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Airbnb Offers Unconditional Apology, And $50,000 Insurance Guarantee
- barredo 15y agoAlmost a perfect response. Only a week after. But being this their first "defcon 1". It's pretty great. The AirBNB guarantee is spot on. Buen trabajo
- eli 15y agoA week and a ton of negative press later. I still give them credit for doing the right thing, but it'd be a lot more impressive if they did it back when it was just the "right thing to do" and not "the quickest way to end this crisis that threatens to destroy the company"
- Cushman 15y agoThat negative press means nothing anymore. They haven't just fixed it, they've come around spectacularly and destroyed their competitors. From now on this is a story about what could happen if you go with a service that doesn't have Airbnb's $50,000 Guarantee.
- jules 15y agoThe problem is that a lot of people have read the negative story, and a smaller number of people have read the positive ending, simply because it's less interesting.
- eli 15y agoI respectfully disagree. For one, the fix will not get nearly as much coverage as the initial problem. Many people will not hear about it and will be left with a negative impression of the company. Second, for those carefully following the story, I think it's clear that they've handled this very badly up until now. Maybe I'm being unfair, but I award only partial credit for doing the right thing only when your back's against the wall. The Guarantee would have been spectacularly more powerful had they announced it before the story got picked up by CNN and USA Today. I think it's silly to argue otherwise. Finally -- and this is just my personal opinion -- I think even with the new insurance policy it's a net loss for Airbnb. This episode has highlighted just how bad the worst case is for someone using the service. The personal value of my home and safety is considerably higher than it's appraised dollar value. Bottom line, I am less likely to use Airbnb today than I was last month.
- Cushman 15y agoI pretty much agree with your first three points. As to the last, though, I think it's pointed out a problem with the industry. Airbnb has separated themselves with a huge reason to go with them over craigslist, and that market is not going to go away.
- eli 15y agoI agree with you, but it's not a zero sum game. Airbnb (and its competitors) are counting on people who wouldn't previously have participated in short term P2P rentals. Hotels and hostels are at least as much their competition as is craigslist.
- mcantelon 15y ago>That negative press means nothing anymore. Good luck communicating their policy revisions to those who read of the AirBnB horror story on USA Today.
- Cushman 15y agoAnd there it is. That thing that Airbnb could do to not only fix the problem, but turn it into a spectacular value add for relatively little cost to themselves, and something which absolutely cannot be matched by their competitors. Well done.
- pseudonym 15y ago>>>It’s never too late to fix bad press with a straightforward, unconditional apology. I'd debate that. That said, given that the snail-news services like CNN have picked up on this fiasco, it'll be interesting to see if they also pick up on this follow-up, or if it's already outside of the news cycle and, as such, too late for an apology to anyone who follows CNN but not HN or Techcrunch.
- andrewcooke 15y agoso they pivoted to insurance fraud detection? [you can downvote this to your little gung-ho-yc heart's desire, but the problem won't go away as easily]
- pemulis 15y agoThe guarantee is probably handled by pure insurance companies, who have been dealing with fraud successfully since before the Code of Hammurabi.
- hugh3 15y agoAre you sure? In a low-fraud world, it's probably cheaper for airbnb to insure against it themselves than to outsource that to somebody else. You don't insure against a large number of small losses, you insure against the possibility of one big loss -- this is why you buy car insurance but Avis doesn't.
- gst 15y agoAt least in the short-term there is one big risk for them: They don't know how many users will claim that there have been damages. So they don't really know how much this insurance will cost them. By outsourcing the insurance to an insurance company it's not their problem. It's the task of the insurance company to assess the risk and Airbnb knows beforehand how much it has to pay.
- fletchowns 15y agoIs a big insurance company going to be willing to insure people that are illegally subletting their apartments?
- Powells 15y agolast I heard, they are still shopping around for insurance companies and that was at lunch today.
