Well, it's pretty much a textbook case for insurance: a very small risk spread across a large number of rentals where the worst case is bad. AirBnB has the advantage that they could tailor the premium based on the exact parameters of the rental.
Airbnb could kill it if they offered
an insurance to book you a hotel if the appartment is no good.
My fear in using Airbnb is prebooking in locations that sell out (skiing for example) so that if the landlord cancels or the place is bad
you are stuck having paid all the other costs and there is no where else
to stay or it is insanely expensive.
AirBNB landlord are probably more ordinary people with lives, not professional hospitality operators so I get a bit nervous.
I used AirBnB a couple of times, I think is a good idea. Prices aren't cheap at all, but you get an appartment with utilities and not a B&B room. However, I too keep wondering on the risks associated with renting. They are just difficult to estimate. The renter may put a bomb in the appartment, how do you protect yourself financially from this?
For this to make sense the number of the appartments (or cars) destroyed or damaged must me low enough that the cost for repairing is way lower than AirBnB revenues. Not sure this is possible with only 10% fee on renting although.
When someone first told me about AirBnB I immediately dismissed it - just like Fred Wilson did. It fell in the group of ideas which I just find puzzling because the concept is totally alien to something I would want to do/buy/participate in.
I don't get why anyone would want to rent out their couch or spare room to a transient stranger - even 'vetted' within a community (and we can see that vetted is very lose here).
Sure, I sort of get the appeal for the renter but I'm lost as to why a homeowner would want to do this - especially considering the risk/reward here. The upside is a few dollars here and there, the downside is $10k's of damage - like this.
If you've never owned a house, you won't know that it's a labor of love and something you invest more than just your money into. Why you would want to risk someone destroying it, I don't know.
AirBnB needs to offer insurance as part of the deal - just like the car sharing programs seem to have negotiated their own insurance for the duration that the other person is driving your car. Otherwise it just seems an unwise risk to offer accommodation on AirBnB.
Airbnb has its own risks, which you multiply by having many, many, many times more people going through your place, and not caring about it like a home.
There's also far more overhead in terms of managing it.
Agreed, though I see a lot of people using AirBNB for guesthouses, rooms in their house (where they'll at least be at the place), or investment houses. Those scenarios seem less risky.
Well, using AirBnb instead of a hotel or similar has this inherent risks... Now, these are the kind of problems those companies have already sorted out.
I think this only works if the benefits outweigh the potential costs. Crashing a car, getting a rental, and purchasing a new car are all unwanted headaches that are more likely in this model vs some screwing up a room in the airbnb model.
It sounds like you are overly risk-averse (I'm guessing you are not a founder?).
AirBnB is rewards versus risks, as the article author implies right at the end.
I have used a wide variety of accommodation: AirBnB, hotels, staying with friends, short term rentals, campervans, cars, outdoors, staying with randoms I have met.
They all have benefits, and they all have risks.
AirBnB has given me a huge range of different benefits, and I super appreciate that it exists.
I'm not an expert on AirBnB in the slightest but I think that's what you would consider their competitive advantage; you make the homeowners assume the responsibilities normally reserved for the Hotel.
That way AirBnB just acts as an intermediary and doesn't need to deal with the fussy details.
I'm in the same boat, been staying in Airbnb's 100% of the time and haven't had a bad experience yet. But I'm always worried that one day it'll happen to me. Until then, I'll keep risking it I guess.
I'm guessing at this point, the savings I've made will cover the eventual problem where I need to book some super expensive hotel in an emergency.
One obvious benefit is that the owner or lessor of the place being sublet on Airbnb is often a party to contracts with their community that forbid short-term rentals; for instance, the owners of condominiums have a responsibility shared with all the other owners of condominiums not to compromise everyone's quiet enjoyment expectations by turning their place into a hostel.
i don't get that part about Airbnb rentals - those are probably as utilized as possible and are just different type of rental (or similar, depends on the choice of the owner)
If you aren't comfortable renting your home to random people then don't use AirBNB, plain and simple. Buy a second home for commercial purposes and AirBNB rent it out instead (and if that gives you pause then maybe you should reconsider the whole idea of being a small-time landlord with AirBNB).
And if you are renting your home with AirBNB and _don't_ have some type of commercial rental insurance or coverage through your main policy you are skating on very thin ice. Even the nicest looking person in the world could ruin your place, or at the very least hurt themselves seriously in your home and bankrupt you with a massive liability lawsuit. If you aren't ready to be a landlord and abide by their rules, regulations, etc. then don't rent out with AirBNB.
The retroactive obviousness of it does seem quite incredible. People get hotel rooms to do things they don't want to do at home. AirBnB is a hotel substitute.
I wonder if AirBnB internally had some risk assessment of this.
I think the biggest benefit AirBNB has over Craigslist / dealing with someone directly is insurance. Before AirBNB existed, I'd use the vacation/temporary section of Craigslist. I'd go stay at someone's place, and hope that I wasn't going to be kicked out, and lose the rest of the money I gave them for my stay. It was worse for the people subletting - if I damaged their place, they had almost no recourse.
While it's possible that enough trust can build up over time to where people would go around SpareChair, I doubt it will be a problem for them. Even if friends of friends were to co-work at my place, I'd feel a lot more comfortable if they were insured.
But you don't get something for nothing and the usual decrease in cost comes at a price. As a customer of Airbnb I am extremely aware I taking a greater chance using it than booking myself into a hotel. The likelihood of being robbed, scammed, having a lousy time etc is arguably higher. My home city, Melbourne Australia, has seen its fair share of scandals involving apartments being used as backpacker hostels. Cramming several people per room into cheap apartments is a recipe for among other things fiery death.
The laws should be changed to allow Airbnb to operate, but at the same time provide protection to everyone involved.
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