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Rivals hit back at rental agency Airbnb

apartmentsAirbnb, loved by property renters and owners, is attracting a hefty share of criticism from its rivals who claim its operation is illegal.

In its five years of existence, its users have organised 11 million stays in 35,000 locations in 192 countries.

Airbnb takes 3% of each rental, whether 5* or living room sofa. While it does not disclose figures, analysts reckon it took something like $189m (£113m) in revenues in 2012. The business is now valued at $10 bn which is more than Intercontinental Hotels.

But its rapid growth has put the frighteners on the hotel industry. Trade organisations in various parts of the world have tried to get it shut down altogether or at least to make owners adhere to strict regulations which had been put in place for big hotels and resorts.

In Britain, local councils are broadly willing to ignore some dated legislation and are in discussions to scrap some laws which no longer make sense.

But war is raging in New York City with the powerful Hotel Association accusing Airbnb hosts of failing safety standards and avoiding hotel taxes, roughly 15% of a hotel bill.

It further claims that people are breaking state laws whenever they let their homes out for fewer than 30 days at a time, unless they are there themselves. Breaching tenancy agreements can lead to evictions.

If the claims were not enough, there appears to be confusion within the state administration as to how taxes could be collected following on from an offer from Airbnb itself to collect those taxes and hand them over to the government.

New York is not the only US city to be clamping down on short-term rentals.

Meanwhile, Amsterdam's city authority was concerned that landlords would buy up swathes of apartments to use as Airbnb rentals, forcing long-standing tenants out. But research found that Airbnb actually helped instead to keep communities intact.

By renting out their spare rooms on Airbnb, existing residents were able to gain a bit more money for the rent, enabling them to stay in their homes.

Detractors have been swift to pounce on mishaps in the renting scheme. One owner in Manhattan found his apartment being used for an orgy and tales have surfaced of rentals being used as temporary brothels.

But Airbnb is part of a growing movement of companies setting up in the “sharing economy”, originiating mostly from the US. Services such as Parking Panda lets people rent out their driveways, Rentoid lets users hire someone else’s camping equipment for a song, and Taskrabbit allows people to advertise for help with office errands or chores.

Uber lets people summon a minicab on their smartphone and Lyft enables everyday folk run a de facto taxi service. Both have had fierce opposition from the traditional associations of taxi drivers.