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How Airbnb Works


Lorna and Darryl from Cambridge, England, receive the key to the private apartment of Henning (right) who lives in Berlin; they booked his apartment online via Airbnb.
Lorna and Darryl from Cambridge, England, receive the key to the private apartment of Henning (right) who lives in Berlin; they booked his apartment online via Airbnb.
© Jens Kalaene/dpa/Corbis

For years, you've been squirreling away money in your "Paris" fund and hording sick days for the trip of a lifetime. The goal is to eat as many baguettes and sip as many cups of café au lait at as many sidewalk cafes as possible. While you might check out the Louvre, this trip is all about experiencing the "real" Paris of quiet cobbled side streets and small neighborhood bistros.

But where to stay? Nice hotels in your favorite Parisian neighborhood — Saint-Germain-des-Prés — average more than $300 a night. That will burn through your Paris fund in days. Wouldn't it be better to experience the real Paris by staying in the home of a real Parisian?

With Airbnb, you can rent a room, apartment, home and the occasional castle in 34,000 cities around the world directly from the people who own them. In fact, there's a cute studio apartment in Saint-Germain-des-Prés for only $145 a night. Even better, your host, Edouard, is happy to tell you about the best patisseries, bars and art galleries within strolling distance of his studio overlooking the Luxembourg Gardens. Oui, monsieur!

When Airbnb launched in 2008, the site hosted a handful of apartments in New York City. By 2014, visitors to Airbnb could search more than 600,000 listings in 192 countries. The business model is simple: Connect local hosts with visiting tourists and charge a small fee for the service. With more than 50,000 bookings each night, some analysts value the privately held company at $10 billion [source: Konrad].

Airbnb started in 2008 when co-founders Brian Chesky and Joe Gebbia launched a Web site to rent out two airbeds in their San Francisco apartment during a conference to make some extra cash. (Hence the Web site name, which stood for "airbed and breakfast"). The site's popularity has taken even the co-founders by surprise.

"At first, we thought, surely you would never stay in a home because you wanted to, you would only stay there because it was cheaper," Chesky told the Atlantic in 2013. "But that was such a wrong assumption. People love homes. That's why they live in them. If we wanted to live in hotels, more homes would be designed like hotels."

Not surprisingly, hotels are some of the site's most vocal detractors. They, along with landlords and city governments, accuse Airbnb users of skirting rental laws and evading taxes. And residents of trendy neighborhoods from Brooklyn, New York, to Marfa, Texas, decry the gentrifying effect of Airbnb on housing prices and availability [source: Monroe].

Keep reading to learn all about renting and hosting through Airbnb and the lawsuits that threaten to derail the darling of the sharing economy.


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