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Our product is real life.
—BRIAN CHESKY
OF COURSE, HUMANITY IS NOT always well behaved, and despite Airbnb’s idealism-filled promise, there is an obvious question here: How can you smush all these strangers together and not have things go wrong?
After all, there are some very bad actors in the world. And there are seemingly few easier ways to attract them than to offer a service whose core mission is getting someone to hand over the keys to his or her home to a complete and total stranger. So wouldn’t these types flock to Airbnb? Some did. In other cases, accidental oversights had unintended, sometimes grave consequences. And while overall these instances are very rare, they are part of the brave new world of large-scale home sharing—and they have had important implications for the company.
There were incidents like EJ’s ransacking back in 2011, the company’s first major lesson in how to handle extreme violations of the trust it had tried to create, as well as the related PR and crisis-management issues. But the ways in which people can misuse Airbnb are numerous, and the most colorful instances over the years have become media sensations. In 2012, police busted prostitutes using an apartment they found on Airbnb in Stockholm as a brothel. In a well-publicized incident in New York in 2014, Ari Teman thought he rented his Chelsea apartment out to a family that was in town for a wedding, but when he stopped in to pick up his bags before heading out of town, he found what he said was a sex party for overweight people in full swing. A few weeks earlier, start-up executive Rachel Bassini rented her penthouse in New York City’s East Village and returned home to find furniture damaged and overturned and everything from used condoms to chewed gum and other detritus—including what seemed to be human feces—on the floors, walls, and furniture.
In the spring of 2015, Mark and Star King, married parents of two young children in Calgary, rented their three-bedroom home in the city’s suburban Sage Hill residential neighborhood to a man who said he was in town with a few family members for a wedding. Toward the end of their stay, a neighbor called to tell them the police were at the house. The Kings returned to find the home completely wrecked after what police later called a “drug-induced orgy.” It was a level of destruction similar to or worse than what happened to EJ in San Francisco: furniture was broken and stained; Star’s artwork had been destroyed; and the house was littered with used condoms, puddles of alcohol and cigarette butts, and piles and piles of trash. There was broken glass on the floor, and food products were bizarrely spread and strewn throughout the house, including barbecue sauce and mayonnaise on the walls and ceiling and chicken legs stuffed in some of Star’s shoes. Because there were unknown fluids present, police taped off the house, put up biohazard signs, and returned with white suits and masks. “We wished the home was burnt down to ashes. It would have felt way better,” Mark King told the CBC at the time. Neighbors later told them that shortly after the Kings had left, a party bus had pulled up to the home and let out what looked like one hundred people. The home had to be stripped down to the baseboards, the flooring torn out, walls repainted, and the ceiling retextured, a process that took six months (and was paid for by Airbnb’s Host Guarantee). “Most of the contents in the house were not salvageable,” says Mark King.
These kinds of parties have been going on for years, with their organizers using all kinds of websites, from Craigslist to HomeAway to others, to find spaces to rent. But as Airbnb grew and offered an easy, friendly interface and millions of listings beyond just those in vacation-home markets, it became a very accessible place to fish for venues.
“They Don’t Look like Golfers”
In July 2016, the annual PGA Championship tour was coming to the Baltusrol Golf Club, a 121-year-old golf course in Springfield, New Jersey, about twenty miles west of New York City. Barbara Loughlin (not her real name), who lived in a wealthy suburb nearby with her husband and four children, started thinking that maybe they should rent out their home during the event. They were spending most of the summer at their vacation home at the Jersey shore anyway, and what were the odds that a prestigious national event would come and create lodging demand in their sleepy area?
Loughlin had recently been doing research for an upcoming trip to Napa Valley, and had been browsing short-term-rental sites and liked the array of nice-looking properties she was finding, so she had become comfortable with the practice. She took some photos and posted the four-bedroom Victorian with its spacious backyard and a pool, listing it for $2,000 per night (“which is sort of outrageous for our town,” Loughlin says. “With the exception of a golfer wanting to stay there, why would anyone want to pay $2,000 to rent our suburban home for the night?”). She started getting some queries, but she turned most of them down because they looked suspicious, like the eighteen-year-old who wanted to have his high school graduation party there. But soon she heard from someone named Kay, an event coordinator whose listing name was “Plush.” Kay said he was working with an editor for Golf Digest magazine who wanted to rent the Loughlins’ house for the weekend and host a “launching party” for fifty to sixty golfers outside in their pool area on Saturday afternoon.
Loughlin thought this sounded appealing: Kay wanted the house for only three nights and was willing to pay the fee of $2,000 per night, and what better-behaved crowd could there be than golfers on a Saturday afternoon? Plush was an odd name, to be sure, but he had a Verified ID account, Airbnb’s opt-in method of enhanced identification verification. Even so, Loughlin, the daughter and sister of attorneys, took extra measures: she generated an additional contract and requested the driver’s licenses of not just Plush but all six adults whom Kay said would be staying overnight on the property. Kay obliged, sending copies of the licenses; all six names went on the additional contract, it was signed and returned a few days before the weekend of the event, and the booking was made and paid through Airbnb.
