I think you could make a similar argument for YouTube, but I personally find all of these services to be tremendously valuable and I'm glad that they are working to evolve the law.
Laws are written and interpreted within the context of old, established businesses. Innovation will inevitably produce a certain amount of tension with those old laws. One approach for to dealing with this is to ask permission / change the law first, but that will usually fail because the incumbent businesses generally don't like change (imagine trying to get Hollywood's permission to launch YouTube). The second approach is to move forward within the spirit of the law, deliver genuine value to consumers and society, and then work with legislatures and the courts to develop improved laws and understandings of the law.
First, the YouTube comparison is far less appropriate than you suggest. The Digital Millennium Copyright Act contains a safe harbor that is designed to shield internet service providers from liability associated with copyright infringment provided that they meet certain criteria. The U.S. Court of Appeals for the Second Circuit determined that YouTube was protected by this safe harbor.
Second, and more importantly, you seem to neglect the fact that some AirBnB hosts are not just violating laws, but their leases and HOA rules. These are legally-binding contracts between private individuals.
AirBnB's most ardent supporters like to focus on zoning and hospitality laws, suggesting that they're antiquated, anti-competitive, etc. Some of these arguments are quite reasonable in my opinion, but what about private contracts? I have yet to see convincing arguments around the issue of hosts who are violating their contracts with their landlords and/or homeowners associations.
Most apartment leases have strict terms around subletting and many HOAs have restrictions around property use that would be in conflict with AirBnB-style short term rentals. Even if AirBnB doesn't have a legal obligation to help enforce these, given the number of listings that are ostensibly governed by leases and/or HOA rules, it seems implausible that AirBnB isn't aware that a good number of its hosts are breaking private contracts, potentially exposing those hosts, their neighbors and even their "guests" to a variety of risks.
Does AirBnB not have a moral obligation to address this? I'd love to see more AirBnB supporters take on this issue. At least it would be more entertaining and perhaps even more enlightening than the recurrent arguments against zoning and hospitality laws.
I was expecting a response like this, and it completely misses the point of my comment. Notwithstanding the potential benefits to hosts and guests in ensuring that activity on AirBnB is above board, I focused on a simple question: even if AirBnB doesn't have a legal obligation to help enforce private contracts, does AirBnB not have a moral obligation to address the issue because it is almost certainly aware that a good number of its hosts are violating them?
It seems like your response is "AirBnB has no moral obligation to try to discourage its hosts from violating an agreement it knows likely exists", but I'm curious as to why you chose to throw this back to me as a question rather than stating a concrete opinion. Do you hold other companies to this same standard, and are you comfortable stating on record that what's good for the goose is always good for the gander? If so, why disguise your opinion as a question?
On the point of corporate morality, I'd note that companies in certain industries are frequently lambasted for acting amorally. Just look in finance. Big banks, mortgage lenders, hedge funds, high frequency traders. They face almost constant criticism for engaging in behavior or failing to prevent behavior, even when their actions do not violate the letter of the law.
Are there no AirBnB supporters who have criticized other companies for amoral behavior?
At least, with the finance industry, those entities are directly perpetrating and in control of the immoral behavior, rather than acting as a proxy/facilitator for entities that might be doing it. I would think this situation is more akin to hosting copyrighted content, where we're finding that service providers aren't held liable (morally or legally) as long as they comply with requests to take down specific offending material.
As a side note, look how often that criticism of the finance industry amounts to any real effect on those companies. If that's the model we're looking at, the prevailing wisdom says to just do it and ignore the critics.
Also I think most people just aren't that concerned about the sanctity of HOAs and residential lease agreements (compared to, say, the global economy), and those are easier to amend and negotiate on than laws.
It's pretty obvious that turning an apartment into a hotel room is a legal problem in many if not most instances. Making the claim that "people just aren't that concerned about the sanctity of HOAs and residential leases" is just plain delusional. You'll get concerned when your lease gets terminated or the HOA takes up action against you.
The whole situation is a moral hazard -- the owner/lessee of the apartment/house bears almost all of the risks. AirBnB just needs to keep the PR machine churning. That's why they have figured out how to verify the identity of renters (to address the issue of some sort of psycho serial killer renting rooms), but still find it impossible to confirm that lessees of property can in fact rent those rooms.
You seem to be of the belief that a) financial institutions never play the limited role of facilitator and b) entities which facilitate transactions are somehow less culpable when they know that the transactions they are facilitating are ethically questionable. You're wrong on both counts.
Many financial institutions facilitate transactions. Goldman Sachs paid over half a billion dollars to settle charges related to the Abacus deal it facilitated in 2007.[1] Goldman was paid a $15 million fee for facilitating that deal, a meaningless fraction of the $46 billion in revenues it earned in 2007.
As I noted, the vast majority of apartment leases forbid subletting without the landlord's approval, and you would be hard pressed to find a single landlord who allows tenants to turn their apartments into hotel suites. As such, one could argue that as far as apartments go, this isn't a "might" proposition. There's a very reasonable argument to be made that AirBnB can safely assume that apartment listings on its site more often than not involve a tenant breaking the terms of his or her lease.
