Airbnb’s Reputation

Airbnb’s reputation over the past decade hasn’t exactly been spotless – in fact, more than a few problems have made headlines recently and have yet to be solved. So when the news broke that the Silicon Valley company was planning a 2019 initial public offering of their stock, naturally a few red flags popped up.

While Nathan Blecharczyk, the company’s co-founder, recently hinted to Business Insider that preparing for an IPO and actually releasing an IPO are very different things, there’s still a lot of contention surrounding the company that may indicate they should think twice before going public.
But first… What’s an IPO?
When a well-established startup company has amassed enough success, stability, private investors, and revenue to be able to commit to something like an initial public offering, it signals their entry into the world of larger publicly-traded organizations, and therefore their intention to stick around for a while.

They send out the word, collect investor interest in the initial sale of their stock, set a date to release, and, ideally, enjoy a wildly popular IPO when the public begins purchasing publicly traded shares of their company. When this happens, as was the case with companies like Apple and Facebook, it usually means the company is ready to enjoy some big growth. It also tends to indicate that they’re doing a great job in almost all (if not all) areas of business.
What could happen if Airbnb releases an IPO in the near future?
The Good: It could work. The company’s stock could be well-received, or even better – it could explode with interest. This would cause Airbnb’s overall value to rise, and the company would have billions more to spend on bettering their internal and external practices… assuming that’s what they’d spend it on.

The Bad: There are quite a few possibilities for negative outcomes of an Airbnb IPO.
● The initial valuation could be way off-mark, resulting in a drastically under- or overconfident public market – both of which can be undesirable when it comes to an initial public stock offering
● The valuation could be accurate in terms of how confident investors are, but inaccurate with regard to the company’s actual ability to deliver on the expected level of success
● The market itself could change drastically within Airbnb’s niche, resulting in a sudden downturn in investor confidence and a flopped initial public offering
● Airbnb may begin to lose business due to some of their recent struggles, and investor confidence could tank sooner than anticipated
So why is an Airbnb IPO a bad idea?
1. Airbnb’s customer service SUCKS
Airbnb used to be a standard-setting company in the realm of customer service. Their complaints were minimal and their problem resolution teams were renowned for fairness and speed of solution. Even settlements in the previously-rare instances of damage claims and misconduct were considered to be quite fair.

As of late, though, Airbnb’s own Community Help page has become inundated with tales of incompetent, slow, unfair, and even outright terrible service.

It’s also worth noting that until very recently, the company made concerted efforts to be hard to reach. This was such a problem that many websites have posted pages specifically built to help customers find Airbnb customer service contact details in case of emergency or other needs.

Since then, the company has attempted to appear more available by allowing access to help via their Twitter page and other online resources. However, it appears their service via these portals is as unpredictable and frustrating as ever.
2. Civil disputes abound
There are numerous ongoing and recently-settled civil legal complaints against the company, especially those pertaining to illegal use of residences as Airbnb listings, failure to comply with local tax ordinances, and the company’s utter lack of action to resolve and prevent these issues.

Airbnb has made some headway in these areas, but maintains their slack stance and process for verifying the identities and rental locations of hosts.
3. Criminals slip through the cracks too easily
Now we get to the scary stuff. Airbnbs have been the sites for numerous crimes of many varieties, including such issues as guests stealing from hosts, guests being robbed at knifepoint, sexual assaults, and even murder. Airbnb’s identification policies are seriously lacking in many areas so, unfortunately, these stories are not surprising.

While these atrocities are by no means encouraged by Airbnb, their responses are not known to be appropriate or supportive. In many cases, few and meager damages are paid, woefully underwhelming support is offered to those in need of assistance, and responses are slow at best. The company has a long way to go before they can be considered good at handling these kinds of issues.
4. They seem unable to keep up with existing growth
We can easily see from the marked uptick in complaints and issues against Airbnb over the past several years that they’re not excelling at problem resolution. In fact, as they grow they seem to be struggling more and more.

It would seem reasonable to cut the company some slack by recognizing that with an increase in customers comes an increase in complaints and complainers. However, based on research, it seems pretty evident that their problems are increasing too drastically to simply be attributed to growing pains.
5. They may already be making financial missteps
While the company is certainly successful and wildly popular, they may have overvalued themselves a touch, or at least by the standards of investors in today’s market. Speculation circulated in 2016 that if illegal listings were removed from the site, the company may be worth far less than the $30 million estimated current value at the time.

Morgan Stanley offered their own take in 2017, asserting that the travel market that Airbnb occupies space in had likely reached its peak. They subsequently down-valued Airbnb, which caused a flurry of discord about the true value of the company as a whole.

Even as recently as this year, the company’s lack of fundraising over the previous two years has been criticized. In general, fundraising surges – not slows down – when a company is gearing up toward a successful IPO.
6. Airbnb’s reputation is increasingly unfavorable
Just like a political candidate going into an election year, a company entering preparations for an IPO doesn’t want any lingering trouble to sneak up on them and ruin their potential success… and Airbnb has a lot of bad blood to clear up before their reputation can be considered “spotless” again.

Considering the drastic and public nature of Airbnb’s struggles, the surge of Airbnb complaint platforms like AirbnbHell.com, hugely problematic ratings on Better Business Bureau and Trust Pilot, and many other dings on their reputational “credit report,” it seems like Airbnb might want to straighten a few things out before they take the IPO plunge, or they’ll risk an extremely rocky start to their publicly-traded life.