Airbnb CEO Brian Chesky.
John van Hasselt | Corbis | beautiful images
A short-term rental hostel owner has filed a proposed class-action lawsuit against Airbnb, alleging that the tech company violated their contracts with hosting providers when it fully refunded enough money for guests after the coronavirus pandemic in March.
The lawsuit was filed Thursday in California̵7;s Northern District Court in San Francisco by Anthony Farmer, an Airbnb host in Texas. Farmer has been a host for Airbnb for three years. Farmer stopped hosting with Airbnb due to the $ 655 amount, claiming that the company owes him from canceled reservations. The lawsuit alleges three lawsuits against Airbnb: breach of contract, breach of fiduciary obligations and violation of California’s consumer protection laws.
The lawsuit comes as Airbnb prepares to go public after a difficult year for the company and the tourism industry as a result of Covid-19. Homeowners have complained about the company’s handling of pandemic cancellations, with the company in March issuing a mitigating circumstance that applies a refund policy of many homeowners. . Hosts have also complained about the lack of payments while many guests complained that Airbnb didn’t give refunds for trips affected by the pandemic.
Aaron Blumenthal, a lawyer at Gibbs Law, representing Farmer, said: “Due to the Covid crisis, hosts are not paid, guests are usually not getting a refund and Airbnb is just ahead.” Something the lawsuit will be looking for is calculating where the money is. “
An Airbnb spokesperson said the allegations of the lawsuit were unfounded.
Airbnb said in a statement: “When the WHO declared Covid-19 a global pandemic, we made the difficult decision to activate our longstanding Mitigating Case policy and provide adequate funds. reimbursement is given to eligible guests because the health and safety of the community comes first “. “While we know it has a significant impact on booking and revenue for our host community, we firmly believe that is the right thing to do. This complaint is completely frivolous and of no value. “
This lawsuit is notable as it happened after Farmer first attempted to sue Airbnb through an arbitration court, as outlined in Airbnb’s terms and services for the server. To bring his case to arbitration, Farmer worked with FairShake, a company that helps consumers file lawsuits against companies. FairShake has worked with a number of Airbnb’s holding companies to pursue legal action against the company since March.
“Neither the guest nor the host gets that money back,” said Teel Lidow, CEO of FairShake. “That’s what got us started together doing the arbitration campaign that ultimately led to this class action.”
Anthony Farmer, an Airbnb agency in Texas, filed a class action lawsuit against Airbnb.
Jimmy Zuninga Photography with the support of Anthony Farmer
Farmer was able to sue the company after Airbnb failed to pay the legal fees needed for the arbitration proceedings on time. New California law allows plaintiffs to take their cases out of arbitration and go to court if the company suspends payments after 30 days of receipt of the bill.
“They don’t pay the referee just another slap in the face,” said Farmer. “What a shock and a disgrace.”
An Airbnb spokesperson disputed the claim.
“Airbnb was fully involved in the arbitration process with Mr. Farmer,” the spokesperson said in a statement. “This arbitrator is currently active, and in fact, the American Arbitration Association appointed an arbitrator on October 30.”
Before the pandemic, Farmer relied on Airbnb as his main source of income. Farmer has used a strict cancellation policy that could allow him to receive at least part of the reservation if the guest needs to cancel. That has been overridden by Airbnb’s mitigation policy. While $ 655 may not be a lot of money, he is relying on that money to pay mortgage, utility bills, homeowner connection fees and other costs that come with short-term rent. Said Farmer.
“This is definitely affecting me during a pandemic,” said Farmer. “I’m very angry about that. I’m angry, frankly I’m sure I’m not the only one affected.”
Blumenthal said it hopes the lawsuit is granted class action so that other similarly affected servers can join the lawsuit. With the company preparing for an IPO, this situation might be of public interest, Blumenthal said.
“I think the public and potential investors will want to know how much money Airbnb has, if our lawsuit is right, then they belong to the owner legally,” Blumenthal said.
In March, Airbnb activated an extenuating circumstances policy to offer guests affected by the pandemic a full refund for their bookings, applying a host refund policy. Many guests complain that when they try to claim those refunds, they are unable to get the full refund, have to jump through several rounds or get no refund.
After that, Airbnb announced it would set up a $ 250 million coronavirus bailout fund for the servers, returning 25% of the money they would normally receive under their cancellation policy, but many homeowners talked with CNBC complaining that they are not getting the correct amount or any payment. at all.
In August, many homeowners complained that they lacked payments from the company. Airbnb blamed these missing payments on “a minor technical problem”.
“I want justice for the other hosts that have been hurt by this and I want Airbnb to be held accountable,” Farmer said.