November 11, 2015

By Tammy Sachs, CEO

When I first read the Forbes article about the lengthy process Airbnb uses to cull big data to create the optimal pricing algorithm, I thought "Why not just send a skilled person to check each place out?"  This process could ensure safety, accuracy, insurance, cleanliness and the legality of the rental. Each property would then start out with a professional review -- immediately increasing its value.  After all, the number one thing that drives up price -- as AirBnB well knows -- is a good review.  It would also be a great way to establish a baseline price (accounting for neighborhood, season, World Cup, SXSW, etc.)

Most importantly, it would limit the potential liability for faulty gas lines, death traps, predator hosts and other things that get in the way of  a wonderful customer experience.  (Check out this article from Matter that shows one very tragic situation.)  The absence of this process results in the occasional wrongful death, rape and a huge number of law suits related to illegally rented properties. Instead, AirBnB spends its money (always tight before an IPO) on professional photography and the famous logo, Bêlo. 

I'm all for the use of big data to identify trends and understand your market.  Though in a business as personal as living in someone's home, how can AirBnB get away with signing up hosts without checking out their dwelling?  And, as the Matter article points out, how can hosts not be subjected to the massive commercial insurance that even the smallest B&B has to pay?  So when you are killed or injured at an AirBnB or the coop throws you out mid-stay, who is responsible, AirBnB or the host...or neither?

The shared economy is a wonderful thing -- though companies need to be accountable and consider using actual humans to vet what they are selling.  If AirBnB can deploy a huge army of photographers to make the inventory pretty, they might consider an army of "checkers" who make the inventory deliver on what it promises customers.