Wednesday, August 3, 2011

The Importance of Reputation: Airbnb Rental Horror Story Keeps Getting Worse

Editor's Note: People trash room rentals all the time, but businesses are usually mentally and financially prepared for it. They have people ready to clean rooms, steam clean floors, and often charge clients credit cards for damages. They don't leave personal items in the rooms and they don't take it personally. But AirBnB renters expected the company to provide trust. Is AirBnB to blame? Perhaps, for not having a solid reputation and verification system in place and for not giving insurance guarantees, which seem a no brainer. Trusting a national business as an intermediary, whatever their reputation method (Facebook profiles can easily be deceiving), is not the same thing as trusting a neighbor, a friend of a friend, or local client for a reference. It's an interesting design challenge for a company that is national out of necessity (catering to out of towners). You wouldn't want to exclude shy people or poor people from using peer to peer services. Couch surfing and Warm Showers and others may face similar challenges. On the other hand, these services as they have managed thousands upon thousands of transactions, have created positive experiences for many, creating more trusting attitudes. Let's not let a few rotten eggs spoil the shift to a sharing, trusting culture.

From Consumer Affairs
by James R. Hood

Would you use the Internet to make a blind date? To buy a car sight unseen? Send a money order for a few thousand dollars to collect millions of dollars in a sweepstakes you didn't enter?

OK fine, but would you use the Internet to rent your apartment to a perfect stranger?

Believe it or not, people do this every day using, a site that takes the Web sharing concept to new heights. Basically, Airbnb lets you rent your house or apartment to someone you've never met and whose identity you are not given.

Of course, Airbnb has never met this person either but, taking a page from the dating site playbook, claims it thoroughly checks the references of would-be renters.

It didn't work out so well for a San Francisco blogger known as "EJ." She rented her apartment last month while she was out of town on a business trip. When she returned, the place had been trashed and EJ hastened to the keyboard to describe the damage in chilling detail.

EJ's renters not only trashed the apartment and stole numerous valuables. They also took the time to thoroughly investigate her personal documents, thus gaining access to account numbers and other data useful for future identity theft adventures.
Sincerest regrets

Airbnb dutifully expressed its regrets and vowed to tighten up its procedures going forward and police said they had a suspect in custody.

Now a second Bay Area Airbnb member, Troy Dayton, is telling a similar story, claiming his Oakland apartment was rented three months ago by a drug addict who trashed the place and left it littered with meth pipes, Techcrunch reports.

The latest account calls into question Airbnb's initial claims that EJ's experience was the first it knew of – "our first major incident in over 2 million nights" as the company put it.

Perhaps none of this would be worth the buzz it has generated except that Airbnb is one of the current hot items in the online business. The company raised $112 million recently on an estimated valuation of $1.3 billion – not bad for what amounts to a classified-ad site.

Hoping to rescue its reputation, and valuation, Airbnb now says it will provide $50,000 worth of protection to Airbnb hosts. The company also says it will beef up its user verification profile process and integrate profiles with social sites, allowing hosts to view potential guests prior to agreeing to rent to them.

1 comment:

  1. In commercial transactions, parties may have an established history of dealings which
    leads each to form views of the others’ character. This continuing relationship may
    result in the establishment of trust,or an understanding between the parties, with
    each being able to rely on the other party to do what is necessary to ensure the
    success of the transactions.