Airbnb is one of
the fastest-growing companies in the world and for most users, Airbnb is a very
safe and useful platform. In August 2020 however, an Airbnb guest violated the
company’s policies in addition to California health guidelines by throwing an unauthorized
party of over 15 people. Not only did this party increase the risk of COVID
transmission, three people were shot and wounded at the party. In a first,
Airbnb has decided to sue the guest and has pledged to donate any money from
the case to a charitable organization in the Sacramento area that is against
Airbnb CEO, Brian Chesky (2016)
Most ethical theorists would agree with Airbnb’s actions in this case. A classical individualist would agree with the company’s decision to sue the guest, but they would disagree with Airbnb’s future decision to donate any settlement money to a non-profit organization. From a more revised individualist’s view, Airbnb is doing the right thing by donating the money from the guest. It is clear that Airbnb’s actions were ethical in a utilitarian’s view and that happiness was maximized in for most parties to the best of the company’s ability while also taking into account the long-term effects as well. Most Kantian thinkers would view Airbnb’s actions as ethical and that the company had good motivations. In this case, Airbnb expressed good character and made ethical decisions that a virtue theorist would agree with.
In the wake of this shooting, Airbnb must show that they are committed to bettering the community as opposed to just using the communities to gain profit for the company. Airbnb must strive to implement and embrace the values of Safety, Guest Accountability, and Contribution to Community into their operations in order to move past this incident and to retain trust between Airbnb, its guests and the community.
At about 1:15 a.m. on August 9, 2020, residents reported gunfire as well as people being shot in the neighborhood of Howe Avenue and Delma Way in Sacramento, CA (ABC 10). Police discovered that three victims had been shot and were taken to nearby hospitals, all with non-life-threatening injuries. At the time this is written, police have yet to arrest anyone for the shooting and the reason for the shooting is still unknown. The shooting occurred at an unauthorized party which took place in a rental-house listed on Airbnb. The party consisted of at least 15 people, most of them being in their early 20s, and was being held in violation of the Airbnb listing rules as well as California State COVID regulations. The home was immediately removed from the site listing, pending police investigation, and the party host was banned from the platform. By mid-week, Airbnb had announced that the company would be suing the host for violating their ban on house parties which is the first time Airbnb has sued a guest for throwing an unauthorized party. The company added that any money awarded from the lawsuit would be donated to a non-profit organization that strives to fight gun violence. Airbnb has gone even further to allow hosts in the Sacramento area to vote on which non-profit the money would go to. ABC 10 added that Airbnb bad been preparing for their initial public offering and have been trying to sharpen their company image in preparation of the IPO.
In a statement, “The
company [Airbnb] notified the guest on Monday of its intent to bring legal
Airbnb Rental where three
people were shot (August 9,200)
action, alleging negligence and violation of local health orders, violation of Airbnb's Community Standards, and that the Guest booked the listing under false pretenses (KCRA Staff). The information and rules from the listing at which the shooting occurred have not been made public, nor have the guest’s booking details. Airbnb can choose to settle informally, go to arbitration, or go to small claims court (Airbnb 23.2).
At the time of the shooting, the California Department of Public Health (CDPH) had issued a statewide regulation on gatherings in attempt to slow the transmission of COVID-19. The guidelines stated that all non-essential social gatherings were to be postponed or cancelled, a gathering defined by CDPH as, “Any event or convening that brings together people in a single room or single space at the same time.” This adds strength to Airbnb’s case against the host as they were also in violation of the regulations set forth by the CDPH by throwing the party.
A month prior to the Sacramento shooting, Airbnb had strengthened their ban on unauthorized parties by disallowing guests under the age of 25 with less than 3 positive reviews from booking homes in their area of residence (AP). The rule had been piloted in Canada, resulting in a significant drop in unauthorized parties. Guests who are unable to book within their area are still allowed to book individual rooms within in their area, as well as homes in different locations. Although this rule was implemented during the COVID Crisis, the rule was implemented as a result of a deadly shooting that occurred at an unauthorized party at an Airbnb rental on Halloween 2019.
On Halloween night of 2019, police in Orinda, CA responded to a shooting that occurred on the 100 block of Lucille Way (Orinda Police Department). Upon arrival, it was discovered that there was an unauthorized house party being thrown at an Airbnb rental. Over 100 people attended the party, as it was advertised on social media sites. Three victims died on scene and two others succumbed to their injuries at local hospitals. Others were treated for non-life-threatening gunshot wounds as well as injuries related to fleeing the scene. Two firearms and shell casings were recovered at the scene and five arrests were made, but those individuals were released within a couple days due to lack of evidence. Sheriff David Livingston said that the shooting involved San Francisco’s Paige and Marin City Jungle gang members and that there was an attempted robbery within the rental that might have led to the shooting (ABC7). However, the investigation is still open, and a perpetrator has yet to be held accountable for the killings.
