While on vacation in September 2019, reporter Allie Conti accidentally uncovered an elaborate Airbnb con when she herself became the unwitting victim of the scam.
Conti and her friends paid Airbnb $1,200 to stay at an apartment in Chicago. But just as they were about to check in, the host called to say the place was flooded. He offered another property of his instead but that alternative turned out to be pretty dingy. Even worse, the host kicked out Conti and her friends after just two days — forcing them to find a hotel at the last minute.
The host never offered them a refund. But Airbnb ended up refunding her in full after her article was published.
When Conti researched her horrible host, she found that the same people responsible for scamming her also managed Airbnb listings in eight cities across the US.
On this episode of the Reset podcast, she tells host Arielle Duhaime-Ross how the scam works:
“You book a place that looks pretty nice and pretty cheap and then about five minutes before check-in you get a call about an emergency. It’s flooded, the air conditioner’s broken, something insane is happening. You don’t want to stay here. But luckily, he’s there to save the day with a nicer, bigger place. You’re going to be disoriented in a new city and just decide to do the easiest thing, which is to trust this person that you don’t know. You get it there and it’s just disgusting. But you have to request a refund before check in. So it’s too late at that point to ask for a refund through their policies as written.”
Later in the episode, New York Times tech reporter Mike Isaac breaks down what about big tech companies makes them ripe for exploitation at the hands of crafty criminals. Isaac explains that Silicon Valley’s insistence on “scaling up” and having companies like Facebook, Uber, and even Airbnb grow very big, very fast leaves little room for them to focus on “doing the proper due diligence to make everyone safe and happy.”
“That’s just the nature of being a platform. You have to get big before you can police your content. And then it becomes impossible to properly police it once you get that big. So it’s kind of a Catch-22.”
If you’ve ever rented a place or Airbnb or plan to one day, listen to the entire discussion here. Below, we’ve also shared a lightly edited transcript of Isaac’s conversation with Duhaime-Ross.
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The scam that Allie discovered is actually just one of the scandals Airbnb is dealing with right now. How could these issues have been prevented? And why weren’t they?
Mike Isaac, you just came out with a book about Uber, which is perfect because Uber, like Airbnb, is an app that connects customers to people who own a thing like a car or an apartment that they can share.
So, Mike, walk us through the last couple of weeks for Airbnb?
It’s just been a series of total press PR nightmares for Airbnb the past few weeks. They had this really awful tragedy happen in this community called Orinda in Northern California, where folks had rented out an Airbnb house to basically use it as a party house for Halloween.
Some really awful shootings happened and people got killed over what should have been like a fun night. Folks essentially said that Airbnb should be more responsible in policing that.
And then Allie Conti stumbled upon this crazy widespread scam where folks are essentially getting ripped off for renting Airbnbs and then getting duped last minute when they got to the place. It was a way of scamming people out of paying a lot more than they should for these properties.
So all of that kind of blowing up at one time for the company has not been great on showing how Airbnb handles these properties.
How has the company responded?
They’re doing these standard corporate things — “We’re looking into this. We’re taking this seriously. We guarantee we’re going to police our platform a lot better.” They said they’re going to start verifying each property and making sure what is advertised is the correct thing that you’re going to get. But I see it as kind of a little bit of lip service.
So Brian Chesky, Airbnb’s CEO, recently said in an interview with Kara Swisher that his company had been slow to implement strong verification policies.
That’s kind of a head fake, honestly. Part of the whole philosophy of becoming a platform — and Airbnb is one of the largest platforms for home sharing and renting your place in the world — is expanding as fast as possible. That means just getting people to sign up and list their houses or apartments or whatever. By design, those verifications and checks in the process are not going to be built in from the beginning just because you have to have what’s called liquidity on the platform. You have to give people as much selection as possible.
The way that technologists view it is some subsection of our properties are always going to be false or at least not properly vetted. That’s the sort of percentage that our platform is willing to deal with in order to make this work in the long run.