- hugh3 15y agoI don't know why you got downvoted, but yes, insurance fraud detection is gonna be a significant problem for them now, especially since they don't have any expertise in it. No doubt they'll need to hire some claims examiners. But if I say "omg, the person who stayed here last night has run off with my $30,000 necklace" then what evidence do I have to provide?
- BasDirks 15y agoBravo.
- dasht 15y agoI think they need to sharply pivot to some very different products or else fold and return investor money. What is their guarantee to guests? What prevents them from being a target for scams to collect host insurance? What statistics can they provide us about the wellbeing of all past guests and hosts? If I'm going to rent out a room or a flat for the prices they advertise -- but apparently I better have an extra $50K of insurance before doing so -- is the two or three digit per night rent really worth it? This new guarantee sounds like an admission of failure.
- cletus 15y agoAirBnB reminds me a lot of early days of Ebay. Ebay has a trust problem. The seller needs to trust the buyer will send whatever is sold. The buyer needs to trust the seller to pay. Part of this is handled by the transaction process where the seller doesn't typically send something until paid but the buyer if unnscrupulous can always do CC chargebacks, cancel checks or the like. The buyer just has to trust the seller. Reputation is the big part in this but is no guarantee. Actually what Ebay needs is to show the total value of buy and sell transactions separately, not just the number of transactions. AirBnB seeks to solve these same problems with reputation. The problem? At worst on Ebay, the buyer or seller loses 100% of the transaction's value. On AirBnB, the potential loss is many thousands time the value and can include irreparable harm (eg murder, serious assault, rape, etc). What's more they're facilitating people doing something generally not allowed by their leases (if they rent) or by legislation or regulation. That's potentially a huge problem. So it's fitting they set up this kind of insurance guarantee. Much like Ebay securing transactions (to some degree at least), the extra confidence in the system promotes its use. I don't believe this is an end to AirBnB's problems however. They're simply kicked the can further down the street. Imagine this scenario: someone rents a house through AirBnB while the owner is away. They set up a meth lab. The meth lab explodes, burning down the house, burning down 2 neighbours' houses and kills three people, two of them innocents. What a huge liability mess that would be. Who is responsible? Clearly the person who set up the meth lab are responsible but a canny lawyer will argue that AirBnB and the owner were negligent in their actions.
- deleted 15y ago[deleted]
- chrisbroadfoot 15y ago> The seller needs to trust the buyer will send whatever is sold. The buyer needs to trust the seller to pay. ITYM "The buyer needs to trust the seller to send whatever is bought." etc.
- redthrowaway 15y agoWell that settles the matter for me. Wish they'd done it sooner, but better late than never. Hopefully EJ is satisfied with the outcome.
- access_denied 15y agoHow can she be satisfied with that? AirBnB lied to here and now they insult her dignity with a $50k price tag on top of that. Not mentioning what happened in the past.
- tptacek 15y agoThis is a story about the #1 story on HN right now, and its only contribution is the last sentence where Arrington continues to try to stir up shit about the way Chesky wrote one sentence in the post. I flagged it. Fuck this shit. I'm sure the story does a service to TechCrunch readers, but it's a drag on HN.
- hugh3 15y agoI thought it provided something new, in that it has a more useful headline. I clicked on this one before "Our Committment To Trust And Safety", which was much less informative.
- oasisbob 15y agoFrom http://ycombinator.com/newsguidelines.html http://ycombinator.com/newsguidelines.html: Please submit the original source. If a blog post reports on something they found on another site, submit the latter. An arguably more-informative headline isn't worth bifurcating the discussion.
- deleted 15y ago[deleted]
- c2 15y agoAgreed. It seems for all the vitriol against AirBnb, there seems to be a vitriol against the criticism of AirBnb as well. Either way, all the articles, from TechCrunch and on Hacker News, have been useful to me in understanding both the issue, the reaction in the press, the sentiment on hacker news and among tech circles, and beyond. This one in particular does add some new information which I found useful. I will keep upvoting stories I find interesting about the whole ordeal and I encourage others not to be deterred by the extreme comments in either way.
