I think it's fantastic that they're implementing this, but it's still rather depressing that it took a month of time and a weekend of bad PR to get them to do it in the first place.
To be fair, they've said they'll implement it, not that it's implemented already. The truth of this will be shown when someone who isn't EJ and isn't riding on the crest of a wave of internet pitchforks tries to collect.
They have $112m. They can self-insure for as long as it takes to set it up.
I think they did a great job on this response, except that it took too long. Individual incidents should have been handled as exceptions and handled well, and then this policy developed and announced once they noticed a trend of such exceptions in their CRM (or in weekly support team meetings with the founders)
you can't just snap your fingers and self insure. there are a tangle of regulations to think through, claims processes to setup in a variety of languages, adjusters and investigators to train, policies to write, etc.
the fact that this is the first major incident to make headlines after 2 million nights being booked means that they have probably been doing a great job handling exceptions. mistakes happen. especially in fast growing companies.
This is pretty much exactly what they should be doing. The fact that it took them several weeks to do it is what constitutes a poor response to the crisis.
Regardless, it looks like they're doing what they should be doing, and I hope it works out both for them and their customers.
I disagree. Changing your support model to a 24 hour call center in a month is a big, impressive feat. Think of the hiring/training/management/infrastructure challenges.
Not to mention the insurance policy, which is international?
This is not trivial stuff. It would take most companies several months to even get close to this.
I agree that these are no small feat, and while I honestly think that these things were huge gaps in the service previously, I do applaud the quick implementation of them.
However, even if they could not be implemented immediately, coming out early, before the story really blew up, talking about it openly and frankly, and announcing these changes would have done wonders. Instead, they've been beaten up in the press for the last week or two for their relative silence.
Granted, but this is a PR statement. I have a sneaking suspicion that this is "in the process of beginning to implement" stages, not "We were waiting to have everything fully functional before making a statement about it".
But that said, yes, good on them.
>>It would take most companies several months to even get close to this.
I think that if a company's ability to remain in business was dependent on getting this sort of infrastructure change in place, most would be able to pull it off. Pulling it off well is another question entirely, and I'm going to be interested to see what kind of service they provide in the next couple of months.
Worth noting that my original title said just that ("Airbnb horror" story hits CNN) - and that this was corrected by a mod or automated process within a minute of posting... but not instantly.
Sounds like some nice double-standard going on here, considering this one maintains its title. I'm sure it will be blamed on "the gremlins in the automated system"... funny how they seem to favour YC startups in the middle of a big funding round.
Even if it is because they favored YC startups - so what? This message board is run by the founder of YC and isn't meant for posting sensational articles whenever one of their companies gets caught in the spotlight.
Seems like a disconnect regarding how the up arrow is defined on Hacker News and how it's actually used. I imagine most users use it to promotion awareness of submissions to the site ... but HN describes all up-voted posts as "Saved Stories" in the link from your profile page. Different people save stories for different reasons ... so maybe the "Saved Stories" link could use a better name.
A story can't be killed if it has ten comments on it. You were one away. I asked a question that died with 61 points. But knowing that it only takes 10 flags to kill a story, I wouldn't be surprise to know that AirBnB has ten diehard supporters.
I'm just a supporter of a crap-free HN. Thus, I flag stories that don't add anything new to the discussion. I know there are at least ten others like me...
Well, this certainly drags AirBnb into the eBay and PayPal sized fraud prevention industry... and I wonder how this will affect the vibe of the website. Certainly, AirBnB will survive this ordeal, and gain more name recognition from this event. Hopefully it doesn't do things like kill their profit margins or harm the ease of renting through AirBnb.
I think the only part of it that wasn't inevitable was the up to $50k reimbursement, that shouldn't bankrupt them if the incidence rate stays low. Their support team growth was almost definitely going to have to double (and prob more) this and next year anyway.
If done right, I think they'll gain more credibility through these measures and lure more people from using other services. And with the financing they have, they'll have a greater capacity to execute this than imitators.
Implementing a 24-hour customer service phone line for their host partners immediately puts Airbnb head-and-shoulders above eBay and PayPal in the trust and reliability department.
It's not the same level of challenge as eBay and Paypal. Are Nigerians going to buy houses in SF so they can pretend to have them robbed?
eBay and Paypal's #1 way of avoiding fraud is by validating physical addresses. AirBnB has this built in. Something tells me their insurance policy doesn't apply to shacks in Nigeria.