Just to be sure, Loughlin then Googled the names on the driver’s licenses to make sure they seemed legitimate. They all looked like real people and professionals with profiles on LinkedIn and other sites, but Loughlin thought it seemed odd that there was no reference to golf or Golf Digest in any of their online profiles. By then it was the day before the tenants were scheduled to arrive, and she called Kay and said she still didn’t quite understand the golf connection. He reassured her that he could provide a link that would explain it. They talked three times that day, and each time she reminded him to send the link, and each time he said he would send it—but no link arrived.
The next day, as planned, Loughlin and her husband drove up from their beach house to meet Kay and his caterer at the house to hand over the keys. Kay called to say he was in Brooklyn meeting with his attorney and running late, but the caterer arrived, gave Loughlin a copy of his driver’s license, and assured her it would be a small party and a simple affair. Kay called again and said he was still in the city, tied up at the airport picking up the other renters, so Loughlin gave the caterer the key. Loughlin and her husband drove back to their beach house at the Jersey shore that night.
Loughlin had alerted her neighbors to the golf event, so the next morning when one of them texted her a photo of a furniture-rental-company truck in her driveway, Loughlin replied yes, that made sense and was OK. Everything was happening as planned.
A few hours later, another neighbor called Loughlin. “I don’t want to alarm you, and everything’s fine,” she said. “But the people coming to your house don’t look like golfers.” She described groups of young people scantily clad in bathing suits. Loughlin called Kay and asked what was going on. He told her the neighbor had probably just seen the setup crew, which hadn’t left yet; the golfers had yet to arrive. Somewhat wary, Loughlin took him for his word. But soon the neighbor called back and said more and more people were arriving, all looking the same: women dolled up in bikinis and cover-ups and high heels, men in bathing suits, all roughly between the ages of eighteen and twenty-five.
When Loughlin called Kay back yet again, this time he had a different explanation: he told her that his clients had rented two houses for two different events, and at the last minute they had decided to switch the events. The event at the Loughlin house was now a family party where the main organizer of both events, a man named Jean Manuel Valdez—one of the six names on the lease who’d provided a driver’s license—would be proposing to his girlfriend.
At this point Loughlin and her husband sensed something was not right, so they got in the car and headed back from their beach house once again. Along the way, their neighbors continued to text them photos and told them that more and more people were arriving, groups of young men and women who were streaming into their house by the dozens. By the time the Loughlins arrived, every street in their neighborhood was lined with parked cars, and clusters of attendees were approaching the house on foot. When the Loughlins made it to their house, they were greeted at the end of their driveway by professional security guards who were checking people in with wristbands. Hired by the event organizers, the guards had no idea about any party for golfers. There was a second check-in station in the Loughlin’s garage, and in the backyard there were three DJs, a cash bar, a barbecue, six large, resort-style cabanas—and somewhere between three hundred and five hundred revelers. “It was insane,” says Loughlin.
The Loughlins couldn’t enter their property, since doing so would violate the terms of their lease. Because their neighbors had called to complain, though, the police were already on the premises, and they had authority to enter the property, shut down the party, and evacuate the guests, which took two hours. Barbara Loughlin asked for Jean Manuel Valdez and was told he was out getting lunch. “I said, ‘I don’t think anybody on this lease is on the property,’” Loughlin says. Kay, her main contact, was nowhere to be found, and she never met Valdez. After the last guests were gone, the Loughlins walked through their home with a police officer to assess the damage, which was minimal—a broken candlestick, a damaged wicker chair, and some cracks in the pool decking. Since none of the tenants were there to give the Loughlins their key back, they called a locksmith, who came and changed the locks.
The Loughlins later learned that their home had been used by promoters to host a hip-hop party called In2deep. The bash had been advertised on Instagram and Eventbrite for weeks, selling itself as a “private mansion pool party” with VIP cabana service, “VIP champagne for the first 100 ladies,” and DJs spinning hip-hop, dance-hall, and Afrobeats music. “Style it up in a Cabana or Wet it up in the Pool,” the ad read. Attendees paid fifteen to twenty-five dollars per ticket and were given the address after payment.
Despite the minimal damage to the property, Loughlin was distraught: she felt she had been defrauded, their vacation had been ruined, and she was mortified at having caused her neighbors so much disruption. She was afraid—she had seen posts on Instagram from some of the attendees (one wrote, “Yesterday was on pace to be something great but you know the white devil wouldn’t let the children of God prosper but don’t worry we got a few surprises”)—and she thought annoyed guests might return to their property for retribution. Mostly, though, Loughlin wanted Plush to be caught and to pay a price: the Loughlins’ sense of trust had been violated, and they had been scammed.
The Monday after the event, Loughlin called Airbnb and, after looking for the phone number on the website for what she said was forty-five minutes and being put on hold for another fifteen, relayed her experience to a customer-service manager. The employee she spoke with said she would escalate it to a case specialist who would get back to her within twenty-four hours, and encouraged Loughlin to send in any additional details about her case in the meantime. Three days later, Loughlin hadn’t heard from anyone, so she sent an e-mail asking when she could expect to hear back, and she provided more details: a description of what had happened and a Dropbox link to some forty photos of the event that they’d collected from Instagram. She asked if someone from Airbnb could call her.
