Vandalised home puts pressure on Airbnb

http://www.ft.com/intl/cms/s/2/9aac5f80-b924-11e0-bd87-00144feabdc0.html

by arghnoname • 15 years ago

318 138 15 years ago

arghnoname• 15 years ago

There's nothing new in the actual story. I thought it's placement on the front page (below the fold) of the print edition was significant. It's not exactly a tech publication.

notexactly3• 15 years ago

I don't know what you mean by It's not exactly a tech publication. but this is not exactly a tech problem, this is a general business problem.

corin_5• 15 years ago

OK seriously, why did you feel the need to create a fake account to post that from?

jsavimbi2• 15 years ago

> (below the fold)

web 1.0 term now in disuse. As soon as a story, any story, is disseminated by a world renown publication such as the Financial Times, it might as well be the main story for the amount of time the long tail decides to keep it alive.

It's a business problem; the tech part to AirBnB was just the application. Developers should get used to the fact that their apps grow up, move away and marry business people.

michael_h• 15 years ago

Point taken, but 'below the fold' is most assuredly not a web 1.0 term when we're talking about a printed publication.

______• 15 years ago

What is "new" is that this is now getting a lot of exposure in the non-tech press, which it wasn't before. Techcrunch is relatively niche compared to FT, and hacker news is even more niche.

What this means for AirBnb is that for a great many readers of FT, if they haven't heard of AirBnB before, will have an opinion that the service is inherently unsafe (even if this is the 0.001% story). And once someone makes up their opinion on a product or service, it is very hard to make them change

pseudonym2• 15 years ago

I'm a little surprised it took this long to start showing up in print, as it were. I'll also be interested in seeing if they do a followup with her latest post.

o1iver2• 15 years ago

This long? The initial blog post went viral yesterday only... So to be in todays print edition I guess they wrote it last night or during the night...

pseudonym2• 15 years ago

Yes, but the actual incident and blog post was weeks ago, and this is the kind of combination of thing that rags like to pick up on-- harshly-treated victim, forgotten by an up-and-coming company that doesn't know how to spin PR properly.

Uchikoma• 15 years ago

Danger, Will Robinson.

civild• 15 years ago

It won't be long until the tabloids pick this up and run with it, applying their own sensationalist inaccuracies. I think Airbnb have to act quickly to fix this before it turns into a Fox affiliate human interest story and damages their reputation irreconcilably.

corin_5• 15 years ago

Can't speak to American papers, but it certainly won't be big news in UK tabloids, if it's mentioned at all. The FT cares because it's business, tabloids won't care because it's not a particularly well-known business (over here).

swombat• 15 years ago

tabloids won't care because it's not a particularly well-known business (over here).

1) I actually started using Airbnb because a non-technical friend used it and said it was great. It's more widespread than you think, even in Europe.

2) Tabloids will love the human interest angle, and be quite happy to blame "internet startups" in general for ruining this person's life. Accuracy is optional in a lynch mob.

greenpaint• 15 years ago

Agreed ... and even without inaccuracies, such stories typically get framed with the service as the problem. In the UK a few years ago there was a big story about a teenager who held a party while her parents were away. She advertised it on Facebook, word spread and the house got trashed. Parts of the media emphasised the Facebook angle when they covered the story. Would they have blamed lampposts or flyers handed out at school if she had advertised the party that way?

bfe• 15 years ago

Not analogous, because in this case the business intentionally facilitated the arrangement, it's their whole business model.

karl112• 15 years ago

Has there been any verification anywhere that this actually happened, beyond just two blog posts?

kafene• 15 years ago

I would take the response by brianchesky as an authoritative source indicating that it did actually happen.

asmithmd12• 15 years ago

It just seems a little too perfect to me. With the amount of money at stake in disrupting the hotel business it is not impossible that the event was staged. Her writing is just a little too perfect and why doesn't she respond to emails from the press?

http://travel.usatoday.com/destinations/dispatches/post/2011...

It seems like the only person who has talked to her is the CEO of airbnb

karl112• 15 years ago

Strange that a straightforward question gets voted down like this. Is it really an unreasonable question to ask?

ceejayoz• 15 years ago

AirBnB's CEO had a response on TechCrunch stating a suspect was in custody, which would seem to indicate they agree at least that something illegal happened.

