
“Startup Robs Every Customer They Have for Thousands of Dollars Overnight” - EE84M3i
https://www.reddit.com/r/legaladvice/comments/b9vk9g/san_francisco_based_startup_robs_every_customer/
======
jhfdbkofdcho
Sounds like a hi tech version of a scam in my city where a guy rents an
apartment (or just squats it) and then turns around and sublets it and stops
paying rent to the actual owner. People actually living in the unit stuck
holding the bag.

~~~
dmix
Subletting is entirely legal is it not? And it’s not a free ticket to do
whatever you want with the property either.

~~~
larkeith
> and stops paying rent to the actual owner

The idea is they take the sublessee's deposit and first rent payment, don't
pay the owner the rent, and vanish. The sublessee has now payed deposit + rent
but has nowhere to live (as the landlord is unpaid).

~~~
dmix
Right. That’s different, I misread.

This happened to my relative when someone owed her $9000 in rent. We were able
to retrieve most of it via small claims court. It also helped he was dumb
enough to leave bank papers behind when he was evicted so it made the process
easier. A credit agency is handling the rest.

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oooshha
"Lightspeed Venture Partners and Mucker Capital " guys might want to sort this
out, the founder doesn't seem worried bout his rep but I'm sure those VCs are.

------
spectramax
What is “the startup” in this case? What is preventing from disclosing the
name of the business?

~~~
Animats
Homeshare fits the description.[1] Not finding any other articles which
mention this problem, though.

[1] [https://www.businessinsider.com/homeshare-rents-luxury-
apart...](https://www.businessinsider.com/homeshare-rents-luxury-apartments-
at-affordable-prices-2018-1)

~~~
rurban
They have 3 investors in the first and only round:
[https://www.crunchbase.com/organization/homeshare#section-
in...](https://www.crunchbase.com/organization/homeshare#section-investors)

~~~
Animats
How did they manage to lose money in that business? They get paid up front, so
they don't have a cash flow problem. They don't have much of an investment.
There's plenty of demand. What went wrong?

~~~
netsharc
It's a startup, so they probably have 20 developers and 5 business majors who
are "C-levels", each getting 6 digit salaries...

As someone asked somewhere, "Why does Twitter need hundreds of developers?
It's basically a CRUD interface."

~~~
egypturnash
What Twitter - or any large social media site - needs is a large, well-paid
abuse team. Hundreds, if not thousands, of people. That'd blow through a bunch
of money.

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bengale
Do you have a deposit protection scheme like we have the the UK? Our
refundable deposits don't sit with the landlord or letting agent, they go to a
separate company. At the end they release the funds unless there is some sort
of damage in which case they investigate and decide whats a fair payment to
the landlord.

~~~
oceanghost
At least in California, no. My experience has always been the landlord makes
up any excuse at all to keep the deposit and you fight them tooth and nail.
California does have a fair number of renter protection laws, but the
companies rarely observe them.

~~~
thaumasiotes
My experience in California has been that the landlord didn't try to keep the
deposit even when the rental contract arguably allowed them to.

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asperous
Archives:

[https://web.archive.org/web/20190406050632/https://www.reddi...](https://web.archive.org/web/20190406050632/https://www.reddit.com/r/legaladvice/comments/b9vk9g/san_francisco_based_startup_robs_every_customer/)

[https://archive.fo/V3vsK](https://archive.fo/V3vsK)

------
idlewords
A venture-funded startup for putting up $1500 living room dividers that
manages to run at a loss may be peak San Francisco.

~~~
Gibbon1
I was thinking recently about Triplebyte which is paying to spam every public
webpage I visit. Far as I can tell they're basically Barbizon modeling school
for tech bro's.

~~~
garry
Actually Triplebyte has been getting jobs for good hackers without
credentials. That’s the opposite of what you are thinking: tech bros are from
central casting and have high powered CS degrees.

Many Triplebyte alums have no degree or no formal CS training yet the test
shows they are among the top software engineers in the world and deserve high
salaried jobs.

~~~
Gibbon1
Keep believing if that works for you.

------
stuart78
I realize intimately how hard it is to get by in SF and other big cities, so I
won’t criticize the renters here, but I have no such hesitation about
criticizing the founding team and investors. Turning apartments into tenements
could never have turned out well. How does this business scale outside of the
core nimby tech cities? And even in those cities, the decentralization of the
market is both good and hard to take down. One hopes those responsible are
compelled to do so, but one also fears it will just be the renters left
twisting.

~~~
icebraining
House prices are getting pretty high on cities all over the world; there's
plenty of market if they were willing to go global. The concept in itself
doesn't seem to be obviously broken to me.

~~~
landryraccoon
What’s broken is resorting to massive investment in hacky, brittle
technological solutions to a policy problem that needs a political solution to
address the root causes.

IMHO we live in an age where maybe some more smart people should be turning
their minds towards affecting public policy.

------
bthomas
What’s the rationale for not naming them here?

~~~
bloopernova
Reddit users are like a swarm of zombies sometimes. If something negative gets
shared about a person or company, you can be fairly certain that there will be
hundreds to tens of thousands of Redditors expressing their anger. That anger,
whether deserved or not, results in everything from DDOS attacks, phonecalls
from thousands of people, people contacting employees at home, death threats,
etc etc.

