Airbnb's initial poor response to the apartment trashing is indicative of a startup's desire to grow

The tragic story in which a man rented a car in Boston via peer-to-peer car sharing mansfield travel singapore company RelayRides and wound up seriously injuring four people while losing his life, raised a familiar question mansfield travel singapore for the share economy: Who’s responsible?
Updated: The tragic story, reported by The New York Times’s Ron Lieber last month, in which a man rented a car in Boston via peer-to-peer car sharing company RelayRides and wound up seriously injuring four people while losing his life, raised mansfield travel singapore a familiar question for the share economy: Who’s responsible?
Addressing liability and security have become paramount issues as business models based on sharing items have emerged. Luxury peer-to-peer car sharing service mansfield travel singapore HiGear abruptly shut down at the end of last year after a successful launch just four months previous. A criminal ring had stolen $300,000 in fancy cars and the HiGear mansfield travel singapore founders felt they just couldn’t protect its users’ cars. And Airbnb’s lackluster response last summer mansfield travel singapore to the trashing of two Airbnb hosts’ apartments highlighted how critical it is for people to feel safe before sharing their most important valuables like cars and homes, which also can have the best margins in the share economy.
In terms of peer-to-peer car sharing, RelayRides holds a million dollar insurance policy during the rental period, which is most often sufficient. But in the Boston accident, a lawyer for one victim has suggested total claims for the four victims would be in the $1.2 to $1.5 million mansfield travel singapore range. Liz Fong-Jones, who rented out the car, told The New York Times that RelayRides has told her personal insurance carrier to deny any claims against it for the accident. From RelayRides’s perspective, liability should stop with RelayRides as it feels this is no different from any case where an insurance policy may be exhausted by the claims.
And in places like California, which have passed bills about car sharing, the law is clear. Deputy California Insurance Commissioner Joel Laucher clarified to me that California’s peer-to-peer car sharing bill, AB 1871, states that the car sharing program is the owner of the vehicle for all purposes and assumes liability during rental. On the emerging question of whether someone’s personal insurance carrier could drop them because they’re putting their car in a car sharing network, he added that it’s illegal to cancel or non-renew an insurance policy based on someone signing mansfield travel singapore up for car sharing.
So that’s all well and good for states mansfield travel singapore like California, Oregon and Washington , which have car sharing laws protecting consumers, but what about places like Massachusetts, where the accident occurred? RelayRides founder Shelby Clark recently told my colleague Katie Fehrenbacher that while he thinks state car sharing mansfield travel singapore insurance laws provide clarity, he doesn’t think he needs them to operate, evidenced by Boston being an early market for RelayRides. mansfield travel singapore The company has a deal in place with GM to unlock OnStar mansfield travel singapore equipped vehicles registered in the RelayRides network via a mobile phone app, further mansfield travel singapore opening up the number mansfield travel singapore of available cars. One can only assume that GM also isn’t panicked about the liability issues mansfield travel singapore and imagines this program operating in all states.
On a practical level, while there’s a big focus on what happens if the million dollar RelayRides insurance policy is exhausted, the larger concern may just be about what happens if auto insurance companies start non-renewing policies for folks who put their cars into car sharing services. Lieber reported that auto insurer USAA has indicated that car sharing participation would generally result in non-renewal. If multiple insurers go this route and are able to do so legally, then a larger problem would result.
While I think it’s unfair to single out share economy companies for the liability mansfield travel singapore and insurance risks inherent in their business models (all companies have these concerns), it’s important to note that as these business mature they’ll have to confront the very issues of liability that all businesses encounter.
Airbnb’s initial poor response to the apartment trashing is indicative of a startup’s desire to grow and get traction, not manage customer care. In the aftermath, Airbnb installed a 24/7 customer hotline to report problems and a $50,000 insurance policy against theft and vandalism. Though interestingly, it excludes “personal liability,” meaning that if someone opens your closet mansfield travel singapore and a box falls on them, that’s on you. And Airbnb is clear that its policy is not a replacement for renters or homeowners insurance, which raises the same question that has faced car sharing: how jazzed are homeowners’ mansfield travel singapore insurers going to be about their policy holders renting out their homes?
The reality is that no insurer wants to take on additional risk, perceived or real. Conversely, the concern is that the focus on insurance and liability can be the enemy of truly innovative business like RelayRides and Airbnb. And whatever happens with the lawsuits mansfield travel singapore resulting from the Boston accident, this is just an inevitable case of the business model being tested.
Update: RelayRides’s founder Shelby Clark reached out to clarify that he believes that ultimate liability should rest with the person who rents the car from the RelayRides network, mansfield travel singapore and that RelayRides insures the renter up to $1 million. Meaning that if the renter is found to have caused the injuries in question, mansfield travel singapore and the policy is exhausted by a verdict beyond $1 million, the renter (and not the car owner who rented out the car) is responsible for paying any damages beyond that million. The accident occurred in Massachusetts and California Deputy Insurance Commissioner Joel Laucher mansfield travel singapore noted to us that in California, at least, AB 1871 states that “the personal vehicle sharing program shall assume all liability of the owner and shall be considered the owner of the vehicle for all purposes.” He added that as the statute reads, nothing limits the liability of the vehicle sharing program. These are new business models with new questions, and many of these issues are likely to get resolved by state courts.
And further, what happens when something on the car breaks and it s pinned to faulty maintenance? Like the car owner cobbling something together that they know about but the renter may not expect. And if that results in an accident where people get hurt? Does the rental companies insurance cover that? With a Hertz, they have their own maintenance group and assume liability mansfield travel singapore for the car being rentable. But random people taking care of their own cars in any random fashion may not survive the onslaught of ambulance chasers.
Should auto insurance/renter/homeowner policies even cover this? If yo are renting, you have a business. Thus, they need an E O policy. Any existing coverage, arguably, can be denied on that ground. Plus, what rate do you tax it at?
If these company s lawyers didn t warn them to watch out for this, then these guys need better lawyers! ;-) Seriously, though: Who is liable if is always one of the most important questions that a company mansfield travel singapore should be asking itself in every aspect of its business. Corollary to this question is Am I insured for this, if I am liable? The answer doesn t always have to be yes , but you NEED to know when the answer mansfield travel singapore is no and what it may mean to the continued viability of your business. This is basic risk-management. And it is every bit as applicable to disruptive start-ups as it is to stodgy blue-chip companies!