This is bad news.
They're going to backtrack on this. The sooner they do it, the better for them politically.
I understand the problems of setting a precedent. And there really is no getting around the fact that the hosts do have the final responsibility for screening travelers (and travelers for screening hosts).
But rightly or wrongly, they're going to end up on the wrong side of this story unless they make things right for this gal and can tell Arrington and other journalists, "we've made sure our customer is whole."
After saying that, they can use this as a learning exercise for their community about how screening hosts and travelers yourself is important.
[Edit]: Is she in San Francisco? It looks like she is. She called SFPD. This is an easy one. Brian, Joe, or Nathan needs to be out there to provide a shoulder to cry on and an open checkbook to fix anything that money can fix. Nothing in that apartment costs more than the value of the ammunition this is going to give to their enemies.
The earlier they do this, the more quietly they can do it, which serves their purposes as well.
[Edit #2]: Some form of insurance might be a worthwhile addition to their offering, but that's something they can debate and decide on after they put out this fire. [added:] Also, insurance doesn't solve the safety issues involved here, so they're still going to need to emphasize the importance of screening travelers (and hosts) carefully.
[Edit #3]: EJ doesn't sound particularly litigious in her post, but consider what happens if she does decide to sue AirBnB and any part of it makes it to a jury. I mean, HackerNews is lining up against them. Consider what 6-12 normal people might decide. The wise move would be to make sure that she's fully satisfied with the way they treated her.
[Edit #4]: Arrington updated the article after speaking with Brian Chesky. Brian, Joe, Nathan and company did the right thing here, as you would expect.
I don't, actually. If the financial industry has taught us one thing, it's that you can insure anything.
Let's assume that this is a very rare occurrence and that the total cost of making this right (say, tops $100k?) can be amortized over the profit being generated. I have a hard time understanding how it'd be rocket surgery to get something in place to handle these cases, especially just after a $112 million cash infusion.
Everyone keeps bringing up fraud, but fraud is nothing new to insurance and there are centuries of practices established in that industry for dealing with such – i.e. it will happen, it can be minimized by establishing premiums, requiring police reports, and, again, amortizing the cost of fraud over the spread of valid commerce.
[Edit replying to parent's #2 edit]
Sure, this one needs to be out of pocket. Actually, it'd probably be easier for them to insure now since there's a data point for how often this will happen per x number of rentals. Handling one of these out of pocket can't be a biggie for a company with several orders of magnitude more cash in the bank. And with a multi-billion dollar valuation, there will be institutional insurers that will be willing to build up a risk profile for them and work out a policy to handle these these things in the future.
There would be plenty of large insurers happy to insure AirBnB (and the reinsurance would end up down the corridor from me).
The way I suspect a deal would be structured is that the institutional investor would not be insuring the homes of Airbnb's customers, but insuring Airbnb against claims, with a process of validating those claims that involved sending out a third party adjuster.
I have full confidence in the insurance industry's ability to find a way to finagle a deal of this sort if there are enough zeros behind the dollar sign.
Also, if it were indeed the case that AirBnb is soon to be illegal, it would make more sense for insurance companies to sign them up: the risk of AirBnb being shut down ought to reduce the likelihood that they'll need to pay out.
you're talking about the things you don't know about. The US processors can't legally process payments coded for gambling (some gambling operators code the transactions as "groceries", etc... - this is how the things still sometimes can fly under radar )
"implementation of America’s Unlawful Internet Gambling Enforcement Act (UIGEA), which bans the facilitation of online gambling by payment companies."
I'm talking about US headquartered companies like Visa and MasterCard processing transactions for UK customers of UK (and Irish) online gambling companies; I do know about this, not least because I have an account on paddypower.com funded from major credit card companies like Visa and MasterCard.
The analogy is with insurance companies dealing with a business which is not legal in some states. That should not stop them dealing with the business in states where it is legal.
Sounds like an oxymoron to me...
Which is not to say I agree that that would be an oxymoron. A 'morally sound free market' or 'morally sound unregulated capitalism': those are oxymorons, because there is no imperative that causes unbridled competition in free markets to lead to companies doing 'the right thing'. Which is why we need a government to regulate stuff. How much of a government is a different question: there's a difference between supporting libertarianism and supporting anarchism and not even the most staunch libertarian disagrees we need a government for some things.
My employer and I pay $7,500 a year for my health insurance. I developed a debilitating back condition which required over $150,000 in surgery and therapy. My cost? Less than $1,000.
A friend of the family was killed in a tragic accident. He left behind a wife with a long-term debilitating illness and 3 children. Several life insurance policies paid sufficient monies that they have the financial resources to live their lives.
I do argue that companies are essentially amoral: outside of governments, the only force working on them is the pressure to survive in the face of competition, using whatever means needed to achieve that goal. The only reason companies generally behave in morally acceptable ways is by government regulation. Without those, monopolies on drinking water, oil and other essentials would be acquired and enforced by companies with armies. But the net effect of the current state of affairs is that companies generally behave in morally acceptable ways.
What you can, if you find a dealer, is to buy a risk swap contract that will pay you the contracted amount in the case of some house burnt or some earthquake happens or some bonds go south. This isn't an insurance in the sense of regulated insurance business. In stocks it is called options, in mortgage bonds it is CDS.
No I'm not. btw i trade options & risk swaps for a living, so I had a good laugh reading your mini tutorial on "this is called option, that is called CDS" :)
Anyways, there's lots of holes in your explanation. For one, you say it is illegal to double-insure. Not true. It is illegal to double-dip, not double-insure. So you can get health insurance for yourself from your employer & simultaneously be covered by your spouse's employer - this is quite routine and legal, though frowned upon. What is illegal is to bill both the providers for your expenses. Another eg. you double-insure expensive realty, so if one insurance provider goes out of business, you don't have CP risk. But if there's damages to your house, you can recover losses from only one provider, not both.
