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A New Kind Of Vacation In The Sharing Economy

Summer travel in the sharing economy. What’s happening to rentals, resorts, and vacations in the age of Airbnb?

This March 8, 2014 file photo shows strollers on the boardwalk in Point Pleasant Beach N.J. walking past a home being offered as a summer rental.  (AP)

This March 8, 2014 file photo shows strollers on the boardwalk in Point Pleasant Beach N.J. walking past a home being offered as a summer rental. (AP)

Summertime, with a little luck, is vacation time at some point.  Pack the car.  Hit the road, the skies.  Head for the hills, the lake, the beach, the city of your dreams.  And when you get there?  Well, things are changing.  Maybe there’s a little cabin or motel or grand hotel you’ve always loved.  A house you’ve always rented.  And suddenly, everybody’s hopping online and sharing.  Snagging houses and apartments and cottages on Airbnb that take them right out of hotel lobbies and into, well, maybe your neighborhood.  This hour On Point:  summer vacations in the age of the sharing economy and Airbnb.

– Tom Ashbrook

Guests

Pauline Frommer, editorial director for Frommer Guidebooks. (@Frommers)

Carolyn Said, business reporter for the San Francisco Chronicle. (@CSaid)

Deb Archer, president and CEO of the Greater Madison Convention and Visitors Bureau.

Emily Badger, urban policy reporter for the Washington Post‘s Wonkblog. (@emilymbadger)

From Tom’s Reading List

New York Times: Airbnb’s Promise: Every Man and Woman a Hotelier — “Part of what regulators don’t like about Airbnb is the sense that it promotes transience, and all the problems attendant to it, in buildings intended as permanent residences. But how many of them have raised a fuss about the erection of high-rises that serve as de facto resorts for the global aristocracy?”

Forbes: How Airbnb Could Finally Disrupt the Business Travel Market – Business travel is an enormous market segment, and tapping into even a portion of the annual multi-billion industry could be a windfall for agencies like Airbnb. Indeed, Barb Delollis, the former hotel reporter for USA Today reports that AirBnB is cautiously exploring the market.”

Atlantic Magazine: Airbnb CEO: Cities Are Becoming Villages — “Brian Chesky, the co-founder and CEO of Airbnb, an online marketplace for people to rent out their homes in lieu of hotels or other accommodations, has a theory for how urban-living has progressed over the last several hundred years. The theory begins in pre-industrial villages, wends its way through the Machine Age, and arrives in cities where services like Airbnb are thriving.”

Please follow our community rules when engaging in comment discussion on this site.
  • Salty

    I have been using AirBNB for years. It is a great service, great price. …and probably will be until it gets regulated out of existence. I know I am renting a private home for a night or two NOT a hotel. My expectations for a hotel are different. I know some local governments are trying to shut AirBNB; I would guess that pressure is being applied by the hotel lobby, so to speak…

  • Tim

    I live in an area of San Francisco that is not frequented by tourists. I have been hosting for a few years and the majority of my guests are families that cannot afford the high hotel costs when visiting San Francisco. The extra income for our family has been life changing. We can afford to buy memberships in museums, violin and guitar lessons for our daughters, and are paying state and federal taxes for the first time in a decade. We are even eating better because we can now afford to buy organic fruits and vegetables at our local shop. Also, I can finally see a dentist to remove a decaying wisdom tooth.

    One neighbor was going to lose her house due to unemployment but because of Airbnb she can afford the mortgage and taxes thus enabling her to stay.

    Airbnb is saving neigborhoods in my opinion. Residents who own their homes are no longer being forced to sell due to unemployment, disability, or life emergency.

    I am very happy the ballot initiative was withdrawn. My neighbors were really angry and disgusted by the wealthy individuals who were trying to ban home sharing, They felt it was another assault on the middle class.

    • Salty

      Your home, your business… for the most part…

  • Eric

    People are also renting out their personal cars!

    RelayRides is one company helping car owners make extra money by renting out their cars.

    Recent story on RelayRides: http://www.forbes.com/sites/alexkonrad/2014/06/24/relay-rides-altered-future/

  • http://hlb-engineering.us/ HLB

    Do the owner wives and sweethearts go with the beach shack and the view?

