AirBnB has been dealing with quite a bit of negative publicity as the story of a California woman, whose apartment was ransacked, robbed and trashed, circulated on popular blogs and mainstream media sites. While the investigation into that case continues, it seems the whole apartment ransacking facilitated by AirBnB thing isn’t a one off incident, as previously implied by the company.

The meth pipe found in the ransacked apartment of an AirBnB apartment owner. A suspect in a separate apartment ransacking incident was arrested for possession of meth.

TechCrunch is reporting that a man named Troy Dayton encountered similar problems when renting his apartment out via AirBnbB:

“In addition to valuables stolen, the thieves/addicts did thousands of dollars of bizarre damage to my rented home and left it littered with meth pipes. They were identity thieves, too and all my personal information was strewn about. Further investigation of my own led me to evidence that the people were not just thieves but were also dangerous. I too, feared for my own safety and would not stay at my house for some time.

I had a similar problem with haphazard communication from people at AirBnB. I gave them multiple opportunities to make me a happy customer to which they did but then retracted their offer after their was miscommunication among the team. Sometimes days went by without hearing from anyone, while I was fear-stricken, totally disoriented, and angry. It was almost the most absurd customer service crisis one could ever imagine. But I am one squeaky wheel, and we eventually found an agreeable solution that I was generally pleased with.” {TechCrunch}

While Dayton was satisfied with AirBnB’s response to the situation (after a bit of back and forth, they compensated him for bookings at other AirBnbB studios and one bedroom apartments for 3 weeks), this obviously takes the problem beyond an isolated incident to one that AirBnB will have no excuse to be unprepared for a third time (if this is, indeed, only the second time such apartment trashing has happened).

There are 3 things AirBnB has to do immediately to stop these type of incidents from permanently damaging the company.

1. Implement a 24-hour Customer Service Line

At the heart of its business model, AirBnB maintains that it’s only a marketplace for temporary and vacation rentals, but if they want to continue to charge a fee for that (as opposed to Couchsurfing, which facilitates alternative travel accommodations for free) both renters and apartment owners are going to expect more than they would from a Craigslist or Couchsurfing post gone wrong.

Both EJ, the woman who wrote the blog post that initially gained attention, and Dayton spoke about frantically trying to get in touch with someone from AirBnB, only to be left sitting in their destroyed apartments for hours at a time with no reply. After the initial response to EJ, communication was intermittent, seemingly concluding with the CEO contacting her to pressure her to update her blog post with a happier ending, though many issues remained unresolved.

With over $100 million in funding, there’s no reason AirBnB shouldn’t be able to implement some sort of 24-hour customer help line. Not only for serious cases like EJ’s and Dayton’s, but even relatively minor incidents like renters not being able to get in touch with apartment owners when problems arise.

While many travelers have smartphones that keep them in touch by email, if you’re in an unfamiliar city or location, being able to pick up the phone and reach someone – rather than waiting 14 hours for an email telling you that there’s nothing that can be done to help, could be a huge reassurance.

2. Plan for the Worst Case

So two cases out of hundreds, likely thousands, of bookings does not mean the AirBnB model doesn’t work. Troy Dayton has gone on to rent his apartment out on AirBnB again, without any other incidents like his first horror story. Even though the worst case doesn’t happen that often statistically, the fact that it’s happened twice without any measures put in place to protect against it happening in the future is a problem.

How do you plan for the worst case?

Insurance would be a good policy. No one plans on getting into a car accident, or having their home burn down, or getting sick. That’s why auto, home and health insurance exist, because in spite of our best plans, sometimes really bad things happen. Most home insurance policies wouldn’t cover subletting or damage from subletters. AirBnB could easily have a very lucrative secondary business model by creating just such an insurance policy.

That would not only pay more than lip service to the claim that these type of incidents are infrequent, and don’t happen often; but AirBnB would also have hard data to prevent future incidents.

Both apartment ransackings took place in the San Francisco Bay area, there’s evidence that drug addicts and identity thieves were involved in both (San Francisco police have a 19-year-old suspect in custody in EJ’s case, who was charged with possession of meth and stolen goods among other things). A pattern, perhaps?

If AirBnB truly took on the responsibility of paying for damages surrounding legitimate criminal incidents, they’d have an incentive well beyond good PR to ensure that the warning signs of one incident don’t lead to a second.

3. Open Up

Implement more open profiles for renters and apartment owners. Though all of the incidents we’ve heard about so far have involved the people who own apartments and rent them out, it’s only a matter of time before other stories of renters scammed or misled by apartment owners emerge. AirBnB understandably wants to keep transactions on their site, but at the minimum AirBnB needs to know more about who’s on their site if they expect users to continue to go with the “just trust us” responses. AirBnb should be able to – at a minimum – verify a user’s real name and physical address, even if they don’t pass this information on until after a booking is confirmed.

Unverified users could be allowed to use the site, but with additional fees, of restrictions on the number of nights or accommodation type that could be booked. A shared room might be allowed, but an entire apartment might not, for example.

AirBnB recently raised a $112 million venture capital round that put it in the billion dollar valuation club. If the story of one traveler’s experience with the site is proven to be accurate, they may need to set aside some of that money for an insurance policy to maintain user trust in the site. While more protections on both the renter and apartment owner side will need to be put in place, there are a few parts of this particular story that draw us back to “proven to be accurate.”

About  a month ago, someone identified only as EJ posted about a truly awful rental experience with AirBnB, the marketplace for temporary room and apartment rentals. The story was recently revived through a series of posts on blogs and social sites like Quora.

“Three difficult days ago, I returned home from an exhausting week of business travel to an apartment that I no longer recognized. To an apartment that had been ransacked,” EJ writes.

