Airbnb has always been illegal in San Francisco.
That’s right: the city that gave rise to the $10 billion room-renting site never allowed the service to operate—at least not officially. But that all changed on Tuesday, when San Francisco’s Board of Supervisors voted to legalize Airbnb-style short-term rentals, albeit with restrictions that fall far short of embracing the company’s idealistic rhetoric.
Not that Airbnb ever really felt illegal in San Francisco. Sure, there were some tiffs with landlords, some lawsuits, some fines. But as the vast number of San Francisco listings on the site attest, Airbnb has thrived in the city regardless of what the law said.
Still, running a business under constant threat of legal action—or more importantly, a business whose customers are under constant threat of legal action—isn’t really sustainable. Manning the barricades of disruptive innovation against an army of bureaucrats might feel bold during a startup’s early days, and it’s that “ask forgiveness, not permission” attitude that allowed Airbnb to grow so big so quickly. But a perpetual running battle with regulators is hardly the most efficient way to hold onto the value Airbnb has created. At some point, the compromise must come.
The company is still waiting for that compromise in other parts of the world. But in the case of San Francisco, Airbnb and its users can now rest assured that all that value has been locked in.