I like it when startups / companies learn from their mistakes and make an effort to improve things. Nothing is perfect, but striving for perfection is a good aim. I posted my own lessons learned from this affair in hopes that I'd never experience the same. Some people thought my lessons learned were lame, but it's clear that there are lessons to be learned by everyone in this, whether you are AirBnB or just a growing startup.
Great news, thanks for the link. From the article:
On 06/28/11 the SFPD through investigative leads conducted a search of a premise in Belmont, CA. Two people were detained, but released pending further investigation. The search yielded some of the items that were taken in the theft.
Later on that night through investigative leads, SFPD officers made an arrest of Faith Clifton, female, white, 19 years of age of San Francisco. Faith was booked into San Francisco County Jail that night on possession of stolen property, methamphetamine, fraud charges and outstanding warrant out of Milpitas, CA.
SFPD has been in contact with the victim and have been in contact with the website company, who has provided as much information as possible in this matter.
A $50,000 guarantee seems a bit low. Condos in OK neighborhoods here in Chicago start at around 200K so theoretically a lot more than 50K in damage could be done.
Is it possible to damage a condo, without damaging the neighboring units, in such a way that it would cost more than $50k to repair? (Spraying putrescine doesn't count. I don't know why.)
An unbounded guarantee isn't necessarily reasonable or practical.
On the other hand, your concern probably presages an eventual headline of the future: "AirBnb guests burn down host's home; AirBnb guarantee only covers less than 10% of loss."
As a home owner and someone who has used airbnb, trust me, $50k will more than cover everything in pretty much every place airbnb rents out.
Just because someplace costs $200k doesn't mean it costs $200k to rebuild from the ground up (a lot is in property, structure, etc...). Realistically, you'd really have to try hard to do $50k+ damage to a typical airbnb property without the cops being called as it is happening.
"Just because someplace costs $200k doesn't mean it costs $200k to rebuild from the ground up "
In Dallas (where I live), a structure usually costs much more to tear down and rebuild new than it is currently worth. For example, you might get a mortgage on a $250,000 10yo house here yet your insurance will be for $375,000 for that reason.
I'm not saying they are, but I'm sure if the structure was destroyed by a sub-letter there is a good chance the landlord's insurer would allege the tenant was negligent.
$50,000 is on the low side for a freestanding house (house fires are in the high tens of thousands of dollars), but seems totally reasonable for an apartment.
You wonder how much of the concern about the specifics of this announcement really reflect the typical HNer's lack of comfort with the Airbnb model, period. Remember, lots of people on HN would never be comfortable renting their place out period. And that's fine; those people aren't Airbnb customers right now. Plenty of people obviously do find the transaction palatable.
Similarly, terrible incidents like this happen without the fancy Rails app to facilitate them. Ask around for subletting horror stories. How often do we as a community freak out over the concept of subletting? A giant slice of all renters have to consider doing that any time they need to get out of a lease.
Right. I've sub-let an apartment and I was definitely concerned before I did it. If I'm super uncomfortable renting to someone through AirBnB, I'm just not their target market and I suppose a 50K guarantee would probably cover a lot of mishaps.
Also, I'm not sure what the terms are of my homeowners insurance but I would make sure that something would be covered in a situation like this before I rented my place.
I wonder too.. They are proposing a worldwide guarantee, how could they verify each claim?..By partnerships with insurance companies all over the world?
Yes this kind of thing is hardly sustainable, I think it may just be a smart PR move and they'll hugely downsize it or cancel it in the next months, after the storm has passed.
Will this submission have it's title changed to the original post ("Our Commitment to Trust & Safety"), as was done for the original submission of EJ's blog post?
EDIT: Here's to consistency! Title has been (presumably mod-) edited.
After edit: The submission title has been changed to match the original article title in this thread. I wonder if that will happen in the thread from last week I linked to in the link shown just above this P.S.
They should be interesting to read, since the current statment - "personal property will be covered for loss or damage due to vandalism or theft caused by an Airbnb guest" - offers a whole lot of wiggle-room.
For example, what about non-personal property? If I live in a rental apartment, put it on Airbnb, it gets trashed, and my landlord says I have to fix it up...will the policy cover that? It's damage, but it's not damage to the personal property of the person connected to Airbnb.
It's amazing that someone would admit that they f*ed up with such humility. I hope people are as quick to appreciate AirBnB as they were to criticise them.
I'm guessing a call from certain interested investors put Brian on the right course as he mangled this over the past few weeks. A good lesson for us all going forward on what to put in place first.
