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
gun violence.
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.
Case
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.
Stakeholders
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.
Individualism
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.
Utilitarianism
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.
Kantianism
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 Theory
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.
Ethics Evaluation
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.
Action
Plan
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.
Currently,
“Airbnb's mission is to help create a world where you can belong anywhere and
where
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.
Conclusion
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.
B. Thompson
References
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