Five days after that, still not having received a response, she e-mailed Airbnb again, asking what was taking so long. The following day, an Airbnb case manager, Katie C., sent her cheery greetings (“Thank you for reaching out to us, although I’m so sorry it had to be under these circumstances!”) and apologized for the delay. Katie suggested that Loughlin take full advantage of the Host Guarantee, Airbnb’s reimbursement program for host property damage, explaining in detail the benefit and the process for filing a claim. Loughlin told Katie C. that the damages she was concerned with were not to her property but that rather, she was looking for answers to some urgent questions: she wanted to know whether Airbnb had run a report on the driver’s licenses; whether the company had looked to see if these same actors were still on the website renting other properties on Airbnb; and whether the company had gotten to the bottom of how Plush could have had a Verified ID. After her e-mail went unanswered for two days, Loughlin wrote Katie C. again and said it had been two weeks since the incident and they still had not received a response from Airbnb on her questions. She added that a local television reporter had called the Loughlins, wanting to do a story on the incident, the news of which had spread throughout their town.
Two days after that, Katie C. wrote back and said Airbnb couldn’t give out personal information but if Loughlin was working with local law enforcement, those officers could e-mail Airbnb’s special law-enforcement liaison to make a formal request for information regarding Plush’s identity. She again encouraged Loughlin to file a claim for physical damages under the Host Guarantee. She had received the photos, but in order to consider the case for compensation, Airbnb would need the official Host Guarantee claim filled out with an itemized list of damages and receipts. “I understand this is a frustrating incident,” she wrote, “and we are doing our best to provide support, such as forwarding you to our Host Guarantee process.”
After more back-and-forth, during which Loughlin filed a Host Guarantee claim for $728 and repeated her questions, Katie C. told Loughlin that unfortunately, the company’s privacy policy prohibited the disclosure of any information regarding Plush’s account, but if Loughlin’s local law enforcement wanted to investigate, they could contact Airbnb’s law-enforcement liaison, who would cooperate with any investigation. She added that she was committed to doing everything she could to advocate for Loughlin through the Host Guarantee program.
Loughlin had little interest in the heralded Host Guarantee. She wanted Airbnb to help identify Plush and prevent him from defrauding others on the platform. She and her husband wanted to press charges against Plush, but they had no personal information for him, and they didn’t think their local police would take up their case the way Katie C. had suggested; it wouldn’t be worth their time. Loughlin wanted Airbnb to help. At the very least, she wanted a phone call. “They never spoke to us on the phone,” she says.
In the meantime, she realized that around the same time, she had received a request to book her home through VRBO from a Christopher Seelinger, one of the other names from the group of fake driver’s licenses. “These guys are just scamming again and again and again, and Airbnb is doing nothing,” she says. “They won’t even call me back to talk about it.”
The circular responses continued. After she filed the Host Guarantee claim, another Airbnb representative named Jordan wrote to Loughlin, saying that he noticed she hadn’t used the Resolution Center as she had been instructed in a previous e-mail.
Airbnb refers all disputes between hosts and guests to the Resolution Center, a messaging platform on the website where parties can attempt to resolve conflict on their own by requesting extra payment. If no agreement is reached, the parties can ask Airbnb to step in to resolve the conflict. Loughlin was confused—no one had made any mention of a Resolution Center to her—but she followed Jordan’s instructions, filing a lengthy request and asking for $4,328 in damages, itemized in detail as $728 for the physical damages to the property, $350 for some extra landscaping services that were needed, and $3,250 to cover the ten hours of legal counseling she and her husband had received. (“You defrauded us,” began the nine-hundred-word statement that she addressed directly to Plush.)
A few weeks later, Katie C. wrote back to let Loughlin know that Airbnb had processed payment of $728. Loughlin was flummoxed: she had requested $4,328, had not heard back from Plush, and had not agreed to any other payout plan. And she still had not received any phone call from Airbnb. She relayed this to Katie C., who wrote back and said she did not understand, since the physical damage expenses totaled $728. “Can you elaborate on how you came to $4,328?” she wrote. Loughlin e-mailed back and again explained that the remainder was for legal bills. She again asked whether Plush had responded and what steps Airbnb had taken “to reach out to him about his fraudulent acts.”
Three days later, Katie C. wrote back and said that the guest had not responded, his account had been quarantined, and the Host Guarantee did not cover legal expenses, so they were not included in Airbnb’s final offer. She was, however, happy to process additional reimbursement, through the Host Guarantee, for the extra landscaping services Loughlin had mentioned—could she please send an invoice for that?
Loughlin was exasperated. All she wanted was for Airbnb to find Plush and prevent him from acting again and for someone from Airbnb to call her toward that effort, since she had his contact information and had heard from the real owners of some of the other stolen driver’s licenses the group used—and instead, she felt trapped in an endless circle of chirpy discussions about the Host Guarantee. In the end, Loughlin elected not to take the reimbursement: in order to receive it, Airbnb requires payees to sign a form that, among other things, relinquishes the company from any future liability related to the booking, which Loughlin refused to do. She felt that the document was “unconscionable” and that Airbnb’s policy was protecting Plush, since it wouldn’t release his information to her. “Plush could knock on my front door or rent to me again and I would have no idea who he was,” she wrote to the company. Airbnb sent several follow-up e-mails asking her to sign, after which point a supervisor contacted her and said the company was able to authorize payment of $271 of the remaining $350 without her signature—and the supervisor said she was also including a $100 coupon toward an upcoming reservation.