Ygor• 15 years ago

The question now is will this be the Hindenburg moment of this type of services, or is it just a speed bump?

We'll see how all this bad press is going to spread across the rest of the mainstream media and tabloids. I know we are all disappointed with the way airbnb handled the situation, but we really shouldn't be happy if all the sensation seeking press starts using this to boost their sales, and in the process damages this market beyond repair.

al_james• 15 years ago

I think this may be the Hindenburg moment for services like this built purely on trust. Trust alone is a naive defence that only works when your user base is small and well aligned with your core concepts. In many ways its the coming of age of the concept when it starts appealing to crooks. Mandatory insurance and more strict user verification is the only way this kind of service will survive.

grandalf4• 15 years ago

Crooks? Someone that would seriously vandalize someone's home is not really a "crook" but a victim of some sort of mental health problem. There will always (in any area of life) be a small percentage of people who do that sort of thing.

jmjerlecki• 15 years ago

I think the important thing to note is that this might be Airbnb's Hindeburg, however this was entirely preventable had they dealt with this sooner and correctly. This could be and (already is) a lesson on how to (not)deal with PR on a business built entirely on trust and community.

jccodez2• 15 years ago

I remember the early days of ebay and stories of fraud. I don't think this will be the end. They need to make adjustments, but I don't think this is the "end" of this type of service.

robjohnson• 15 years ago

I tend to agree. While the largest unknown independent variable here is how the Airbnb handles this crisis, I feel that they will be able to steer the ship through this.

Keyframe• 15 years ago

I think it's overblown. It's a one odd situation out of MANY good ones, same as couch surfing - from which airbnb is a commercialized version.

xefer• 15 years ago

I'd say it's closer to the Hindenburg moment.

These services are great as long as it's part of a small, insular community of like-minded people. Once the criminal element sees it for the opportunity it is, it's over.

There's an obvious analogy here to email and spammers.

I suppose it could still work if the vetting process is better, but there will always be those who mask their identity and "sneak in". The cost of this to a criminal is probably minimal while the potential rewards are great. Perhaps the key is to create smaller "circles" of trust within the wider community.

jackowayed• 15 years ago

So ... email was destroyed by spammers? I didn't know about that; could you email me the details?

localhost30002• 15 years ago

This is great practice for airbnb. Far worse things than this will happen as the service grows and they will need to be prepared to handle the absolute worst (eg craigslist killer type stuff). Get enough people together and bad stuff is certain to happen. It's just a matter of time.

SoftwareMaven5• 15 years ago

They have failed in their handling to this point though.they are going to be lucky to survive, and they may take the industry with them.

jamesbritt• 15 years ago

This is great practice for airbnb.

What about this, exactly, is practice?

adnam2• 15 years ago

Why would anyone give the keys to their home to a total stranger? (And leave them on their own for a whole week?)

ed209• 15 years ago

And if you do, you should take as many precautions as possible. Airbnb handled this badly, but in truth it can just as easily happen to anyone renting out a property.

I don't understand why Airbnb aren't as rigorous as regular rental companies? And why they are not better educating their customers on security and crime prevention.

hack_edu• 15 years ago

> I don't understand why Airbnb aren't as rigorous as regular rental companies?

Because they wouldn't be profitable if they were, it's too complicated and doesn't fit in their model. The regular rental companies would soon copy their model outpace them if they went that route.

Did anyone ask about this in their YC interviews? ;)

ry0ohki• 15 years ago

One word that answers most of these types of questions: money

xd• 15 years ago

I'd like to think that most people go through life being trustful of their fellow human .. no matter how horrid a world the media paints.

danparsonson2• 15 years ago

As a famous man once said: "Trust, but verify".

limedaring• 15 years ago

What I don't understand is renting to a stranger... but leaving valuables in the house. At least put that stuff in storage while you're out.

mentat2• 15 years ago

Yes, this exactly. You're not letting your friends use your house. Trusting random strangers, getting burnt, and then saying that it's all the fault of the person who introduced you to them as a stranger makes no sense. Airbnb wasn't vouching for their renters any more than a hotel booking site does. You think hotels leave expensive unsecured items in all their rooms? Do you think hotels don't have a way of charging for damage? This person didn't think their actions through at all and now they're blaming everyone but who they should, themselves.

