The Dark Side of Airbnb

Airbnb is a superb concept, rapidly expanding. But ask yourself this: How good are they when things go wrong?

Last year I found that out the hard way -- I was left out in the cold when one of their listings went sour. My experience could serve as an M.B.A. case history on how not to treat customers.

I travel to Los Angeles every six weeks for medical treatment and have been doing so for two years. I’ve used Airbnb or one of its competitors for my lodging arrangements, and those transactions went reasonably well. Then, a few months ago, I booked an Airbnb house in L.A. managed by a woman named Doris. After reading testimonials on her house’s Airbnb page, I prepaid $3875 for a 16-day stay, a month before my arrival date. I assumed the house would be clean and safe.

My wife, son and our friend Mary traveled with me, and after one night in the house we knew something was wrong because Mary awoke with pain in her lungs and trouble breathing. My wife, son and I also developed headaches and throat irritation a few hours later. I searched the house and found extensive mold on a carpet in a back hallway that had apparently affected the entire house.

Since we were headed to my L.A. doctor’s office for my treatment that morning, we skipped a trip to the nearest emergency room and took Mary to my L.A. doctor’s clinic. She became priority at the clinic and was treated for two days.

Then my L.A. doctor sent one of his staff to inspect our Airbnb house. After 30 minutes’ of exposure the staff member developed a headache and told us to evacuate the house as soon as possible. “You have toxic mold poisoning here,” he said.

Since it was spring break, it took me several hours on the phone and Internet to find hotel rooms for our group. All of us were getting sicker as each hour passed.

Once we found rooms at a hotel, we evacuated Doris’ house. Then I called Airbnb. There was no phone number I could find on the Airbnb website so I searched using Google, found an Airbnb number, and called. After a delay I was connected to a young man who listened to my saga and promised that a senior claims specialist would call me back that night. He also asked me to e-mail him photos of the mold and a detailed synopsis of our experience. I immediately complied with his request.

I did not hear back from a senior customer service specialist at Airbnb until several days later. The customer service representative apologized for the delay in getting back to me and then asked me what my complaint was. He listened to my story, made promises, and then e-mailed me, saying another senior person would contact me.

In the meantime I received an e-mail from Airbnb saying that although we had vacated the house early, there would be no refund, due to Doris’ cancellation policy. “What about unsafe premises?” I asked. The Airbnb person replied, saying, basically, “That’s too bad.”

I also e-mailed Doris a summary of what had happened. She breezily replied that she would have handled everything for us if we had let her know right away. She was a good poker player. She had misrepresented the house and then refused to reimburse me. If the house were inspected by the state health department, it might be deemed unfit for occupation.

It took a week or more for each of the four of us to recover from the toxic mold; Mary still had some lasting effects three weeks later. Our relocation hotel and medical out-of-pocket costs resulting from the unsafe Airbnb premises were $19,000+. The cost to our health and family well-being was hard to put a number on.

This was a case of willful negligence that caused bodily harm, lost earnings, emotional distress and significant cost. I called an L.A. attorney specializing in environmentally unsafe premises, and was told there was not enough proof, since I was no longer staying in the house and thus could not oversee a proper mold test.

I didn’t have the stomach to waste any more time with Airbnb, so I made a simple request with Bank of America, my Visa card provider, and within three weeks had a modest credit of $1300, representing some of the days we were unable to live in the house. It was a small, solitary victory.

Airbnb has spawned world-wide acceptance of its Internet-based, quasi-hotel service, and is perhaps the largest lodging business in the world. It is a sign of the times that it owns no hotels. That’s the power of the Internet for you, when it is used to fill a vacant niche.

But as I found out, if you have a serious problem you can’t call the hotel’s front desk and speak with an attentive manager. A serious problem is not something Airbnb seems equipped to deal with. You may end up paying double for lodging, as I did, and have little or no recourse on other expenses.

When one of its competitors moves up in quality control, Airbnb could morph into just another has-been, perhaps no different than the nearly empty shells that K-Mart and Sears are today. Knowing this, it may be best to keep your investment dollars in a total stock market index fund, where stocks such as Airbnb are offset by growth companies more serious about customer service--and more likely to succeed long term.

Frank Farwell is founder and former president of WinterSilks/The White Pine Company, Ltd., which was a three-time INC.500 member and in 1995 won the catalog industry’s customer service award. His book, Chicken Lips…: An Entrepreneur’s Wild Adventures on the New Silk Road, was an initial nominee for the 2011 Financial Times/Goldman Sachs Best Business Book of the Year award.

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