  • http://hlb-engineering.us/ HLB
  • AnneDH

    I’m new to the concept of Airbnb… considering to rent in a home in Baltimore this fall.

    Are there protections in place for the safety of the renters and their possessions?

  • http://hlb-engineering.us/ HLB

    How about the Lincoln bedroom in the White House. What’s the going rate now?*

    * William J. Clinton, prop.

  • hennorama

    Jason — what about “Business Travel” Rentals By Owner”?

    Are they restricted as well?

  • J__o__h__n

    I don’t want people who aren’t vetted by my landlord living in my apartment building if their hosts aren’t home.

  • http://www.laugh-eat.com/ kyron

    Tom – it’s not all roses. Here in New Orleans we’re watching AirBnB degrade our quality of life. Our residential neighborhoods are being turned into giant hotels for tourists — long-term renters are being kicked out and properties bought by out-of-town owners to use as commercial businesses. They don’t pay taxes, get inspected, or have proper insurance.

    You can’t open a liquor store in your house, why should you be able to open an illegal hotel?

    Ironically your guest cites “tourists getting into residential neighborhoods” as a plus. We residents hate it.

    -matt

  • Matt MC

    Access is more important than ownership, yet it was our nuclear family, car-in-every-garage, every-little-thing-in-each-house, consumer lifestyle that fueled the post-war boom. Does the sharing economy encourage a virtuous cycle of growth because consumers have so much more money to spend, or does it have the opposite effect, where we don’t consume enough, or as much, so we don’t support the same number of jobs? Or, do we reach an equilibrium where we earn less, get paid less, but have relatively the same amount of stuff as before?

    • Salty

      I am for the pay less, consume less… Nearly all of us have too much stuff.

  • http://hlb-engineering.us/ HLB

    People iron on vacation?

    • Matt MC

      You’re damn right they do!

  • Jo Bleaux

    Anyone who discounts the Parisian argument that short-term rentals take housing stock out of circulation clearly has never tried to find an apartment there. The same thing is seen in a much smaller scale in New Orleans. Even pre-airbnb, illegal short-term rentals substantially (and negatively) changed the residential nature of the French Quarter.

    • Godzilla the Intellectual

      EVEN pre-AIRBNB.

      That means if AIRBNB wasn’t doing it, SOMEONE ELSE would be.

      Plus. what landlord would prefer to put up with renters rights, when short term’ers are so much nicer, cleaner, and PAY LOADS MORE.

      • Jo Bleaux

        False argument. I was for enforcement of the laws before airbnb.

        • Godzilla the Intellectual

          False argument. You just said laws didn’t exist (or weren’t being enforced) pre-AIRBNB.

          Therefore, if AIRBNB wasn’t doing this, someone else would be.

  • Virginia J. Pulver

    During our Peace Corps experience (Ukraine 2005-2007) we rented flats when we traveled in country. It was a wonderfully relaxing way to get acquainted with the communities and the people. It was so much better than a sterile hotel experience. – Ginn, In Steamy SC

  • http://hlb-engineering.us/ HLB

    Fred’s Flop House. Breakfast in bed. View of the alley. Colorful denizens. Free delousing upon check out.

  • jimdt

    What about the taxes that hotels and motels collect for local and state governments? Do the “air b & b” pay these taxes? If not, aren’t they taking an unfair advantage? By that I mean getting all the benefits of infrastructure et al hat hotel taxes pay for yet not paying. Are they licensed or registered with local authorities? How about insurance and safety concerns? If a guest is injured are they covered by the provider? If a next door neighbor is damaged by the guest does the air b & b provider have a responsibility to cover the damages? If I live in a neighborhood shouldn’t I be concerned or know about the traffic in my ‘hood, who is coming and going-evidently on a regular basis-next door to me.

    • Godzilla the Intellectual

      The hotels are charging TOO much. If they were more competitive, AIRBNB would be LESS competitive. END OF STORY.

    • Salty

      The customer knows what they are or aren’t getting. They need to be allowed to make informed choices. I would think a hotel has a certain level of service. Renting someones apartment for a night or two does not come with those services so, no, the taxes hotels pay would not apply.

