As the COVID-19 crisis brought travel to a screeching halt, the people that rent rooms, condos and all sorts of other abodes on Airbnb suddenly found themselves with little to no income.
What's more, Airbnb instituted cancellation policies that allowed guests to get full refunds, a policy that made sense given the situation but which left many hosts with the short end of the stick.
GoFundMe campaigns have sprung up across the nation to help small businesses like bookstores and restaurants survive until the virus recedes and people begin to roam about again.
And in that vein, Airbnb employees created the Airbnb Superhost Relief Fund, a program intended to help at least some of its highest-rated hosts, known as "superhosts" to survive. The fund is limited to superhosts who can prove Airbnb is their main source of income, have been on the platform for at least a year and have two or less properties (a nod to regulatory pressure to limit hosts building big hotel-like businesses on Airbnb, with multiple listings).
The fund is invitation-only; Airbnb chooses who can apply. Superhosts will get up to $5,000 apiece as a grant, not a loan, although they'll be responsible for their own taxes.
Airbnb's weathly founders put $9 million into this fund. Company investors put in $7 million.
And Airbnb's employees contributed $1 million from their own pockets, the company says. Airbnb has its share of highly paid engineers, but it also has an army of of hourly workers.
"While I can't be certain I will receive an invite to apply, I cried tears of gratitude for the @Airbnb superhost grant fund. Losing my sole source of income overnight was tough," one host posted on Twitter.
The employees' $1 million-worth of contribution to the fund is especially noteworthy given that Airbnb employees thought 2020 would be a jubilee year for them, as the company was expected to go public in one of the biggest IPOs of the year. That IPO is now on ice, and their employer is scrambling until the travel industry comes back. Airbnb has had to obtain $2 billion in two new financing deals this month.
Such generosity by people who are facing their own uncertain future is beautiful.
But it also shows a scary side of our the so-called sharing economy.
It's not really sharing.
You take the risk, I take the money
The so-called independent workers running their own businesses are beholden to the tech company that owns the platform.
The tech company assumes very little of the business's risk. In Airbnb's case, it doesn't hold the mortgages or clean the rooms or pay the utilities or the taxes. In Uber's case, it doesn't make the car payments or pay for the maintenance. For Amazon's third party sellers, the retail giant doesn't pay for the products.
These platforms are built on the backs of these small business owners who don't share the power. If the platform changes a policy (which they have been known to do), they can devastate the people who risk it all to provide the platform with the products it sells.
Because Airbnb has been so lucrative, some people have leveraged themselves to the hilt with many mortgages, an unwise risk in hindsight. Those people won't be helped by the Superhost Relief Fund, as one angry host points out in a tweet.
"@Airbnb I don't understand [the] superhost relief fund NOT including the hosts who have dedicated everything to being AirBNB hosts (those w MANY listings). We are the ones whose sole income is #airBNB and we are the ones with HUGE mortgage costs sitting on our necks during #COVID2019"
Airbnb says these hosts may have qualified for small business loans under the emergency funding CARES Act, but the $349 billion federal relief program for US small businesses ran dry on Thursday, the SBA said.
If there were no Airbnb, those landlords would likely have been renting their rooms and apartments to long-term tenants. Airbnb properties are now flooding onto the rental market, which could lead to falling rents and, some say, will exacerbate an impending real estate collapse.
Power to the suppliers
Obviously, no one wants to go back to a world where there are no tech platforms and no opportunities to build a global small-businesses accessible with the tap of the smartphone. The platforms provide the software, hire the engineers and pay the bills for the big cloud services that link everyone together.
But we may not want to go back to a world where the economic risk is not shared more equally by everyone. Whatever happens to the Airbnb property owners or the Uber drivers or other gig workers, the founders of these platforms are already billionaires and the well-paid engineers will likely land on their feet at other jobs.
There may be two outcomes after COVID-19. We may see the rise of some form of a union for platform suppliers where suppliers can band together and, in essence, collectively bargain. The platform will be forced to consult with the suppliers before it tinkers with policies that could badly hurt them. We've already heard whisperings of tenant associations forming in some parts of the real estate world.
Another intriguing potential outcome of the current crisis is the emergence of a new type of tech platform in which gig workers — that is, the "suppliers" in a platform business model — have greater control of their individual business.
For instance, a startup called Dumpling is doing this for grocery delivery workers. It offers software that lets personal shoppers build a grocery shopping client base, independent of, say, an Instacart.
Dumpling was named by VCs as one of the startups that will thrive in the post coronavirus world.
Supply-side platforms like this would allow sharing economy workers to use the broader platforms — whether for grocery delivery, transportation or home rentals — while also building their own, truly independent businesses.
Are you an Airbnb employee or insider with insight to share? Contact Julie Bort via email at email@example.com or on encrypted chat app Signal at (970) 430-6112 (no PR inquiries, please). Open DMs on Twitter @Julie188.