Economy

Airbnb Death Raises Questions about the Sharing Economy

The story of a man's death at an Airbnb rental in Texas in 2012 raises a host of questions, many of them taken up by his son in a recent article published in Matter. It was Thanksgiving and a rope swing outside the rented cottage was attached to a faulty tree trunk that snapped and fell on his head, killing him. What does this tragedy say about regulation in the sharing economy?

At first glance, that question might seem callous or beside the point. But it is something that Zak Stone, the man's son and a writer for business publications including Fast Company, asked in the months following his father's death.

What is the sharing economy?

The sharing economy, which Federal Trade Commission chairwoman Edith Ramirez recently described as "digital platforms that serve as marketplace intermediaries that enable small buyers and sellers of products and services to identify trading partners," is non-traditional and largely unregulated. Airbnb and Uber are companies that most frequently come to mind when we talk about the sharing economy.

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In effect, these companies offer services that appeal to consumers because they seem convenient and user-friendly compared to traditional options. Airbnb is the preferred option for renting out rooms, especially for Millennials. But unlike bed and breakfasts or hotels, Airbnb lacks many safety regulations, offering only user reviews and photos of rentals as a basic safety provision.

Are there certain shortcomings?

Stone argues that his father's death could have been prevented had those safety standards been put in place. Rather than focus on the safety of the rentals available in the Airbnb marketplace, however, the company emphasizes that "Airbnb has no control over the conduct of Hosts and disclaims all liability."

Stone wrote:

"Of course, platforms are not neutral pieces of technology: they are embedded with the values of the marketplace, strategically designed for maximum profit and minimal liability. Companies that take advantage of such ambiguity pose risks to consumers, particularly when they’re trafficking in human experience, not just data or speech like Napster, Tumblr, and others before them who have appealed to their platform status to weather challenges to the legally murky activities they host."

There are other examples of accidents happening at Airbnb locations. In 2011, a San Francisco woman came home to find her possessions burned, stolen, and destroyed. She had rented the place out on Airbnb, and after her story went viral, the company changed its policy "to guarantee $50,000, then $1 million, in property damages."

airbnb

The policy safeguards for buyers and sellers in the sharing economy appear to change in response to incidents, accidents, and tragedies like these.

"The division between a platform’s managers and its users creates a regulatory grey area," the Brookings Institute recently reported, noting that there is a simple solution to many of the problems that exist exclusively within the sharing economy:

"Harmonizing regulations between new and old industries would preserve consumer protections without hindering innovation. There is no need to reinvent the wheel for sharing economy regulations when a novel application of existing consumer protections may be all that is necessary."