>> Airbnb facing a reckoning. The online lodging service got its start in San Francisco. Eight years and a $30 billion valuation later, Airbnb's hometown could be the battle ground that determines whether it graduates to the public markets or suffers a serious blow. And cities around the world are watching.
Reuters tech correspondent Heather Somerville.>> Airbnb is really facing a global crackdown from regulators. Cities have really gotten serious about what Airbnb is doing. How they're affecting neighborhoods, how they're affecting housing shortages. In San Francisco the city has passed an ordinance that looks to give Airbnb some of the responsibility of enforcing regulations meant to limit short term rentals.
And Airbnb has, in response, sued the City of San Francisco.>> The San Francisco case tests one of Airbnb's key strategies. The idea that it can't be held responsible for how individual property owners use its platform. Losing its legal case here where a judge's decision is imminent, could mean Airbnb is required to enforce local laws limiting who can rent a home, drastically reducing the number of listings.
As its legal battles intensify, Airbnb is also suddenly trying to play nice with regulators.>> By Airbnb's own admission, it's spent many years staying out of the conversation about rent prices, about housing shortages and it's impact on neighborhoods. And it has, to its credit, taken a amenable tone with some cities in drafting legislation for short-term rentals.
>> A recognition that if it wants to avoid legal showdowns later, it has to engage cities from the start. The question for Airbnb now is whether that shift in strategy comes too late.