- kevin_morrill 15y agoI don't understand why our community has so much adulation for TechCrunch. Arrington is a Yellow Journalist all the way. Why give TC the clout and role as a spokesman for our industry? Seems like we could do a lot better.
- dmlevi 15y agowell done Airbnb. However que the fraudulent charges team...
- staunch 15y agoThey did what every great startup should do: respond to user problems with solutions that make the product better for every user. Most startups don't have products that interact with the real world so directly, so their learning is more painful, but the concept is always the same. I'm rooting for Airbnb. I hope this incident will just spur them on to do a better job and move even faster.
- jcc80 15y agoThis is all very disappointing. What am I supposed to read about now? Where is the drama, intrigue and scandal? Oh well, guess I will do some actual WORK.
- curt 15y agoGreat response but there's still going to be a ton of damage done to the brand that will really hurt their long-term growth. How many millions of people are hearing about Airbnb for the first time in a negative light. That's hard to overcome. They raised their round to fight off any potential competitors, but they just made a huge opening for one of them to exploit.
- ibejoeb 15y agoWow, I would have liked to listen to them come up with this plan. Nobody else is concerned at this announcement? Good for being aggressive, but retroactive $50k pseudo-insurance? That seems like a bit much to commit to right now. edit: the new customer service operation sounds fantastic, btw. Nice assembly in just a few days.
- WordSkill 15y agoOkay, so, it's a major u-turn, so major that they're now denying they even ever had the previous policy of simply denying all responsibility. But the past is the past and the $50,000 is, well, $50,000 more reassurance than their users had before. It's just a pity that in this final coming clean with their customers that they couldn't, you know, come clean. "... we weren’t prepared for the crisis and we dropped the ball". How is it possible that no-one predicted that something like this might happen? With multiple founders and employees thinking about the business day and night, this never occurred to anyone? Really? And what about the investors? Not one single investor, these Gods of fine detail, raised the question of what contingency plans were in place for just such an event? I don't buy it. Airbnb had a plan, and that plan was to boldly deny all responsibility, to flat out ignore the human consequences of their flawed model - a flaw that affects only a tiny fraction of their hundreds of thousands of users but one that, nonetheless, has massive, life-changing consequences for the unlucky few who get caught beneath the wheels of statistical inevitability. Brian Chesky knew this, every employee knew it, every investor new it and Paul Graham damn well knew it too. Unfortunately for all of them, they didn't think about the possibility that one of the unlucky few might have the communication skills and, more importantly, the sheer tenacity to tear down the illusion that they have so carefully crafted. In the past few days, she became a victim again as a panicked company and horrified investors, watching $1.3bn start to swirl down the drain, launched a concerted slur campaign against her, casting aspersions on her sanity, as if that had any bearing whatsoever on the tragedy that befell her - they owe her a quite separate apology for that nasty, mean-spirited assault. Hilariously, they also owe Michael Arrington an apology, but you shouldn't hold your breath waiting for that one. So, yesterday is yesterday, we stride bravely into the future with a somewhat more humane policy in place. What hasn't changed is that the model is still fatally flawed and, sorry to be crude, but how is $50,000 meant to be applied to a serious beating or, God forbid, a rape? We all hope that won't happen but, again, I look at this whole concept and I know in my heart that, eventually, it will. Does anyone really believe that this model has a future? Are we in that much of a bubble? P.S. Just for the record, and Brian Chesky take note, this comment "reflects my true feelings".
- drink 15y agoHave you ever tried to collect a claim against insurance? They will find any loophole possible to avoid a payout. Have fun trying to turn that $50,000 guarantee into something real.