Emily Gonzales, who heads Airbnb’s Trust and Safety Operations team for North America, says the company’s delay in responding to Loughlin was “unacceptable” and that the team was looking into ways to make sure it wouldn’t happen again. She said that since Loughlin’s legal fees didn’t relate to any specific legal action being taken, they could not cover those expenses. She said that the company did cover the damage claims, as was its policy, that it had removed the Plush account permanently and confirmed for Loughlin that it had been removed, and that it had checked and was able to confirm that the “Chris” she had subsequently heard from was not the same Christopher whose name had appeared on one of the the fraudulent driver’s licenses.
Nick Shapiro, Airbnb’s global head of crisis communications, says the company’s delay was “absolutely unacceptable.” He also points out that the tools the platform provides give hosts multiple opportunities to assess potential guests and to use their own judgment: factors like the number of reviews a potential guest has, whether they have a Verified ID, and the way they communicate during messaging, all of which can help a host evaluate a potential guest and signal potential trouble. Shapiro pointed out that in this case, the guest was new and didn’t have any reviews and clearly stated his intent to have a party, which Loughlin consented to. “There is no silver bullet,” Shapiro said. “That’s why we have a multilayer defense.” He added that if a host books a guest and someone else shows up, as happened in Loughlin’s case—when Kay did not show up to her home but the caterer did—a host can and should call Airbnb and cancel the reservation on the spot. Loughlin maintains that since Plush had a Verified ID, she felt secure: “They’re saying he’s a real person.” When I relayed this to Gonzales, she said that “what you’re describing is something we’re working on and improving.” The company is developing an enhanced version of Verified ID that it plans to launch in the near future.
A Scary Attack
Another incident came in the summer of 2015, when, as was reported at length in the New York Times, a nineteen-year-old from Massachusetts named Jacob Lopez was staying at an Airbnb in Madrid. According to the Times account, his host locked Lopez in the apartment and demanded that he submit to a sexual act. He said that the host, a transgender woman, threatened him.
According to the account, Lopez texted his mother in real time, asking her to call for help. His mother called Airbnb, but the employees she spoke with said they couldn’t give her the address of the listing in Madrid—they needed the Madrid police to call them directly to request that information—and they also said they could not call the police directly to report the incident; she would have to do that herself. They gave her the phone number for the Madrid police, but when she called, according to the Times, she got a voice recording in Spanish that disconnected her.
Meanwhile, the situation inside the apartment had escalated and, as Lopez recounted, he was assaulted. He was ultimately able to talk his way out of the apartment by telling his host that the friends he was meeting nearby knew where he was staying and would try to find him if he didn’t show up. (According to the Times article, the host denied these charges, said the incident was consensual, and said Lopez was transphobic. The Times also said that the Madrid police declined to comment and that the host indicated that the police had already visited her and she expected to be cleared of charges.)
Like the ransacking of EJ’s apartment in 2011, the story went viral as soon as it was written about. Lopez appeared on the Today show. “If You’ve Ever Stayed in an Airbnb, You Have to Read This Horrifying Tale” read a headline on Cosmopolitan.com. Airbnb quickly made changes: it updated its policy to grant employees authority to contact law enforcement directly in cases where there is an emergency situation playing out in real time. It also added the option for travelers to set up an emergency contact on their profile who would be authorized to receive any information in case of an emergency; and it made it easier to share itineraries with friends and family, especially from a mobile device.
But this situation raised a question as to why, in 2015, seven years after the company had been started, it wasn’t already Airbnb’s policy to have employees call law enforcement directly in the middle of an emergency playing out in real time. “We were a little shy about calling law enforcement before,” Chesky conceded when I asked him. He said the company had developed its emergency-reaction policy with input from experts who had specifically advised that it’s better to not intervene and that victims should ask for help from law enforcement directly, to avoid the chance of escalating a situation the victim may not be ready for. But Chesky said Airbnb personnel hadn’t considered the possibility of an incident unfolding in real time. “We missed the nuance” in developing the policy, Chesky said. He also said that when they reviewed the details of the case afterward, the judgment call that was made in the Lopez incident to not refer the case to authorities “didn’t pass the smell test.”
Airbnb’s responses tend to carefully stress that such incidents are rare and often part of a bigger problem. “The issue of sexual assault is a global challenge, but there’s nothing more important to us than the safety of our community,” read a statement the company issued after the Lopez incident. “That weekend, more than 800,000 people stayed on Airbnb with no incident—including 70,000 in Spain alone—but even one incident is one too many.” “No one has a perfect record” is a common refrain—“but that’s what we strive for,” the statement continued.
But safety is paramount to Airbnb’s business; more than “belonging,” one could argue, not being hurt and not being vandalized are fundamental in Maslow’s hierarchy. And just like entrusting a user to provide good hospitality, safety, too, is a real challenge when the company doesn’t own its assets. “Our product is real life,” Chesky says. “We don’t make the product.” Because of that, he says it can’t be perfect. “What you end up with isn’t a community where nothing ever happens.” But he maintains that Airbnb is a “high-trust community” (the “real world on the street,” he says, is by comparison a low-trust environment), and when instances do happen, the company always tries to go above and beyond to make things right. In every instance, he says, “I hope we would have done more than you thought we would have done in that situation. I think most of the time, people would say we do.”
