The "Sharing" Economy: Issues Facing Platforms, Participants, and Regulators A Federal Trade Commission Workshop
I am an Airbnb host in Birmingham AL and over the course of 13 months have hosted 62 different individuals and earned $9508 in supplemental income. I charge $45 a night and reduced amounts, per night, for multi-week or monthly rentals. I'm 27 years old, a PhD candidate and work full time for the university that I attend. This extra income has allowed me to build myself a financial safety net and to max out my yearly IRA contributions despite that my income from the university is $26000 annually, before taxes. $9500 per year may not seem like much to those that have larger incomes than I but Airbnb has enabled me to use the resources I have, my home, to garner 36% more income per year. I'm abundantly blessed in that I have no education debt or credit card debt. Nonetheless, there were pre-Airbnb times when I spent a lot of time worrying about money. My monthly salary is $1800. My rent, to be close enough to my university so that I can bike to work, is $800 per month. My collective utility bills range from $100-300 depending on how cold or wet it is (unfortunately, the historic homes in Birmingham are not the most energy efficient). I spent approximately $200-300 on groceries a month (healthy food is important to me). There are incidental expenses like life insurance/car insurance/gas/office supplies/etc that could total between 100-200 per month. This left, on the tight months, $200 to spare. A trip to the doctor, a punctured tire, or another unexpected expense left me cutting it dangerously close to $0. I've always had a small financial safety net thanks to early saving and have never carried credit card debt. Nonetheless, that level of 'cutting it close' made me uneasy. I never wanted to overextend myself financially but didn't feel as though I had any wiggle room (or the ability to save a bit more money to give myself some breathing room). I considered waiting tables or bartending, as I had in undergraduate, but I knew that my PhD studies would suffer from the erratic working hours. Furthermore, Airbnb as a company made this easy, stress-free and safe. I was provided with a first-aid kit, a emergency info card, and a smoke/carbon-monoxide detector shortly after enrolling as a host. The Airbnb platform allows for the upload of identifying documents so that I know that people who stay in my home are who they say they are (Airbnb verifies these documents, not me but I trust them). While some may argue that Airbnb is taking away business from local hotels, I would argue that many of my guests would not have used a hotel in the first place. At $45 a night, there are no hotel options in downtown Birmingham. There are couch surfing platforms but these sites are the opposite of Airbnb in their regulation/safety of both guests/hosts. For those staying longer, they would have had to use short-term rental services which likely would have cost more and would have stretched their budgets. At $45 a night my guests have a safe, comfortable place to stay but can also engage in the local economy. I have a binder full of local businesses that I recommend my guests to patronize. Many people remark how impressed they are with Birmingham, having never been there before or having stayed downtown, and how they are looking forward to return. Overall, Airbnb has enhanced my financial security and, in my opinion, positively impacts my local economy. I am a single host and I imagine if you multiply these benefits across all hosts, the positive impacts are overwhelming compared to the minimal cons.