As an aside, much of this is enforceable because insurance is such a heavily regulated industry, so you have centralized databases & its easy to check if you are double-insured, double-dipping & other edge cases. With HTBRAI, assuming such a thing ever comes into existence, you'd need a framework for all that regulation to fit in, which is what I'm skeptical about. airbnb is a fine service and they have a sound business model & a solid future - these insurance wrinkles will hopefully be ironed out in due course.
Other examples in the entertainment industry - say there exists insurance that your movie will earn a minimum revenue say 25 million usd. Your competitor simply buys those contracts and then trash talks your movie on the opening night ( by simply paying out bloggers and amateur journas some pittance sum of money ). Your movie tanks and so the contracts get exercised and your competitor makes a whole lot of money. So the next time around, you make a shitty movie to begin with. Then YOU buy the contracts, wait for your shitty movie to tank and cash in the contracts! This actually happens sometimes in Bollywood, though not in the exact fashion I described but in a more shady fashion.
Edit: I should have scanned the thread
And yet your analysis of this particular case is spot-on. They stand to get CRUSHED by this story.
Damned if they do, and damned if they don't.
You can write insurance for anything, if you're willing to pay enough premium. I can't imagine this premium would be that exorbitant for Airbnb to pay for it's users, just as Getaround does.
In fact they have an even better guarantee, since they know (ideally...) exactly who the perpetrator was. They're not giving you the money to replace your stuff, they're lending it to you until they can recover it from the criminal. If the person who you claim did the damage claims they didn't, that's a problem they have with you, not with Airbnb.
There's also the fact that insurance companies are subject to many laws and regulations that other businesses are not.
Surely that should already be a primary focus of theirs.
Are they going to require faxing in photocopies of ID? Run credit checks? All this would do is to verify that a person with this information exists. This wouldn't stop a bad guy from using someone else's identification to register, and none of this addresses whether the renter has the legal right to rent the property.
And, once they are that deep in the process, if Airbnb is making any representations to their customers about this kind of vetting, then they are exposing themselves to liability if something goes wrong.
Right now, they are content to verify that the customer and landlord have valid credit cards / bank accounts, and that's that.
Fraud is a problem with all insurance policies. Deductibles and investigations go a long way to curtail it.
They can also set the premium high enough to cover the costs and get to claim that it's available if the homeowner chooses, even though most won't do to the high price. It's a feature that would make them stand out among their ever growing competitors.
can UberCab happen here, ie. some zealous DA would come down on AirBnB itself and/or subpoena the records of people renting out?
So yes, at some point I'd say it is likely that AirBnb's records are going to be used against their customers. Some of AirBnb's customers aren't breaking the law, but some are.
Of course, the odds that the criminal has anything left to take are low...
In this case, and in all others, Airbnb can not be responsible for this kind of stuff. Also, I highly doubt a homeowners policy is going to cover it because the person was renting out their place (again, probably illegally).
Yes -- to drive up prices for the cartels who control entry into the market.
When it gets to personal things like "found ... grandmother's jewelry" and "I don't have the mental energy to take those last few steps into my apartment. It's too creepy in there anyway."
It's really hard to "make someone whole" with a cash payout. There's a lot of distress involved. It's not just a case of "TV was stolen, TV costs $500, here's $500". There's family heirlooms and emotional trauma involved.
Aside from that difficulty, you're perfectly right.
Might be just me but i didn't read it like that at all.
I've been fascinated with AirBnB. I'm taking a week-long vacation in August and have been considering listing my NYC apartment to help offset some vacation costs. Their response in this situation totally turned me off from the idea. I'm sure I'm not the only one.
I think the bigger problem is that if they reimburse this person they can set up an expectation that everyone will get reimbursed for damages to their home, and they cannot afford that.
I remember the first time I got screwed on an eBay transaction I thought it was just a random, unfortunate thing -- "well, I've been using this a lot, I guess it was bound to happen." Then it happened again. Pretty quickly I realized that things were going downhill, and the trust I'd put in other users of the service was no longer reasonable.
I think that's the direction that AirBnB is headed, unless they take steps to intentionally restrict their growth and remain in a niche market. Eventually they'll have to do what eBay has done, and make the transactions as anonymous and automated as possible, and probably push all but the big commercial operations (who can absorb the fraud risk that gets pushed onto sellers) out of the market.
But the upside is, I think there's a market for services like AirBnB that are still niche. As AirBnB grows and becomes less and less pleasant to do business with, and as the risk involved in every transaction grows (as it did with eBay), there's an opportunity for someone to create a competitor that's tailored to a specific niche market. Or maybe one that's built on top of a social network, so that you're always renting from a friend of a friend or something. There are a lot of possibilities I could imagine.
But AirBnB seems to be going for mass-market adoption and I think that's the death of a friendly, trusting community if it involves money.
Cases like this are so rare, and although the damage is horrific to one person the dollar amount is trivial on the scale Airbnb operates. Seems like a perfect case for a shared risk pool that actually works rather than insurance.
Then they could peg the cost of the insurance fee at a realistic share of your risk, and the theoretical cost of someone trashing the place would be built into the cost of the room.
Fraud would mean the owner having an accomplice renter who destroyed something, Airbnb compensating the owner, and then being unable to track down the accomplice for redress. That's only a problem if a significant number of renters are able to use Airbnb without Airbnb having any way to track them down.
And if that's the case, they already have a problem.