As a result of the shooting, Airbnb
immediately rolled out new measures to detect and deter
Memorial for Halloween (2019) Shooting Victims
unauthorized house parties (Forbes). One of the biggest changes that is coming soon is to verify all 7 million listings on the site. Unverified hosts have the ability to post false listings with false identities which is a contributing factor in unauthorized parties. Another change that is currently being implemented is a 24/7 neighbor hotline for hosts’ neighbors to call and report things such as unauthorized parties. In addition, high-risk reservations will now undergo human review in order to prevent unauthorized parties, high-risk entailing elements such as large, last-minute bookings in the city of residence of the user who has few ratings. This goes to show that Airbnb has established a reputation of integrity and acting fast to remedy issues.
On November 16, 2020, Airbnb publicly filed for their IPO and has applied for their stock to be traded on Nasdaq (CNBC). Best estimates place Airbnb’s initial public offering around December 2020. Revenue has been down due to COVID and the company has recognized that its listings and bookings have been down as well. In response, the company established a $250 million COVID relief fund for its hosts, but some have accused it of being a publicity stunt. As the IPO date nears closer, it is important for them to do as much as they can to clean up their company image for the best possible stock market debut. Filing suit against this guest could be seen as a way for Airbnb to exhibit their integrity as a company, improving their company image. But more importantly, the company is ensuring that the person who endangered the lives of other guests is being held accountable for their actions and that any settlement money goes towards gun violence prevention.
Although the case is still pending and there is no clear dollar amount that the company is demanding, it is very likely that Airbnb will win the lawsuit against the guest for violating Airbnb’s rules on parties. Airbnb is in good position to win the case considering that the guest violated the company policy on unauthorized house parties as well as the CDPH state mandate against gatherings. Airbnb’s policies are clearly listed on their website as well as on the individual listings within the platform. Also, the fact that the party resulted in partygoers getting shot will be held against the guest. Even if Airbnb does not win the case, it was still stated by the company that they intended to donate the proceeds to non-profit organizations which displays the company’s desire to benefit charitable causes, regardless of the outcome.
The stakeholders in this specific case would include the Party Host (Airbnb Guest), Party Guests/Injured, Future Shareholders, Future Airbnb Guests, and the General Public. Airbnb’s reputation and future success are affected by the actions they take in relation to the case. Airbnb’s actions also determine the correct level and amount of punishment for the guest who violating the Airbnb community standards. The guests and those injured as a result of the gunfire can have a better or worse outcome from the situation, depending on the actions that Airbnb take. Future shareholders are affected because the way the company handles the situation can alter the future value of the company’s stock once they go public. Future Airbnb guests are affected because the rules that Airbnb have implemented will alter the experience of those future guests. The general public is affected because Airbnb’s are spread all across the world, in countless communities which means that the actions of Airbnb guests and events at those rentals can have effects on the public. Further analysis of the stakeholders is later discussed in the utilitarianism portion.
An individualist could view this case from either a classical or more revised individualistic view. In classical individualism, Milton Freidman believes that management’s actions should maximize profits for the owners of a business while doing so within the law (Salazar 17). Also, businesses should not try to be socially responsible by doing things like donating money because doing so is equivalent to stealing from money from the owners of the company. Tibor Machan believes that classical individualism should be revised in order for businesses to acknowledge the fact that other goals besides profiting, such as donating to charitable causes, can actually help boost profits (Salazar 18).
In Airbnb’s case, a classical individualist would agree with the company’s decision to sue the guest, but they would disagree with Airbnb’s future decision to donate any settlement money to a non-profit organization. This is because a classical individualist would rather the company retain the settlement money for themselves. By donating to charity, Airbnb is stealing money from the owners. From a more revised individualist’s view, Airbnb is doing the right thing by donating the money. This is because Airbnb realizes the fact that by donating the proceeds to a charitable cause, they are promoting a positive company image that will likely translate into a more profitable IPO. In the long run, donating the settlement money would likely yield a higher net profit as opposed to just pocketing the money upfront.
A utilitarian would view Airbnb’s way of handling the situation as the most ethical beneficial. Under utilitarianism, business actions should seek to maximize the happiness in themselves and others in the short-term as well as the long-term (Salazar 17). Salazar (19) also states that, “Long-range perspective can help businesses avoid short-sighted thinking that often boosts profits momentarily but leads to a quick demise”.
