Airbnb allowed rampant price gouging following L.A. fires, city attorney alleges

Original Article ↗ Hacker News Discussion ↗

Role of Airbnb vs Hosts and Algorithms

  • Several ask whether prices were raised by individual hosts or by Airbnb’s pricing tools; the article is criticized for not showing concrete before/after examples.
  • One host says “almost nobody” sets prices manually; most rely on Airbnb or third‑party algorithms that respond to occupancy and hotel rates, making spikes look like “normal” demand surges.
  • Others push back that Airbnb’s recommendation system can effectively fix or inflate prices, even without true underlying demand, and that this resembles cartel-like coordination.

What Counts as Price Gouging?

  • One camp argues this is just supply and demand: higher prices during a sudden housing shortage are a “normal market correction,” similar to a big conference in town or Uber surge pricing.
  • Another camp insists that in emergencies (fires, hurricanes, COVID, famine), unconstrained pricing is unethical, especially for necessities like housing, water, fuel, and that “basic supply and demand is nefarious when it comes to survival.”
  • California’s long‑standing anti–price-gouging laws during emergencies are cited; others argue such laws themselves can worsen shortages by killing incentives to bring in extra supply.

Ethics vs Efficiency in Emergencies

  • Pro-market commenters emphasize that higher prices:
    • Draw out new supply (spare bedrooms, second homes, hosts on the fence).
    • Allocate scarce units to those who value them most.
  • Critics counter that:
    • Supply is inelastic in the short term; market responses arrive too slowly.
    • High prices just privilege the rich, not those most in need.
    • Rationing or public provision (e.g., government housing) is preferable for essentials.

Platform Power and Regulation

  • Some see Airbnb as a “virtual cartel” enabling coordinated rent hikes in an already constrained, quasi-monopolistic housing market.
  • Others argue if there’s a problem, it’s broader land-use policy, permitting delays, and homelessness—not post-fire price spikes.
  • A parallel debate arises around Uber/Lyft: large platform cuts and surge pricing are seen as exploitative by some, as necessary price signals by others.

Broader Structural Critiques

  • Several link the controversy to:
    • Chronic housing undersupply and restrictive zoning.
    • Weak local governance and slow reconstruction.
    • The tension between capitalist pricing and social expectations in crises.