This past week, with much pomp and circumstance, New York State Attorney General Eric Schneiderman filed a massive report indicting the major upstart Airbnb for its dubious short-term leasing practices in New York City. Schneider thinks that his report is sufficient to nail Airbnb to the mast for its pervasive illegal conduct. But on a closer inspection the report looks more like an indictment of the City’s obsolete laws for dealing with new disruptive technology. Why complain about a business that matches many an out-of-town traveler with willing hosts, for a fee that leaves both sides happy, even after Airbnb takes its cut?

New York State is going after the enormously popular company now that its rental transactions have soared in recent years. Starting from virtually nothing in 2010, revenues have roughly doubled from year to year so that the business today generates about $282 million in total revenue and about $61 million in revenue to Airbnb. About 6 percent of the participating unit owners generate about 37 percent of the profits from the nearly 500,000 reservations to date. The price per unit is about the same for large and smaller renters, so that there is no sign of antitrust difficulties in a market marked by easy entry and exit. Not surprisingly, the most lucrative rentals are on Manhattan’s west side, and in those parts of Brooklyn close to Manhattan. According to Schneiderman’s report, about 72 percent of these rentals are said to be in violation of New York City’s Multiple Dwelling Law, which imposes minimum rental periods of 30 days. Units turn over far more rapidly under Airbnb. Now that Airbnb has come of age, it is critical to separate the wheat from chaff in the Schneiderman report.

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