In Airbnb’s case, happiness was maximized for most of the stakeholders which is as follows:
Party Host (Airbnb Guest): The party host will ultimately be negatively impacted as a result of this case. Currently, the host has been permanently banned from the platform and could possibly be denied from using other similar sites in the future. Also, the host could be facing criminal charges from the pending investigation as well as fines from the city for violating CDPH guidelines. Furthermore, the host will likely be facing some sort of settlement fee as the odds are stacked in Airbnb’s favor.
Party Guests/Injured: The guests, including the ones injured, will benefit overall from Airbnb’s actions. By filing suit against the party host, Airbnb is ensuring that the person who caused trauma and injury to the guests is held accountable and punished for their actions.
Future Shareholders: Taking into consideration the upcoming IPO, the future shareholders will also benefit from this case. By quickly responding to the shooting and holding the party host accountable for their actions, Airbnb is making themselves a more attractive company for future investors. This will likely increase the money earned from the IPO which is beneficial to the shareholders. Also, the actions in this case are consistent with their actions in similar cases from the past. This consistent integrity gives the shareholders more confidence in the company’s ability to make good decisions that will raise the value of the company and its stock price.
Future Airbnb Guests: In terms of future Airbnb guests, they are both positively and negatively impacted from Airbnb’s actions. On the positive side, by implementing a 24/7 neighbor hotline, neighbors can report unauthorized parties, preventing parties from getting out of hand and resulting in guests getting injured. Also, by verifying all future hosts, guests will feel reassured and safer knowing that the listings and hosts are legitimate. On the flip side, Airbnb guests must now realize that Airbnb takes rule enforcement seriously and that Airbnb is not afraid to ban and sue their users.
General Public: Overall, the public is positively impacted by Airbnb’s actions. By donating future settlement money to non-profit organizations, Airbnb is contributing to causes that help improve the community and its members. By taking steps to reduce unauthorized parties, Airbnb is protecting the neighboring homes and residents by limiting the chance of violent acts occurring in their neighborhood. Also, by limiting the occurrence of unauthorized parties, the community is at less of a risk of increased COVID transmission from irresponsible parties.
It is clear that Airbnb’s actions were ethical in a utilitarian’s view and that happiness was maximized for the most people. The company had been in similar situations in the past and as they did before, Airbnb acted quickly and ethically in this case which not only addressed the current issue, but their actions also take into consideration the long-term effects.
Kantians would analyze this case by checking to see if Airbnb acted in ways that violated the formula of humanity which states that it is wrong to use people as a mere means to get what you want because it devalues their rationality and freedom and treats them as lesser than a human being (Salazar 21). Also, in order for a company’s actions to have a positive moral gain, they must have the right motivation. A company must act with good intentions in order to get moral credit for their actions. In this case, most Kantian thinkers would agree with Airbnb’s actions and that the company had good motivations.
Anyone who has used Airbnb knows that the rules of the rental are clearly listed and Airbnb’s policies on matters are easy to find on their website. So, the party host clearly knew what the rules were and that they ran the risk of punishment. As it pertains to COVID guidelines, Airbnb’s current position was that all hosts must require their guests to abide by the appropriate health guidelines (Airbnb). Although it is a first, Airbnb was completely within their rights to ban the guest from the platform and to sue the guest for violating Airbnb’s policies. By formally suing the guest rather than just banning them or coming up with violation fees, Airbnb is treating the guest with respect and dignity by giving the guest a chance to plead their case and have possible settlement amounts accurately determined.
Some could argue that because of the looming IPO, Airbnb was just using the party guest as a mere means to attain a better public image, resulting in a more successful IPO. However, I do believe that Airbnb’s motivations were truly good in this case. Their decision to sue the guest will deter future guests from endangering the lives of others and donating any money from the case will help others are all reflective of the company’s desire to do the right thing, not just what’s best for the company. Looking back at the 2019 Halloween shooting, five people were shot and killed at an Airbnb rental and the killers are still on the loose, leaving the victims’ families searching for answers to this day and in this 2020 shooting, the perpetrator is still at large as well. From a purely humanistic standpoint, Airbnb and its workers cannot feel good knowing that unauthorized parties at their rentals are resulting in unsolved shootings of their guests. Airbnb donating any money from the case to non-profits against gun violence is the right thing to do and they are deserving of moral gain because they are motivated to help prevent more innocent people from being injured.
Virtue theorists expect companies to act in ways that embrace virtuous or good character traits and to avoid bad character traits (Salazar 22). While there are many traits, some specific virtues that are considered to be positive include prudence, courage, temperance, and justice. In this case, Airbnb expressed good character and made ethical decisions that a virtue theorist would agree with.
