Latest news with #pricegouging
Irish Times
5 days ago
- Business
- Irish Times
Fine Gael irked by Niall Collins's dismissal of blanket VAT cut for ‘price-gouging' hospitality sector
A row has emerged between Fianna Fáil TD Niall Collins and some Fine Gael representatives over his recent dismissal of a blanket cut to the VAT rate for the 'price-gouging' hospitality sector. Mr Collins, Minister of State at the Department of Justice, said luxury and five-star hotels benefiting from a universal reduction in the VAT rate to 9 per cent would sit 'very, very uncomfortably with me'. Fine Gael TD John Clendennen, who has previously worked in Irish and international hotel chains, questioned the Limerick politician's claim that the industry has engaged in 'immense' price gouging. Some Fine Gael Ministers also criticised Mr Collins for trying to 'split hairs' and for criticising a policy that would help support entry-level jobs in rural Ireland. READ MORE This week it emerged the full-year cost of the proposed VAT cut for the hospitality sector would be almost €1 billion, taking up the majority of the €1.5 billion tax package available for Budget 2026. It is understood the Government is now considering delaying the cut until the middle of next year and applying the cut to food and drink services but not accommodation. Mr Collins told Limerick's Live 95 radio station this week he is 'not convinced that a VAT reduction is merited within the hospitality sector'. He said there was 'little to no evidence' that a previous temporary reduction from 13 per cent to 9 per cent for the sector 'was actually passed on to the consumer'. 'There's no evidence that that ever happened. And secondly, we saw an immense amount of price gouging within the sector in recent years,' Mr Collins said. The Fianna Fáil TD said he would favour 'targeted interventions' for parts of the hospitality sector 'where there is a genuine threat of job losses'. Mr Collins repeated his opposition to a blanket VAT rate on RTÉ Radio 1 on Thursday morning. However, Mr Clendennen, a Fine Gael TD for Offaly, told The Irish Times he 'was not so sure' about Mr Collins's claim there was widespread evidence of price gouging in the hospitality sector. Mr Clendennan said many hospitality businesses have come under 'pressure' with rising costs. He said he is 'very much in favour of VAT 9 as a measure to help business'. 'I think we need to try to ensure that the maximum number of hospitality businesses can remain viable,' he said. Mr Collins's comments went down badly with Fine Gael Ministers, one of whom pointed out that he seemed to be at odds with Taoiseach Micheál Martin, who has indicated support for the measure this week. Another Fine Gael Minister said he felt Mr Collins was complicating matters by singling out luxury hotels. The Minister said it was difficult to hear 'a rural TD trying to split hairs' over something that would create and sustain entry-level jobs in his own constituency. 'People have been crying out for this,' the Minister said. Tánaiste Simon Harris had previously described the Government's commitment to cut VAT for the hospitality sector to 9 per cent as a 'solemn' vow. Mr Harris also told his parliamentary party last month that the measure would be included in Budget 2026.
Skift
22-07-2025
- Business
- Skift
California Sues Airbnb for Alleged Price Gouging and Bogus Host Identities Following Wildfires
With 8 million listings and around 5,000 hosts, verifying them has been an oft-stated Airbnb ambition, but it has fallen short on completing this ever-growing and gargantuan task. The State of California has filed a lawsuit against Airbnb for alleged price-gouging following the Palisades and Eaton wildfires in early January, and for continuing to incorrectly label fake or nonexistent hosts and properties as "verified." The state is seeking to stop Airbnb from price-gouging — raising rental rates by more than 10% — in future states of emergency. And it wants to prohibit Airbnb from engaging in allegedly unfair and fraudulent business practices such as claiming that hosts and properties are verified when they are not. The lawsuit is seeking civil penalties against Airbnb of $2,500 per violation of California's Business and Professions Code on unfair competition and fraudulent practices, and $30,000 per violation of LA's anti-price-gouging provisions. Thousands of Properties The state alleges that 2,000 to 3,000 Airbnb properties raised rental rates mor
Yahoo
19-07-2025
- Business
- Yahoo
Airbnb allowed rampant price gouging following L.A. fires, city attorney lawsuit alleges
The Los Angeles city attorney's office has filed a lawsuit against Airbnb, accusing the home-sharing platform of allow price gouging and unverified hosts and addresses at more than 2,000 rentals following the January firestorm in Altadena and Pacific Palisades. In a statement, L.A. City Atty. Hydee Feldstein Soto's office accused Airbnb of allowing illegal rental price hikes and permitting false and nonexistent hosts and addresses on the platform. The lawsuit seeks a permanent order to halt Airbnb from hiking up prices during the existing state of emergency, as well as reimbursement for consumers who were charged higher rates. "Although Airbnb subsequently took steps to curtail price gouging, evidence indicates that illegal gouging on the site continues and may be ongoing,' Feldstein Soto said in a statement announcing the civil enforcement action. 