  • maxdaddy

    My wife and I have been renting apartments and houses in western Europe and the US for 10+ years. Even very nice hotels, though they can have fantastic services, do not give you the sense of “living” in Paris, say, the way the morning croissant run does. Price is an issue, too, though there are all kinds of price points. Two winters ago my wife and I stayed in Santa Barbara (well, Montecito) for a month, just behind Butterfly Beach. A month in the grand Four Seasons there is $450+ per night–that’s almost $13,000 for four weeks without counting meals, spa services, etc. We rented a house for a month in the same neighborhood for $11,000. No room service, to be sure, but a handsome fenced yard, so we could bring our dog, and a pool, and a 3500 sf house handsomely decorated. It was under a ten-minute walk to Butterfly Beach–and to the Four Seasons, where we went for several meals, on our own or with guests.

  • Miles Swanson

    Airbnb is wrecking neighborhoods, especially here in New Orleans. It drives out long term residents, exacerbates quality of life issues such as noise and trash especially in residential neighborhoods and creates neighborhood “dead zones” where nobody lives and tourist just come in to party on the weekends.

    • Godzilla the Intellectual

      Destabilization of old paradigms rules.

  • Godzilla the Intellectual

    AIRBNB is AMAZING!

  • OnPointComments

    Charleston, S.C. fines those who rent out their homes for short-term vacation rentals, and has sting operations to catch them.

    Charleston targets vacation rentals as it tackles tourism-related problems in downtown neighborhoods
    http://www.postandcourier.com/article/20140705/PC05/140709685

    “…short-term rentals exacerbate parking problems and threaten the ‘healthy neighborhood dynamic.’ ‘Creating what essentially becomes hotel rooms within neighborhoods is absolutely not something we see as appropriate for Charleston neighborhoods,’ [City Planner] Keane said. ‘For us, a healthy neighborhood is with people living there year-round. They have ownership in the neighborhood, they’re not coming and going for a few days.’”

    • hennorama

      OPC — Interesting.

      The same article notes a planned increase in government employment, and possible additional regulations to come. (Emphasis added)

      The recent increase in enforcement comes as the city works with the Tourism Advisory Council, an appointed board of residents and hospitality industry professionals, to strike a balance between the robust tourism industry on the peninsula and the quality of life for downtown residents.

      As the council considers adding new rules to the Tourism Management Plan, city officials aim to make sure the rules already on the books, such as the vacation rental code, are being enforced.

      The livability department is in the process of hiring three new enforcement officers to keep an eye out for violators.

      One assumes that’s A-OK with conservatives in the Charleston, SC area.

      • OnPointComments

        I suspect it’s A-OK with both conservatives and liberals in the Charleston, SC area.

        • hennorama

          OPC — Thank you for your response.

          I definitely can see both sides of the issue, and to a large extent would support viewing this more on a case-by-case basis. If the activity is truly disruptive to neighborhoods, then some increased enforcement and regulation makes sense.

          On the other hand, if the activity is mostly infrequent and blends in to the usual course of events, I would say “live and let live.”

          Thanks again for your response.

          • Jo Bleaux

            Considering that tourism is a major industry in Charleston (as it is in my city), it’s likely that the activity is frequent and disruptive, and places pressure on the regular residential market (as it does here).

            If it did blend into the usual course of events, why would they go to such lengths to enforce the laws? You might say to preserve hotel tax income, or because of pressure from hoteliers, but at the low levels you suggest, that would hardly be worth it.

          • OnPointComments

            I get the impression that it’s a problem that is not small, and is increasing rapidly.

          • hennorama

            Jo Bleaux — thank you for your response.

            As stated, I can see both sides of this issue.

            While my comments in this thread were triggered by the article about Charleston, SC, the idea of a case-by-case view, perhaps triggered by specific complaints from local residents, rather than the far-reaching “sting” operation described in the article, is not limited to any locale.

            Even in the case of Charleston, one specified neighborhood was exempted from the regulation, “because neighborhood leaders wanted more visitors in the area.” This shows that the regulation is not universally supported or wanted.

            It’s a difficult issue, that’s for sure. Balancing the rights of the property owners, and the impacts of the activity on others, is no easy feat. Both sides have good and valid points.

            Thanks again for your response.