Airbnb’s strongest defense against these headlines is that despite these high-profile incidents, they are rare. The company says that of forty million guests staying on Airbnb in 2015, instances that resulted in more than $1,000 of damage occurred just 0.002 percent of the time. “It’s something that we wish was point zero-zero-zero, without any point-twos, but it is an important stat for context,” says Shapiro, whose job is to manage the media melee when things do happen. (If that sounds like a stressful role, consider that Shapiro was previously the assistant press secretary to President Obama and the deputy chief of staff for the CIA.) Out of a total of 123 million nights booked as of early 2016, the company says that fewer than a fraction of one percent were problematic at all.
And of course, bad things happen all the time at hotels, too, though statistics on hotel crime and safety are hard to find. Some experts have estimated that a big-city hotel may have a crime per day, typically a theft. According to the U.S. Bureau of Justice Statistics National Crime Victimization Survey, from 2004 to 2008, 0.1 percent of total violent victimizations occurred in a hotel room, and 0.3 percent of property victimizations did.
These statistics don’t allow for much comparison. But Jason Clampet, cofounder and editor in chief of the travel-industry news site Skift, says that, as a matter of practice, the platform doesn’t run stories on bad things that happen on Airbnb precisely because he sees the headlines that come across the wires about equally bad things happening at hotels. But he points out that these incidents can and still do cause Airbnb serious PR damage and can discourage hosts from signing up. “It’s one of the challenges when you have a company built on other people’s assets.”
Designing for Safety
The potential for bad things to happen was also one of the main issues that scared off investors when the company was first getting off the ground. “I pulled the guys aside and I said, ‘Guys, someone is going to get raped or murdered in one of these houses, and the blood is going to be on your hands,’” the venture capitalist Chris Sacca recalled saying to Airbnb’s founders before passing on the investment, in a recent podcast with the author Tim Ferriss. Sacca says this was back in 2009, when the primary focus of the company was renting out rooms when the host was present, and he says that’s what kept him “from getting the nightmare scenario out of my head.” (The decision cost his fund hundreds of millions of dollars. “I was completely distracted from the larger opportunity,” he later said. “That proved to be an incredibly costly position to take.”) And indeed, the EJ crisis in 2011 was a near-fatal experience for the company, a breach of trust that touched on every potential user’s worst nightmare and had investors afraid that the new company’s nascent user base could lose trust in it completely.
In fact, the few weeks of immersive crisis management during that time—that stretch veteran employees still remember, when teams were sleeping in the office for several days—were pivotal, leading not just to new tools like the Host Guarantee and the 24/7 hotline but also to the creation of the company’s Trust and Safety division, a sort of parallel operation to its customer-service team designed to focus exclusively on issues of security, safety, and emergency response.
These days, Trust and Safety is a team of 250 operating out of three big operational centers in Portland, Oregon; Dublin; and Singapore. The department is divided into an operations team, a law-enforcement-liaison team, and a product team. Within that framework, a community-defense team performs proactive work to try to identify suspicious activity in advance, conducting spot checks on reservations and looking for signs that might suggest fraud or bad actors, while a community-response team handles incoming issues. The product team includes data scientists, who create behavioral models to help identify whether a reservation has a higher likelihood of, say, resulting in someone throwing a party or committing a crime (reservations are assigned a credibility score similar to a credit score), and engineers, who use machine learning to develop tools that analyze reservations to help detect risk. There are also crisis-management and victim-advocacy specialists trained to help intervene and de-escalate situations; insurance experts, who analyze claims; and veterans of the banking and cybersecurity worlds, who help detect payment fraud.
When bad things do happen, they’re coded from Tier One—issues of payment fraud or stolen credit cards or chargebacks (where in most instances the victim is Airbnb)—through Tier Four, which is any case where a host’s or guest’s physical safety is at stake. A triage system helps route the right cases to the right people as quickly as possible. Once cases are under way, a law-enforcement engagement team works with any local law-enforcement investigations that happen on the ground, and a policy team shapes standards for responding.
Then there are features built into the product so things don’t happen to begin with: the review system the Airbnb founders created from the outset is still one of the most effective tools for reputation assessment (travelers can complete a review only after they have paid for a stay, so it’s not possible for someone to gin up a favorable image by asking friends to write several reviews). In the United States, the company runs background checks on all users, but in 2013 it introduced Verified ID, the enhanced verification process that includes a more rigorous proof of identity and confirms a connection between a person’s online and off-line identities. Both hosts and guests have the option to only do business with Verified ID guests. And with all interactions, personal information like a phone number and an address isn’t visible until a host has accepted a guest and a reservation has been booked, eliminating the chances of two parties going off the site to book.
There’s a trust-advisory board, a team of advisers including the former deputy administrator of FEMA, a former assistant secretary for the Department of Homeland Security, a former U.S. Secret Service agent, the head of security for Facebook, a top cybersecurity expert at Google, and an expert in preventing and addressing domestic violence. The board meets once per quarter to talk about ways Airbnb can become better at preventing incidents from happening.