At that point Airbnb is put in an impossible situation - they either pay for what may be fraud, or they refuse to compensate what may be actual theft.
So as the owner, it's my word against the renter with the cops involved. They're going to figure it out eventually. Maybe I'd be able to float a few grand for a while before it caught up with me, but surely there are easier ways for me to turn false testimony to my advantage than screwing over the web site that's earning me money?
It is, of course, very possible to set up insurance so it has few loopholes - insurance companies do it! My point is simply that it's not trivial, and Airbnb would have to invest significant resources to make it work well - while still potentially failing to gain the goodwill they need (few people actually LIKE insurance companies).
Insurance fraud is no joke and it takes a hell of a lot of stupidness to attempt it.
Is there someone here that can set up a Paypal account for this gal? I'd happily donate a few $.
If not, then Airbnb should have some sort of insurance for these situations. Can't have all of the upside and none of the downside.
Not to mention if this happens a few more times, Airbnb's business model will be legislated away.
However I don't agree that because there are legal intricacies a company valued at over 1 billion dollars shouldn't protect its financial future.
I expect that unless you rented out your space a lot in a given policy year, it may render it unprofitable to do so.
I hate to think of the potential liabilities if someone got injured in your home and you didn't have the right insurance.
Down the track, they can say "Sorry, that other time was a once-off, we have many T&C/suggestions that cover what's happened" and the victim is going to have to be unnaturally persistent with the press to create a story this damaging.
I don't care what the long-term implications are, I don't care about precedent, I don't care about policy, I don't care about cost.
If my business does this to someone I make it right. Even if that means going into my own goddamn pocket. Anything less is simple villainy.
If you are going to enjoy the rewards of your business, you have a moral obligation to ensure that you make things right when that business harms someone else. And let us be clear: this is harm. This isn't "oh dear, my careless guest spilled wine on my TV. Buy me a new one guys."
This is "the guest you sent me destroyed my home and sense of safety." This is completely beyond the pale, an incredible stretch no one, clearly, bothered to imagine. Crucially: it's completely documented by law enforcement.
If it's true these guys aren't going to make this right, Airbnb is dead to me. Fuck Obama O's, to hell with their Cap'n McCains, and all the struggle that earned my admiration. I'd say that to their faces, I'd say that if I worked there, and I'd quit if I worked there and this wasn't made right. This is a test of human decency. I hope they don't fail it.
Technically, they've already failed it. Now they just have to admit that they failed, and actually fix the problem (financially). If this was my company, a "worst case scenario" money chest and an itemized plan-of-action would've been the first thing I created. Investors are protected (in a number of ways) from the financial risk of investing in Airbnb (or any company); the clients should have a similar expectation of security, considering that they're creating the value for investors.
The book isn't closed on this yet. I don't know these guys personally or anything but hearing Brian Chesky talk about his company and his struggle, you can tell that these guys aren't assholes. Right now they're getting stupid, shitty, short-sighted advice from people who've convinced them to do the wrong things.
I want to believe they'll turn it around.
If they don't... well, as I said.
* Guest trashes the place, takes off with host's camera, iPod, laptop, jewelry - should AirBnb chip in for the cost?
* Guest scratches a hardwood floor that's pretty expensive to fix - should AirBnb chip in for the cost? Or just buy a rug to cover it? What if it's some Mongolian oak that's custom-ordered at $5000 per sq.ft.?
* Guest overflows the toilet, causing some floor damage and a call to plumber - should AirBnb pay for just the floor? Or cover plumber's visit?
* TV is not working on guest's departure, guest claims to never have touched it, owner says it worked perfectly before the guest arrived - should AirBnb just buy a new TV?
It's pretty simple. If the user can't pre-screen and validate the guest's identity before renting, the onus is on Airbnb to ensure that they will not destroy your home.
Besides, that's the only way this company can work at scale. Without trust in the system, who will use it?
Try to divorce yourself from the topic and read your reply again, realizing that you've set up an impossible standard and blanket-judged a complicated balance of liabilities as "pretty simple."
The problem for any organization dealing with a large volume of possible cases is that you need to figure out where to draw the line. Preferably you want it in some place that is transparent and easily communicated to people. Otherwise you'll have an endless stream of cases close to the line with arbitrary outcomes that you can't explain.
Clearly, "So and so drilled through my walls to steal my stuff" should be on the far end of the line. Clearly, "So and so stole my pencil" should be on the near side of the line. But where do you draw it in the middle? With the claim of a broken TV? With a hole in the wall?
Even if AirBnb had a way to check this guy out, it's quite possible he doesn't habitually destroy homes and steal people's identities.
Dunno. That's going to be Airbnb's problem to solve if they want to enjoy ongoing business. That's their job if they want to be the "Ebay of spaces."
If your argument is based on the assumption that hosts can not screen guests then your argument is wrong.
"If damage incurred through malice or gross negligence exceeds a reasonable proportion of the overall value of the establishment" where reasonable proportion might be defined as anything from 0.5% to 5%. The cool thing about legalese is how it can define a whole lot of undefinable things.
I am not a lawyer and never will be.
Do you care about your company continuing to exist for more than six months?
If you ran AirBNB and paid out to this girl, you would probably be flooded with similar complaints and legal assaults.
You'd feel great about the several people you helped, but then you'd be looking for a new job.
Not to mention the theft of personal documents and potential theft of identity. The (very real) potential of being bushwhacked by additional fraud years down the line due to this incident is pretty horrifying.
People should know the risks they're taking in letting a complete stranger into their house without even meeting in person. Just because someone found you through AirBnB doesn't mean you can take the risk for granted. You're still letting a complete stranger have access to your house and belongings.