If you don't have a problem with AirBnB facilitating apartment rentals in the face of constructive knowledge that many of them are taking place in violation of the terms of the host's lease, that's fine. But then you shouldn't have a problem with financial institutions when they merely facilitate transactions that don't pass your smell test. What's good for the goose is good for the gander, right?
Well the hilarious part is that AirBnB now requires guests to prove who they are by posting a passport.
It wouldn't be rocket science to require hosts to prove that they have ownership or approval to let out their flats (i mean, you can look up property ownership info online for most US cities). Especially since, from the host's perspective it's not a 1 time transaction.
They're just skirting the law because it's convenient.
From the perspective of a home owner, if I rented my flat out, I'd definitely include a no subletting clause. I'd also love to have a way to temporarily blacklist my property on AirBnB and other such sites.
There's both the letter and the spirit of the private contracts.
Some HOAs are restrictive on sublets and some newer ones explicitly prohibit short-term rentals or require an owner live-in minimums. The question is why?
The spirit of such regulations is that long-term owners, who typically rule the HOA, don't want their complex/neighborhood to be used for short-term parties, which brings noise concerns, safety concerns, possibilities of vandalism, etc.
If that is going to happen, HOA has the means to nab the offending owner, usually start him off with a warning, and later move that up to penalties or whatever other means they have at their disposal. If that never happens, HOA will stay mum.
Why should AirBnb get in front of the issue that's self-solving?
Some people are not going to be covered by insurance during a sub-let. Those people might be the host or guest or apartment owner; but in the case of catastrophe someone is going to lose out.
So there is some value to customers of having listings vetted by AirBnB so that everyone knows that the sub-let is legal and insured.
Hardly Airbnb related either, here's a response I got back from a craiglist ad for a temporary sub-lease (that I declined):
> My place is available for the whole month of June, and is located at xxxx. Subletting isn't technically allowed at the building, so you would need to be careful around the staff.
Contract terms, like laws, might be outdated or imbalanced, like when they're based on fears from an age with far less of our modern credit/reputation/identity-monitoring, or when circumstances have changed significantly since their negotiation (or in the case of residential leases, rote templatization).
Thus there's the idea of "efficient breach" - where the right thing to do might be to break the terms and compensate the counterparties, leaving everyone better off:
There are many tiny breaches of leases and other contracts that leave society better off: looking the other way if a small pet or temporary houseguest arrives, or there's an occasional bit of "medicine smoking" on the premises, or some unapproved property improvements. It's tough to work up moral outrage if there's no evidence of actual harm, just technical violations. Compare malum prohibitum vs. malum in se:
A contract is an agreement between two private individuals. If one of those individuals believes that the terms of the contract are antiquated and thus cannot honestly provide an assurance of honoring them, that person is ethically bound not to execute the contract. All the Latin in the world doesn't get you around that.
While some cities will probably revise occupancy and hospitality regulations to accommodate things like Airbnb, the tension between renters and landlords w/r/t/ sublettors is quite old and quite well explored by the courts (check out your local tenants union for chapter-and-verse citations). The lease provisions that forbid Airbnb will stand up in court.
>A contract is an agreement between two private individuals. If one of those individuals believes that the terms of the contract are antiquated and thus cannot honestly provide an assurance of honoring them, that person is ethically bound not to execute the contract. All the Latin in the world doesn't get you around that.
That is really a very simplistic view of the real world of real estate. For example, in 1983 when I bought a Houston house, I read every scrap of paper involved in the transaction. (Title company closers call us "readers.") The faded Nth generation copy of the deed restrictions ("an agreement between two private individuals") had horrific language about not allowing those of other than the white race to live in the property (unless in servants quarters). By that time, that language had been neutralized by the Supreme Court, but there was a good period of time where it had legal force but had to be ignored by those of good conscience. George W. Bush got the one news cycle treatment about that as the same language was in the deed restrictions he signed, as well as in many subdivisions from that era. That language carries on in the record forever.
In American law, a covenant is best thought of as something different than a contract. They are related, but covenants are a property law concept, while contracts are their own area of law. A covenant can run with the land: someone in 1920 can put a restriction in a covenant that the owner of the property in 2014 must abide by, even if the property has changed hands many times in the interim. However, contracts only bind the parties that agree to it.
The distinction between the two is very relevant vis-a-vis your response to 'tptacek. The terms of a lease contract are freely bargained-for between buyer and seller in the present day. Because contracts cannot bind non-parties, they will only contain provisions that at least one party considers meaningful. However, a covenant is not freely bargained-for between buyer and seller in the present day. Both the buyer and seller may be bound by provisions that both believe to be antiquated (like covenants not to sell to particular minority groups).
If you think a contractual term is antiquated, you're free to bargain with the seller to have it eliminated. With a covenant provision, however, both you and the seller might be stuck with what someone wrote-in decades ago.
I'm not sure what your point is. Sublettor restrictions on leases have been challenged in court, and there are classes of restrictions that have been judged unconscionable; you cannot, for instance, rent out an apartment in Chicago and absolutely forbid sublettors, nor (obviously) can you forbid African American sublettors.