But even with all of this, there is room to improve. “Plush” somehow got through the Verified ID process. Barbara Loughlin should have been quickly called by an Airbnb representative expressing empathy and gently explaining why the company leaves the prosecuting of bad actors to law enforcement. She should not have been put on hold for fifteen minutes when she called the Airbnb emergency help line and it should not have taken her forty-five minutes to find that number on the Airbnb website. Looking for a customer-service or emergency phone number on the Airbnb website can indeed be an exercise in frustration—because, at least as of this writing, it’s not there. Shapiro says there are reasons for this: if there is a true life-safety emergency, it’s better and safer if the parties call 911 immediately. He points out that the Airbnb number comes up immediately on Google, and the company has teams that monitor Twitter and Facebook for calls of distress. The company has had a phone number on its website in the past, and it says it is building out infrastructure to be able to answer non-urgent calls without wait times, and when it does it will return. But for now all searches for a phone number funnel into the online help center.
Good Actors, Bad Accidents
Bad actors are one thing. What about accidents due to safety issues in the homes themselves—things that no one ever intends to happen? In November 2015, Zak Stone, a writer in Los Angeles, posted a heart-wrenching essay in the online magazine Medium about the tragic death of his father at an Airbnb rental in Austin, Texas, where the family had traveled for a vacation together. When his father sat on a rope swing in the home’s backyard, the tree limb broke in half and fell on his head, leading to traumatic brain injury that killed him, a horrific and tragic scene that Stone described in graphic detail. In the piece, Stone also revealed another Airbnb-related death: in 2013, a Canadian woman staying in a listing in Taiwan was found dead after a faulty water heater had filled the apartment with carbon monoxide. Danger lurked in both places: The apartment in Taiwan didn’t have a carbon-monoxide detector, and in his piece, Stone wrote that his family later found out that the tree in the backyard of the Austin listing had been dead for two years.
From a legal perspective Airbnb claims it is not liable in these kinds of instances, which it makes very clear with a disclaimer on its website: “Please note that Airbnb has no control over the conduct of hosts and disclaims all liability. Failure of hosts to satisfy their responsibilities may result in suspension of activity or removal from the Airbnb website.” But who bears the cost when such an accident takes place? Though some allow exceptions for it, most homeowner’s insurance policies do not cover commercial activity, and most insurers would consider renting out rooms on Airbnb commercial activity. In Stone’s case, the host of the Austin home happened to have a homeowner’s insurance policy that covered commercial activity, and the Stone family reached a settlement with the insurance company. In the Canadian woman’s case, Stone reported that Airbnb paid the family $2 million. (Airbnb declines to comment on the case.)
Chesky says these incidents were “heartbreaking” for the company. “I take them very, very personally. I am very idealistic about the notion that you’re helping to create this version of the world that’s better, and that people are going to be better in it. If something is antithetical to that, let alone a bad experience . . . that just stops you in your tracks.” He says the company tries to learn how to be better from every experience. “You have a responsibility to learn to do everything you can so that it’s something that will not happen again.”
I spoke with Zak Stone about his father’s death. “I think the question comes down to what’s preventable, and if so, is there anything they could have done to prevent it,” he says. “I would argue that it was preventable.” He maintains that the host deliberately posted a photo of the swing in order to market the property. Airbnb, he says, has the ability to see something like that and to potentially screen for higher risk. “I would advocate Airbnb taking a much more cautious approach to onboarding new properties,” he says. He also points out that he was coming from a perspective of someone who had lots of positive experiences on Airbnb. “I’m twenty-nine, I work in start-ups, and many of my friends are Airbnb landlords who make double their rent on their New York apartments so they can be artists and travel,” he says. “But my story is just as important, if not more so, than all the other stories used to sell the platform.”
In 2014, Airbnb started offering $1 million in secondary liability coverage to all hosts—meaning that if the host’s primary insurer denied a claim, Airbnb’s policy would kick in—and one year later, Airbnb made the insurance primary. Airbnb hosts in twenty-plus countries get automatic liability coverage of up to $1 million in the event of a third-party claim of bodily injury or property damage, even if their homeowner’s policy does not cover them for commercial activity, and even if they don’t have a homeowner’s or renter’s insurance policy.
Not surprisingly, the issue of the safety of the premises is one of the hotel industry’s biggest beefs with Airbnb and with short-term rentals in general. Hotels have to adhere to rigorous safety standards regarding fire prevention, food and health safety, compliance with the Americans with Disabilities Act, and more. Airbnb—and all home-rental sites—have no such requirements. In its section about “responsible hosting,” Airbnb recommends that its hosts ensure they have a functioning smoke alarm, carbon-monoxide detector, fire extinguisher, and first-aid kit; that they fix any exposed wires and address any areas where guests might trip or fall; and that they remove any dangerous objects. But relying on the hosts to actually do those things is outside the company’s control.
Bad accidents can and do happen in hotels, too. For example, in 2013, a USA Today investigation found that 8 people had died in hotels and 170 others had been treated for carbon-monoxide poisoning over the previous three years. (A hotel-industry consultant in the article said that relative to the risk, it was too expensive for hotels to equip each room with a carbon-monoxide detector.) An earlier study found that from 1989 to 2004, sixty-eight incidents of carbon monoxide poisoning in U.S. hotels and motels led to 27 deaths and 772 people accidentally poisoned. According to the National Fire Protection Association, hotels and motels averaged 3,520 fires a year from 2009 to 2013, resulting in 9 deaths.
