With Airbnb under scrutiny in Congress, one venture capitalist told CNBC's "Closing Bell" that something is missing from the debate.
"One thing we're losing sight of here is whilst it might substitute out some long-term rent opportunities, the overall pie has expanded," Tony Tjan, CEO of Cue Ball, said Thursday. "Airbnb has created more supply side — more places for people to take accommodation."
Democratic Sens. Elizabeth Warren, Brian Schatz and Dianne Feinstein are the latest to lash out at the short-term rental start-up, urging the Federal Trade Commission to investigate the effect on housing costs from companies such as Airbnb.
"We are concerned that short-term rentals may be exacerbating housing shortages and driving up the cost of housing in our communities. We have also read troubling reports of racial discrimination on some short-term rental platforms," Schatz said in a letter to FTC Chairwoman Edith Ramirez.
Indeed, critics of Airbnb have argued the so-called "sharing economy" has enabled landlords to turn permanent apartments into high-priced short-term stays, squeezing housing supply in already-expensive markets like San Francisco. But Airbnb told CNBC that most of its customers are middle class people who boost their income with Airbnb's services.
Based on his experience in the venture world, Tjan said any large-scale innovative company will have short-term negative impacts, but the market is highly efficient in the long term. He thinks that Airbnb has been compliant overall, and the only major threat is to the hotel industry.
"When cellphones came out, people worried about telephone booths," Tjan said. "Would people who couldn't use a cellphone have access to 25-cent telephone booths? We forget that now. Efficiency of the market in technology always wins out in the long run."
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