Couchsurfing.com's Attempt to Make Profit Out of Solidarity
Hospitality exchange platforms host users who extend accommodation to others with the promise of a more “local” experience that differs from hotels. The concept of a hospitality exchange platform promotes a different type of economy. People who share the values of hospitality, sharing, and caring could meet thanks to these platforms. We argue that for profit legal status for such a service works against the community values they build on and induces problems with transparency and accountability.
Couchsurfing.com is one such hospitality exchange platform. Once a non-profit between 2003 and 2011, the business is now a C-Corp, signaling a shift from the company’s non-profit roots and potentially alienating users. Couchsurfing.com's attempt to profit and behave like a typical corporation is a new model - a for-profit that gains from the legal void and the lack of ethical standards for this type of business. Since it is niche, it is subject to less regulation, leading to market domination by a company failing to protect the interests of its userbase.
Since turning the network into a for-profit enterprise, not even a B Corporation, the co-founders and several CEOs have consumed large amounts of venture capital and then tried different methods to make income from people creating a gift economy. If they had turned the company into a B Corporation, they would be able to make some degree of profit and meet social sustainability and environmental performance standards that may more closely align with the ethos of the userbase. Gift economy platforms should be seen as a distinct type of service. It is more than just a matter of conformity to current regulation. When a company enters a new territory, it has a lot of leeway because the activities are new and have not been considered by the legislation. This is the task of a movement and resistance to bring a new regulation of the sphere about. Protection of the values hospitality exchanges espouse is important, and needs action to preserve them.
Companies operating online platforms are now changing or exploiting the way labor may be conceived. For example, they include Facebook offering a free service, Amazon using readers' reviews, or other companies collecting data from the behavior of their users as part of their income. While there is no employment contract between them and the users, users' activities are practically laboring for the company because the company extracts profit from their data and their behaviors on the platforms.
A for-profit group is prohibited from having people work for them without being paid, according to Fair Labor Standards Act (FLSA). What would a judge say about the activities of all the peers that constitute the network of the gift economy? As a for-profit, Couchsurfing.com is operating in a legal void. A lawsuit would help in establishing whether a for-profit can actually base its revenue on volunteer work provided by hosts and community organizers. Couchsurfing.com's activity is supported by local Ambassadors. Can we see the activities of Ambassadors as promotional activities to be paid at the level of at least minimum wage? A class action would give us an answer.
Should mutual aid, solidarity, and the commons have their own rights and be protected from a grab of profit-oriented interests? Usually, mutual aid, solidarity, and the commons are organized as non-profit or cooperative. Another platform of this kind, WarmShowers, is a US-based non-profit. There are two other non-profits offering a similar service, BeWelcome.org and Trustroots.org. Can they actually be organized by a corporation? In September 2011 (Retrieved June 8, 2020), an attempt was made to address Couchsurfers’ concerns regarding the change via their blog, stating they were "confident" they could find other methods of profiting, and that "investors have a minority stake," even acknowledging the length of time between conception and profitability as typical of US-based startups. What are the legitimate ways of earning money in such settings?
Since mid-May 2020, some users will never be able to get in touch with people met through Couchsurfing if they had not exchanged contact information outside of the platform due to a paywall. Some people probably will not return to the platform after being suddenly locked out from their profiles without a warning. They are right in not wanting to return because the management was justifying the decision with COVID-19 crisis. Couchsurfing.com is now behaving like a typical C Corporation. Without transparency, we are not able to assess who may be profiting from the current crisis and whether the COVID-19 crisis is being used for exploiting people's efforts and goodwill. If a company claims that they have no funds, users should have access to more information about salaries of the management and other financial information to see whether it is the case because they were not transparent before the "crisis." In the past, they raised 22.6 million dollars in investment. The core team explained that this was the only option. While they may have no money at the moment because of the quarantine, we cannot find out whether the lack of funds is caused by the investment ending up in the CEO's pocket at the time, or squandered when it was still possible to accumulate revenues.