Make their user whole with a big fat wad of cash that approaches the value lost in the described crime. Relocation assistance. Go completely above and beyond.
> Do you not think it's a little unreasonable that AirBnB would have to take on the role of the insurer here ?
In general? Sure. Here? Absolutely not unreasonable. This is the absolute worst case scenario. The only way you top this is burning down a house and killing someone's dog.
Airbnb did not plan for this and did not appropriately set expectations. What they did set expectations for was "an Ebay of spaces," a safe and orderly way to monetize your home. The victim here argued very persuasively that because you can't contact people before the transaction, the onus is on Airbnb to ensure that they aren't sociopaths who will destroy your home and steal your identity.
Remember: once you've allowed physical access to your resources (computer, accounts, home, ...), all bets are off with regards to future security.
AirBnB has a pretty intractable problem here.
People aren't fundamentally vettable. It's an age-old problem. TSA, the HUAC, lie detectors, loyalty oaths, pledges, blood bonds, FICO scores, PGP webs of trust, are all attempts to solve that problem.
We can identify, authenticate, predict, track, audit, and prosecute.
We can't know the future.
The keys problem is fairly easy. I don't have keys. I enter a 4 digit number to enter my house. Just install something like that and change the passcode when the guest leaves.
Shit just got real. Thanks for creeping me out even further.
Beyond that, the lock/deadbolt/wall is pretty weak. A sledge hammer will open almost any door in a single blow. Windows are essentially just big gaping "serial-killer's enter here" signs, as you can easily break them and gain access to the domicile. Where, presumably you would feed on the brains and organs of the residents.
And worse, the phone company publishes a book that lists your name and address. No longer do serial killers need to drive endlessly, trying to stumble upon a Stuart or a Fred, they can just pick up a phone book and they'll find a perfect list of people, indexed by name for easier killing.
But seriously now, you're over-reacting here. These risks are everywhere and AirBnB was just another way to meet another person.
What I'll consider unethical is if they do anything differently for this lady, who got the media attention first, than they'd do for anyone else.
I don't necessarily think they're liable, even morally. It depends on how they represent themselves. If they purport to offer screened participants and don't, that's a problem. But if they don't it simply means they're offering a lesser service, pay accordingly.
I want a market to exist for cheap and potentially dangerous things instead of offering only padded kid-safe versions. For instance, Lithium-polymer remote-controlled vehicle batteries. Essentially the same tech as the laptop/cellphone batteries that occasionally catch fire. But they don't have protective circuitry built in to prevent this. If you overcharge them they will catch fire. But they're far cheaper and you can draw more power than if they had safeties built in. If you're clear about the trade-offs what would cause a recall and lawsuit in one market can be perfectly acceptable in another.
Authorized entry is, and in the case of AirBnB you've got a case where someone's contracted for entry, may have notified neighbors / building management that strangers will be present, etc. (though "hey, strangers will be present, would you mind looking in on things might have been another good practice for EJ).
Your points on locks are very well made, and there's a long Internet (and pre-Internet) history of attempts at censorship by lockmakers against picking methods.
Phone books? How archaic. I don't have a landline -> no phone book entry. My information might be accessible elsewhere, but my perimeter security systems are quite good, and Krell steel resists mosts assaults.
Your idea of "unethical" (to say the least of good business sense) is markedly different from mine.
I'm sure it'd be more profitable (and thus good business sense) to treat customers better based on the publicity they have. But do you really consider that ethical?
> Phone books? How archaic.
I wondered if someone would nitpick that. :)
But do you remember when lists of people's name and address were common and people weren't all chicken-little about it? I wonder if Terminator changed that with its phone-book directed killing spree.
It is completely possible to vet your guests before accepting them. Now granted I do agree that it would be very kind for AirBNB to compensate her for the damages she suffered, but I do not feel like AirBNB should be held responsible as if they caused this to happen, because they certainly didn't prevent her from looking up this rogue guest before accepting the transaction.
Airbnb is built on smoothing over the process of renting your house to a complete stranger. If they don't have a solution or even a process for the possibility that a complete stranger will trash my house, they just lost a huge part of their value proposition.
I don't think anyone is saying Airbnb is legally liable— just that they should take responsibility for their own sake.
I don't care what the long-term implications are
Clearly you’re not a business person if you wouldn’t care what the long-term implications of your company’s response to this were. They have responsibilities to investors, employees, and other users—they’re (rightly) making a decision with those stakeholders in mind, not the woman who had her house ruined.
I don't care about cost
Again, clearly you’re not cut out to run a business if you don’t care about cost.
If my business does this to someone I make it right.
Airbnb didn’t do this to her. The people who did it to her did it to her. Airbnb provides a marketplace for these interactions to occur—nothing more. The users cannot abdicate their personal responsibility not to use the service carelessly. I mean, we’re talking about letting people into your home here.
Is a car manufacturer liable when a driver runs over a jaywalker because they were texting on their phone? No. Is the phone manufacturer liable? No. Should I be sued when I recommend my accountant to my friend and the accountant defrauds him? No. Should Craigslist be liable if precisely the same thing happened through Craigslist? No.
Anything less is simple villainy.
This is a test of human decency.
Calling this villainy is one of the most hyperbolic statements I’ve heard in living memory. So is declaring, as if it were agreed upon fact, that Airbnb is evil if they don’t reimburse her.
If you are going to enjoy the rewards of your business, you have a moral obligation to ensure that you make things right when that business harms someone else.
If your company actually does something to somebody, then sure—but not when you’re company doesn’t. Airbnb didn’t do anything to her: she let a stranger into her house for a week without thinking about it! I’m not blaming the victim, I’m blaming the people who did it to her—but I’m certainly not blaming the middleman.
