freak_fest

Airbnb has been praised for its reaction to a customer whose apartment was used to host an orgiastic night of debauchery instead of the meek guests he was promised. The company has changed his locks, wired him more than $20,000 for damages, and put him up in a hotel.

According to articles published by Fast Company, the swift reaction to this latest controversy is the result of Airbnb’s efforts to improve its status as a hospitality company, instead of being the service where people rent out their spare bedrooms and come home to find out that some erotic massage service run by a clown nose-wearing duo has forever soiled their linens. The service that began as a simple way for people to find an air mattress to sleep on is growing up.

That requires a few things, chief among them being the hiring of Chip Conley, the founder of boutique hotel brand Joie de Vivre and Airbnb’s new chief hospitality officer. One of his first actions? Making sure the company can respond to every controversy it can imagine:

Conley began ‘scenario planning,’ a strategic form of thinking used by everyone from the military to global corporations to simulate long-term outcomes. He and Chesky came up with a game plan for how to respond to a range of incidents. The aim was to make sure its hosts and guests feel safe and cared for in any situation.

It also requires that Airbnb CEO Brian Chesky focus on building a company instead of stewarding a service, especially as it increases its focus on becoming a hospitality brand:

Hospitality seemed like the right direction, but Chesky quickly understood that his management style had to change in order for the company to shift from handling one part of the trip–the room–to, hopefully, managing all parts. He knew he would have to go from managing a product to managing the company that manages the product.

These changes come during a period of maturity for new marketplaces like Airbnb and Uber. The companies used to shirk liabilities and manage controversies by distancing themselves from the people who use their products — now they’re starting to take responsibility for them.

Perhaps the greatest example of that maturation is the increased insurance coverage Uber offered to drivers following the January death of a 6-year-old girl. The company denied that it had any responsibility for the driver, who was not ferrying anyone at the time of the incident, but has since announced that its policy will cover damages incurred whenever its app is open.

The announcement, and Airbnb’s commitment to handling problems better than it did a few years ago, aren’t just about making these companies seem more responsible than they did in the past. They can also help these companies keep business by putting customers and lawmakers at ease, as I wrote when Uber announced its new insurance policy:

Insurance coverage has been a contentious issue for ride-sharing services. Seattle, Chicago, and the state of Colorado have all questioned the expansion of these services because of their insurance policies. New York sent a cease and desist to RelayRides last year because of its insurance policies, and fined the company $200,000 earlier this month for the same reason.

The backup policies announced today might allow Uber and Lyft to fill the gap between what they cover and what these regulatory bodies think they should cover. Taking responsibility for their drivers is a good marketing tool, and it might be good for business, too.

It seems that ruthless capitalism, corporate responsibility, and newfound hospitality have more in common than most people might think.

Reactions from around the Web

Gawker notes that the orgy might’ve gone off without a hitch if it weren’t for social media:

Really, this is (yet another) story about the power of social media in our everyday lives, just with a twist of BBW orgy. Had Teman Googled David’s phone number before handing over the keys, he probably would have cancelled the agreement and saved everyone the trouble. If David’s number wasn’t plastered across Twitter, he and whomever wanted to pay $20 to enter his party could have fucked all over Teman’s apartment in peace.

Instead, Teman ended up stuck in New York and displaced from his apartment. David did not get to throw his Freak Fest. They both have spent the past 48 hours entangled with lawyers and policemen. What a weekend it could have been.

Airbnb gives Business Insider a statement explaining the incident’s rarity:

Over 11 million guests have had a safe and positive experience on AirBnB and problems for hosts and guests are incredibly rare, but when they happen, we try to help make things right. We were appalled when we learned about this incident and we took immediate action to help this host. The individual who rented this space has been permanently removed from our site. We’ve reimbursed the host for damages to his apartment and ensured he has a new place to stay. In the days ahead, we’ll continue to work with the host to assist him with his additional needs and we will work cooperatively with any law enforcement agencies that investigate this matter.

Pando weighs in

Paul Carr wrote about Ayn Rand’s influence on companies like Uber and Airbnb in October 2012, and how a veneer of sweetness hides some bitter greed:

Given their Randian origins, we kid ourselves if we think most Disruptive businesses are fighting government bureaucracy to bring us a better deal. A Disruptive company might very well succeed in exposing government crooks lining their pockets exploiting outdated laws, but that’s only so the Disruptor can line his own pockets through the absence of those same laws. A Disruptive company may give you free candy in your 50-dollar cab but, again, that’s only because doing so is good business. If poisoning that same candy suddenly becomes better business than educating people about how to stop binge eating (like encouraging New York cab drivers to be distracted by their phones, or putting vulnerable people at risk of attack is better business)… well maybe that’s an option worth exploring too.

Chesky talked about the vandalism incident during a PandoMonthly interview in January 2013:

‘I was told that we were going to take care of her and then we didn’t fulfill that promise,’ Chesky said. ‘And then, I go on TechCrunch, and I write this blog post that was incredibly ignorant – I felt like we were in this airplane and then suddenly it got shot down. … The other thing that was happening was, our lawyers, for good reason, were like ‘You can’t say this, you can’t admit responsibility, because you open yourself up to liability.’

Carmel DeAmicis wrote about Uber’s expanded insurance policies last week:

Of course the reassurance that the policy ‘just works’ isn’t much relief given Uber’s spotty record with security in the past. Its zero tolerance background checks proved to ‘work’ less than well.

That said, clearly Uber is making a serious effort, both in terms of rider-friendly policies, and in communicating those policies to the public. For a company previously known for its hostility and secrecy, this can only be a positive development.

[Illustration by Hallie Bateman for Pando]