So my point isn't that the black letter language of any contract must in all cases stand up in court. My point is that the restrictions in leases that block Airbnb will stand up, because despite the relative novelty of Airbnb, the lease restrictions they butt up against aren't obscure. They are central to the tensions between renters and landlords and thus well-tested.
Also: if someone puts a contract in front of you that requires you to discriminate against African Americans: no, I don't think you can ethically sign it.
>Also: if someone puts a contract in front of you that requires you to discriminate against African Americans: no, I don't think you can ethically sign it.
Again, you make a simplistic statement that ignores the real world. When social systems are realigning, there is a period when you ignore the plain terms of the contract because you know people aren't enforcing it anymore. Whether that is happening with AirBnB or not is not my point. My point is that it is really easy to make a blanket statement about being ethical in contract law. The chance of that statement actually being the "ethical" choice in all cases is, effectively, zero. The real world is much too complicated to reduce it to the logical exactitude you are claiming.
When you sign a lease, your landlord expects approval over sublettors. You know they do. They know they do. The contract says they get it. This notion that the Internet is rewriting the ethics of that situation is relativistic bullshit; the argument is embarrassing.
Sorry, but the Internet has not in fact rewritten every rule that is somehow inconvenient to people on the Internet.
Wow, we must be having two different discussions. I don't disagree with your last comment. In fact, not a single word of my comments have anything to do with the internet, and, in addition, my original example predates the web by a good ten years. I only object to your making blanket statements about it being "unethical" to <insert absolute statement>. That is hardly a relativistic bullshit argument. In fact, entire fields of human study are devoted to the intricacies of the edge cases of such "embarrassing arguments." If only ethics could be reduced to predicate calculus.
If it's efficient breach than surely AirBnB sublettors violating their inefficient leases are compensating landlords for the breach making both parties better off. Right? Surely it's not one party secretly violating the terms of the contract and keeping all the benefits? That doesn't sound very efficient at all; don't think that's what Posner had in mind.
Landlord has been using the same faded form contract for a decade; doesn't even know for sure which provisions are in it, or still legal under recent legislation or court decisions. (But, a standard 'severability' clause protects them when they've got illegal and unenforceable terms inside their template.)
Renter skims contract, but doesn't consider its terms negotiable, practically speaking. They often ignore the precise terms regarding notices, houseguests for more than X days, small pets, drugs on the premises, new roommates, sublettors, etc. In many cases the local law, or tenants' legal support groups, will defend them for violations of such terms - because the signed lease was illegal or unreasonable.
During the course of the lease, both the landlord and the renter may deviate from the exact terms from time to time, by tacit agreement, or occasionally verbal agreement (even if the contract stipulates "no verbal amendments").
Many renter violations are essentially in the realm of "don't ask, don't tell". The landlord doesn't really care and also doesn't want to know, because knowing would force conscious acknowledgement, perhaps encouraging further violations or incurring liability. Only if there's actual property damage or risk of harm/liability (or other adversarialism has begun from other factors) does the landlord become interested in monitoring and enforcing every clause.
Into this mix comes AirBnB. Many landlords won't notice the activity. Or they'll suspect it but don't want to pry. Or they'll know, but don't want to be known to "know".
Yet they may notice the rental rates the market will bear go up, benefiting them for looking-the-other-way. They may notice the renter's treatment of the property improving – as they now share an extra interest in its appeal. Compared to an empty room/apartment, the presence of good guests can make the property and neighborhood a safer and more pleasant place. So landlords can benefit implicitly even without an explicit renegotiation of terms.
In fact, they may prefer this sort of indirect benefit – because they retain the optionality of enforcing the terms, if things go poorly, without the risk of formally approving the activity.
Real economic and social relationships are way more complicated than, "the letter of the rules is X so everyone is duty-bound to do no more nor less than X".
Doesn't that make Youtube a perfect example? It existed before the DMCA. The safe harbor provision was written specifically to protect websites like it because the owners of such sites had an influence on how the laws were written.
I find Airbnb tremendously valuable as well (Airbnb is probably hooking me up in London early next week, after I finish spending this week in a Scottish house I also rented through an online service). And I'm sort of addicted to Uber as well.
That doesn't make either of those services any less fraught. They can be incredibly valuable to me and a net negative for the communities they operate in. Not everything that makes me happy is good for society.
Personally, I prefer paying (cash), because it changes the nature of the situation. As a free guest, you are - or can be - expected to participate in the hosts' events, such as meals, touring the city, etc. That may be great, and I might still want to do it, but I'd rather keep my options open in case I don't get along with them or I have different plans.
I wouldn't call CS a "free service". It's supposed to be more of a community. It's great for meeting people and learning their way of life, but if I travel on business or when I know I won't have much time to spend with the host, I find alternative accommodation.
Laws are written and interpreted within the context of old, established businesses. Innovation will inevitably produce a certain amount of tension with those old laws. One approach for to dealing with this is to ask permission / change the law first, but that will usually fail because the incumbent businesses generally don't like change (imagine trying to get Hollywood's permission to launch YouTube). The second approach is to move forward within the spirit of the law, deliver genuine value to consumers and society, and then work with legislatures and the courts to develop improved laws and understandings of the law.