What happened to this girl sucks, but your post is overly emotional and absurd. It’s not Airbnb’s moral responsibility to do anything about this. They may choose to from a pragmatically-motivated customer relations, reputation, and corporate image standpoint—and sure, it would be an all-around charitable and nice thing to do—but I completely disagree with the claim that they have any moral responsibility to do so. Airbnb can do whatever they damn well please and what they believe is in the best interests of their business.
What I think is indecent is creating an artificially high and illogical holier-than-thou moral high ground divorced from the realities of running a $1B business that you then use to drum up a public crucifixion of a company that doesn’t live up to said standard.
Doing the right thing is more important than making money. I'm really glad I learned that before earning my business degree.
I'll tell you a story.
A couple of years ago, during the height of the financial crisis, I decided to quit a pretty safe job, move across the country, and focus full-time on building and selling iOS apps.
Just before the move, with cash tight, I shipped a new app.
It was doing... so well. A nice bit of press, good placement in the App Store, and revenues like no other project had yet produced.
There was just one problem: sometimes, you could enter a shitload of data into the app – and then it would crash without saving. A lot of work lost. Not all of the time, just enough to make you suspicious of the app. And as a result, a worthless tool.
The fix was very easy. Absurdly easy: one line of code. An over-released object. But Apple doesn't work quickly now and definitely didn't then. I had a choice: two weeks of selling what I knew to be a worthless app or destroy all my momentum and pull the app until the fix was ready.
So I pulled the app. Lost the high ranking that would have led to even more sales. Donated all the sales from that first day to a worthy cause, since I couldn't issue refunds. Fuck, did I need that money.
But I never looked back. Because it was the right thing to do.
You profit from creating value. If you do harm, you take responsibility and put things right. Anything less is unworthy of your humanity.
That's it. If my passion for doing the right thing makes me bad at certain things, oh well. Money comes and goes. My conscience is with me until I die.
> What happened to this girl sucks, but your post is overly emotional and absurd. It’s not Airbnb’s moral responsibility to do anything about this.
Sorry you feel that way. We'll never have common ground to work together. Good luck!
If you do harm
Again, you’re not addressing the simple fact that you’re working from the assumption that Airbnb itself did harm here. They simply didn’t.
Doing the right thing is more important than making money.
Clearly Airbnb does not believe that doing so would be ‘doing the right thing.’ You’re simply calling them evil instead of recognizing that they have a different—and quite defensible—point of view concerning their responsibility.
The utter destruction of your home at the hands of a service that aims to help you monetize it is ipso facto a bug. Intent: create value. Result: destruction of value. Bug! It would be like a roach trap that helped roaches breed instead of killing them.
It's pretty simple. You can't talk to guests until the transaction is consummated. If that's so, it's on Airbnb to make sure that they're not sending a dangerous creep into your arms.
They failed in that task. If they want to be the "Ebay of spaces" then they need to provide for some basic level of safety and security.
It's okay that you and I have different value systems. They're incompatible, so we won't ever work together.
Again, Airbnb didn’t destroy her home. Are you under the impression that someone from Airbnb itself was the one staying at her house?
Intent: create value. Result: destruction of value. Bug!
You’re basically defining what you want the responsibilities of Airbnb’s service to be and then faulting them according to those responsibilities. But those are not Airbnb’s responsibilities. Again, Airbnb doesn’t claim to prevent things like this, therefore it’s not a bug.
If they want to be the "Ebay of spaces" then they need to provide for some basic level of safety and security
No they don’t. There will be business consequences for not doing so, but they don’t have to. They can define their service to be whatever they want it to be. As it currently stands, their service is not meant to prevent this from happening.
They're incompatible, so we won't ever work together.
This came through loud and clear the first time you patronizingly said it.
"You can't talk to guests until the transaction is consummated. If that's so, it's on Airbnb to make sure that they're not sending a dangerous creep into your arms."
No one thinks anyone from Airbnb blew up her home, dude. I'm not paid well enough to know if this meets the standard of tortious negligence. Yet it was negligence. Had she not used the service, she'd be fine now.
And, I mean, if you've got such a boner for the business side of this, in what universe can you trust a service like Airbnb now? You can't vet people until you're locked in, you have no recourse if you get screwed. This is a business problem, without the morality of hey, it's a good idea not to bring harm into people's lives.
You can tell them your name, and they can look you up on FB if need be to do a background check. It is false to say that AirBNB does not allow hosts to communicate with guests, and it is fully possible for hosts to check up on the background of their guests.
And you’ve just illustrated my point perfectly: if she hadn’t used the service, she would be fine now. But she used the service of her own volition; nobody forced her to; and she made the decision herself. Airbnb might have made the gun the guys used to trash her apartment with, but Airbnb isn’t the one that fired it: she pulled the trigger. Again, the people who trashed her apartment committed the crime here, though.
This is a business problem
I never said it wasn’t a business problem—that’s exactly what it is. But it’s not an issue of morality.
in what universe can you trust a service like Airbnb now?
I would never in a million years use Airbnb. Why would I leave a complete stranger alone in my house so that they could trash it and go through my things? You realize how insane that is, when evaluated outside the reality distortion field of the startup craze we’re in right now, right?
I think the genesis for your arguments is your desire to live in a world where you can trust a service like Airbnb. But if you just think about it for five seconds you realize anyone could do this and Airbnb in no way prevents it from happening. Just because Y Combinator funded it doesn’t mean it’s magical.
It doesn't? jk. But seriously, if you mention airbnb to an average person, say anyone in my family on the east coast they haven't heard of it. So, airbnb isn't even big enough to have the problems craigslist has had with scams...but, this is just the start.