Prudence includes caring for ones future self and making the right decisions at the right time. In this case, Airbnb decided to sue a guest for throwing an unauthorized party in order to address the current situation while also deterring future guests from throwing similar parties by dishing out a severe punishment. Airbnb could be greedy and sue for a lot of money and keep it all for themselves as profit. Instead, they figured that they would benefit in the long run from being a charitable company and donating the money as opposed to just pocketing this settlement money. It is tough to tell how much Airbnb will sue the guest for, but I would expect the company to express temperance by not suing for too large of an amount.
A company’s courage is their ability to stay on course when the going gets tough, their implementation of decisions, and their boldness. Airbnb expressed all of these factors considering that a large party occurred at one of their rentals during a pandemic and it also resulted in three people getting shot. This is without a doubt one of the worst scenarios that a company could face but Airbnb addressed the situation head-on and quickly announced new changes to be implemented to deter similar incidents from occurring in the future. Airbnb also acted bold by banning the party host from the platform and suing them to show that the company is not afraid to punish those who violate their policies and put the lives of others at risk. All of these actions go to show that Airbnb embraces the trait of justice which entails practicing empathy, truthfulness, sincerity, and friendship.
In my opinion, Airbnb acted very ethically and appropriately and were also right in suing the guest whose party resulted in people getting shot. As previously mentioned, Airbnb has a track record of taking actions and implementing changes after incidents occur and this case further solidifies this track record. Additionally, the company has pledged to donate any settlement money to charity which exhibits the fact that company has the well-being of the community in their mind. The company could just keep the settlement money and promise to invest it in better deterrence measures, but by donating directly to non-profits, everyone will know that the money actual went towards something related to the incident.
I believe that the guest was completely in the wrong by throwing an authorized party in direct violation of the Airbnb guidelines. It was very irresponsible of them to be hosting a party which ran the risk of increasing the spread of COVID amongst the party goers and the people they encounter away from the party. I believe that they deserve to be sued and removed from the platform as they should be punished for their actions. This case should act as a deterrence to anyone who might think about hosting similar parties.
Since the case is still on-going, I can only hope that the party host is rightfully punished and that the proceeds go to an organization that will better the community. If so, Airbnb would look very good going into their initial public offering and they would be a very attractive company to invest in. Airbnb rentals can be in anyone’s neighborhood, so it is in our best interest that Airbnb be a company of integrity that cares about the communities they operate in and not just profit.
Considering that there have been shootings at Airbnb rentals in the past, it is especially important for Airbnb to act accordingly and act to resolve the current issue in the best way possible. So far, Airbnb has handled the situation very well and the company is doing its best to mitigate the damage from the event. By banning and suing the party host, Airbnb is showing that they strictly enforce their policies and will punish those who violate those policies. Also, by implementing new rules and measures, they are decreasing the risk of similar situations from occurring in the future. All of these actions combined gives future customers, hosts and the community reassurance that Airbnb takes seriously the well-being of everyone, including the general public. If they have not done so, I would like to recommend that Airbnb privately settle with the injured and traumatized guests that way Airbnb directly benefits those people as well.
“Airbnb's mission is to help create a world where you can belong anywhere and
people can live in a place, instead of just traveling to it (Fortune).” My recommendation for a new statement is, “Airbnb’s mission to is to ensure the safety and protection of everyone and to create a world where feel like you can belong anywhere. Instead of just traveling to it, renters should feel that they are part of the community.” This encourages Airbnb’s actions to have more focus on the community and the safety of the community and shows the public that Airbnb intends for their rentals to mesh well with the community and not be a burden.
In order for the company to move past this party shooting incident and to follow through with its new mission statement, Airbnb will benefit from focusing on implementing these three values within their operations:
Safety- The safety of both guests and the community should be a top priority of Airbnb. There have been multiple shootings arising from unauthorized parties at Airbnb rentals, so it is crucial that Airbnb continues to take measures to decrease the likelihood of similar incidents from occurring. Also, it is even more important to deter parties from occurring due to the spread of COVID amongst guests and within the public.
Guest Accountability- By holding guests accountable for their actions, it will deter future guests from acting in similar ways. Policy violations that can jeopardize the well-being of others should be punished heavily, such as the throwing of a large unauthorized party. By taking action such as banning and suing users, future users will be much less likely to violate Airbnb policies.
Contribution to Community- Considering that Airbnb rentals can arise in essentially any neighborhood, it is important for the public to be aware that Airbnb is mindful of the space they operate in and that they give back to the community. Airbnb could do something along the lines of publicly donating money or public recreation areas to communities that have high densities of Airbnb rentals. Acting in ways such as that will show the public that Airbnb is not looking to take over or disregard the communities they operate in, Instead, Airbnb is interested in recognizing the community and seeks to intertwine with the community as best they can.
