In the tech world, “disruption” is the buzzword so buzz worthy it’s disrupting the way we buzz about words altogether.
In short, disruption refers to any innovative business model that upends an established set of market practices. In many ways, mobile crowdsourcing apps like Uber have come to define the “disruption” trend. But critics say these disruptions often do more harm than good, putting more money into the hands of an already monied elite, erasing existing jobs, and ultimately hurting consumers.
Airbnb was one of the first crowdsourcing businesses to reach critical mass. The service allows homeowners and residents to rent out spare rooms, guest houses, or entire homes to travelers through the Airbnb site and mobile app. The service has been hailed as a victory for peer-to-peer economics, but now critics have gone on the attack, claiming the site only creates “illegal hotels” that disproportionately benefit real estate moguls.
According to a new video advertisement by a group called ShareBetter, 40% of Airbnb’s revenue goes to real estate moguls. The group says they arrived at that number by calculating data reported by the New York Attorney General’s office in 2014. The New York Attorney General also criticized Airbnb — along with fellow disruptor Uber — for illegally operating in New York City without commercial licenses.
In response, Airbnb claims ShareBetter is funded by the hotel lobby. Airbnb spokesperson Christopher Nulty says the new video series is nothing more than a smear campaign.
“This ad is dishonest and the hotel industry lobbyists who paid for it should know better by now…This is a story of personal empowerment and benefits to the city; no amount of advertising will convince New Yorkers to choose hotel industry moguls over regular people.”
The hotel industry has faced a host of new competitors this decade, both from new services like Airbnb and from corporate housing providers offering short-term rentals for business travelers. Hotels are sometimes too expensive for travelers who need to stay more than a few nights, sending business travelers to other rental services. The average stay in temporary corporate housing in 2014, for instance, was 84 nights, mostly by business people.
Corporate housing providers and Airbnb simply argue that they’re providing a service the hotel industry can’t — something more than nightly rate hotels but less than year-long leases or sublets.
But, of course, even corporate housing is prone to disruption. A Silicon Valley entrepreneur just received $2.3 million this July to fund HomeSuite, a startup trying to disrupt the corporate housing marketplace.