So I would argue that it’s kind of built by design that way initially. And then later on, once you get to a big enough scale, then they could say, “Oh, we’re going to start doing the proper due diligence to make everyone safe and happy.”
These policies that would be designed to keep people safe, to make sure that there’s a very low percentage of scams on the platform, they cause friction. They stop people from signing up. They’re a barrier to entry. And companies like Airbnb don’t really like that.
Yeah. Hundred percent. All of these are very interchangeable. Airbnb might have said we could have had better vetting policies upfront, but that’s the same as Uber, which has gone through this process of background checks for drivers and making it harder for people to sign up for the platform if they didn’t have identity verification.
That all comes later once they get to the scale that they are early on. Uber was just kind of taking as many bodies, whether as riders or drivers on the platform as possible, just as Airbnb was trying to do.
They’re like software corollaries to this, too. You can look at YouTube in its earliest days. All they wanted was just getting as much video content on the platform as possible to grow. And that included copyrighted material that was just ripped off or was free-booted material from other networks.
That’s just the nature of being a platform. You have to get big before you can police your content. And then I would also argue that at the same time, it kind of becomes impossible to properly police it once you get that big. So it’s kind of a Catch-22.
What is it about that culture that these companies respond only after something bad happens and a reporter writes about it? Is this a Silicon Valley thing?
This is why I take all of these “We’re very concerned” statements with a real grain of salt because everyone who’s building these platforms knows exactly what they’re doing. And sort of by design — this is how it was meant to scale.
It’s fair to argue that you don’t know exactly how the platforms are gonna be exploited because criminals or thieves are very creative. And we’re finding new ways that Facebook is being manipulated every day. It’s hard to really predict how your platform is going to be used.
That said, there’s an acceptable amount of risk built in to building any of these things in the first place. It’s really about getting to scale and doing that as quickly as possible for it before some other competitor beats you to it.
I feel like these companies want to get as big as possible and as quickly as possible. Why, though, is it so important for these companies to reach scale?
There is the advantage of what’s called “a network effect,” which means the bigger you get, the more your platform reinforces its own entrenched incumbency.
You’re the dominant force, basically.
Facebook greatly benefits from that. The more people that use it, the more people are going to continue using it over time. Part of that is maybe the nature of the business itself.
I can’t imagine most of the folks in Silicon Valley wanting to be fine with a small, modest, and sustainable business that isn’t growing by 100 or 200 percent every other quarter. It’s just about changing the world and world domination.
For the past 15 or 20 years, that was a lauded approach to how we look at CEOs. Now that sort of view is becoming questioned in tech, which is in for this reckoning right now.
It’s interesting because I think that for a lot of people listening to my question, they would just go, well, money, obviously. But clearly, it’s not just money, it’s more than that?
I’m hesitant to put all this stuff on money just because a lot of the guys — and again, it’s mostly guys that are running these companies — have money right there. They’re set for life. Zuckerberg isn’t doing it for the money. He has more money than you will ever be able to spend.
It’s about conquest. It’s about history. It’s about making one’s mark on the world. Or if you want to go, Steve Jobs, the dent in the universe thing.
Really, it’s about ego.
I’m hesitant to say these businesses only care about money because I think it’s not the thing that really drives them at the end of the day. It’s about maintaining power and and beating your competitors so that you don’t have to worry about being usurped or becoming irrelevant.
And in order to do that, you say I’m okay with 2 or 3 percent of listings being fraudulent and customers be damned. That’s just their problem.
There’s always going to be laws being broken or crimes being committed or some “acceptable” amount of problems. It always exists.
So it might be hard to hold the platforms to a 100 percent standard of keeping everything pristine. But they also know what they’re getting into when they’re building as quickly as possible without proper verification.
So you have to come in and say, look, you need to forget worrying about growth at all costs and start protecting people on your platform, especially when it’s having real world, potentially life-threatening consequences.
To find out, listen to the full episode and subscribe to Reset on Apple Podcasts, Stitcher, Spotify, or wherever you listen to podcasts.