My eastern European friends have told me that Americans are strange with the example being that they need their coffee labeled hot whereas "normal" people know that coffee is hot. This is the same thing. Leaving very valuable things out when inviting strangers to stay in your house when you're not going to be present is just something "normal" people know not to do.

carbonica3• 15 years ago

What about your TV? An expensive rug? Any desktop computers? Why doesn't AirBnB tell you that you may need to move hundreds of pounds worth of stuff out of your home to use their service safely?

What's to stop them from cooking meth in your home? From what EJ says, her bathroom smelled deathly horrible, and the arrested suspect had meth on them. You don't need valuables around for someone to turn your home into a meth lab.

Finally, this type of rental is advertised by AirBnB as a main use of their service. And they don't tell you that the only way to do so safely is to clear your home out of anything you'd like to see again - saying that up front is pretty bad for business.

bproper• 15 years ago

It would cost a fraction of their recent raise to make this woman whole again, at least financially.

They should have brought her in, given her a heartfelt apology from the executive team, and paid her a large lump sum. In return she would sign a NDA.

adnam2• 15 years ago

That wouldn't fix the underlying trust problem.

theklub• 15 years ago

Trust problem with AIrbnb? Or trust that if you let a random person into your house they aren't going to do anything harmful. I don't think Airbnb is to blame at all here, its kind of like blaming craigslist because you go ripped off when trying to sell something but got ripped off instead. If you rent your house out to random people you should protect yourself against having your life ruined if something does happen.

user24• 15 years ago

> In return she would sign a NDA

Would work OK if she took it, but only until it happens the next time. AirBNB cannot afford to make 'pay them to shut up' a policy.

And if she took the moral highground, it would look very bad indeed. And the money could not replace the stolen personal items, which makes her accepting "take this cash and shut up about it" less likely.

michael_dorfman2• 15 years ago

AirBNB cannot afford to make 'pay them to shut up' a policy.

Are you sure about that? I imagine it depends on how often it occurs, and what kind of liability insurance they can arrange. Since they claim to have over 2 million uses of their system, and this is the first case we're hearing about, I'd suggest that it may in fact be the case that they cannot afford not to have a 'pay them to shut up' policy.

raganwald• 15 years ago

> In return she would sign a NDA

It depends what’s in the NDA. If AirBnB are acting honorably and correctly, there is no nead to silence me about what happened to me and how they responded.

About the furthest I would >personally< go is agreeing not to disclose the exact amount of compensation. That’s a fairly normal term, and the usual reason is to prevent scammers from being enticed into fraudulent claims of damages, or for others to use my settlement as a baseline for negotiations.

Other than that, asking me not to talk about something that actually happened is wrong. If they do A and B and C in the negotiating room, well, they ought to stand behind my talking about A and B and C, at least in general terms.

Trying to “buy my silence” would raise my hackles, and I would immediately presume that they were an untrustworthy organization that prefers guile and miscommunication to honest dealing.

>JM2C, it’s a matter of personal conscience to decide what to accept or refuse. But it’s also a matter of public perception. If I read that they settled with her and she agreed as a term of the settlement not to talk about it... I would make certain inferences about AirBnB. Of course, this has not happened so we are speaking only of a hypothetical situation.<

bambax• 15 years ago

> Trying to “buy my silence” would raise my hackles

Same here; if I were in such a predicament I don't think there's any amount that would justify signing a NDA.

I'm wondering if this is what happened? As the story stands, one side is clearly not telling the truth, or withholding a part of it.

What could have happened could have been, Airbnb offered compensation + NDA, victim said she wouldn't sign it. Back and forth a few times, and in the end she went ahead with her blog post. Seeing this, Airbnb stopped all communications.

If this is actually what happened, they should have offered compensation anyway, no strings attached.

It'll be very interesting to know the real details; I don't understand how they could let this blow out of proportion like this.

run4yourlives• 15 years ago

An NDA would be shady. Besides, if you do everything you can for a person, and they're happy as a pig, you want them talking to everyone they can.

If what you do doesn't make them happy, you've got bigger problems.

Omnipresent• 15 years ago

never imagined this type of thing would happen in startups - top level bureaucracy. Doesn't this happen in big corps?