'Airbnb is aware that its verification processes are inadequate … potentially luring prospective tenants into a false sense of security about its hosts and locations.' Airbnb disputed the lawsuit's accusations, saying the platform has played a consistent role in supporting victims with financial aid following the wildfires. Read more: Scams, bidding wars and predatory landlords: One couple's quest for housing after the fires 'Since the wildfires broke out, Airbnb … contributed nearly $30 million to fire recovery efforts in Los Angeles, including free emergency housing to nearly 24,000 people impacted by the fires,' an Airbnb spokesperson told The Times. 'We will continue supporting the city of Los Angeles in its recovery and rebuilding efforts.' The lawsuit seeks fines of $2,500 for each instance of alleged price gouging in L.A., which could reach between 2,000 and 3,000 properties, or up to $7.5 million in total penalties. The lawsuit also alleges that Airbnb's 'inadequate' verification processes left users vulnerable to offenses such as identity theft, robbery, sexual assault, invasion of privacy and voyeurism. Airbnb did not respond to an inquiry from The Times regarding those claims. The unverified and 'nonexistent' hosts alleged in the lawsuit refer to cases of hosts using fake names to represent themselves on the platform. According to the lawsuit, cases include a profile under the name of 'Amber Hiller' that actually belonged to a woman named Akila Nourollah, and a host named 'Greg,' verified using the ID of someone named Guven Sacikarali, a relative of the actual account controller, Ali Sacikaral. Read more: While many were helped, some fire victims say Airbnb's free vouchers are useless While not the correct name of the account owners, Airbnb does allow the use of 'preferred names' in its terms and conditions. The lawsuit also mentions several cases in which verified locations on Airbnb were actually located up to four miles away from the advertised address. If price gouging claims are determined to be true, the lawsuit claims that Airbnb can be found to have violated the state's Unfair Competition Law, California Penal Code Section 396, the Anti-Gouging Law, and the Jan. 16 state of emergency declaration by Gov. Gavin Newsom, which states that it would be illegal for Airbnb to increase the pricing of rentals by more than 10% during the state of emergency. The firestorm that erupted on Jan. 7 ultimately destroyed more than 16,000 buildings in Pacific Palisades, Malibu and Altadena. Read more: After disasters, FEMA leases apartments for survivors. But not after the L.A. fires In January, Airbnb released a statement denouncing price gouging and promising to make it impossible for hosts to raise the prices of their properties by more than 10% from their pre-wildfire rates. 'With tens of thousands of people currently displaced in the Los Angeles area and the prospect of that figure continuing to increase, the last thing anyone should encounter is pricing for a hotel room or a home that seeks to take advantage of a desperate situation,' the statement read. The company also pledged to give free $1,000 vouchers to fire victims for Airbnb stays. By Jan. 28, more than 11,000 vouchers had been sent out. However, some fire victims claimed that strict regulations and a lack of response to applications made the vouchers essentially useless. While the state of emergency declaration aimed to prevent rental price hikes during and following the fires, previous Times reporting revealed that prices had continued to balloon in parts of L.A., leaving those without shelter with little options besides expensive stays. Read more: 'Everyone else has moved on': Why L.A. fire victims may be feeling even worse now An Airbnb spokesperson said the cap on increasing rental prices following the fires stayed firm, allowing for no illegal increases. The company cited California Atty. Gen. Rob Bonta's early statements, which praised Airbnb's promises to comply with the state's emergency declarations. "They're doing the right thing, I thank them for doing that. We hope other platforms will follow suit and do the same,' Bonta said during a Jan. 16 news conference. However, Bonta's statements came before many long-term Airbnb rates were set. Sign up for Essential California for news, features and recommendations from the L.A. Times and beyond in your inbox six days a week. This story originally appeared in Los Angeles Times.
Reuters
18-07-2025
- Business
- Reuters
Los Angeles sues Airbnb for alleged price gouging following wildfires
July 18 (Reuters) - Los Angeles sued Airbnb (ABNB.O), opens new tab, accusing the home rental company of allowing price gouging affecting more than 2,000 properties during January's wildfires in southern California, City Attorney Hydee Feldstein Soto said on Friday. Airbnb was accused of violating a California law that prohibits prices of essential goods and services from rising more than 10% following a state of emergency. Governor Gavin Newsom declared a state of emergency in Los Angeles on January 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% market share in the city, has taken steps to curtail price gouging, "evidence indicates that illegal gouging on the site continues and may be ongoing." She also accused Airbnb of misrepresenting to prospective renters that it has "verified" hosts and property locations on its website, some of which don't exist. A copy of the complaint was not immediately available. In a statement, Airbnb said the company, Chief Executive Brian Chesky, and its affiliated nonprofit have contributed nearly $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% from pre-emergency rates. The lawsuit accuses San Francisco-based 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 $2,500 per violation, Feldstein Soto said. 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.
