The Rent Economy Takes It On The Chin

Update:  AirBnB to offer $50,000 guarantees 

I have spent a lot of time thinking about the benefits of the rent economy.  I have been working through the business case for a couple of ideas of my own around the idea that people like to rent when they can.  Last week I wrote about Plumgear, a company that rents baby clothes. On my podcast that I do weekly with Anders Brownworth, we talked about GetAround.com, a company that enables car owners to rent their cars to complete strangers.  Today there was a story on TechCrunch about the downside of all of this rent tom-foolery.

AirBnb, a company that has had fabulous success over the past year or so, was taken out behind the woodshed by a customer who had her house absolutely trashed, everything in it stolen, all the while having no indication that any of it was happening.  AirBnb lets complete strangers rent your house or apartment, much like Roomorama.

We all knew this moment was coming.  Whether it was with someone’s car on GetAround or someone’s house with AirBnB, there are enough idiots in the world that this was bound to happen.

The question is what happens next.  Are these companies going to have to step up and provide better insurance to the owners?  As it sits right now, AirBnB is saying that they are not responsible and will not reimburse the owner.  I get why they are saying it, but can they afford the awful publicity they are getting?  Furthermore, isn’t it an opportunity for Roomorama to offer a competitive advantage to move to them by insuring against loss?

I don’t know the economics of providing insurance around this kind of transaction, but it seems to me that someone is now going to have to solve the problem we all knew existed.  Sooner or later, someone will get screwed and scream about it.  When TechCrunch picks up the story, it’s going to be a problem.  One bad apple can in fact spoil the barrel.

UPDATE:

Did AirBnB try to quiet the victim?

AirBnB updates its Safety Tips pages after publicity about this incident

Have you used AirBnB or Roomorama? Furthermore, would you rent your home or your car to complete strangers?  What would it take for you to do it?  Leave a comment below.