Once airbnb gets bigger there will be more of these stories. Someone will build up a rating by renting a few low priced places and then just completely rob a more expensive place.
I guess they should have seen this coming but now it's time to accept they are getting big enough where the common criminal will look to exploit the service. "You mean I just rent a few places and then some rich person will give me the keys to their place and I can take whatever I want? Awesome!"
I mean it's terrible, but I think we can all imagine it's possible someone using airbnb to rent a room in their home getting killed by the renter.
The first "bug" arises from the fact that AirBnB is much like a pay-for-play dating service, with all of the flaws of that business model. They have to control communication between the parties to keep from being cut out of the revenue loop... which means that they indisputably need to accept some responsibility for conducting the due diligence that they forbid their users to conduct. That's expensive and risky at best, but if they don't step up to the responsibility -- which they don't -- then they don't deserve to succeed. A stolen credit card should not be enough to gain access to someone's home for a week. Cases like this provide the necessary publicity to call attention to the unfair bargain they offer hosts.
The second 'bug' was the almost unbelievable naivete on the part of the host. She was, or should have been, aware of the terms of AirBnB's service and the limitations of their liability, because she would have had to agree to those terms and limitations when she signed up. It shouldn't take a law degree to understand that AirBnB's terms are ridiculously inadequate when situations like this arise. The idea of turning over the keys to your home to someone you've never met, based on the inadequate assurances and warranties offered by AirBnB, sinks to the level of incompetence IMHO. Not everyone will agree, but come on... if what she did isn't "asking for it," then there's no such thing as "asking for it."
To me, it seems clear that the responsibility for allowing this incident to happen falls on the host's shoulders... but at the same time, AirBnB should not be lauded for trying to play it both ways. If they're going to do everything they can to prevent hosts and renters from doing ordinary due diligence on each other, then they also need to stand behind their decisionmaking process when they approve a renter. I think a mandatory insurance policy has got to be part of the answer, just as common sense on the host's part is also a requirement.
I don’t dispute any of these things—my only real point was that it’s completely off-base to call Airbnb immoral for not compensating the woman.
I really wish more people, especially SV-esque startup people, approached business this way.
So they sold a fad product (cereal) at the right time to make a little bit of money. Just tells me they have no moral integrity (which explains the craigslist email spamming).
So they struggled to make rent in SF a while. Who told them to stay in an expensive city with no savings? That's bad financial planning, and they could've bootstrapped their startup in Austin.
Oh, and they made a startup that is illegal in many parts of US, and manage to dupe investors to give them hundreds of millions. Now they won't even help a girl whose life they help tear to shreds.
Sounds like upstanding fellows to me.
I doubt they're that soulless and cold-hearted; and if you'd just waited a bit, you would've caught Brian's response explaining how he plans on helping her out financially.
You're the one failing on human decency due to your inability to exercise even a shroud of empathy for these guys. They're trying to play it smart while still doing what they can to help.
I don't get why anyone would want to rent out their couch or spare room to a transient stranger - even 'vetted' within a community (and we can see that vetted is very lose here).
Sure, I sort of get the appeal for the renter but I'm lost as to why a homeowner would want to do this - especially considering the risk/reward here. The upside is a few dollars here and there, the downside is $10k's of damage - like this.
If you've never owned a house, you won't know that it's a labor of love and something you invest more than just your money into. Why you would want to risk someone destroying it, I don't know.
AirBnB needs to offer insurance as part of the deal - just like the car sharing programs seem to have negotiated their own insurance for the duration that the other person is driving your car. Otherwise it just seems an unwise risk to offer accommodation on AirBnB.
eBay and Craigslist were early instances. I'd count eTrade and other online trading startups as another instance. Blogs, generally, cut out the middleman in publishing.
There's couchsurfing.com, various direct-lending startups, etc. And now AirBnB.
Some of these are fairly low-risk activities.
Craigslist, having been in the business for nearly 14 years (the domain was registered 11 Sept 1997) have a prominently displayed and long list of ways to protect yourself against fraud, including very explicit warnings and suggestions. It smells very real. And there are still a ton of posts to the feedback/help forums asking / warning / telling of scams attempted or perpetrated. And a few notorious headlines.
Startups especially like to portray the world as consisting of mostly nice people. This may be the case, but the exceptions to that rule can be, well, exceptionally bad.
Close family friends run a B&B. They've done it successfully for nearly 30 years, and have mostly good stories to tell, as well as some cool celebrity guests. It takes a mindset, especially when you're inviting strangers into your house (their current setup has separate guest cottages), and it's a lot of work.
Ultimately, AirBnB is going to have to look at whether or not they want to put a bunch of rank amateurs in touch with one another (with the inherent risks), or serve as an intermediary for more established entities (much eBay and CL traffic is now through at least semi-official dealers and brokers).
I can think of some explicit steps EJ could have taken to protect herself: having a storage locker and moving valuables off-site would have been a good first step. Meeting the guest another. Some sort of in-apartment surveillance, at least of entry an exit areas, a third. At the very least this would help track the perp / establish whodunnit.
AirBnB could self-insure or take a guest deposit of some sort (possibly encouraging credit-card fraud) against such issues. I suspect they'll have to or fold with the publicity of this story.
One of the lending companies I spoke doesn't assume systemic risk (based on credit scores and such), but does assume all risk in the event of identity fraud. This would be a very good model for AirBnB to follow. Bruce Schneier has long railed on how credit card / debit card fraud proliferates in large part because banks bear little of tye risk (most falls on merchants, some on cardholders).
This will be interesting to watch.
The main damage will be from the publicity from this story. Now there's at least one cement example of somebody suffering greatly, that fear will penetrate anybody who uses this service from here on out.
