Subletting startup Kiki has quietly paid a US$152,319.93 ($234,638) settlement to the City of New York, following alleged violations of short-term rental laws that it previously characterised as a “regulatory grey area”.
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The payment resolves the city’s monetary claims against the startup for failing to comply with verification and reporting requirements under Local Law 18, which governs short-term rental platforms in New York City.
Kiki operated in the city between 2023 and 2025 without registering listings or reporting transactions as required by law.
Kiki fined over unverified short-term rentals in New York
In the settlement document, seen by SmartCompany, the Office of Special Enforcement (OSE) suggests Kiki collected US$50,773.31 in fees from unverified short-term rental transactions between October 2023 and April 2025.
SmartCompany understands the agreed penalty — equivalent to three times that amount — has already been paid in full. However, the OSE noted that Kiki did not admit or deny the findings of its investigation.
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Speaking to SmartCompany, OSE executive director Christian Klossner said the city expects “every short-term rental platform” to use its verification tool.
“Major platforms have complied with the verifications, and should expect that other companies will be held to the same standard,” he said.
“OSE will continue to monitor the short-term rental market to ensure compliance with city laws.”
Kiki was notified in March 2025 that it was subject to enforcement under both Local Law 64 (the Reporting Law) and Local Law 18 (the Registration Law).
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The city formally deemed Kiki a “booking service” and gave the company a cure period to provide overdue reports. Kiki ultimately submitted the required filings within the allotted timeframe and avoided additional penalties under Local Law 64.
However, the settlement suggests Kiki violated the registration law by processing rental transactions without verifying whether those listings were legally permitted under New York’s short-term rental rules.
Those rules, which prohibit rentals of entire homes for fewer than 30 days unless the host is physically present and registered, had been in force prior to Kiki launching in New York City.
Kiki’s original investor pitch deck to Blackbird from 2023, seen by SmartCompany, acknowledged potential legal risks and even suggested that cease and desist letters from the city could serve as a “pioneering moment”, with Kiki outlining options to either ignore the government or build a lobbying team.
“This settlement sends a clear message: If you are a company that facilitates short-term rentals, ignoring city laws will be an expensive proposition,” Klossner said.
The company officially ceased operations in New York in April 2025 and later confirmed it would relaunch in London.
The agreement with the OSE states that Kiki must comply with all short-term rental laws if it resumes operations in the city, and the case will reopen if the startup attempts to return without registering listings or misrepresents its activities.
The OSE declined to comment on similar platforms operating in New York but said it continues to monitor the sector.
Investor updates omitted fine as Kiki framed exit as strategic
In its final New York ‘investor update’ in April 2025, Kiki framed its departure from the city as a “tough decision” prompted by regulatory uncertainty.
“We’re not in a financial position to continue to work with the city on a solution that will work for us and for them, so we are making the tough decision to leave New York and go to a city where we can actually help people and build what they want,” the update read.
The update, distributed to non-cap table ‘investors’, highlighted user growth, trip volumes, and a planned London launch.
Kiki began in New Zealand under the name EasyRent, before expanding to Sydney and later moving to New York in 2023 with the backing of Blackbird Ventures.
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The company raised US$6 million in seed funding and projected it would reach US$2.5 million in monthly revenue within its first year in the US.
Instead, investor documents showed Kiki generated just US$76,000 in total revenue over approximately 10 months following its New York relaunch.
A rent guarantee scheme trialled in late 2024 cost US$13,000 in one month alone. The startup also spent heavily on discretionary items, including off-sites and a 300-person rooftop party.
By the time it exited New York, Kiki was still relying on manual matching processes and had only achieved 30% platform automation.
Before leaving the market, the company reported 756 matches, US$1.2 million in gross merchandise volume, and US$120,000 in booked revenue across 13 months of New York operations. It claimed 480 active hosts and 2,300 users had joined the “club”.
Kiki is now operating exclusively in London. The current version of the Kiki website requires an Instagram handle to view listings and mandates that new users be vouched for by an existing member or apply via a private application form.
“We have a strict ‘no weirdos’ policy,” the website reads.
The OSE settlement follows almost two years of scrutiny over Kiki’s operational strategy, including its abrupt pivot to a “girls-only” membership model, internal hiring controversies, and inconsistent investor updates during its US expansion.
SmartCompany contacted Kiki for comment but the company didn’t respond in time for publication. SmartCompany has also contacted Blackbird Ventures for comment.