Maybe I'm looking at this whole black cloud of bad PR in a simplistic way but why is it so hard to bring EJ over or fly over to her, assess the situation, put her in a hotel, replace her stuff, help her find a new place. Doing that will get AirBnB much much more popularity than their famous cereal box story that we've heard so much of.

shareme• 15 years ago

Its not a customer service issue..hold on wait..let me explain..

Its an identity problem..How do you have processes and procedures in place that uses identity as the qualifier of being able to trust a person to temp rent to ? Fro example, world wide what do we use as the identifier to get all this info? Is it a credit card number? Is it a credit card number and other pieces of info?

Look at the processes of PayPal..similar identity/trust problem or Amazon Stores..

I submit that Airbnb has not solved the identity/trust set of problems yet and that is their stumbling block not reactions to customer problems as the techmedia has blarred..

michael_dorfman2• 15 years ago

I agree that they haven't solved the identity/trust set of problems.

However, in the absence of a solution to those problems, it's the customer service issue that's killing them.

If they had been aggressive in their customer service, reaching out to EJ, and doing whatever it took to resolve the situation, plus some, they could have turned this into a PR coup, or at least, mitigated the fall-out substantially.

Instead, they magnified the problem significantly.

giardini• 15 years ago

The identity/trust set of problems was solved long ago by hotels and most other businesses: when the customer arrives you meet him, check his id, get payment info and show him his room. You can take pictures of him if you wish (e.g., security cameras in the lobby). A check-out process should also occur.

The AirBnB contract should be between rentor and owner of rental property: AirBnB's participation should be only as an agent. That limits liability and makes clear what is expected of each party.

IMO AirBnB should not be responsible. This is looking more and more like a shakedown of AirBnB or preparation for a lawsuit.

Aloisius• 15 years ago

Exactly. Every vacation rental I've ever had asked me for my ID and often, a refundable deposit to cover damages. When I used AirBnB in Paris, the owner asked to see my passport.

dbuizert• 15 years ago

I think more importantly, could this have been prevented? They should have done the proper research on the risks involved.

They should also have provided users with a quick (even webpage) on risks involved and precautions people can take and make. And provide the users more background info on the renter. It's not as simple as running a hotel.

To me this looks and feels like a story of simple thinking and bad iterating. I doubt this is the only case out there. There should have been a lot of minor issues as well. And we all know it starts small before it becomes a tornado and tears your house and community down.

zwieback2• 15 years ago

My first thought was "business opportunity to offer insurance to airbnb customers".

Apparently there are already websites up to do just that.

rmc• 15 years ago

Good luck being able to cover all a person's personal heirlooms that cost thousands.

aeden2• 15 years ago

As long as the volume of insurance related payouts is small enough and the volume of customers purchasing insurance is large enough, then it's a viable business model. In fact, that's how insurance works (and how it stops working when there are major catastrophes that cause the number of claims to spike dramatically).

zwieback2• 15 years ago

Usually property insurance works as a percentage of the insured amount. If I were to rent out my house I'd put my treasured heirlooms into storage/safe deposit box.

aeden2• 15 years ago

It looks like AirBnB themselves may also be working on providing an insurance policy. I wonder if it'll cost extra?

http://launch.is/blog/airbnb-confirms-insurance-in-case-your...

helwr• 15 years ago

There is no such thing as bad publicity

SoftwareMaven5• 15 years ago

BS. Perhaps the vast majority of publicity can be made positive for you, but if you screw up in your handling, you can get eaten alive.

AirBnB had a chance to make this publicity tolerable. Instead, they worried about "precedent" and "cost" and, in a fit of immaturity, tried to sweep it under the rug. Every one of those actions have magnified the severity of this crisis.

Now, instead of them being in the drivers seat of the story with some control of the fire, they are subject to whatever the winds want to do with it. In both cases, stuff gets burned, but it's usually not houses, businesses, and people in a controlled burn.

chailatte• 15 years ago

At this point in time, I wonder if it's in pg's best interest to cut loss, and sever the relationship with airbnb altogether. Sell yc's stake in airbnb, and avoid talking about them ever again.