And a few hundred dollars? The people I rented from in Paris were pulling in over $4k a month through AirBnB per property and they owned several.
If they simply charged a refundable deposit against damages like your average vacation rental, made people sign a damage contract and AirBnB secured the identity so you could prosecute someone if they destroy a place completely, a lot of these problems would go away.
I can't imagine any insurance company signing up for insuring "rented your home while being away" guests at rates that would be considered affordable for the rental model, nor a lot of AirBnB audience willing to turn their property into a de-facto hotel establishment.
If an insurance company specialising in unconventional insurance don't think they can make money out of a premium, that does actually say something pretty insightful about the risk you're taking.
If you'd like a specific example, consider that insurance companies in 48 states can and will likely cancel insurance policies of anyone who rents their car to another individual, even if they hold a separate insurance policy to cover it. This means that the tens of millions of cars sitting in garages would never be shared even if a startup decided to insure those doing peer to peer sharing.
GetAround, which won the TechCrunch Disrupt audience prize last year, or RelayRides which does the same thing, would never have started if they followed this rule. It's a bit early to claim that they have changed the world for the better, but I am optimistic they will.
I think what I said may be somewhat pithy but I certainly wasn't being glib.
More to the point, neither GetAround or AirBnB are in any way deep into territory that insurance hasn't ventured before. Insuring against burglary/damage in rental properties happens all the time, just like for rental cars.
The only times when insurance is unattainable is when the risks highly outweigh the premiums (SEE: Flood insurance in the Mississippi Delta) or when there is no actuarial data available which is tough to come by at this point.
For the first point I'm going to say the parent is very correct in avoiding this type of un-insurable behavior. And as for the latter, you had better have deep, deep pockets because if you can't even convince an insurance company of the risk, are you sure you've thought it through?
I know of few disruptive markets for which actuarial data sets are available.
Obviously you should think through the risks of starting a business not endorsed by insurance companies. If you have an appetite for such risk and believe the rewards (to yourself and/or to society) outweigh the risk, you should do it. Do you think Google could have bought insurance for their self driving cars before they started working on them?
I am an airbnb host. If the upside were a few dollars here and there I wouldn't do it. The upside is 60% to 120% of my rent every month. I imagine it could put a similar dent into a mortgage.
I felt the same way about Ebay. How would you guarantee you didn't get junk shipped to you by some individual who changes his ID every day? How would you make sure that the top bidders actually go through on their agreement? The whole things seemed shaky. But it seems to have worked out for them.
It's like growing vegetables in the backyard.
"Update: I spoke with Brian Chesky. He says the company has offered “to assist financially, find new housing for the host, and anything else she can think of to make her life easier.” He says they intend to “go above and beyond” to make the situation right for her."
Honestly, if you explain the business model of Airbnb to any ordinary run of the mill US citizen not residing in Silicon Valley, their very first question is going to be, "Why would I trust a stranger in this situation?" Airbnb's response was a joke in their FAQ about a grand piano.
It shouldn't have been. I have rented vacation apartments in Europe and there are plenty of ways to do this RIGHT, starting with identity exposure. There should have been a set of procedures for people to identify and vet one another BEFORE completing the sale. Of course this would have meant that some Airbnb customers would cut deals directly with one another and screw Airbnb out of its revenue share. OH WELL. Safety has a price and a clever entrepreneur would devise incentives - rental history, quality public feedback and ratings - to discourage people from going outside the system.
This isn't just one incident Airbnb needs to respond better to. It exposes a deep flaw, not only in their systems for preventing these types of incidents but for responding to them as well (it took 14 hours and a friend's intervention to get a call returned from the "urgent" hotline, wtf?).
What is especially infuriating about this is that, in an effort to bolster their income statement and become a hot company, Airbnb has created very bad publicity for a FANTASTIC and growing form of lodging.
Lending your home as a holiday home already has well-established range of estate agents, cleaners and so on, (like Gîtes in France) so it can be done but relies on a more active role of the company organising the rentals.
> The death-like smell emanating from the bathroom was frightening (and still is) and the bathroom sink was caked with a crusty yellow substance. Various pairs of my gloves were strewn about
"This week, New York Governor, David Paterson, signed a bill outlawing the use of private dwellings as makeshift hotels."
Related: how long before your home owner / rental insurance specifically excludes AirBnb type activities?
(From what I understand, Couchsurfing is closer to a gray area, because of no money exchanged. Having a guest visit is considered a normal use of a home, and it's not clear if an insurance company could successfully argue that Couchsurfing guests aren't "real" guests.)
Letting a stranger stay for a few nights in exchange for money is not novel to Airbnb, and will be excluded.
Whilst AirBnB charges a fee, that's purely as middleman for connecting two parties.
Of course it's horrific for the person, and this is an extreme example, but it's a lesson learned of how to rent out a property.
Take AirBnB out of the equation, and they've just let a complete stranger free reign over their apartment with a key for a week whilst leaving their own possessions on view.
To not ask a neighbour to hold onto the key, or meet the person beforehand, or get them on video chat, or remove all sensitive documents, or require a deposit, or a way of monitoring the property, is negligent on the owner's part.
Could AirBnB do more to vet users? Sure. Should they be responsible for the combined actions of two parties? Not at all.
A tough, hard-learnt lesson for the owner.
This is something you can't do on airbnb, so it's not at all fair to compare using their service to letting just some stranger in willy-nilly.
If they'd been a bit more subtle and a little patient, they could've engaged in massive identity theft and financial fraud without ever making it clear that AirBNB was the attack vector.
