Los Angeles sues Airbnb for alleged price gouging following wildfires
According to a complaint filed in Los Angeles Superior Court, rental prices rose more than 10 per cent for 'at least two thousand—and possibly more than three thousand' Airbnb properties in the city between Jan 7 and 17.
Los Angeles said the increases occurred before Airbnb disabled its 'smart pricing' tool, which lets owners have rental prices adjust automatically based on demand, for Los Angeles and Ventura counties.
Airbnb was accused of violating a California law that prohibits prices of essential goods and services from rising more than 10 per cent following a state of emergency.
Governor Gavin Newsom declared a state of emergency in Los Angeles on Jan 7, triggering the state's anti-gouging law, and it has been extended several times.
Feldstein Soto said that while Airbnb, with an estimated 80 per cent market share in the city, has taken steps to curtail price gouging, evidence indicates it may be continuing.
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She separately accused the San Francisco-based company of misrepresenting to prospective renters that it has 'verified' hosts and property locations on its website, some of which don't exist.
In a statement, Airbnb said the company, chief executive Brian Chesky, and its affiliated nonprofit Airbnb.org have contributed nearly US$30 million to fire recovery efforts, including free emergency housing to nearly 24,000 people.
It also said Airbnb hosts receive error messages if they try to boost prices more than 10 per cent from pre-emergency rates.
The lawsuit accuses Airbnb of violating California's unfair competition law.
It seeks an injunction to stop illegal rents during the state of emergency, plus civil fines of up to US$2,500 per violation.
The Southern California wildfires killed at least 30 people and destroyed or damaged more than 16,000 structures.
Much of the damage came from the Palisades Fire in Pacific Palisades and the Eaton Fire in Altadena. The fires charred an area larger than Paris. REUTERS
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