"Earlier this week, I wrote a blog post trying to explain the situation, but it didn’t reflect my true feelings."
I'm not sure how I feel about this line (I assume it's referring to his TC post). On one hand, it's nice that he's now 'fessing up with a this-is-how-I-feel post. On the other, it's a pretty clear admission that he's had no problems in the past sending out PR spin as a blog post under his own name - so what should make the reader think this (or any future posts) are actually him, and not more spin? It seems like it's muddling the authenticity of the message a bit.
"In working with the San Francisco Police Department, we are happy to say a suspect is now in custody."
Haven't they been saying this for a while, and each time they do, it turns out that when someone tries to verify it with SFPD, the suspect isn't in custody (because they've been extradited to another community)?
As for the potential for fraud, that doesn't concern me that much. If they're doing a blanket insurance policy like this, then they're contracting it out to a legit insurance company - who will presumably have adjusters and claims people who will investigate every claim, the same as other forms of consumer insurance (like you get on your rental car).
I'm also interested in the legalities of this insurance - particularly in places where short-term rentals to strangers are illegal/contrary to bylaw/in violation of the occupant's lease. You'd think that insurance companies would have a problem selling a policy to cover the side-effects of a prohibited activity; that all Airbnb hosts would have to sign a line that certifies under penalty of perjury that they're legally allowed to host a place on Airbnb, which most can't.
If I was a landlord who had a tenant who put their place on Airbnb, and which then got trashed, I'd make the tenant fix it up (which they'd pay for, presumably, from the insurance), and probably try and sue the tenant for violating the terms of their lease. Could I then sue the insurance company as well, for helping my tenant break the conditions of their lease?
> Could I then sue the insurance company as well, for helping my tenant break the conditions of their lease?
The decision to break the conditions of the lease was solely your tenant's decision. Any sane insurance company will either verify the tenant's ability to rent out their place, or will void the contract if they discover later that the tenant did not have the legal right to rent out their place. Most likely, if the insurance is an online-type thing, the tenant will be certifying when they buy the policy that they have the legal ability to rent out their place.
I agree - but isn't this then a huge out for Airbnb, in terms of reducing the number of people that will actually be covered under this? NY has its well-known laws that make most Airbnb listing contrary to State law, and in my lease (for example) it specifically says that I can't rent it out to people without the landlord's permission - which I think is similar to most boilerplate leases.
Given that, would all the damage to EJ's stuff even be covered by the policy?
It seems silly to the point of trollish to argue that the $50k guarantee Airbnb announced in a post about EJ's incident would have been designed to exclude EJ. Give it a rest.
Clearly it wasn't designed to exclude EJ, but it also likely wasn't designed with EJ in mind. airbnb is no doubt working with an insurance company, and if that company finds an "out", they're going to take advantage of it. Like most all renter contracts, it excludes subletting without consent, which is what EJ may have been doing.
Let's definitely have a 19-comment argument speculating about the worst possible case scenario with the $50,000 guarantee Airbnb just announced, because that will definitely pump the oxygen back into the thread.
After mentioning EJ specifically in this post and very specifically mentioning that they will take care of her not taking care of her would be 'suicide by media' at this point.
If you thought what happened so far was ugly I'd hate to see what would happen if that were the case. Can we move past this?
Sure it is all words but they are on the company blog this time, not in a forum and to me they come across as written by a man that has seen the Elephant in person.
Specifically: "We will extend this program to EJ and any other hosts who may have reported such property damage while renting on Airbnb in the past."
You have really been shutting down discussion on this issue. I don't know you from Adam but I think you need to step back a little and let people discuss all angles, I honestly think you're creating a little bit of a straw man here. I think it's reasonable to debate that yes, maybe this insurance will exclude a lot of people, and if so what does that mean for AirBnB's business model?
It is not the critic who counts: not the man who points
out how the strong man stumbles or where the doer of deeds
could have done better. The credit belongs to the man who
is actually in the arena, whose face is marred by dust and
sweat and blood, who strives valiantly, who errs and comes
up short again and again, because there is no effort
without error or shortcoming, but who knows the great
enthusiasms, the great devotions, who spends himself for a
worthy cause; who, at the best, knows, in the end, the
triumph of high achievement, and who, at the worst, if he
fails, at least he fails while daring greatly, so that his
place shall never be with those cold and timid souls who
knew neither victory nor defeat.
-- Teddy Roosevelt
Great to know that the potential for fraud "doesn't concern you that much". You'll post your comment and they'll still be here with the responsibility of running the company, without the ability to airily handwave away the issue.