“They smashed a hole through a locked closet door, and found the passport, cash, credit card and grandmother’s jewelry I had hidden inside. They took my camera, my iPod, an old laptop, and my external backup drive filled with photos, journals… my entire life. They found my birth certificate and social security card, which I believe they photocopied – using the printer/copier I kindly left out for my guests†use. They rifled through all my drawers, wore my shoes and clothes, and left my clothing crumpled up in a pile of wet, mildewing towels on the closet floor. They found my coupons for Bed Bath & Beyond and used the discount, along with my Mastercard, to shop online.  Despite the heat wave, they used my fireplace and multiple Duraflame logs to reduce mounds of stuff (my stuff??) to ash – including, I believe, the missing set of guest sheets I left carefully folded for their comfort. Yet they were stupid and careless enough to leave the flue closed; dirty gray ash now covered every surface inside.

They did weird stuff too: moving things around in a spooky, psychotic kind of way – creepy little things that I am still discovering as I dig through the wreckage – like cutting the tags off my pillows, and hanging a painting of Paris on the wall that I had never hung before… probably while wearing my now-missing Ugg boots and Roots cap.

All the while, Dj Pattrson was sending me friendly emails, thanking me for being such a great host, for respecting his/her privacy…. telling me how much he/she was enjoying my beautiful apartment bathed in sunlight, how much he/she particularly loved the “little loft area” upstairs… with an “lol” closing one sentence, just for good measure. It makes me sick to my stomach to think now of these emails.” {Around the World and Back}

That absolutely sounds like the renter from hell, and AirBnB CEO Brian Chesky offered this response:

“Hey everyone – we were shocked when we heard about this unsettling event. We have been working closely with the authorities, and we want to reassure our community that, with the help of our security infrastructure, we were able to assist the police in their investigation, and we understand from authorities that a suspect is now in custody.” – Brian Chesky on Hacker News

Here’s the thing: as AirBnB expands, they’ll have to deal not only with hotels who don’t like to see their business threatened, but some of the issues hotels face as well. Issues like who pays for cleaning if an apartment is left dirty? Even in the case of normal rentals, some hosts ask for deposits against cleaning or damage in addition to the rental fee. AirBnB doesn’t have any mechanism in place to handle this, so in the worst case renters can end up being out a hundred or so dollars while the owner hangs on to the money a bit longer than they should (which happened to this writer). For the apartment owner, the worst case probably sounds like EJ’s story above. Hotels normally handle this by requiring a credit card on file for incidentals, and this is something AirBnB could look into. While there have been very few “worst case” situations that we’ve heard about, there are probably even more minor grievances that never surface: the temporary renter who lost the keys, or the apartment owner who shows pictures of one apartment and rents another, for example. All growing pains that the hotel industry has figured out, that AirBnB will have to address as well.

Yet something about EJ’s story seems off. It’s not that we doubt the events described happened: the CEO of the company probably wouldn’t have commented if the person hadn’t actually rented from them and there weren’t supporting evidence of the events described. But there’s something about these events that seems so personal that we can’t help but wonder if this was really a random crazy person or someone the author knew more personally. Even if it’s the latter, it doesn’t change the fact that AirBnB is going to have to put better abuse policies in place and invest in some level of owner and renter security (at least financially). It would make a difference in the minds of many if this were the result of someone with a personal vendetta rather than a complete stranger though. While we can see the theft of the passport, cash and jewelry as something a random criminal might do, burning sheets, wearing the apartment owner’s clothes and hanging pictures doesn’t seem to fit with someone whose primary motivation was to easily rob an unsuspecting person.

Trashed desk photo by Lara604

Update: And now, like any properly developing controversy, there’s an accompanying video from Taiwanese web animators Next Media Animation.

Airbnb (short for Airbed and Breakfast), a marketplace for travel room and apartment rentals is raising $100 million at a valuation of $1 billion. {TechCrunch} That’s quite some airbed.

The company, which even offered to rent out the entire country of Liechtenstein for $70,000/night at one point, has booked more than 1.6 million nightly stays to date and experienced growth of more than 800% last year. Liechtenstein is off the table now, but there’s still a charming little castle available if you want an example of how far the site’s com from its airbed roots.

TechCrunch reports that on any given night, there are more people staying in rooms via Airbnb than there are rooms available in the largest Manhattan hotel.

Unfortunately, a recently passed New York State law makes it illegal to rent apartments for less than 30 days, so some of that new money might go towards defending against lawsuits. Depending on how successful Airbnb becomes as a hotel alternative in one of the world’s most popular tourist destinations, we can see those lawsuits getting quite costly.

We can see both sides of the issue. If you’re staying in a major city for more than a week, it really is more cost effective to rent a room or an apartment.  As someone who has done just that, Airbnb provides a clean, well-lit alternative to wading through the murky myriad of Craigslist postings offering 2 bedroom Soho apartments with an Ocean view for $70/night (read: the obvious scams).

On the other hand, there are some people who are obviously taking apartments strictly for the purposes of renting them on a nightly or weekly basis. If you’re looking for affordable housing in New York on a permanent basis, it’s certainly harder to compete against the potential income from rental income versus monthly income. In theory, that reduces availability and ends up driving up costs for residents. Not to mention that contrary to their reputation for being super friendly and welcoming, most New Yorkers aren’t so warm on the thought of having multiple, random neighbors. Stuytown Lux Living is particularly vocal in their dissatisfaction with the Airbnb model.

So who wins? For now, it seems Airbnb is. It’s successfully brought some order to a market that was previously unorganized for the most part; and for as disruptive as it may be to local hoteliers and apartment hunters alike, at peak times when hotels have no inventory Airbnb keeps tourist dollars coming into the local economy, and lets leasing companies continue to keep apartment rentals an owners’ market.