AirBnB Asks SEC To Revise Its Security Ownership Ruling For 2019 IPO

In the current SEC ruling, only the Airbnb‘s investors and employees are eligible for equity ownership and stake company options. This current ruling conflicts with Airbnb’s vision to make the company open and available to everyone.

This current limitation prompts the company to ask the SEC to revise their ruling so that Airbnb’s hosts have access to equity and stake in the company. Aside from that, the company believes this is the first step to achieve their 2019 IPO goal.

Airbnb For Everyone

According to the company’s written letter submitted to the SEC last Friday, Airbnb believes that 21st-century tech companies like them are most successful nowadays since they make sure the interests of all their stakeholders are aligned with the company’s goals.

The investors, employees, and the organization itself are sharing the benefits of the rising thriving gig-economy, but not their hosts who mainly use their marketplace. Airbnb wants to bridge the gap by also allowing its hosts to own an equity or stake at the company.

Airbnb’s home-sharing platform also runs on so-called “gig economy” workers, the same business method implemented in Uber and the food delivery company named GrubHub

Currently, the Airbnb hosts’ are closer to paid contractors than the company’s investors and employees. Airbnb argues their hosts must be included in the company’s stake and equity options since their business and community model differ from a traditional business.

According to the company’s CEO Brian Chesky, he hopes the SEC will consider their reforms and he also expresses their company is willing to work with the agency to make more economic opportunities available to more people. Aside from that, the Airbnb believes this will be the key to realize their dream of becoming a public company to offer IPO by 2019, Chesky said as they have unveiled this plan since May of this year.

The Expansion

The said announcement and initiative were welcomed by its thousands of investors, customers, and employees, with them commenting that it’s rare for a company to acknowledge the crucial role of hosts in harnessing a positive relationship in a business. The business experts also claim it needs a further amendment on the current SEC ruling if they want to include their hosts as part of their company.

Also known as the SEC’s Rule 701, the SEC requires any private company to register if they have more than 2,000 shareholders or more who are not the U.S. accredited investors

According to them, Airbnb has changed and grown into more than five million listings since they launched their business foundation last 2008. This major boom in their business platform creates a major problem with the SEC‘s regulation on private companies.

They also noted how most gig economy startup businesses don’t pursue offering equity options for contractors since it could trigger the mandatory SEC reporting whilst being private entities. Aside from that, Airbnb might face some complication since Airbnb’s business has expanded outside the U.S. Market. In fact, most of the company’s operations are located overseas. It currently offers lodgings in over 81,000 cities and 190 countries worldwide, which makes the handing out of U.S. based equity pretty tricky to implement.

The Positive Outlook

Most of the business owners and investors in the gig economy lauded Airbnb for taking the initiative of establishing a positive business relationship with their hosts by offering the company’s shares. According to them, the role between the marketplace provider or company and the gig economy worker has been negative due to the strains when it comes to giving them benefits and perks.

While most companies and employees enjoy hiring an independent, gig economy worker because of the degree of flexibility in time and workaround time, most freelancers don’t reap the benefits a conventional employee has like overtime pay, paid vacation, holiday pay, health insurance, etc. While some startup businesses have taken the initiatives to cover offer some benefits, most of their solutions still cost the worker. The investors hope Airbnb will be the first company to give exclusive perks to its gig economy workers.