There's also the tale of the Boston Marathon bombing, where some "over-
enthusiastic" Reddit users took it upon themselves to solve the crimes based
on footage from security cameras. The Reddit Detectives managed to hound and
accuse the wrong people: [https://www.businessinsider.com/reddit-falsely-
accuses-sunil...](https://www.businessinsider.com/reddit-falsely-accuses-
sunil-tripathi-of-boston-bombing-2013-7)

So Reddit is very anxious to avoid unleashing the zombie horde again, hence
its very strict policies about naming companies or individuals.

~~~
i4blux
Calling those who did the Boston Marathon detective work "Reddit" is like
calling those who hailed the NZ mosque shooter "4chan".

~~~
baking
I think it is worse than that. I was actually actively involved in the process
of looking through those photos on /r/Boston at the time and the whole "red
herring" story was not organic to that process and just seemed to be something
that an outside group of trolls (maybe outside of Reddit or outside of
r/Boston) decided to bandwagon and got it picked up by the media. Nobody
really involved in the process really bought into it. I always feel like the
"internet detectives" got a bad rap.

Maybe the lesson to be learned is that the media needs to know what they are
dealing with before going with the "Reddit says" storyline.

~~~
bloopernova
I didn't know that, and I'm sorry that I only read this response after my
comment's edit window had closed.

------
CaliforniaKarl
In general, I understand and support the idea that, should your startup not go
well, you fail, wrap things up, and move on. It's too big of a risk to stake
your entire life on one venture, and my understanding is that VC firms,
angels, and the like all understand that this can happen when they invest in a
startup.

That risk is not something that is understood by most end users, where in this
case "end users" includes landlords and other people "on the ground". Those
people made an agreement with the startup in good faith, and I contend that
faith has been violated, to the potential financial ruination of (at least) a
subset of the tenants, and possibly (depending on their financial position) a
fair subset of the landlords.

(It's worth noting the Reddit post was made about a day ago. In my rental
agreement, for example, I would now be in violation for failing to pay rent to
the landlord. I expect many of the tenants are now in that same position.)

I contend that you should not be allowing things like this to be precipitated.

Yes, I'm looking at you, YC. Yes, I'm looking at you, A16Z. And all of the
other VC organizations, _and their alumni networks_. With this case serving as
an example, I think you have a self-policing problem.

You might say something along the lines of "Oh, it [the startup] wasn't
affiliated with any of us", or "Oh, that 'VC' isn't an actual VC", or "Oh, we
didn't know them". In an instance like this, I don't think that matters. What
matters is two things:

1\. If not illegal, I contend that the actions of the startup (and maybe the
VC) were at least highly immoral.

2\. From the landlord's perspective, they see this as a startup and a VC.
Maybe that's not what they actually were, but that doesn't matter. For this
point, it doesn't matter what the reality was, it matters what the perception
_is_.

I suggest two actions:

1\. You (the same collective 'you' as above) should immediately reach out to
the poster, to learn both about their tenants and to get in contact with the
representative that the landlord was working with. You should then use that
contact to identify other landlords where this has happened. Make the tenants
whole through at least April, if not April and May.

2\. Create a framework to prevent things like this from happening. I admit
that I'm being _way_ to vague here, but that is because I do not have enough
expertise in what you do, to make a concrete suggestion. Instead, I am calling
out the problem, so that you can use your knowledge and experience to
formulate a solution. For example, many of you have talked about—or otherwise
targeted—basic income. Why not tackle this first.

~~~
icebraining
> Make the tenants whole through at least April, if not April and May.

Are you saying that organizations that just happen to be in the same general
business should be covering for the fraud of unrelated companies? Should
Stanford be paying back the students of Belford University?

~~~
tialaramex
It depends whether your industry wants to have a good reputation or not. If
you're OK with all being seen as scum who try to get whatever they can, I
guess not.

Suppose an airline collapses, leaving passengers stranded. Better run airlines
_could_ say "Sucks to be you, choose a better airline next time" and charge
full fare to anybody stranded trying to get home. But actually they mostly
don't do that, usually "rescue" fares will be offered at a steep discount to
secure good will. A customer who has a now worthless $500 ticket often finds
that a rival company will swap that plus $50 for a ticket home on their plane.

~~~
ipython
Actually, that exact scenario just happened with Wow! Air (Iceland discount
airline)... while rival airlines have advertised so-called 'rescue fares',
actually obtaining them is another story all together (at least judging from
the comments on TPG[0])

[0] [https://thepointsguy.com/news/these-airlines-are-offering-
re...](https://thepointsguy.com/news/these-airlines-are-offering-rescue-fares-
to-stranded-wow-air-passengers)

------
gok
What the fuck is the manager of a leasing office of a luxury apartment
building doing posting on r/LegalAdvice?

~~~
jtms
Why shouldn’t they?

~~~
gok
A large property management company should have their own lawyers, potentially
in-house. This whole post sounds like they're trying to drum up support, not
actually ask for legal advice.

~~~
oceliker
Judging by the last couple sentences, I think they’re posting on behalf of the
residents, who wouldn’t get much help from the company.

