In Paris, Uber is the devil, while Airbnb is an angel. Uber angers the City Hall, while Airbnb cuddles the municipality. The local Parisian authorities banned Uber X, while Airbnb has just agreed to play tax collector on behalf of “la Ville de Paris”. Each year, about 60 million euros will be collected by Airbnb and transfered to the coffers of the city of Paris.
Both Airbnb and Uber consider Paris, France a very important market. It is already the #1 city for Airbnb, with about 4 times more listings than New York. As for Uber, the legend has it that Uber’s founder had the idea of creating his startup while waiting in vain for a taxi in the streets of Paris.
However, the two American companies take widely different approaches when it comes to approaching local authorities.
Unlike Uber, Airbnb is good at creating local allies.
Airbnb is great at creating a positive corporate culture, where guests, hosts and even local authorities can like the company. Not so with Uber where drivers and customers sometimes resent the company’s culture.
Paris in love with Airbnb
There are several reasons why it is both Paris and Airbnb’s interest of finding an agreement :
- Paris is already Airbnb’s number market in the world, so Airbnb must make its business as legal and problem-free in the city as possible. Paris has more than 50,000 Airbnb listings, while New York Ciry had 18,000.
- Paris the capital of France, a leading tourism destination in the world. As France is centralized, if you can win the battle of Paris, you can much more easily go after the rest of the country.
- The French code tax is so complicated that a lot of hosts had no idea that they had to pay this “taxe de séjour” thing. People know that hotels have to collect it, but rental owners have often no idea.
- Paris has a lot of debts and Mayor Anne Hidalgo made a lot of promises to get elected. The Airbnb money is much welcome.
- Airbnb will collect and transfer the money on its own, so need to hire yet more local civil servants. Tax collection with maximum return on investment for Paris!
- Airbnb will be hosting its 2015 Airbnb Open Conference in Paris – Get a room, Airbnb and Paris!
Airbnb is offering to the City of Paris a free tax collection system
When you bring millions of euros to a municipal budget, you suddenly have local friends
How it will work
In France, the tourism tax (Taxe de séjour) is something that is established, regulated and collected by local municipalities. Each village, town or city has its own rules. As there are more than 36,000 municipalities in France, you can imagine how complicated it is, even for an hones taxpayer, to know how much they should charge a guest.
In Paris, it is €0.83 (about $1) per person per night at a vacation rental. Most Parisians have no idea that the tax exists, how much it is and who they should give the money to.
Airbnb comes with a solution:
- Starting October 1st, Airbnb will add a new line to the guest’s invoice: The Taxe de Séjour (If the rental is located in Paris)
- Airbnb will automatically calculate the charge, add it to the invoice and collect it along the money for the owner and its own service fee
- At the end of the stay, the tax money will be transfered to the City of Paris.
French code tax is confusing, Airbnb makes it simple
This is a first in France, 35,999 more municipalities to go! But it is Airbnb’s number 1 market and this step will have an impact worldwide on the company’s negotiations with other local authorities.