A simple solution to problems caused by Airbnb.

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I have been an Airbnb customer since 2012 and love the platform. Airbnb has allowed many to have great experiences that would not have been possible otherwise. 

But when technology enables new business models it usually causes a new set of problems as well. Airbnb (and copycats) are no exception. Tax compliance of hosts is low and tourists are invading residential areas. This causes noise complaints and related issues. 

AirBnb flats in a residential buildings cause different problems.

In addition, rents have gone through the roof in many cities. The reason for this spike is that a company that expects to rent out a place for €200 a night at an 80% occupancy rate is able to pay more than a regular tenant. 

The solution.

There is a solution for all of this: a lottery that awards temporary tourist licenses for properties in the format of a digital signature. 

Once a year, or with any other frequency, all licenses to rent out apartments will be raffled. The number of available licenses can be restricted by neighbourhood. Optionally cities can also charge a fee to participate in the lottery that could be used to counteract some of the effects of tourism.

It will only be possible to participate in the lottery with each property once. If you win a temporary and non-transferable license to rent out your place via any platform is awarded. This license is in the form of an API-like private key / digital signature that will be required for Airbnb to process reservations. A decentralised ledger (yes, I am actively avoiding the word blockchain) can be used to authenticate transactions and prevent fraud. 

How will this solve the problems caused by Airbnb?

Rising rents. The lottery inserts uncertainty in the transaction for companies that rent properties with the sole purpose of listing them on Airbnb. There will be a risk that an apartment will not get, or keep, a tourist license. For this reason businesses will not be willing to pay the high rents that they are now.

Noise & related issues. Licenses can be withdrawn in case of repeated problems. This will incentivize hosts to more carefully consider whom they rent to, and be responsive to neighbours complaints. 

Any license withdrawal will be automatically enforced thanks to the authentication system for reservations. 

Illegal listings. Digital signatures will make it impossible to illegally list or rent out a property on Airbnb.

Tax compliance. All transactions can be audited because they are recorded in the decentralized ledger. 

Simple but not easy.

The proposed solution is simple, but that does not make it easy to implement. The lottery concept implies replacing existing tourist licenses and that seems legally challenging and politically complex. 

However, the suggested solution can also be partially adopted. Only implementing the decentralised ledger and tourist licenses in the form of a digital signature would be a great start. It would address most of the issues and can be achieved fast. 

About the author

Ivo Oltmans
By Ivo Oltmans

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About

My name is Ivo. In the last 10+ years I have worked on various SaaS products in marketing, sales and business development roles.

Want ideas to grow your company? I love meeting new people and chatting about business. My gmail handle is i.oltmans.

When in doubt whether or not to contact me, you should :-)