To some degree, we are putting ourselves at risk anytime we enter someone else’s home. But at least guests know whom to blame, complain to, or sue when there’s an accident at the Sheraton. They are largely on their own in the brave new world of widespread home rentals, where the company providing the product has no control over the product or all the bad things that can happen with it. “It will never not happen,” Shapiro says. “We’re dealing with people entering a home, and you can’t predict people’s behaviors. We do as best a job as we can, and I think that shows.”
The scale of the Airbnb platform has grown so large that the fact that more things haven’t gone wrong may show that perhaps that trust is deserved. Some say we may also be heading toward a new paradigm of adjusted expectations for the brave new world of the sharing economy. “Fundamentally, this model of business isn’t going to have the same kind of protection that the hotels or the car-rental companies or the taxi commission provide,” says NYU’s Arun Sundararajan. “We always make a trade-off, and we’ll start to make different trade-offs with the sharing economy.”
Some of the people who were victims of some of the worst incidents of breached trust seem to support this argument: Mark King of Calgary, whose home was trashed and had to be rebuilt, called the Kings’ experience “one in several million” and said, “It didn’t turn me off to the idea of Airbnb.” Rachel Bassini, whose penthouse was trashed in 2014, returned to hosting on Airbnb. She has lots of positive reviews.
The Opposite of “Belonging”
Airbnb spent a good long time refining its trust and safety mechanisms, because the company’s founders knew at the outset that there were risks to be encountered, and they knew that finding a way to minimize them as much as possible was critical to getting people to use its platform. But they were less prepared for another epidemic of bad behavior: racial discrimination.
In 2011, Michael Luca, an assistant professor of business administration at Harvard Business School, began studying online marketplaces. He had become intrigued with the way they had shifted over time from fairly anonymous platforms—those like eBay, Amazon, and Priceline—to newer, fast-growing, sharing-economy platforms where users’ identities played a much greater role. In particular, Luca was interested in the way these later sites made heavy use of personal profiles and photographs about the people behind the transactions in attempting to build trust. While those tools helped serve the admirable goals of trust building and accountability, he suspected they may have an unintended consequence as well: facilitating discrimination. Conducting a field experiment of Airbnb—because it was the largest such platform and because it required users to post large photos—Luca and his team found that nonblack hosts were able to charge roughly 12 percent more than black hosts, even when the properties were equivalent for location and quality—and that black hosts saw a larger price penalty for having a poor location relative to nonblack hosts.
Curiously, the study got little attention when it was published in 2014. When it came out in the press, Airbnb issued a dismissive statement saying that the research was two years old, it was from just one of the thirty-five thousand cities in which the company operates, and that the researchers made “subjective or inaccurate determinations” when compiling the findings. Two years later, Luca and his team published a second study that looked specifically at the booking-acceptance rates of black guests compared with white guests. They created twenty profiles—ten with “distinctively African American names” and ten with “distinctively white names”—leaving all other elements of the profiles identical. They sent 6,400 messages to hosts across five cities inquiring about availability for a specific weekend two months in the future. The results bore out their suspicions: requests from the guests with the African American–sounding names were roughly 16 percent less likely to be accepted than guests with “distinctively white names.” The differences persisted when other factors, like ethnicity or gender of the host, price of the property, and whether it was a shared or a full home, were held constant. “Overall, we find widespread discrimination against guests with distinctively African-American names,” the researchers wrote.
The researchers focused on Airbnb because it was the “canonical” example of the sharing economy, but they cited previous research that found similar issues on other online lending sites, such as Craigslist.com and elsewhere. “Our result contributes to a small but growing body of literature suggesting that discrimination persists—and we argue may even be exacerbated—in online platforms.”
This time, the study got a little more attention. A few months later, the issue would hit full boil when an NPR piece put a face to the issue. In April 2016, a segment focused on the experience of Quirtina Crittenden, an African American business consultant from Chicago. She told the broadcast that she was declined routinely on Airbnb while using her real name, but when she changed it to Tina and switched her photo to a landscape shot, the rejections stopped. She had started a hashtag on Twitter, #AirbnbWhileBlack, which had gotten traction.
Airing during the popular drive-time slot to an audience of millions, Crittenden’s story went viral. Multiple stories followed, and tweets poured in with the #AirbnbWhileBlack hashtag, with many more people coming forward with similar stories.
A few weeks later, Gregory Selden, a twenty-five-year-old African American in Washington, D.C., filed a lawsuit against Airbnb, claiming that a host in Philadelphia had denied him accommodations but then accepted him after he applied using two fake profiles of white men. In his suit, he claimed violations of the Civil Rights Act and said Airbnb did not respond to his complaints. He said that when he confronted the host with the results of the fake profiles, the host told him that “people like [him] were simply victimizing [himself].”
A few weeks later, when a black woman tried to book a room in Charlotte, North Carolina, she was approved, but then the host canceled, sending her a message that called her the worst kind of derogatory term multiple times, telling her, “I hate XXX, so I’m going to cancel you,” and “This is the South, darling. Find another place to rest your XXX head.”
