody with slogans such as "HOMELESSNESS," “ENTITLEMENT” and "EVICTIONS" followed by "Love, Airbnb."

You can agree or disagree with the protestors’ claims, but one thing is clear: It is very rare to see such a Greenpeace guerrilla-style activity against nice guys. In a way, these sorts of activities draw the line between nice guys and not-so-nice guys.

Finally, if you look at the dichotomy that Neal Gorenflo describes in his piece last week between Platform Coop and Death Stars, the way Airbnb handled the campaign against Prop F (the big money, the ads and even the victory announcement) makes it a more integral part of the Death Stars camp, which includes companies mixing “technology, ideology, design, public relations, community organizing and lobbying in a powerful new formulation that’s conquering cities and users around the world.”

Narrative change No. 3: Airbnb has fucked up the culture

Although only three years passed since Peter Thiel told the Airbnb team “don’t fuck up the culture,” it seem like this advice was forgotten. How else could you explain the Airbnb ad campaign? In its apology on Twitter, Airbnb wrote: “We apologize for Wednesday’s SF ads. They displayed poor judgment and do not live up to the values and humanity of our global community.”

“The culture is strong; you can trust everyone to do the right thing," wrote Chesky. If indeed this ad campaign is a sign that something is wrong with Airbnb’s culture, could we trust the company in the future to do the right thing?

Narrative change No. 4: Airbnb struggles with design for complex relationships

Last year at the Aspen Ideas Festival, Brian Chesky described very accurately the challenge Airbnb faces: “When we designed Airbnb, I thought there were two parties in the transaction – there was a guest and there was a host -- and I match these two people together and that was the end of it. And over time I learned there were many other parties of a transaction – there was a guest, there was a host, there was a neighbor, there was a landlord, there was maybe the building owner … there was the city government, there was the hotel industry … then you had local businesses. You started having not two parties to a transaction. You had 10 or 12 parties to a transaction.”

This challenge, in other words, is how to design for complex relationships, and it is a complex challenge, as it requires a very different mindset from the one currently dominating the sharing economy, moving from a narrow peer-to-peer point of view to a broader stakeholder point of view. The fact that Airbnb had to deal with Prop F in the first place, as well as the way it handled it, show it still struggles with this challenge. What’s more, it’s not clear at all to what degree Airbnb has changed its mindset to acknowledge the multiple parties that are part of every Airbnb transaction.

Narrative change No. 5: The (missing) resilience factor

“Over the next year, Airbnb wants to built 100 community guilds in cities around the world," Chris Lehane, Airbnb’s new head of global policy, explained in a press event last Wednesday. "These 'grassroots' organizations would receive tools, training, support and an undisclosed amount of money from Airbnb to help fight unwanted local regulations.”

The problem is that Lehane, a former political strategist to Bill Clinton, thinks in terms of winning political campaigns, while the actual combat field might be very different. I believe that cities around the world will ask themselves more and more whether companies like Airbnb have a positive or negative impact on their resilience. If the answer is the former, they will be willing to legalize these platforms, but if the answer is the latter they won’t do it. Hence, Airbnb needs to think in terms of resilience and figure out how it could help improve the resilience of communities rather than think in terms of political campaigns and how to win them.

If Airbnb learned the wrong lesson from the fight over Prop F, I’m not sure it actually won.

So, what do you think – did Airbnb won or lose the fight over Prop F?

Image credit: Flickr/Open Grid Scheduler

Raz Godelnik headshotRaz Godelnik

Raz Godelnik is an Assistant Professor and the Co-Director of the MS in Strategic Design & Management program at Parsons School of Design in New York. Currently, his research projects focus on the impact of the sharing economy on traditional business, the sharing economy and cities’ resilience, the future of design thinking, and the integration of sustainability into Millennials’ lifestyles. Raz is the co-founder of two green startups – Hemper Jeans and Eco-Libris and holds an MBA from Tel Aviv University.

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