    • Salty

      As a strong conservative with libertarian tendencies I can see this both ways. “My property, I should be able to do what I want.” but… “There is an affect on others by your choices. If a neighborhood was over run with short term rentals the character of the neighborhood would change…” I lived in a beautiful small hamlet in England about an hour outside of London. Most of the homes were small thatched cottages that dated back hundreds of years. If these homes were bought up and rented out like AirBNB the character and nature of the hamlet would never be the same.

      I think reasonable restrictions would be the answer and strict legally enforceable restrictions for NEW purchasers. Don’t change or add to the rules in the middle of the game.

      • OnPointComments

        My neighborhood has restrictive covenants that have been in place for a decade or more. Occasionally there is someone who will say it’s “my property, I should be able to do what I want,” when what they want violates the covenants. Everyone else who bought homes in the neighborhood relies on the restrictive covenants being enforced. I see your point about rules being changed in the middle of the game, but old rules should be enforced.

        • Salty

          Yep, I agree. Enforce the rules or drop them. When one buys a property they should be bound by the restrictions, but those of us who live there need to make sure we enforce those rules.

  • Tarvia

    Beware being scammed on virtual sites. Read the directions! Your guest is saying you pay the org., not the host, but we were pirated on that site: someone posing as my brother rented our house and made off with $12000.00 that the potential renter sent them (she didn’t read the fine print warning against this) so she, and we, lost a lot of money.

  • hennorama

    Can one skirt the 30 day requirement if the rental contract period is 30 days, but the occupancy is a day, week, etc.?

  • Godzilla the Intellectual

    Even HAVING this show on On Point is spreading AIRBNB!

  • Unterthurn

    B&Bs in most European countries are regulated and some even have a star system.
    What is nice about the sites is you can look up the comments about people before you rent to them. Also certain cultures have bad reputations for destroying things so you can refuse to rent to them.
    When one lives in a high tourism town the hotels are often booked by tour companies so these sites fill a need.

  • JGC

    What do insurance companies have to say about these rentals, whether the owner is still in residence at the same time, or just turns over the key to another party?

    • hennorama

      JGC — that would depend on whether the property owner actually informs their insurer about this activity.

      • JGC

        But if an unfortunate liability issue happens…I guess that is something a property owner would need to investigate and take steps to be sure their coverage is not voided. Maybe these agencies (Air B&B, HomeAway, etc.) have something in place?

        • hennorama

          JGC — TYFYR.

          Yes, the property owner would need to discuss their liability coverage with their insurer. Many homeowner policies cover casual visitors, sometimes including contractors, but might not apply to commercial circumstances without specific riders, or separate landlord and/or personal umbrella coverage.

          These various services likely provide some sort of assurance (not insurance) to the property owner, in the event a paid guest damages the property. Otherwise, it would be far more difficult to get listings, as the property owner generally takes on far more monetary risk than does the guest.

  • OnPointComments

    If there was a zoning meeting to allow a hotel to be built in your single family residential neighborhood, would you support the re-zoning or protest it? Personally, I wouldn’t want my neighborhood becoming a place for short-term transient rentals, whether in a hotel or a private home.

    • Salty

      Is it not like having a house guest? Do you need zoning for that? I just consider AirBNB giving someone a tip for allowing me to be their “guest”.

      • OnPointComments

        I have a friend who wanted to sell a ticket to a football game for substantially more than its face value, but there is a scalping law that prohibited the sale. He said that he was going to get around the law by legally selling the ticket for its $60 face value, and also selling the same buyer a book of matches for $200. He was caught and had to pay a big fine.

        Substance over form almost always prevails. You may say that it’s a tip, but it’s really paying for the use of the room. The room fee is usually agreed to up front, and I doubt that the owner would have been pleased if you had opted to not make the agreed upon payment.

        • Salty

          But… Scalping was already illegal.

          I wouldn’t say that a single residence for a single family or two or three people at a time on an occasional basis would qualify as a “hotel”. For me the occasional use is different from it being my line of work. If I am out of town and rent my house for that period of time then I would feel OK. What about house swapping sites where groups of folks list their homes for use and use the homes of others? No money changes hands…

          I think the law and regulation have some catching up to do.