Great to know also that you're interested in the legalities of the insurance. I guess they should have included citations to case law in a blog post.
> it turns out that when someone tries to verify it with
SFPD, the suspect isn't in custody (because they've been
extradited to another community)?
And how exactly is that under their control?
Some people are never satisfied. You appear to be one of them.
The potential for fraud doesn't concern me because Airbnb will clearly get an insurance company to run this program white-label, and they have whole departments designed to find and fight fraud. Based on the profits in the sector, it seems like they do a pretty good job of it.
As for the veracity of their line about someone being in custody with the SFPD, I stand corrected - my mistake. The last stuff that came to the top of my head was based off EJ's post on 28 July. A few searches reveal that the day after that post went up, the SFPD announced they had arrested someone.
"Airbnb will clearly get an insurance company to run this program white-label" <-- its not known if they can get an insurance policy for such a disparate group of people at a price that allows them to run with a profit
Let it go. They did the right thing, maybe they were doing it all along, maybe they did it under pressure, it does not matter.
What matters is that EJ (and others) will be compensated and AirBNB will live to fight another day in a much stronger and more real-world grounded fashion. Maybe their margins won't be quite as high but that's what usually happens when you underestimate the cost of doing business.
Winners all around, future hosts and guests of AirBNB included.
Note that this does not take care of any emotional issues but it will certainly help with the practical part of it, and I don't think a party like AirBNB could help with those anyway beyond doing their very best to minimize the hurt from such an event.
> "What matters is that EJ will be compensated and AirBNB will live to fight another day"
That's what we're not sure about. EJ, a renter herself, likely didn't have the right to rent out her unit. The blog post says "We will extend this program to EJ...", not "We'll take care of EJ." She still has to qualify through whatever insurance company airbnb is working with. It's going to be an even worse PR disaster when the insurance company says "No."
I think it would be a fair bet that AirBNB will not risk that and will budget out-of-pocket.
Also, I don't see how an insurance company would ever agree to pay out on past cases so my guess is that they'll be paying for all of those out of pocket.
Going forward from Aug. 15th it looks like they'll have a deal in place and in the meantime things are 'murky'. The blog post leaves enough room for AirBNB to assume complete responsibility and/or work together with an insurer, but from the point of an AirBNB host that will likely make very little difference.
i emailed with brian and they are paying all of these out of pocket, even going forward. no insurance company involved. now that opens up a whole other can of worms...
Why do you suppose this is an insurance policy and not a cash guarantee? They never use the word. It's a flat $50,000 everywhere, with terms and conditions to vary by area, and to apply retroactively— does that really sound like insurance?
I know you're gonna say fraud, but why do you think they've doubled the size of their customer support team in the last month? These guys aren't dumb, they knew this was coming. This is the thing they can do with all of their money that will keep them on top.
In fact... my money says the real reason for trying to get EJ to amend the original blog post was they were hoping to keep the story from breaking in mainstream press before they got this system launched.
Agreed. I don't see what the benefit of insurance would be. Insurance only makes sense in one case: when "the big one" will send you under water.
In this case, they're liable to get a few claims per year (or month, or whatever). If they wanted insurance, they'd have to pay all of that PLUS some, spread out into a monthly payment. Doesn't make any sense.
If they had an open-ended policy that covered emotional damages or somesuch, maybe they would need insurance.
Yeah, that phrase jumped out at me too. Both because it implies not telling the truth as well as still passing the buck (were they someone else's words?). And it's too bad because otherwise the post is good.
And I'd have to agree with commentary regarding the photo. It just doesn't strike the right tone of empathy and humbleness. I'm sure it's hard to be humble when you've created a rocket ship but it's a great attribute in these situations.
It looks like it's the report that has to be by August 1, i.e. they'll only cover past damage that has already been reported, before this announcement. Probably to cap their otherwise potentially unlimited liability for people "discovering" past damage after this policy was announced, while still expeditiously resolving any currently-open complaints. Then, starting August 15, they'll have a normal, forward-looking insurance program in place.
"Like Airbnb, the world works on the idea that people are good, and we’re in this together."
Seriously? I usually just roll my eyes when I hear this sort of feel good, warm-fuzzy cheerleading. But seriously, wake up! The reason they're in this mess is because they lacked preparation for the reality that people have an incredible capacity for bad. This is a false premise on which to rent out your most private, personal space.
