Airbnb, Uber Incidents Show Dark Side of Sharing Economy

Airbnb, Uber Incidents Show Dark Side of Sharing Economy

This week’s news of a man’s death at an Airbnb rental shows the growing issue of safety issue of companies like Uber and Airbnb. The sharing economy has a dark side.

Front page news:

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This week, a tech blogger revealed that his father died in an accident at an Airbnb-rented property in Texas. The tragic news of the man’s death rang a stark reminder of the severity of unresolved issues surrounding safety and consumer protection in the fast growing “sharing economy” sector.

According to Zak Stone, the concern with Airbnb is that:

“nothing is currently done to make sure hosts actually comply with safety guidelines (or even read them), which is a problem particularly for newer properties on the platform, which Airbnb’s customers, as opposed to employees, are left to vet for safety.”

The company, currently valued at $10bn, does post safety requirements for listed properties, but the requirements fall drastically short of those required by the hotel industry in places like New York City, though San Francisco just voted down a measure to take on tougher standards.  The thought is that poor consumer reviews would naturally weed out ill-suited properties.

Digging in more:

The core issue for sharing economy companies is that companies, like Airbnb and Uber, which don’t operate as hotel or taxi companies, get around regulation because they consider themselves a technology or app solution which does things like connect “riders to drivers through our apps,” in the case of Uber. It is not running as a taxi company and haven’t taken the issue of safety seriously at times.

Therefore, as technology solution firms, these companies are exempt from many regulation and consumer protection clauses that companies like Starwood adhere to in their properties.  Then chaos ensues, like orgies or the ransacking of apartments and identity theft. In the case of Uber and Lyft, tales of assaults on passengers (and even drivers) continue.   Eventually, these fears could begin weighing on the minds of consumers, affecting business. Even Uber’s liability and insurance issues continue to parse out, as driving accidents happen, and there are concerns about slack driver background checks and whether drivers have too much access to rider information.

Reading in between the headlines:

Safety issues and crime also exist inside the traditional taxi and hospitality industries, so this is not a TaskRabbit or Lyft problem alone. And the big sharing economy companies are putting for strong stances on safety.

“Nothing is more important to us than safety.” – Airbnb statement to Huffington Post

But there is much more “grey area” inside these sharing economy companies, creating risks for the consumer and the company. Take if from this Uber devotee, I have actively starting to think about my safety as one factor in deciding whether to call a ride-sharing service when on my own.  That can’t be good for business.