Sometimes you hear that thriving businesses are capitalist enterprises that relish competing and winning.
And then you read about the heavy-handed efforts of taxi companies to use government to punish innovative competitors such as Uber and Lyft. Or you learn how brick-and-mortar restaurants are working to drive off upstart food trucks with new government regulations. The gales of creative destruction from nimble competitors can be swift and unforgiving, and government often acts as a willing shield.
The latest example comes from today’s New York Times, which details how the hotel industry is working with all levels of government to strangle Airbnb, the website that connects people searching for short-term vacation rentals with willing owners. The country’s paper of record got its hands on some internal documents from the American Hotel and Lodging Association, which counts major hotel chains as members:
Ordinarily, it would be amusing to watch those self-styled consumer advocate senators explain why they choose to join arms with multibillion-dollar hotel chains to crush lower-cost competition. (None replied to the Times.) Except that in this case, anti-Airbnb ordinances from the alliance between government and big business are costing real people real money. Unsurprisingly, a study last year found that “Airbnb properties have started to pressure hotels to keep rates low in a handful of cities where home-sharing units are plentiful,” according to the Los Angeles Times.
Cities with the toughest regulations against short-term housing rentals also happen to be places with some of the most expensive hotel rooms, including New York, San Francisco, and Santa Monica, Calif. New York City issued its first fines against “illegal listings” in February.
An Airbnb spokesman told the Times that “the hotel cartel is intent on short-sheeting the middle class so they can keep price-gouging consumers.” Sounds about right.