The racial-discrimination controversy had now become full blown. Airbnb reacted swiftly, issuing a statement saying the company was “horrified,” and assuring the members of its community that this kind of language and conduct violated its policies and “everything we believe in.” The next day, Chesky sent out a strongly worded tweet: “The incident in NC was disturbing and unacceptable. Racism and discrimination have no place on Airbnb. We have permanently banned this host.” Chesky repeated publicly in the following weeks as much as possible that Airbnb wanted and needed help and ideas and suggestions for how to make this issue better. The company emphasized that “we don’t have all the answers,” that it was putting out a call for ideas for any and all suggestions, and that it would reach out to a wide range of experts to get their ideas and advice. Racism is a problem that belongs to all of us, the message was; we need your help, too. Later that week, two start-ups emerged, called Noirbnb and Innclusive, as lodging platforms directed at people of color.
As the controversy continued to heat up, the company launched a ninety-day top-to-bottom review to figure out how to address the issue, bringing in outside experts like former attorney general Eric Holder and Laura Murphy, former legislative director of the ACLU. A few months later, the company released a thirty-two-page report and announced an extensive set of changes based on the experts’ recommendations: The company would soon require anyone seeking to use its platform to sign a “community commitment” pledging to abide by a new nondiscrimination policy. It started a policy called Open Doors that would find any guest who had been discriminated against a similar place to stay on Airbnb or elsewhere, and it could be applied retroactively. It also said it would create a new product team dedicated to combating discrimination and that the team would experiment with reducing the prominence of user photographs and placing more emphasis on reviews. It increased the number of listings available by Instant Book—listings available to be booked without any approval process—from 550,000 to 1 million; said it would implement unconscious-bias training for hosts; and set up a special team of specialists to help with enforcement and handling complaints. “Unfortunately, we have been slow to address these problems, and for this I am sorry,” Chesky wrote. “I take responsibility for any pain or frustration this has caused members of our community.”
Leaders in the African American community praised the changes; the Congressional Black Caucus called it “a standard that can be modeled throughout the tech industry.” Some, like Jamila Jefferson-Jones, associate professor of law at the University of Missouri–Kansas City School of Law, felt the changes didn’t go far enough and that the platform should remove photos altogether. She also said the issue raises serious questions as to where the legal line is drawn between a platform and a provider—it hasn’t been tested yet in the courts—and that rather than Airbnb’s effort to “self-regulate,” new laws may be necessary. It would prove difficult to use the courts on the issue, though: Airbnb responded to the Selden suit with a motion forcing him into arbitration—like all customers, he had agreed to binding arbitration when he signed the company’s terms-of-service agreement, meaning he had forfeited his right to bring a suit against the company in order to use the service. In early November 2016, a judge ruled that the arbitration policy prevented him from suing.
For his part, Harvard’s Luca calls Airbnb’s antidiscrimination changes “reactive”: “I don’t think anybody at Airbnb set out to facilitate discrimination,” he says. He says he thinks the company was too focused on growth.
Legally, the issue is murky. Hotels have to abide by civil rights laws, but Airbnb operates a platform, not a provider of public accommodation, with arm’s-length regulatory distance from its users. It places the burden of compliance with local laws on individuals, but the Civil Rights Act of 1964 does not apply to people renting out fewer than five rooms in their own home. So under federal law—local laws may differ—hosts are legally able to reject someone not just for hateful personal beliefs but for all kinds of reasons: they can reject smokers, for example, or a group looking for a place to stay for a bachelor party, or families with young children. During my research, I heard tell of one host who rented only to people from China, because they were a huge potential market of travelers and they “paid well”; and another who rented only to “orientals” because they were “nice, quiet, no problems.”
But legal or not, and regardless of whether Airbnb was culpable, discrimination was a crisis of the core for the company. The issue of being friendly and welcoming to one another isn’t ancillary, the way, say, Dove soap believes in healthy body image but sells soap, or the way lululemon believes in community but sells clothes. Airbnb sells welcoming and acceptance, and has built its entire brand and mission around the idea of belonging. If there were a polar opposite of belonging, this would be it. “Discrimination to most companies is an adjacency to their mission,” Chesky said in an onstage interview at Fortune’s Brainstorm Tech conference as the controversy was erupting. “Our mission, most importantly, is to bring people together. This was an obstacle to our mission, and if we merely tried to ‘address the issue,’ we would probably not accomplish our mission.”
And the main culprit was one of the elements that made up the very core of the Airbnb community: its members’ online photos and profiles. As the Harvard researchers pointed out, “While the photos are precisely what help create a feeling of humanity on the Airbnb platform, they can just as easily bring out the worst of humanity.” Discrimination, the researchers wrote, suggested “an important unintended consequence of a seemingly-routine mechanism for building trust.”
Onstage at the Fortune event, Chesky suggested that one reason Airbnb was late to the issue might have been that it was so focused on using photos and identities to keep people safe that it didn’t realize the unintended consequences of making identities so public. “We took our eye off the ball,” he said. Another reason, he added, was that he and his founders simply didn’t think about it as they built the platform because they were “three white guys.” “There’s a lot of things we didn’t think about when we designed this platform,” Chesky said. “And so there’s a lot of steps that we need to reevaluate.”