Daily Mail
17-07-2025
- Business
- Daily Mail
Cafe owners issue a brutal wake up call to Aussies who complain - and expose the untold truth behind your morning coffee
Café owners across Australia have fired back at accusations of 'price gouging' over the rising cost of coffee, slamming claims that $6 cups are excessive as out of touch with the brutal financial realities they face. As the humble flat white becomes a battleground in the cost of living debate, many Aussies are questioning whether their daily caffeine hit is a luxury or a necessity. But those behind the espresso machines say they're being unfairly blamed for broader economic pain and reveal they're barely making 60 cents in profit per cup. 'Cafe owners are not price gouging. It's the opposite. It is not super lucrative. You're working within razor sharp margins,' said Ben Gleeson, Founder and Creative Director at Glee Coffee Roasters. Appearing on his This Is Money podcast, host Glen James broke down the real cost behind your morning brew and it's a far cry from the image of cafés swimming in cash. James explained the average $6 coffee includes about $1.50 in raw ingredients covering beans, milk, cup and lid and $3.90 in operating costs, like rent, wages, power and insurance. That leaves just 60 cents in profit. 'Every time you go to a cafe, if it's a $6 coffee or a $7 coffee – my question is, if it's a small business, are you comfortable to say that $6 coffee, that I would be comfortable with them to have 60 cents as profit,' Mr James said. He added that cafés were unfairly wearing the brunt of public frustration. 'I really love my coffee. It's a need, it's a want I love it. My energy bill, I've got to pay it. My fuel, it sucks,' he said. 'When they start charging me $6.50, now I'm upset. I think you guys in coffee land are catching a lot of the consumers hurt and pain about the world.' Jack Scheeren, owner of Newcastle's Talulah and Bowie Cafés, said the last four years had been brutal. 'We've gone from two years ago people being the richest they've ever been to people being the poorest they've been in the last 30 to 40 years,' Mr Scheeren said. Specialty milks like oat, almond and macadamia are now a huge part of the cost equation, he added. 'The big thing for us to consider, is that most people are drinking $4 a litre milk. Oat is about $3, almond is about $4, macadamia is about $5 and soy is about $3,' he said. 'That is over double the cost of full cream milk and is 80 per cent of the beverage if you get a large flat white or a large milk coffee.' Further west in Newcastle, Wildflower Espresso owner Ri Bingham said prices have crept up slowly but not because café owners are trying to get rich. 'We are absorbing, absorbing and absorbing and the cost we probably pass on, definitely does not reflect what we are paying,' she said. 'It is really difficult for us to be constantly increasing prices because you see on such a ground level the impact that has on consumers. 'It's been interesting to reconcile the product with the experience and how we can continue to do that sustainably in a financial way.' Bingham said food prices have soared too – particularly butter, cheese, and bread — while milk has jumped 13.3 per cent, costing 50 cents per coffee. Takeaway cup prices are also up 25 per cent, and lids have risen by 18 per cent. Her strategy? Sell more coffee to more people, rather than squeeze extra cents from regulars. Wildflower offers a 50 cent discount for reusable cups and a loyalty card with every seventh coffee free. Meanwhile, Ben Gleeson said the price of raw green coffee beans has more than doubled due to global shortages, droughts in Brazil, and exploding international demand. 'Electricity is up between 20 and 30 per cent, as a roaster, gas is up over 20 per cent,' he said. 'We're also dealing with increased labour, increased freight for raw coffee being shipped to Australia. Even just trying to get coffee onto a shipping container, there's a premium. We're paying a lot more as a coffee roaster to get that product to sell to a cafe.' He said the average net profit for an Aussie café is around 7.6 per cent — well below the national business average. 'We're not price gouging. We're just trying to survive,' Mr Gleeson added. Despite all this, Australia doesn't even crack the top 10 globally for coffee prices. A standard flat white here costs far less than in Switzerland ($10.32), Singapore ($8.33) or New York ($6.75). In fact, Glen James pointed out that the current coffee price has simply kept pace with inflation. 'In 2002, the average cup of coffee was $3.20. If three per cent inflation is added for every year till 2024, the price of a coffee would total $6.01,' he said. Yet, hospitality businesses are bearing the brunt of consumer cutbacks, with one in 11 cafés closing in the year to February 2025. According to Creditor Watch, that figure could soon rise to one in 13 cafés shutting in the next 12 months – a warning that if things don't improve soon, Australia's café culture may no longer be sustainable. Emma Felton, Adjunct Senior Researcher, University of South Australia, said Australia risks losing the coffee culture that most of us love. 'For many people coffee is a fundamental part of everyday life, a marker of livability. Unlike wine or other alcohol, coffee is not considered a luxury or even a treat, where one might expect to pay a little more, or reduce consumption when times are economically tough. We anchor on familiar prices. 'Because of this, it really hurts cafe owners to put their prices up. In touch with their customer base almost every day, they're acutely aware of how much inflation can hurt. 'When cafe owners put up their prices, we often rush to accuse them of selfishness or profiteering - but they're often just trying to survive. 'Given the quality of our coffee and its global reputation, it shouldn't surprise us if we're soon asked to pay a little bit more for our daily brew. 'If we are, we should afford the people who create one of our most important 'third spaces' kindness and curiosity as to why.'