Extrapolating but I bet that language "$50,000 Airbnb Guarantee" allows them (airbnb) to buy "claims" insurance thus subverting the inherent issues around offering renters insurance to their market.
I'm impressed. This goes beyond what was reasonable to expect, and goes a long way toward resolving the issue.
It's interesting that 1-15 August is now the only uncovered period. They should also let everyone cancel all reservations during that window without penalty, if they'd like.
Giving credit where credit is due, I think Mr. Chesky and Airbnb have done a good job here. Corporations aren't intrinsically ethical (by law) but start-ups are small enough that they can (a) afford to act human and (b) be held accountable by their customers in meaningful ways. This is why people like Airbnb and why they (myself included) were disappointed in the way the situation was handled. I loved reading Mr. Chesky's response and although this clearly changes things for Airbnb as a business, they are now a company I care to see succeed.
Second that. Words are empty, but this sounds like real action... insurance (especially retroactive) + 24 help + more overall support service - all that hits the nail on the head of the problem. This was the response people (or at least ME) were waiting for.
Corporations must follow the ethical standard set by the law just as any other legal entity. Corporations actually have more stringent ethics than other legal entities such as persons. A person does not have any fiduciary duty to others unlike a corporation which is incorporated with a set of documents explaining it ethics and responsibilities to other parties (such as shareholders). As a person under the law I can act completely in my own best interest (negligence, power of attorney, and other corner cases excluded) and there is no ethical problem whereas when a corporation puts it's own interests ahead of those of its shareholders it is acting unethically.
I'm not sure we agree on the definition of "ethics".
Ethics, the way I understand the term, isn't a set of rules enforced by law. It's true that some laws are informed by our shared moral values, but in general law and ethics are independent. There is no legal punishment for acting like an asshole, but in human society you more often than not pay a price for it. There is no such onus on corporations and in fact the "business ethics" we govern our corporations by can easily be put at odds with what you and I would consider ethical behavior (see Ford Pinto [1]). As you point out, companies are responsible to their shareholders, but their stakeholders are a different (perhaps partially overlapping) set of people to which the corporation doesn't have to answer. It is in that sense that I said companies aren't intrinsically moral.
Its seems that, based on the positive media reaction to this, AirBnB has done everything right from the start:
Everyone is piling on them for screwing up the initial reaction to EJ, by not going far enough in offering to help her. But AirBnB didn't do much to help Troy (from the TechCrunch post) 2 months ago, and that story didn't blow up in to a PR disaster. They simply gave him a few free nights and he was happy.
So, it is impossible to tell if any given customer support issue is a potential "PR-nightmare". If AirBnB had over-reacted and offered Troy thousands of dollars (as was being suggested for EJ), they would have lost out - because Troy was happy with just a few free nights in AirBnB credit. How were they supposed to know that EJ (1) wouldn't be happy with what Troy received (2) Would make a scathing blog post and (3) That blog post would go viral. They couldn't have.
So, if you are a wagering person, it seems like the best course of action is to do exactly what AirBnB did: offering minimal support and grow until something really bad happens. Then come out swinging with a big apology and a big offer of support and restitution.
Since it seems like the media and public are willing to forgive AirBnB (judging by the reaction to today's announcement), this course seems like it may have been optimal compared to over-helping people like Troy.
Put another way: PR distasters are recoverable if you say you are sorry and ask forgiveness. Being too careful upfront and limiting your growth curve is not forgivable.
I follow your reasoning, but this approach is optimized for Airbnb alone. The trick is to find an approach that maximizes both Airbnb's business goals and the happiness of the customers.
I would word it "from a self-interested standpoint", which is hopefully different than "from a business standpoint". I prefer to live in a world where businesses aren't laser-focused on just their own interests.
Ideally, a CEO would try to align all of the goals of the parties relating to the business so that the dynamic is synergistic, not win-lose.
> "If AirBnB had over-reacted and offered Troy thousands of
dollars (as was being suggested for EJ), they would have
lost out - because Troy was happy with just a few free
nights in AirBnB credit."
Even from a "business standpoint" I do not feel they would have lost out. Because they would have avoided the EJ fiasco, and still garnered the media and public appreciation from the apology, support, and restitution to Troy.
The company may not have been able to know the story of EJ, specifically, would take this path. But it was predictable that at some point a vandalism or safety issue would eventually get picked up in the media.
