1. Economics
November 12, 2015

The week in Airbnb drama

By Barbara Speed

This week, both the tech and business worlds have crowded around their screens to watch as online holiday rental site Airbnb navigates what may be its choppiest waters to date.

First, the company was forced to backtrack on its sassy approach to municipal governments and their pesky rules and regulations (complete with entire billboards trolling San Francisco’s Proposition F, which sought to limit short-term rentals in the city). This week, the company released a “Community Compact” statement, in which it pledges to try to cooperate with individual city governments and, crucially, “Help Ensure Our Community Pays its Fair Share of Hotel and Tourist Taxes”. 

The compact signals an admission that Airbnb’s operations will need to adapt to the the city it’s operating in: it can’t impose a one-size-fits-all business model on the whole world, as it has sought to do in the past. 

So far, so good. But then, there was That Medium Post. In it, Zak Stone wrote about how his father died in an Australian Airbnb back in Texas back in 2013 after falling off a rope swing. Stone points out that Airbnb does have some safeguards in place – user reviews, for example but nothing on the scale of the health and safety restrictions imposed on big hotel chains.

In previous cases, the company has been unwilling to pay medical expenses for users injured at rental homes until pressured by the media. As Stone writes: “Its general approach to safety is consistent with Silicon Valley’s ‘build it first, mend it later’ philosophy.”

The post has opened the dam to a wave of similar stories from around the world. The issue at stake: who is liable when an Airbnb, or Uber, or any other part of the sharing economy goes wrong? The casual nature of simply renting our your spare room is all well and good until something terrible happens, and you remember why all those big corporations developed all that big corporate infrastructure in the first place. 

The two fracas are related. Across both, Airbnb is fighting to operate slightly apart from the rules and regulations everyone else is beholden to. In the first story, they look like the Robin Hood of the business word, challenging San Francisco’s restrictive policies and helping locals make an extra buck from their spare rooms and apartments.

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But as Zak Stone’s story shows, the freedom and easiness of the sharing economy has its costs. It’s worth asking a few questions before we steamroller over all that boring business bureaucracy, just for the sake of it. 

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