To ensure that Airbnb can follow their new mission statement and to successfully implement their new measures against unauthorized parties, a few mew internal measures must be taken. First, Airbnb must hire a new fleet of employees that will verify each rental listing. By verifying each listing, Airbnb will assure that each user is being truthful in their postings on the site, thus increasing safety of its guests and decreasing the likelihood of false or misleading listings. Another internal measure to be taken is that when users are being reviewed for suspension or banning after violating Airbnb policies, the employees responsible for determining punishments must be more inclined to ban users that throw unauthorized parties, especially during the current pandemic. Doing so is consistent with previous actions and it shows that the company has a zero-tolerance policy against party policy violation. Also, Airbnb must set up and adjust accordingly call centers that will take calls 24/7 from neighbors of Airbnb rentals. By having a 24/7 hotline, the company will have a better chance at stopping unauthorized parties from occurring and taking turns for the worse. Taking these measures will help lower the risk of similar cases from occurring in the future.
From an internal standpoint, Airbnb currently has no issues with hiring, firing, and promoting and the current Airbnb employees have made great actions and have acted ethically. So, no adjustments to those procedures need to be altered. But as a result of this party shooting, there should be adjustments made to which users are verified and suspended. Previously, anyone could post a rental on the Airbnb website, but as a result of the occurrence of unauthorized parties, all listings will now be verified meaning that it will be much harder for fake listings to be posted. Also, Airbnb should be more inclined to ban users that throw unauthorized parties as opposed to just suspending the users for a period of time. There have been multiple cases in which shootings have occurred from unauthorized parties, so it should not be taken lightly when users violate Airbnb’s policy on parties as peoples’ lives could be at stake. All of these changes if implemented correctly would allow the company to flourish and have the best IPO possible.
As far as remarketing goes, Airbnb is not in a position in which it needs to undergo any kind of remarketing. The company addressed the issue head-on and sternly and the issue was more so the result of an outside factor. Also, Airbnb has previously taken its stance on unauthorized parties, including those that have resulted in gunfire, meaning that people already know where Airbnb stands on the general issue. Rather than remarketing, it is more important for Airbnb to remain firm in their suit against the party host and follow through with donating any proceeds from the settlement. It is also important for Airbnb to be public about the status of the case, meaning that they should announce the outcome and to which charities they are donating to. Depending on the amount received from the settlement, I would say that Airbnb could also pledge to match the amount for more good publicity.
My plan will allow Airbnb to put themselves into the best position for their IPO, act in accordance with their new mission statement and values, all while doing so in the most ethical ways possible. The headlines of a shooting occurring from a large party at an Airbnb rental during a pandemic is not good publicity, especially ahead of an IPO. So, it is very important for Airbnb to make actions that reflect on the values of safety and supporting the community, in response to the party shooting. Acting accordingly will show investors and the public that Airbnb Is genuinely interested in acting in support of communities and that they are a company of high ethical standards. Their new 24/7 hotline will add an increased layer of protection for all guests, hosts, and those in the surrounding communities by allowing neighbors to report any suspect activity at neighboring Airbnb rentals, such as parties that are getting out of hand. This hotline shows that Airbnb is dedicated to the safety of everyone and it provides the company another way of ensuring that guests are adhering to the company policies. By verifying all listings, Airbnb will be able to ensure a higher customer satisfaction rate while also weeding out high-risk or irresponsible hosts. Also, Airbnb will be making sure that hosts are not lying to their guests about the rental which will lead to higher satisfaction for all stakeholders and higher profits. As long as Airbnb adheres to the plan and continually implements what they have planned, they will continue to establish their reputation as that of a company that is good for our communities with higher ethical standards, all while remaining profitable.
Despite Airbnb being faced with a case involving multiple guests of theirs being shot at house rental, Airbnb really stepped up to the plate and acted very appropriately and ethically in ensuring that the party host is held accountable for their actions while also minimizing the negative publicity as much as possible ahead of their upcoming IPO. Most ethical theorists would agree with Airbnb’s actions in this case. So, it is now up to Airbnb to follow through with their plans to deter similar cases from occurring in the future while also following the advice given in the action plan above. Airbnb is unique in that their business has the ability to affect each and every one of us without us having any input or say. There is no controlling whether your neighbors post their house on Airbnb. So, it is in everyone’s best interest for Airbnb to be a company that is focused on protecting the community as best they can through appropriate measures and continue to operate with high ethical standards.
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