Well done. The 50k guarantee and the 24 hour customer service are great features that needed to be there before, but at least they have them now. I wonder though if there's a bigger problem with how Airbnb views customers. EJ and the other guy shouldn't have faced such coldness from Airbnb. It just shows something is wrong. I hope that this "crisis" will help awake Airbnb to take customer service more seriously. Rather than hiring someone from Ebay, they should hire someone from Zappos to head their customer service. Actually, the whole leadership team from Airbnb should take a trip to Zappos and get some training.
For once TechCrunch was able to facilitate a good cause.
There's a hefty chance that AirBnB wouldn't had responded like this if Arrington hadn't been on their back. It's only once TC started to report them rigorously, they started to _understand_ how lame their previous communication been.
Now all Arrington has to bin CatherinaFake-like posts and we have our old TC back on track.
176 comments
[ 4.2 ms ] story [ 108 ms ] threadI think they did a great job on this response, except that it took too long. Individual incidents should have been handled as exceptions and handled well, and then this policy developed and announced once they noticed a trend of such exceptions in their CRM (or in weekly support team meetings with the founders)
the fact that this is the first major incident to make headlines after 2 million nights being booked means that they have probably been doing a great job handling exceptions. mistakes happen. especially in fast growing companies.
Regardless, it looks like they're doing what they should be doing, and I hope it works out both for them and their customers.
Not to mention the insurance policy, which is international?
This is not trivial stuff. It would take most companies several months to even get close to this.
However, even if they could not be implemented immediately, coming out early, before the story really blew up, talking about it openly and frankly, and announcing these changes would have done wonders. Instead, they've been beaten up in the press for the last week or two for their relative silence.
But that said, yes, good on them.
>>It would take most companies several months to even get close to this.
I think that if a company's ability to remain in business was dependent on getting this sort of infrastructure change in place, most would be able to pull it off. Pulling it off well is another question entirely, and I'm going to be interested to see what kind of service they provide in the next couple of months.
And from http://news.ycombinator.com/item?id=2834426 I hear that EJ's story was also retitled to be less enticing.
Sounds like some nice double-standard going on here, considering this one maintains its title. I'm sure it will be blamed on "the gremlins in the automated system"... funny how they seem to favour YC startups in the middle of a big funding round.
I'm just a supporter of a crap-free HN. Thus, I flag stories that don't add anything new to the discussion. I know there are at least ten others like me...
eBay and Paypal's #1 way of avoiding fraud is by validating physical addresses. AirBnB has this built in. Something tells me their insurance policy doesn't apply to shacks in Nigeria.
For Brian Chesky's sake I hope the SFPD actually have a suspect in custody this time.
On 06/28/11 the SFPD through investigative leads conducted a search of a premise in Belmont, CA. Two people were detained, but released pending further investigation. The search yielded some of the items that were taken in the theft.
Later on that night through investigative leads, SFPD officers made an arrest of Faith Clifton, female, white, 19 years of age of San Francisco. Faith was booked into San Francisco County Jail that night on possession of stolen property, methamphetamine, fraud charges and outstanding warrant out of Milpitas, CA.
SFPD has been in contact with the victim and have been in contact with the website company, who has provided as much information as possible in this matter.
On the other hand, your concern probably presages an eventual headline of the future: "AirBnb guests burn down host's home; AirBnb guarantee only covers less than 10% of loss."
Just because someplace costs $200k doesn't mean it costs $200k to rebuild from the ground up (a lot is in property, structure, etc...). Realistically, you'd really have to try hard to do $50k+ damage to a typical airbnb property without the cops being called as it is happening.
In Dallas (where I live), a structure usually costs much more to tear down and rebuild new than it is currently worth. For example, you might get a mortgage on a $250,000 10yo house here yet your insurance will be for $375,000 for that reason.
Hopefully if you rent and use Airbnb, you have a renter's insurance policy with high liability limits.
I think tipping over a candle should do that nicely. Not much effort needed.
You wonder how much of the concern about the specifics of this announcement really reflect the typical HNer's lack of comfort with the Airbnb model, period. Remember, lots of people on HN would never be comfortable renting their place out period. And that's fine; those people aren't Airbnb customers right now. Plenty of people obviously do find the transaction palatable.
Similarly, terrible incidents like this happen without the fancy Rails app to facilitate them. Ask around for subletting horror stories. How often do we as a community freak out over the concept of subletting? A giant slice of all renters have to consider doing that any time they need to get out of a lease.
Also, I'm not sure what the terms are of my homeowners insurance but I would make sure that something would be covered in a situation like this before I rented my place.
I don't use AirBnB - not because I don't trust them but because I don't trust random strangers to use my home. But that's just me.
