On November 3rd, San Franciscans will be voting on Proposition F, a measure to cap holiday rentals at 75 nights a year. This is not good for Airbnb, the website where people list and find short-term accommodation. Airbnb was made pay $12 million in taxes to the city of San Francisco this year after initially failing to pay a 14 per cent hotel tax, and so it used that annoyance as a passive-aggressive advertising hook against Proposition F.
Billboards appeared around the city. “Dear Public Library System, we hope you use some of the $12 million in hotel taxes to keep the library open later. Love, Airbnb” was one, “Dear SF Tax Collector, You know the $12 million in hotel taxes? Don’t spend it all in one place. Love, Airbnb” was another.
How did that advertising idea make it beyond boardroom stage? Presumably an alternative plan – flying skywriters to scrawl “Tax is 4 losers” across the sky of the Bay Area – was seen as a bit too “on the nose”. San Franciscans got narky, the backlash built, and Airbnb realised not everyone was on its wavelength, apologised for “the wrong tone” and began to remove the ads.
Airbnb is in something of a global battle against tax laws in various jurisdictions that keep messing with its "model". Most recently in Ireland, it has been lobbying the Department of Finance to try to allow its users to qualify for rent-a-room tax relief. When a multibillion dollar company bases itself in Ireland to avail of our remarkably low corporate tax rate, and then sees its users potentially being stiffed with a tax bill, is that #irony?
What Airbnb unintentionally did in San Francisco was accidentally reveal its real attitude towards paying tax, while mistakenly thinking everyone else was on board. Such immature passive aggression exposes a far greater truth than all the spoofing tech companies do about “corporate values”.
When you see a company that is valued at $25 billion bitching about a $12 million tax bill, you can only conclude that these companies are on another planet.
Or maybe they'd actually like to be if that meant paying even less tax. Perhaps that's what Elon Musk is up to with Space X after all. It's hard to complain about $12 million when Airbnb's new office in Grand Canal Dock will be sold through Savills for over €30 million. It's hard to complain about $12 million when Airbnb has so far put up $8 million to oppose Proposition F through its "SF For Everyone" campaign.
Delusions on tax
The campaign supporting the proposition, “Share Better SF”, is made up of landlords, housing activists, neighbourhood groups, and unions (primarily Unite Here, a hotel workers’ union). They’ve raised $200,000. The sum of $12 million is a pittance to Airbnb, but it reserves its right to get huffy about it, and when its delusion is called out, frantically backtracks. But now we know what it really thinks about tax.
Tech hates tax. As an industry, big tech also has a serious issue with arrogance, and wants to do everything on its terms. This is big tech's world, and you just live in it. What about society? Society? Isn't that, like, in the cloud? Who needs services when you have the sharing economy? Things are different now. Having an experience is something you share on Instagram. Having sex is something you arrange on Tinder. Friends are just pages you connect with on Facebook. For the cool kids, corporations and brands used to be things to rally against, smashing their windows and sticking it to the man. Now they're sponsored by them. And tax? Tax is a problem the past concerned itself with. This is the brave new world, and we do things differently here. Look, there's a slide in our office.
Big tech operates in an economy built on delusion capitalism, where growth is infinite, companies that can’t even turn a profit are given billion-dollar valuations, and companies that don’t even seem to know how to make money are heralded as bastions of genius. It’s seen as a trendy industry (so were banking and advertising once upon a time), and also benefits from pretending to be progressive. At the Web Summit next month, tech evangelicalism will be rolled out again on a stage and hall that resembles a megachurch.
Yet at its heart is a viscous dedication to profit-making. The cost to society when massive wealth shirks its tax obligations is huge. Ireland is at the heart of this rot, and the EU appears ready to burst our backslapping bubble when it comes to Apple, a company that has paid a tax rate of less than 2 per cent in Ireland for over a decade, with a European Commission ruling expected in the coming weeks.
Versioned utopia
Big tech might like to see itself as a utopian industry, where if your business goal is not “changing the world” then you’re not thinking big enough, but there is nothing utopian or progressive about the attitude the industry has towards tax. It is morally abhorrent for those making the most to be paying so little.
So San Francisco might not pass Proposition F, and the Government might not want to rock the corporate tax rate boat, but Europe has other plans.