Even if theft was presumed, not only would multiple users have been in and out by that time, but you'd have no way of proving who took it, let alone have enough for the police to get a warrant. It sounds like the easiest money in the world.
I love Airbnb but there are so many loopholes for disaster like this. As Airbnb goes mainstream, I expect there will be many more similarly unhappy stories on their way...
That said, I would be absolutely fascinated to learn how this is playing out. It would be a huge service to the community for someone to release a blow-by-blow timeline from inside the company about all these responses and the thinking behind them. I have enough humility to know that they have a lot of really smart people thinking through this stuff, and it's likely much more complicated than we all realize. I'd love to hear about that thinking.
They could be out there making this right but instead they're hiding in their offices. Not even any meaningful words. A check for some reasonable amount of money accompanied by some nice words would go a long way. Something as simple as, "We were appalled by this story. I wish words could convey how deeply the AirBnB team regrets that this crime occurred to one of our customers in the course of an exchange that was arranged through our service. Please accept this check that we hope will cover most of the physical damage to your belongings along with assurances that we will be looking into exactly what we can do to mitigate the possibility of this ever happening to anyone using our service."
Anyway, don't feel bad for them, that's ... misguided.
That said, unlike Craigslist (and other forums), they do take a percentage of the cut.
I can understand that they can't be too forthcoming, as people will trash their own place in hopes of a free remodel.
However, if law enforcement says this is a legit case and even caught a suspect, Airbnb should have had someone onsite with a check in their hands the next day. How much amazing free press would this have generated for, what, $25k? Even if they offered $5k to get her place livable again they could have demonstrated some integrity.
I don't know how much money they think they saved by betraying one of their business partners, but they should debit 5 or 10 years of my waterfront rental from that amount...
Highly unlikely. Grand pianos weigh thousands of pounds and do not fit through doors.
That's just unacceptable. Regardless of whether this ever happened to EJ or not.
"But seriously, you rent at your own risk. Make sure to lockup or move all valuables to a friends place. If there are any problems, contact us 24 hours a day at XXX-XXX-XXXX"
FYI In her blog post, EJ points out that Airbnb also lacks a 24 hour customer support phone number.
I guess they're still in hope-this-goes-away mode.
"The Moment Of Truth For AirBnB As User’s Home Is Utterly Trashed "
Previous submission's title changed from:
"AirBnB: Crimes committed against a host"
"Violated: A traveler’s lost faith, a difficult lesson learned"
pg's response was that if I want to share an editorial opinion about something, other than just posting the title of the page, then I should blog about it and then post a link to my blog.
I know of a counterexample from this week. The original submitter (I) posted an article I learned about from a local scientist with the original title
and then during the subsequent discussion the HN title of the thread was changed to something that I don't think is a fair summary of the submitted article. (I don't know which curator did that, or which users flagged the thread, but I saw it happen after it was too late to edit the original submission.)
The original article is here and you can see its title:
After edit: In view of the blanket policy statement to which I am responding, I'm especially curious about the recent exception I linked to.
Just like you can meet a violent person while dating through Match.com, you can rent out your place to a terrible person using any number of services. The service is something people want and can only do so much to make the marketplace safe. Anytime you connect with strangers, whether it's through AirBnB, the newspaper, a dating service, or by meeting them at a grocery store, there are risks to letting them into your lives. AirBnB is doing the right thing now, and if anything, it's good that this incident will make users of the service more careful. You can't expect companies to perfectly guard every user against every edge case when human elements are involved.
I can imagine it'd be useful for a third party service that provides identity checks and insurance or escrow for AirBnb customers. Why play with fire (without hazard insurance)?
I want to sympathize with the victim, but it's somewhat hard to given the circumstances. In any case, AirBnB should suck it up, fix this one situation, then go into full throttle with trying to come up with a plan to prevent future things of this sort.
I'll admit that the victim has a good point about the secrecy imposed between the parties by Airbnb, but that's just a policy, not a liability, and it can be changed. It's like buying a car that isn't as safe as it could be. Sure you could pay more and get a very safe car, but as long as the manufacturer didn't misrepresent the safety of the car, you will have a hard time holding the company liable when you get injured in a crash.
Basically what they mean by "case by case basis" is that if you cause enough of a media shitstorm to make them look bad, they'll step in and help. And they'll look at your case to determine if you are causing enough ruckus to validate them going "above and beyond."
At least, that's what I gleaned from it.
I have a feeling AirBnB don't offer insurance because the premiums required (and the cost passed on to hosts) would make the entire thing unprofitable.
Hotels have insurance but it is probably much much lower than what AirBnB could provide to hosts because hotels already have a) security infrastructure in place b) your credit card details and c) your agreement to be held liable for damages.
> I would be remiss if I didn’t pause here to emphasize that the customer service team at airbnb.com has been wonderful, giving this crime their full attention. They have called often, expressing empathy, support, and genuine concern for my welfare. They have offered to help me recover emotionally and financially...
That said, I feel really bad for the girl and I hope she recovers. Most people are good, but there are a big number of bad people around to justify some level of security concern.
CraigsList isn't a party in the transaction.
>Seems like as soon as you pay for a service, your expectation goes much much higher.
How it could be otherwise?
Like others said already, If I were Brian, I'd have lunch with EJ, like, today. Whatever solution they find financially, Brian can't let ABnB's cool image turn all corporate and aloof by leaving this one to the lawyers and bean counters.
Does this mean that as soon as Brian & co are not involved in day to day operation the service AirBnB offers will deteriorate?
A good lawyer would argue that this is a criminal case between the renter and the home owner, not a civil case between the home owner and Airbnb.
The following news from March 09, 2001
If people want to trust others enough to risk this sort of crime, let them. Get the fuck out of my life, State.