EDIT: Here's to consistency! Title has been (presumably mod-) edited.
Yes, let's stick with the original title. Using original article titles is preferred according to HN guidelines.
http://news.ycombinator.com/item?id=2823020
(Report of an exception to this principle)
http://ycombinator.com/newsguidelines.html
(The actual text of the guidelines)
After edit: The submission title has been changed to match the original article title in this thread. I wonder if that will happen in the thread from last week I linked to in the link shown just above this P.S.
What are the T&C's I can't find them?
For example, what about non-personal property? If I live in a rental apartment, put it on Airbnb, it gets trashed, and my landlord says I have to fix it up...will the policy cover that? It's damage, but it's not damage to the personal property of the person connected to Airbnb.
"Earlier this week, I wrote a blog post trying to explain the situation, but it didn’t reflect my true feelings."
I'm not sure how I feel about this line (I assume it's referring to his TC post). On one hand, it's nice that he's now 'fessing up with a this-is-how-I-feel post. On the other, it's a pretty clear admission that he's had no problems in the past sending out PR spin as a blog post under his own name - so what should make the reader think this (or any future posts) are actually him, and not more spin? It seems like it's muddling the authenticity of the message a bit.
"In working with the San Francisco Police Department, we are happy to say a suspect is now in custody."
Haven't they been saying this for a while, and each time they do, it turns out that when someone tries to verify it with SFPD, the suspect isn't in custody (because they've been extradited to another community)?
As for the potential for fraud, that doesn't concern me that much. If they're doing a blanket insurance policy like this, then they're contracting it out to a legit insurance company - who will presumably have adjusters and claims people who will investigate every claim, the same as other forms of consumer insurance (like you get on your rental car).
I'm also interested in the legalities of this insurance - particularly in places where short-term rentals to strangers are illegal/contrary to bylaw/in violation of the occupant's lease. You'd think that insurance companies would have a problem selling a policy to cover the side-effects of a prohibited activity; that all Airbnb hosts would have to sign a line that certifies under penalty of perjury that they're legally allowed to host a place on Airbnb, which most can't.
If I was a landlord who had a tenant who put their place on Airbnb, and which then got trashed, I'd make the tenant fix it up (which they'd pay for, presumably, from the insurance), and probably try and sue the tenant for violating the terms of their lease. Could I then sue the insurance company as well, for helping my tenant break the conditions of their lease?
The decision to break the conditions of the lease was solely your tenant's decision. Any sane insurance company will either verify the tenant's ability to rent out their place, or will void the contract if they discover later that the tenant did not have the legal right to rent out their place. Most likely, if the insurance is an online-type thing, the tenant will be certifying when they buy the policy that they have the legal ability to rent out their place.
Given that, would all the damage to EJ's stuff even be covered by the policy?
If you thought what happened so far was ugly I'd hate to see what would happen if that were the case. Can we move past this?
Sure it is all words but they are on the company blog this time, not in a forum and to me they come across as written by a man that has seen the Elephant in person.
Specifically: "We will extend this program to EJ and any other hosts who may have reported such property damage while renting on Airbnb in the past."
Great to know also that you're interested in the legalities of the insurance. I guess they should have included citations to case law in a blog post.
And how exactly is that under their control?Some people are never satisfied. You appear to be one of them.
As for the veracity of their line about someone being in custody with the SFPD, I stand corrected - my mistake. The last stuff that came to the top of my head was based off EJ's post on 28 July. A few searches reveal that the day after that post went up, the SFPD announced they had arrested someone.
What matters is that EJ (and others) will be compensated and AirBNB will live to fight another day in a much stronger and more real-world grounded fashion. Maybe their margins won't be quite as high but that's what usually happens when you underestimate the cost of doing business.
Winners all around, future hosts and guests of AirBNB included.
Note that this does not take care of any emotional issues but it will certainly help with the practical part of it, and I don't think a party like AirBNB could help with those anyway beyond doing their very best to minimize the hurt from such an event.
That's what we're not sure about. EJ, a renter herself, likely didn't have the right to rent out her unit. The blog post says "We will extend this program to EJ...", not "We'll take care of EJ." She still has to qualify through whatever insurance company airbnb is working with. It's going to be an even worse PR disaster when the insurance company says "No."
Also, I don't see how an insurance company would ever agree to pay out on past cases so my guess is that they'll be paying for all of those out of pocket.
