The article doesn't make it clear whether it was AirBNB itself that increased prices, or whether it was hosts. And moreover, it also doesn't even give one example of a before and after price. I'd like to see at least one example.
The supply of housing is more elastic than you think. Some people have spare bedrooms, or second homes in LA. They may have previously chosen to leave them vacant, but for many people the higher rates they can get on Airbnb can entice them to list them. This happens at the margins—it’s not an all or nothing thing. So the higher people can earn renting out available space, the more they’ll be willing to rent. At some price point, even a billionaire will rent out their garage.
This happens to any platform using algorithmic pricing. Any time there is an unexpected event that either constrains supply or increases demand (or both), the algos go haywire. Then the the platform has to put in checks to prevent it from happening again.
Remember when Uber was new and the surge pricing could do 20X+ in just a few minutes when there was an emergency? And then they had to fix it so that wouldn't happen, the trade off being that there just weren't cars available.
The thing is, some people aren't price sensitive. In a sudden blizzard, some people are happy to pay $350 for a two mile ride home, just to get home. And some drivers are happy to go out in that weather for their piece of the $350.
Regardless, I don't see any problem here. The price increases, more people with a spare apartment, home, or room will be incentivized to host which increases supply.
If you suppress the price artificially, then the supply won't increase which won't do people who lost their homes any favors.
Is anyone tracking these platforms? Today coincidentally I got a Lyft from the airport to home and due to traffic it would take 1 hour, the price asked was $125. Ok steep, but the poor driver would be stuck with me for an hour.
BUT NO! I asked the driver and at the end of the trip he kindly showed me how much Lyft gave him.
How is it any different than "congestion pricing"? Last time I experienced such, was on my way from the airport to the city. Unfortunately someone had jumped on the tracks, and the trains were locked down for 3 hours while the police etc. came to investigate the scene. During peak hours. Lines to the taxi and bus must have been 200 meters long and 5 meters wide. Checked out Uber, got something like $250 for a 30 min drive.
Not that I necessarily support extortionate pricing like that, but we do live in a capitalistic society.
Up here in North Idaho...my landlord that I was leaving told me how much more expensive things are going to be since the fires in California...everyone wanting to move here.
I already found another house cheaper/better.
This is an absurd diversion from how poorly LA leadership is performing.
Six months on, and no permits have been drawn for the Palisades/Malibu reconstruction. There are 7,000 destroyed homes, in the most bureaucratic municipality for a permitting and development process. This will be particularly true for anything that requires Coastal Commission oversight. Their job is to get you to leave.
LA city sold $1 billion in bonds this year, not for strategic efforts, but to keep the lights on and water running. They basically punted and said part of the DPW is a project and we want to sell $1 billion in bonds.
In previous years, LA city annual spend includes $700+ million for homeless, and $350+ million for liability payments. It's basically a giant pot of money for a huge feeding frenzy.
Sure, the fire department has an insufficient budget, but no-one talks about 30% of all fires are started by the homeless, and why are they allowed to live under an interstate overpass anyway?
Some of those 7,000 homeowners displaced by the fire may give up and leave. Those that remain are going after LA leadership in court. LA will see massive lawsuits from homeowners and businesses, possibly the state government.
So? Let the free market define the correct price. It’s not like there’s thousands of alternatives to their platform that are better for both renter and landlord, and by regulating them into controlled prices all you’re doing is cementing their monopoly position. Haven’t we learned this lesson yet?
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[ 6.6 ms ] story [ 41.1 ms ] threadBut I guess if we accepted that, nobody would be to blame.
Remember when Uber was new and the surge pricing could do 20X+ in just a few minutes when there was an emergency? And then they had to fix it so that wouldn't happen, the trade off being that there just weren't cars available.
The thing is, some people aren't price sensitive. In a sudden blizzard, some people are happy to pay $350 for a two mile ride home, just to get home. And some drivers are happy to go out in that weather for their piece of the $350.
The hard question is how do you find the balance?
Regardless, I don't see any problem here. The price increases, more people with a spare apartment, home, or room will be incentivized to host which increases supply.
If you suppress the price artificially, then the supply won't increase which won't do people who lost their homes any favors.
BUT NO! I asked the driver and at the end of the trip he kindly showed me how much Lyft gave him.
$62 before tip.
Not that I necessarily support extortionate pricing like that, but we do live in a capitalistic society.
It isn't just a regional problem.
Six months on, and no permits have been drawn for the Palisades/Malibu reconstruction. There are 7,000 destroyed homes, in the most bureaucratic municipality for a permitting and development process. This will be particularly true for anything that requires Coastal Commission oversight. Their job is to get you to leave.
LA city sold $1 billion in bonds this year, not for strategic efforts, but to keep the lights on and water running. They basically punted and said part of the DPW is a project and we want to sell $1 billion in bonds.
In previous years, LA city annual spend includes $700+ million for homeless, and $350+ million for liability payments. It's basically a giant pot of money for a huge feeding frenzy.
Sure, the fire department has an insufficient budget, but no-one talks about 30% of all fires are started by the homeless, and why are they allowed to live under an interstate overpass anyway?
Some of those 7,000 homeowners displaced by the fire may give up and leave. Those that remain are going after LA leadership in court. LA will see massive lawsuits from homeowners and businesses, possibly the state government.