    • hennorama

      OPC — you’re making a watermelons to blueberries comparison.

      A much more apt scenario would be if an actual B & B was proposed “to be built [(more likely "converted")] in your single family residential neighborhood…”

      It’s a difficult issue, with each side having valid points.

      What if a property owner has a very large extended family, and they encouraged their relatives to visit frequently, and the relatives took them up on the generous offer? Would that be different?

      • OnPointComments

        Whether a hotel or a B&B, my position remains the same.

        Having nonpaying guests is different from making one’s home into a commercial venture.

        • hennorama

          OPC — TYFYR.

          What if the impacts of frequent, nonpaying guests were exactly the same as those of “making one’s home into a commercial venture”?

          • OnPointComments

            Even if the impacts of frequent nonpaying guests are exactly the same, it’s different from advertising a room for short-term rental and having lodgers rent the room. I haven’t read of anyone being prohibited from having guests at their home, but there are laws (obviously) against having short-term renters.

          • hennorama

            OPC — TYFYR.

            In your view, why is it different, if the impacts are exactly the same?

          • OnPointComments

            Because one is against the law, and one isn’t.

          • hennorama

            OPC — TYFYR.

            My apologies. Please allow me to rephrase.

            Putting aside any regulations which may or may not exist, if the impacts of frequent, nonpaying guests were exactly the same as those of “making one’s home into a commercial venture,” do you think these similar circumstances should be treated differently?

  • JHM

    I want everyone to be AWARE of VRBO. I booked a room in Chicago last fall on VRBO. Looked great, had nice reviews. Turns out, it was a fake listing, the unit did not exist in the building, and the con artist had my credit card number AND my authorization. It is NOT like AirBNB where a third party is holding the money. The “homeowner” gets your credit card info directly. Be Very Careful!

  • Jasoturner

    The cost of vacations is now high enough that only the 2% can really afford to, say, stay at the 4 Seasons for a week and tour a city. This is a great way for working class people to see things they otherwise never would. I.e. this is not an alternative to conventional travel for some people, it is the only reasonable means of traveling at all.

  • http://1chicretreat.com/ One Chic Retreat

    After renting over 30 vacation rentals in the last 10 years with my family of four, the only reason I see to rent a hotel is if regulations prevent short term rentals. It’s not just a cost issue, it’s a lifestyle choice – our kids have room to play, we aren’t charged for wifi, water, and other annoying charges and we get to experience a locale like locals. We love vacation rentals, especially chic ones.

    As an interior designer, I started a design blog targeting VR owners who wish to create rentals that stand out from the crowd. Owners so far have been very receptive to the resources and how-to articles I provide.

    This is an evolving industry and it’s interesting to watch the rise of Airbnb and other similar sites and how they navigate the waters of appeasing neighbors and local governments.

    Thanks for the interesting hour, Tom.

  • hennorama

    Michael Rogers — there are no “Governments CENSORS” regarding your comments. Most likely, something in your comment triggered it being put into “awaiting moderation” status. This is usually due to words commonly thought of as being profane.

    You can read more at the On Point “community rules” link, just above this Comments section.

    That said, as you have discovered, the most important factor in a provider’s success is Guest Selection. The police can do little about your problems, as they are civil in nature, not criminal.

    Consider getting as large a security deposit as the service(s) you use will allow, and set high standards for the guest you accept. You have far more at risk than do the guests.

    Thanks for sharing your cautionary tale.

    • Michael Rogers

      True–there isn’t –yet a division of social censorship but as you can see by reading the EXACT copy of my original message some AUTHORITY decided that my thoughts were worrisome~~~
      TRUE– If one does a good background check of anyone you don’t personally know including their financial status etc one will probably cut most out that have a problem.
      I have a pile of judgements from “good people” that seemingly were OK.
      There are many that have been grievously economically harmed by the last years financial rip off and have descended from what was a high moral state to survival, These unfortunates often have a good record.
      Perhaps the problem is that on the central coast of California there are few good employment opportunities leaving most but retirees scraping by.