Going forward from Aug. 15th it looks like they'll have a deal in place and in the meantime things are 'murky'. The blog post leaves enough room for AirBNB to assume complete responsibility and/or work together with an insurer, but from the point of an AirBNB host that will likely make very little difference.
I know you're gonna say fraud, but why do you think they've doubled the size of their customer support team in the last month? These guys aren't dumb, they knew this was coming. This is the thing they can do with all of their money that will keep them on top.
In fact... my money says the real reason for trying to get EJ to amend the original blog post was they were hoping to keep the story from breaking in mainstream press before they got this system launched.
In this case, they're liable to get a few claims per year (or month, or whatever). If they wanted insurance, they'd have to pay all of that PLUS some, spread out into a monthly payment. Doesn't make any sense.
If they had an open-ended policy that covered emotional damages or somesuch, maybe they would need insurance.
The man tried admitting his faults, and you're still trying to read in-between the lines, questioning his motives.
Yeah, that phrase jumped out at me too. Both because it implies not telling the truth as well as still passing the buck (were they someone else's words?). And it's too bad because otherwise the post is good.
And I'd have to agree with commentary regarding the photo. It just doesn't strike the right tone of empathy and humbleness. I'm sure it's hard to be humble when you've created a rocket ship but it's a great attribute in these situations.
I thought they said it was the first time it happened?
Anyway, better late than never.
Seriously? I usually just roll my eyes when I hear this sort of feel good, warm-fuzzy cheerleading. But seriously, wake up! The reason they're in this mess is because they lacked preparation for the reality that people have an incredible capacity for bad. This is a false premise on which to rent out your most private, personal space.
Brilliant move!
It's interesting that 1-15 August is now the only uncovered period. They should also let everyone cancel all reservations during that window without penalty, if they'd like.
Good luck Airbnb.
Ethics, the way I understand the term, isn't a set of rules enforced by law. It's true that some laws are informed by our shared moral values, but in general law and ethics are independent. There is no legal punishment for acting like an asshole, but in human society you more often than not pay a price for it. There is no such onus on corporations and in fact the "business ethics" we govern our corporations by can easily be put at odds with what you and I would consider ethical behavior (see Ford Pinto [1]). As you point out, companies are responsible to their shareholders, but their stakeholders are a different (perhaps partially overlapping) set of people to which the corporation doesn't have to answer. It is in that sense that I said companies aren't intrinsically moral.
[1] http://en.wikipedia.org/wiki/Ford_Pinto#Allegations_and_laws...
Everyone is piling on them for screwing up the initial reaction to EJ, by not going far enough in offering to help her. But AirBnB didn't do much to help Troy (from the TechCrunch post) 2 months ago, and that story didn't blow up in to a PR disaster. They simply gave him a few free nights and he was happy.
So, it is impossible to tell if any given customer support issue is a potential "PR-nightmare". If AirBnB had over-reacted and offered Troy thousands of dollars (as was being suggested for EJ), they would have lost out - because Troy was happy with just a few free nights in AirBnB credit. How were they supposed to know that EJ (1) wouldn't be happy with what Troy received (2) Would make a scathing blog post and (3) That blog post would go viral. They couldn't have.
So, if you are a wagering person, it seems like the best course of action is to do exactly what AirBnB did: offering minimal support and grow until something really bad happens. Then come out swinging with a big apology and a big offer of support and restitution.
Since it seems like the media and public are willing to forgive AirBnB (judging by the reaction to today's announcement), this course seems like it may have been optimal compared to over-helping people like Troy.
Put another way: PR distasters are recoverable if you say you are sorry and ask forgiveness. Being too careful upfront and limiting your growth curve is not forgivable.
I follow your reasoning, but this approach is optimized for Airbnb alone. The trick is to find an approach that maximizes both Airbnb's business goals and the happiness of the customers.
Ideally, a CEO would try to align all of the goals of the parties relating to the business so that the dynamic is synergistic, not win-lose.
Even from a "business standpoint" I do not feel they would have lost out. Because they would have avoided the EJ fiasco, and still garnered the media and public appreciation from the apology, support, and restitution to Troy.
The company may not have been able to know the story of EJ, specifically, would take this path. But it was predictable that at some point a vandalism or safety issue would eventually get picked up in the media.
There's a hefty chance that AirBnB wouldn't had responded like this if Arrington hadn't been on their back. It's only once TC started to report them rigorously, they started to _understand_ how lame their previous communication been.
Now all Arrington has to bin CatherinaFake-like posts and we have our old TC back on track.