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Comment by netsharc | Hacker News Reader

Makes me think that there's a market for a 3rd party website for reviews for AirBnB hosts (and probably guests).

But a new host might not get any guests if they don't have a review on this site, and if the guests avoid them, then no one will review them. An idea would be for a host to pay a refundable deposit, and the website could indicate them as so, "We have no reviews for this host, but they have guaranteed with $money that their listing is legitimate/accurate.". After the first review comes, they can get the deposit refunded. But aha, this doesn't protect against fake reviews by friends and accomplices of a dodgy host...

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It's fundamentally a problem of trust. Hotels and big brands work because you can trust them. Why do you trust them? Because they have skin in the game. If their products suck their brand suffers and that's what they want to avoid the most. If Apple releases crappy products they can't just create a new "BtwNotApple" brand. They can sell overpriced products because you're paying for trust/brand.

In these semi-anonymous marketplaces you fundamentally don't have trust. There is no skin in the game for sellers since their identity and brand is not sticky. If you get banned or do something against the ToS it's not a big deal. Regulation is a possibility, e.g. make people go to jail, but I doubt that could work on this scale. Or it would make innovation impossible. You need a fundamentally different incentive model.

Hmm, I've never used it, but something like Silkroad worked, it did not have trust issues. To me it reads like they try to save pennies on customer support.

The differences between Silk Road and Airbnb is that the former didn't have lots of investors and techbros to pay returns to, so they could actually offer a fair escrow service and still remain profitable, where as Airbnb has to commit fraud by pitching you an "insurance" service that never actually pays out because doing so would lower or even negate the techbros' returns.

> It's fundamentally a problem of trust.

Absolutely. That's where bitcoin could help a new platform, as a decentralized trust protocol. The bisq.network protocol requires people to put up significant bonds to perform roles that are trusted, and then if they fail to perform well, they can loose some or all of their bond. The bisq token holders (bisq tokens are simply colored satoshis, i.e. they've built functional governance directly on bitcoin) vote monthly on various governance proposals, and can thus hold people doing bonded roles accountable.

The tough question is whether such a system could make to individual apartment rentals in the real world. Its an oracle question: how to you establish the truth of competing claimed about the state if an apartment? Not an easy problem to solve, but if its solveable it could provide an amazing new marketplace.

Or review faking services. Ultimately, there's no real good way to trust stuff on the internet based on what "others like you" are saying.

Reviews of the hosts are already informally available in the reviews of the rooms and apartments. It's the number-one thing I look for when booking: the reviews should be raving about not only the place, but also the host. If this is not happening, or the reviews are mainly short and neutral, I don't book.

I did get tripped up despite this rule once, when I booked a private room in an apartment and arrived to find the host going on vacation. After he left, a massive mouse infestation stirred up by basement construction the prior week surfaced, and I escaped down several flights of stairs in the dark surrounded by a cacophony of squeaking in the walls. I think a mouse ran over my foot. I have mostly stayed in hotels since.

But I've had many wonderful Airbnb experiences in the past, and I do believe my one terrible experience was an outlier (albeit traumatic). I would have started using it again, but high-quality Airbnb listings exceeded hotels in price in my country, so I stick with hotels, especially since I earned status with some programs.

> But a new host might not get any guests if they don't have a review on this site, and if the guests avoid them, then no one will review them.

The new host needs to price their listing substantially below competitors, to the point where some poor bloke is willing to take a risk, in order to build up a review base.

But then won't they have to jack up the price, after earning a sufficient threshold of trust, to compensate for the huge losses their making at the beginning?

i.e. price their beds the same as hotels, or higher?

No, they can't do that, because, you know, competition. Basically, those few weeks/months of below market rate prices are the cost of bootstrapping your business. Of course, if, over time, you acquire stellar reputation, then you probably can price yourself slightly higher than competitors based on that. But that's very unstable state.

Competition from who? Every established, high trust, host will charge at least the minimum viable rate to break even.

Anyone who charges lower then the minimum viable will simply never break even, given that the money spent to accumulate trust has an opportunity cost.

The cheapest hotels will be priced about the same.

Low or zero trust hosts can't compete against high trust folks without a huge discount as already discussed.

They will raise their prices until they are in the normal market range.

That's different from jacking up the price "to compensate" for the losses at the start. They just have to eat the initial costs, and it will take a while for normal market profits to put them in the black.

No, because money has a time value, the break even rate will be higher because a dollar today is worth more than a dollar a few months from now. It by definition will cause the rates to be higher then they otherwise would be. This might be worth paying for to be guaranteed a high trust host. But that doesn’t the change the fact that the costs are shifted around instead of being reduced overall.

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