Airbnb Pays Out $50M Per Year in Crisis Payouts as Safety Issues Increase for Hosts & Guests

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In October, Airbnb suddenly announced it would delist 200 rentals in Israeli communities on the West Bank. Airbnb intoned that Israeli settlements ... “are at the core of the dispute between the Israelis and Palestinians.” This at the very time when Israel is defending its international borders against terrorist attacks from Hamas in the South and Hezbollah in the North–areas where there are no “settlements”. Photo Credit: Shutterstock

Edited by: Fern Sidman

As the coronavirus pandemic continues to wind down, travelers view the restrictions that kept them isolated in their homes since March of 2020 as something that is now in the rear view mirror. As such, summer travel plans have been made and millions are taking to the skies, the rails and the roads in order to get away.

This also means that travelers will need accommodations and such hosting services as Airbnb are in high demand. A new report however sheds light on the fact that safety issues have placed Airbnb in a position in which millions of dollars are being paid out in settlements to both guests and hosts.

As crime statistics continue to spike in major US cities, Airbnb finds itself embroiled in a public relations nightmare.

According to a recently published BBC report which cited other media accounts, Airbnb paid a tourist $7 million in a settlement after she was allegedly raped at knifepoint as a rental property in New York City.

The 29-year old Australian traveler whose name was not used in the report received the settlement in the aftermath in the brutal 2015 New Years Eve attack, according to a Bloomberg news report. The traveler and her friends picked up the keys to their Airbnb rental at a bodega in the Times Square area of New York, without being asked to present any form of identification. The Bloomberg report suggests that the alleged attacker made a copy of the keys to the rental apartment prior to the assault and it was insinuated that he had taken the keys from the bodega.

The BBC reported that after returning to the apartment shortly before midnight, the suspect, 24-year old Junior Lee allegedly hid in the bathroom and then threw the traveler down and raped her. He has been charged with predatory sexual assault and remains in custody. He has pleaded not guilty.

Subsequent to the attack, the Airbnb safety team went in to high gear and contacted the New York Police Department to offer their assistance in the investigation and to put the victim in a hotel, according to the BBC report. Moreover, Bloomberg reported that Airbnb covered the costs for the victim’s mother to fly in from Australia as well as costs for counseling. Part of the $7 million settlement that was reached two years after the assault says that the victim cannot assign blame to Airbnb for the lax safety measures nor can the company be sued. In addition, the victim cannot sue the host, according to the Bloomberg report.

Speaking to the New York Post, Ben Breit, an Airbnb spokesman challenged these settlement regulations by saying, “In sexual assault cases, in the settlements we’ve reached, survivors can speak freely about their experiences. This includes the NYC case.”

Bloomberg reported that Breit said that Airbnb’s goal following the incident was to support the survivor of a “horrific attack” and that local political issues had nothing to do with its response.

In terms of providing information on safety measures that Airbnb takes to investors before the company went public last December, the Airbnb prospectus said that they conduct “online background checks” which includes criminal and public records for both guests and hosts in the United States.

The prospectus added that: “In some instances, we re-run these checks periodically thereafter. We also conduct host background checks in India prior to the first transaction. We check all of our hosts and guests against certain regulatory, terrorist, and sanctions watch lists to increase safety for all parties.”

Bloomberg reported that “Airbnb’s business model rests on the idea that strangers can trust one another. If that premise is undermined, it can mean fewer users and more lawsuits, not to mention tighter regulation.”

The Airbnb safety team has rapidly expanded since the company was founded in 2008. Bloomberg reported that Airbnb  is now “one of the biggest hospitality companies in the world, with 5.6 million listings, more than the number of rooms in the top seven hotel chains combined. Its $90 billion market value—the share price has doubled since the company went public in December.”

The problem, however, is that the company has paid out tens of millions of dollars in settlements and according to the Bloomberg report its safety team “remains shrouded in secrecy.” The report indicated that the safety team has been dubbed the “black box.”

The job, former team members told Bloomberg is a nerve-wracking one, balancing the often conflicting interests of guests, hosts, and the company. “I had situations where I had to get off the phone and go cry,” a former agent recalls. “That’s all you can do.”

According to a report in the Daily Mail of the UK, the Airbnb safety team is made up of around 100 agents across the world including such cities as Dublin, Montreal and Singapore. The report added that team members have the power to spend any amount tackling the worst crises at their rentals including sexual assaults, murders and deaths. They are tasked with providing support to guests and host and they work to keep these sort of incidents out of the public eye. The report added that Airbnb has spent an estimated $50 million every year on crisis payouts.