Who Benefits From AirBnB?

The sharing economy continues to evolve, suggesting a need for "algorithmic regulation."
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The sharing economy continues to evolve, suggesting a need for "algorithmic regulation."
(Photo: Justin Sullivan/Getty Images)

(Photo: Justin Sullivan/Getty Images)

Companies like AirBbB would have you believe everyone benefits from the sharing economy, but the truth is, no one's entirely sure who the participants even are. That's something of a problem for municipalities trying to understand how to regulate the no-longer-fledgling industry. Now, researchers have sought out hard data on who uses AirBbB, and their results suggest we may need an entirely new kind of regulation to deal with it.

"[T]he sharing economy and its regulation have become highly popular policy topics," write Giovanni Quattrone and a team of computer scientists in a paper to be presented in April at the 2016 International World Wide Web Conference. In part, that's because the sharing economy is having a substantial negative impact on more traditional service providers, like taxi cabs.

"Many municipal governments are attempting to impose old regulations on these new marketplaces ... without a complete understanding of the benefits and drawbacks generated by these new services. Furthermore, such a debate has resulted into little academic work," Quattrone and his colleagues write.

"Cities should rely on data analysis to envision and revise their local ordinances."

Because there's not much in the way of organized data to look to, between 2012 and 2015 the researchers crawled through AirBnB's listings in London, including where AirBnB hosts were renting and how often they rented their places out, using the number of reviews as a proxy for the number of actual visitors. The researchers combined that data with sociodemographic indicators—even things like social media check-ins—to build a picture of how AirBnB in London has changed over time.

Early on in 2012, AirBnB hosts were largely young, ethnically diverse, and living in central London neighborhoods—quite possibly students, the team suggests, since, in addition to their other traits, hosts tended to live in neighborhoods where fewer people were employed. In 2013 and beyond, AirBnB listings expanded outward from the center to include places farther from transit and the major tourist draws.

The frontier at this stage also included neighborhoods with relatively low average incomes, suggesting that hosts were using AirBnB as a way to make more money, with an important caveat: Though there were new hosts in these areas, for the most part the researchers' data indicated travelers continued to stay closer to central London.

Based on their findings, the team recommends a system, "transferable sharing rights," whereby a city can issue and regulate the rights to participate in AirBnB-like rentals. This could help cities' direct economic development efforts and ensure that short-term rentals don't take over and damage a neighborhood's character. Cities should also create incentives to share data, the researchers argue, allowing governments to watch for irregularities and update policies as they learn more about the industry.

Efforts to regulate AirBnB and its peers have focused on "hard and fast rules," the team writes. "By contrast, this work has called for evidence-informed policy making. Cities should rely on data analysis to envision and revise their local ordinances, and here we have shown the way by analyzing data about short-term rentals to offer regulatory recommendations."

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