- lclaude01 15y agoOne week later ! a sign of weak leadership...it may be time to shop for a new CEO and let the founders enjoy life (step aside)
- shareme 15y agohmm you do something illegal according to your lease..Airbnb now going to give out $50,000 for doing some illegal? Read the fine print folks..it does not match..
- nkassis 15y agoThey are not giving any money yet, just offering in case something happens and there was always making money on it so this doesn't change much. Also, i'm not a lawyer but subletting is a breaching of your contract (lease) not something illegal it's just something between the renter and his landlord. And it's not even clear to me that it's really subletting as you still live there and have stuff there you are just not present at the time.
- drgath 15y agoOriginal: http://news.ycombinator.com/item?id=2834334 http://news.ycombinator.com/item?id=2834334 Please post comments there.
- callmeed 15y agoI think this is progress, but I'm still wary. The following 3 things are still question marks for me: 1. Who is underwriting this insurance and–most importantly–is it still valid for hosts who are technically breaking the law of their city/county/state? 2. Are we sure this policy wont make these situations more common or targets for fraud? I'm thinking of bank heist movies where they always say "don't worry, your money is insured by the federal government" ... 3. What about guests? If I were to guess, I'd say the next big AirBnB scandal will be "guest attacked by host's dog" or "guest slips in host's shower, breaking rib". Who's going to cover that?
- lhnn 15y agoI must be the only one who thinks this isn't Airbnb's fault.
- wccrawford 15y agoIt's partially their fault because they prevent owners from doing proper background checks on tenants, and don't offer the service themselves. But it's also partially on the owner for not watching their place carefully enough, and not being prepared for people who are less than honest. You can't do business with the public without having a plan for that.
- jeremyarussell 15y agoI'd like to think that AirBnB is founded by decent people that wanted to make money making something as complicated and common as house renting an easy to do thing for many people. I'd like to think that EJ will get some financial help. I'd also like to think that AirBnB did a good job admitting their wrongdoings and responding to the situation at hand. Years of experience have told me I'd like to think of a fantasy world :). That said I really do hope it works out, but it's to soon to tell how this will all turn out. For now I'm content with the fact that they are trying to make things right.
- charlieok 15y agoIt would be nice to be able to use an "internet-wide" reputation on sites like Airbnb, instead of recreating it on each site. If I can easily prove to Airbnb things like, "this is my identity on couchsurfing, that is my identity on ebay, this is my identity on [wherever]". Airbnb could provide the service of verifying those claims and presenting a summary to the seller.
- SkyMarshal 15y agoThey already integrate with Facebook, just not prominently enough imho. And I don't know why Couchsurfing would cooperate since they're pretty much a competitor.
- charlieok 15y agoI guess I'm hoping for standards in this area to hurry up. Then you could do it between any major site and any other major site. Kinda like linking accounts for easier sign-in (one site becomes the identity provider, the other becomes the relying party). But in this case, the purpose is to satisfy another end user of the validity of the claims, not the site a user is signing into.
- charlieok 15y agoThat was fast! http://blog.airbnb.com/introducing-new-trust-safety-features http://blog.airbnb.com/introducing-new-trust-safety-features
- jpdoctor 15y ago$50K is not even close to the right number.
- flocial 15y agoThey did what they had to do to turn this around. I think it came out a lot more expensive had they been more prepared and $50,000 is one whopper of a liability. Hopefully, they did some simulations for worst case scenarios. One thing is, you have to require due diligence on the part of renters and vary coverage accordingly. Otherwise you just encourage carelessness now that the illusion of trust and safety is tarnished. This fiasco might have dented their velocity but I'd say overall, better now than later. They now have a major asset, getting through a crisis. Now they need to bullet-proof it like PayPal's epiphany that their main business is not digital money transaction but fraud detection (because it can rock their bottom line and tank the business). For this you need hardcore engineers who can apply rigorous analysis to the problem of shady renters not more community guidelines.
- gfaremil 15y agoThat which does not kill us makes us stronger. So it seems AirBnb is stronger than ever after this.