Airbnb wants to give its hosts a stake in its company – TechCrunch
Airbnb wants to give owners who power its service the ability to own part of its business. That’s why, as Axios reportsthe $31 billion-valued company wrote to the SEC asking if its rules regarding securities ownership could be revised.
Specifically, Airbnb is seeking to change SEC Rule 701 — which governs stock ownership in companies — to allow for a new type of shareholder class for workers who participate in gig economy businesses and their services. Uber, for starters, met the SEC to offer a similar allowance but Airbnb’s argument is laid out in a letter which you can read here (thanks to Axios.)
“As a sharing economy marketplace, Airbnb succeeds when these hosts succeed,” the company wrote in a passage. “We believe that allowing private companies to grant hosts and other sharing economy participants an equity stake in the business at an early stage would further align incentives between these companies and their sharing economy participants. sharing for the benefit of both.”
Airbnb plans to potentially go public as soon as next year.
While it’s unclear how earning equity might work for an Airbnb host — or an Uber or Lyft driver, for that matter — a further rule change would be needed. Currently, SEC regulations require that any private company with more than 2,000 shareholders or 500 or more who are not accredited investors in the United States must be registered.
This is clearly a problem for Airbnb, which has reached more than five million listings since its inception in 2008. It remains to be seen how many of these owners might hold equity even if the rules were changed to allow it. More generally, however, gig economy startups will not pursue equity options for entrepreneurs if that then triggers mandatory SEC reporting while they are private entities.
Then there are additional complications for companies that have expanded outside of the US market. Most Airbnbs are located overseas — the service claims to offer accommodations in some 81,000 cities in more than 190 countries — making it difficult to distribute US-based equity.
Yet Airbnb’s public recognition of its hosts and the crucial role they play is a positive part of this relationship. It’s something rare, that’s for sure.
Most of the discussion around the role between the market provider and the gig economy worker has been negative, with Uber is particularly keen to distinguish between contractor and company personnel.
While this modern approach to work gives those who choose it a degree of flexibility like never before, they find themselves without the standard perks of being a conventional employee, such as paid time off, benefits, overtime, health insurance and more. A host of startups have sprung up to help fill some of these gaps, but their solutions all come at a cost to the worker, many of whom are already financially strained.