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AirBnb is one of the landmark figures in the sharing economy world alongside ride share companies such as Uber and Lyft. Starting as a simple website in 2007, Airbnb has grown to become a profitable powerhouse. As of 2018, the company is currently being valued at 38 billion dollars (Forbes). However, as this company has risen higher and higher, it is not without its controversy.
Airbnb is an app that acts like a broker. It allows property owners to lease out a part or all of their property out to tourists. It is free to sign up for Airbnb as a tourist or property owner. Property owners set up their profile, showing pictures of the house as well as house rules and descriptions. Guests also set up their own profiles and search for properties in the area they want to be in and apply to stay in a potential living space. After communicating with the guest, it is up to the property owner to approve or deny the guest’s leasing application. After the stay, the property owner and the guest can choose to review each other or provide recommendations. Ideally, this service is supposed to benefit both the guest and the host. Hosts are able to make some extra passive income on unused space in their houses, and guests are able to stay in a cheaper place than a hotel.
It is not uncommon to hear the horror stories that come from any sort of sharing economy business for either the host or the guest. According to an Airbnb specialist, about 3 to 7% of stays actually become a problem (Asher and Lyric). However, that doesn’t mean that terrible things don’t happen. Some hosts have reported theft or coming back to see the property utterly trashed. In one extreme example, an Airbnb guest broke into the host’s bedroom and stole $35,000 worth in valuables after being told not to go into the locked room (ABC). The guest broke the doorknob off and was caught on camera stealing valuables. In another instance, a guest refused to leave the property even after requesting a refund after the 2nd day out of a 44 day trip (Business Insider). After thirty days, after the host said that the guest had to pack up and leave or the utilities would be shut off, the guest claimed that he had squatters’ rights, and he would sue the host for blackmail and discrimination if she shut the utilities off. In many states, after someone stays on a property for more than 30 days, that person now becomes legally the same as a long-term renter, and they must be legally evicted to be kicked out. The process of eviction takes 3-6 months and requires a legal proceeding. Airbnb agreed to cover the blackmail lawsuit, but it is the host’s responsibility to formally evict the guest.
Airbnb has a 1 million dollar insurance policy, but it does not cover everything. Airbnb will cover any expenses with liability. For instance, if a guest tripped and fell in your apartment, causing injury, then Airbnb would help with the legal expenses (Huffington Post). However, Airbnb does not cover any damages to property or theft. If you come back, and your house looks like it was just ransacked, Airbnb will not cover it. If all of your possessions have been stolen, Airbnb will not cover that either. If you are a guest, and the apartment is covered in mold or fleas, Airbnb will not cover the damages caused to you or your property. Hosts are advised to get renters’ insurance or homeowners’ insurance as a layer of protection against incidents like this one, but please be aware that insurance companies will only allow your house to be lent out for so many nights until the house becomes a commercial property. Your property would then have to be insured like a hotel.
This isn’t to say that guests never face dangerous situations. The largest complaint to Airbnb customer service is that the host cancels the reservation 24 hours before a stay, or the host never shows up (Asher and Lyric). However, the next most common complaint is of scams. Sometimes, guests will arrive, and the host will try to ask for more money than advertised. There are more terrifying instances. For instance, in 2015, one man was held hostage and sexually assaulted by his host in Spain (The New York Times). He tried to call his mother, and while the mother was able to get his message, Airbnb would not give the address of where he was staying. By this time, the perpetrator cut off internet access. The mother tried to call the Madrid police, but she was only met with a Spanish recording and kept getting disconnected. By the next morning, the guest was able to leave by convincing his host that he had friends waiting for him and that they would be suspicious if he didn’t meet them, so he was allowed to leave with his belongings. Airbnb issued a statement that it would take the incident and learn from it, streamlining the connection to law enforcement when there is an emergency. There have also been complaints of moldy or pest-infested rooms that have made travel site headlines.
Cities around the world have also started to crack down on Airbnb rental properties. For instance, in New York City, local hotels have been fighting Airbnb, claiming that it is on an uneven playing field (How Stuff Works). In New York City, hotels have to have a hotel permit. To keep that permit, all of the rooms of the hotel have to be up to building and safety codes. Also, every time someone stays at your hotel, you have to pay a portion of that hotel fee in tax. Airbnb hosts don’t have to do any of that, making their barrier to entry a lot smaller. A bunch of hotel owners in New York decided to take up the case with the state court against Airbnb, claiming that they are in violation of a 2010 New York law that states that a host must be present if a guest is staying for under 30 days. The state attorney has subpoenaed the database of New York hosts, but Airbnb is fighting this request, saying that it will police its guests itself. Other cities such as San Francisco and Barcelona are cracking down on Airbnb rentals because of the effects that Airbnb is having on the housing market (Independent). Entrepreneurs will try to buy numerous properties in large cities to be rented out only for Airbnb, which then drives up housing prices and takes up spaces that would have normally been used by long-term renters.
Airbnb, like any other sharing economy business, is the very essence of buyer beware. While you will be definitely getting a better deal fiscally, host properties are not going to be under the same health and safety scrutiny as a mainstream hotel. Airbnb is currently rolling out a new program called “Airbnb Plus,” where hosts can pay a fee to have someone come and inspect their property to ensure they make certain criteria such as wifi speeds and the softness of the mattress. Both guests and hosts can check out reviews of each other, but reviews can only say so much about the potential people. For instance, in the sexual assault case mentioned above, the host had multiple positive reviews, and the victim wished that there were more red flags for him to have known not to stay at that person’s place. If you would like to learn more tips on how to keep yourself safe and aware of what you would be getting into, check out Airbnb Hell (you can find it here). It also provides uncensored stories of terrible Airbnb stays, which are pretty fun to read (though also sometimes terrifying). Personally, I would prefer to stay in a hotel instead. With more professional trappings and stricter health and safety codes, I would rather shell out the extra money than take the kinds of risks that come with property sharing. Sometimes the better deal really is more expensive.