  • Sandy2118

    I have not yet listened to this show. Too busy running my B&B. Last week I was distressed to read David Brooks’ NYT op ed about Airbnb, the wonderful online site where people rent out “spare rooms in residential neighborhoods” and we all learn to trust one another. It is not that simple. People may have lost trust in big institutions, but B&Bs have been earning “trust” for years. Most innkeepers count on income from their small business. Airbnb hosts often have regular jobs and salaries or pensions. Paris is the largest destination city because French men and women are buying up studio apartments and using them as a source of steady income thanks to Airbnb. Two years ago one person hosted in my Cape Cod town through Airbnb. Last year ten people opened their homes. This spring vacationers found fifty options. Airbnb is a threat to innkeepers who run legitimate businesses. We obtain the required permits. We follow the rules. We declare our earnings. Airbnb hosts? Not so much.

    • hennorama

      Sandy2118 — you implied that “Airbnb hosts”:

      -Do not “obtain the required permits”
      -Do not “follow the rules”
      -Do not “declare [their] earnings”

      A few questions for you:

      Regarding the first two items, are you talking only about your specific “Cape Cod town,” or all of the U.S.?

      What specific permits and rules are you talking about, and what evidence do you have that “Airbnb hosts” need said permits, and are required to “follow the[se] rules”?

      Regarding earnings, I’m confident that Airbnb and similar services report the income of their respective hosts on Federal Form 1099-MISC, as applicable. In addition, Federal tax rules allow for up to 14 days of tax-free rental of one’s home, without any need to report the income. Any individual who does not comply with their income tax obligation does so at their own risk, but not all income needs to be reported. Do you have evidence indicating otherwise?

      • Sandy2118

        No evidence, Hennorama. Referring only to my one little town, seasonal economy. Airbnb had disrupted our lives. Permits? From the town to run a B&B. Insurance, special dishwasher, regular inspections required. I guess Airbnb hosts do not need the permits. So, they should not be serving breakfast, but they are. Real innkeeper hurting here. Wanted folks to know Airbnb does not make US happy. Thinking of retiring now.

        • hennorama

          Sandy2118 — thank you for your response.

          Your concerns are understandable.

          Do you feel that this new competition is gaining market share based solely on price, or are there other factors at play? (Assuming the Airbnb prices are lower than yours, and those of your “Real innkeeper” colleagues, and assuming that they are taking market share, rather than expanding the market.)

          In my personal business experiences, dealing with “fly-by-night” competitors, which are always around to greater and lesser extents, was based on the quality and consistency of the products and services offered. We did not compete on price, as there is always a market for quality.

          In the same way, there is always a market for low-priced products and services.

          Thanks again for your response.

          • Sandy2118

            Prices are mostly lower, too low to make a living in a seasonal economy. The hosts are supplementing their income. For-rent signs have popped up all over town, even from We-Need-A-Vacation, a totally new phenomenon. It is strange because Airbnb suddenly became extremely trendy. We continue to attract return guests and people interested in green living, but our bookings were way down in May. Then I joined BookCapeCod.com, which has a page on Airbnb and in no time July was booked. What I object to is that Airbnb hosts are doing what we do but not calling it innkeeping, and, as I said, not bothering to obtain permits, join the Chamber of Commerce, etc.

  • Ashley Yoshida

    Two years ago my family and I stayed in an air b&b apartment in Tacoma park. It was cheap, but really dirty with funky, uncomfortable furniture and a weird owner. I have always traveled in a budget off the cuff way, but after that experience I am looking forward to staying at a nice hotel in Roppongi on my next vacation.

  • Ashley Yoshida

    There’s also a couch surfing network. Some friends just traveled through China surfing couches. They didn’t pay their hosts anything. They seemed to really enjoy it. Apparently it’s also a big wave.

  • Ashley Yoshida

    The reason we used air B+B was to be walking distance from my brother’s house.

    He had a new baby and already had relatives staying with him. We wanted to be as close to the family as we could be. Air B+B made it possible for us to rent something in a residential neighborhood. Which was great. It was just a shame the apartment we rented was crummy.

  • Dawn

    The sharing economy has opened up a lot of new opportunities for travelers. Check out my list of lodging and other resources, and reviews of many of them, at http://www.sharetraveler.com. On rental lodging in particular, here’s my take: http://sharetraveler.com/sharing-economy-rental-lodging

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