Major Airbnb Scandals Highlight Problems With The Model—What That Means For Consumers

Published on November 7, 2019

It’s been a hard week for Airbnb, the service that lets you rent out homes and apartments in other cities. The company made headlines last weekend when a deadly shooting at a party at one of its rentals that left five people dead in Orinda, California. In retaliation the founder and CEO of Airbnb announced early in the week that the company would be banning partys at its rentals altogether. Vice also revealed on October 31 that it had discovered a scandal in which certain Airbnb users were able to forge listings and use the company’s relaxed cancellation policies in order to scam users out of their rental money. In response, the company announced that it would begin an extensive verification process to assure that each of its listings and reviews are 100% legitimate ahead of plans to list its initial public offering next year.

Airbnb Updates Terms Of Service Agreement

Many Airbnb users got a notification this week that the company has made changes to its terms of use agreement. The updates to the agreement prohibit users from throwing parties at Airbnb properties, which the company says is a decision that will benefit both its hosts and guests in the long run by assuring safety is a high priority. The decision came after the fatal shooting at a house party thrown at an Airbnb property left five dead in Orinda, California.

“Starting today, we are banning ‘party houses’ and we are redoubling our efforts to combat unauthorized parties and get rid of abusive host and guest conduct, including conduct that leads to the terrible events we saw in Orinda,” said CEO Brian Chesky on Twitter. “We must do better, and we will. This is unacceptable,” he wrote in a string of posts on the platform. The party that resulted in the deaths of five people happened in a home in Orinda, California after a woman rented the house claiming to be seeking refuge from the fires with her family on Halloween.

This is not the first time that the platform has had issues with party houses, but banning them altogether may open the door for more discrimination in the future. Airbnb has already had issues with hosts discriminating against guests in the past, so the potential to use the new policy against guests in the future could pose an issue. For home sharing, this highlights just one of the many issues that have arisen since Airbnb became one of the most popular travel platforms.

Airbnb Scam Is More Common Than You Would Think

Vice revealed recently that it had uncovered a scam through Airbnb that let hosts cancel on guests last minute and still get the money they were paid for the rental. The scandal, which spanned hundreds of fake rentals on the site across multiple cities, let hosts take out multiple listings of the same property (according to the photos) even if that property didn’t exist in the first place. When it came close to the guests stay, the host would cancel the booking personally with the guest and instead set the guest up in a secondary property—which was usually much more run down than the original.

To combat the potential wave of bad reviews and flags to the company, the host would cross book their own fake property using the host account of another fake property. This let the host give themselves positive reviews to avoid drawing attention to how frequently guests experienced cancellations, bad experiences, and changes to their reservations.

The fake accounts would leave reviews that raved about how great the property was, making it seem as if the guests that had negative experiences were few and far between. That is, if they left negative reviews at all, as they would often be coaxed into leaving positive reviews with the often false promise that they would receive a partial refund.

Airbnb Has Long Been The Subject Of Controversy

The concept behind Airbnb seems like it would create a positive impact on the surface. The platform gives homeowners and renters with permission from their landlord the opportunity to make money off of their home or extra bedroom by renting it out as a short term rental. The model made the vacation home format accessible to everyone, giving travelers the opportunity to stay in new neighborhoods and explore new parts of cities they would normally never see because of where hotels are often located. In its most ideal form, Airbnb allows for people to earn money while they travel by renting out their home or apartment while they’re away.

In reality, the platform has created just as many problems as it fixed. Skyrocketing rent costs and gentrification in urban areas saw these issues increase tenfold when investors began buying properties to be used strictly as full-time Airbnb rentals in an effort to turn a profit. Many cities have imposed laws on short term rentals, but instead of abiding by these laws, homeowners often choose to break them in favor of earning some cash on their homes.

As a result, many city locals find that they can no longer afford to live in their neighborhoods because landlords can afford to make more money off of Airbnb than they could off of long-term rentals. In cities like Paris, the impact of Airbnb has seen entire neighborhoods upended, resulting in things like school closures as families can no longer afford to live in certain areas at all.

Little Oversight Leaves Customers Vulnerable

Others have pointed out that a lack of legislation surrounding Airbnb and its thousands of hosts opens up the doors for human trafficking to thrive. Many of the worlds hotels and vacation rental companies work together through a handful of organizations to help combat human trafficking through hotels. But Airbnb hosts are not hotel owners or tourism specialists—they’re homeowners looking to make money renting their property.

On Airbnb, there is no oversight to assure that homes are not rented for gang related activity or other illegal happenings. Drug dealers could, in theory, freely rent properties through the platform to avoid looking suspicious by consistently working out of just one property. Others could rent a property to be used as an underground, temporary brothels, as was the case in 2017 when The New York Post reported that the platform was being used for sex work. In hotels, employees are often trained or given a protocol for recognizing the signs of sex trafficking and forced labor. In an Airbnb, it’s fair game.

Julia Sachs is a former Managing Editor at Grit Daily. She covers technology, social media and disinformation. She is based in Utah and before the pandemic she liked to travel.

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