Sure, airbnb has a $1b valuation for now. But does anybody really think they're worth $1b after this, and only on an estimated $10M cumulative revenue? (not to mention the pending stock market collapse and IPO window closing, precipitated by US default next Tuesday)

They have a pretty toxic public image now amongst early adopters, and will only get worse. They have a business process which now appears to be broken, and it will cut into their already miniscule revenue to fix it. They do not have a moral/charismatic leader that can guide them thorough an important crisis like this. They are deemed illegal in many parts of US, and will likely be more so later once more mainstream media picks up on it.

On top of that, they are destroying yc's precarious image. And they're dragging this entire mess on all the other yc's startups (the other yc founders have to stand up to defend airbnb. Other applicants realizes that the best performing company in yc is one that does evil)

SoftwareMaven5• 15 years ago

With the exception on the potential hit to AirBnB, I think you've overstated every single claim in your post. Of course, I have no evidence of market effects; only time will tell, but YC is not going to be judged and thrown out as unworthy because one company has a significant (perhaps deadly to the company) issue.

And why does YC have a "precarious image"? I've never heard anything of that nature. Every YC person whom I've spoken to (albeit not a huge percentage!) has loved the program.

trebor• 15 years ago

Some aging statistical research shows that if you have a bad experience you'll share it with 26 other people; having a good experience nets only 13 people. Multiply that by the internet and predict the market effects.

As disastrous as this is to EJ and her life, I think it'll be the utter ruin of AirBnB.

waterside81• 15 years ago

Where did you see that AirBnB has only 10M cumulative revenue? That seems way too low.

robtoo2• 15 years ago

Someone else did this rough math in one of the (seemingly numerous) AirBnB threads we've had recently...

2 millions nights (claimed) @ $50 per night (est.) with 10% cut (est.) = $10m revenue

SkyMarshal• 15 years ago

I think you're overstating the case. It's just another problem to be solved.

The short-term solution is to take care of EJ, make her whole as much as possible. So far they seem to be botching that, but it's not a lost cause yet, and I doubt it's enough to destroy them in the long term.

The long-term solution is multi-part:

1. figure out a new renter's insurance they can offer as an optional product to property owners. Difficult, but I'm sure there's some intrepid banker or actuary looking to make a name for themselves. Maybe they can require all AirBnB properties pay a small fee into an insurance fund that's backed by a derivative that gets sliced and diced in some clever way and resold on the secondary market, or whatever.

2. Step up the Facebook integration. Make it more prominent. Base the site around real identity, users' social graphs, etc.

I also don't see this destroying YC's (precarious? really?) image. YC has hundreds of companies now, several large exits. This issue with AirBnB isn't going to hurt them in any way that matters. It's not like Ron Conway and Yuri Milner are going to withdraw their investements, or promising startup founders will stop applying all of a sudden.

jamesteow• 15 years ago

"At this point in time, I wonder if it's in pg's best interest to cut loss, and sever the relationship with airbnb altogether. Sell yc's stake in airbnb, and avoid talking about them ever again."

Give them a chance to rectify this ONE publicized incident before throwing them under the bus.

Thankfully, I would think most level headed investors would feel the same.

Havoc• 15 years ago

>These included doubling the size of its customer support team, setting up a 24-hour telephone hotline, and offering insurance products.

That is a pretty weak response. Peddling insurance...really?

Even worse I can't really think of a better response. i.e. The model might be inherently flawed & un-fixable.

gaurav_v• 15 years ago

The last line of her most recent blog post pretty much sums up the entire thrust of her story and its problems for Airbnb:

"And for those who have so generously suggested a donation fund be set up to help me recover, I thank you from the bottom of my heart, and suggest that instead, you keep the money and use it to book yourself into a nice, safe hotel room the next time you travel. You’ll be glad you did."

SteveJS• 15 years ago

How does using a hotel when you travel, help prevent your home from being burglarized while you're away?

indrax• 15 years ago

Other times when people get their houses ransacked while on vacation, we don't have a flap of stories about the post office leaving mail in the mailboxes. A criminal decided to use AirBNB to find an empty apartment and provide cover.

It is important for them to react well to this, but they just can't provide real security. And they shouldn't have to, they're matchmakers.

All this media attention is going to make them feel like they need to do everything, but past the basics of providing good customer service lies a few good measures and a lot of security theater. They're being hammered to do the impossible because they are novel.

Vandalised home puts pressure on Airbnb

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