The lack of communication with the membership has had a long tradition, such as misleading that it was a B Corporation or withholding the change of ownership in 2015. On August 24, 2011, a communication on Couchsurfing's website announced that “we are joining the growing ranks of certified B Corporations.” There was a little nuance in the word “certified.” Further in the same post they wrote as if they had the status of Benefit Corporation, “becoming a B Corporation allows us to get funding.” They mentioned a commitment to transparency, which was implied by this status. The website Inc.com reported that they spent over 10,000 dollars for the services of “the San Francisco-based PR firm The OutCast Agency, whose clients include Zynga and Facebook” in order to bring this communication ruse to the members and volunteers who had built up the network.
Many devoted community members have announced that they are leaving the platform since Mid-May 2020. Some users have reported being blocked on the platform for writing on their Couchsurfing profiles that they had moved to BeWelcome.org or Trustroots.org. Some Ambassadors have either resigned or been suspended for voicing criticism.
Gift exchange platform may turn out to be a dangerous service without a community helping to prevent predators from abusing encounters with strangers. While certainly Couchsurfing has safety measures in place, the most effective safety measure is a community. There are certain things that are difficult to organize in a professionalized way in a for profit setting, such as self-policing.
It would be against the law that Couchsurfing.com accepts volunteer work in running essential parts of its enterprise like quality and safety. Therefore, Couchsurfing.com needs to consider employing local community organizers to ensure safety. Florian, surname not mentioned in citation, who works for Couchsurfing refused to inform press about the number of employees at the company, as their article published on June 14, 2020 revealed. It was published in German publication Jetzt.de – the young readers magazine of Süddeutsche Zeitung.
We need to reconquer the values of community-based economy such as transparency and accountability and make them guide a group of people interested in solidarity and mutual aid rather than bringing revenue to a company. This may build a moral ground or at least evoke some considerations. Long-term cultural work is due in order to update the legal standards to the era of online platforms and profiteering from our need for gift exchange and community.
The law hasn't caught up with the gift economy yet. Faced by a rapid innovation in profiting from crowds, we need to mobilize for ethical standards to be applied in this new sphere of economy. Legal activism needs to attempt to protect volunteer work from corporate extraction. Couchsurfing.com is a C Corporation, which had been a non-profit between 2003 and 2011. The network has been built up by the efforts of volunteers and then taken over by its co-founders. We need a law prohibiting such an enclosure. We need mobilization to protect such a form of commons!
We need to prevent the exploitation of the users and the hosts providing their time for free. One could translate the work of hosts into revenue for the company because they attract potential users, which leads to user fees for the company. Indirectly, they are bringing profit to the company. Recently, the platform has introduced a ruse to attract new members, advertising as a free service and attracting newcomers with the profiles filled before the paywall. In order to communicate on the platform, one needs to pay but the person has been already brought in by an image of a platform where a lot is happening. This deception means unregistered users do not see the absence of users from the platform once it required a fee in exchange to access their own profile. Moreover, existing users whose profiles can be found on Google search, found themselves to be a marketing tool for the ruse. Furthermore, the user base built up by the contribution of hosts and community organizers may be used by the company in a merger to feed another type of company with users' data.
The actual situation further demonstrates that we need a different organizational form – more consistent with the character of the platform and the ethos that it wants to promote – in order to ensure that these values can thrive. We can test a consumer cooperative or a nonprofit. The Platform Cooperativism Consortium at the New School in New York analyses a new organizational model, platform cooperativism, to explore the alternatives to extractivist practices in sharing economy. Fortunately, we have other platforms to turn to while pondering on these questions.
Header image by timsamoff. CC BY-ND 2.0
Katarzyna Gajewska, PhD, Max Lawlor (2020). It's an Ideological Struggle: Couchsurfing.com's Attempt to Make Profit Out of Solidarity. Grassroots Economic Organizing (GEO). https://geo.coop/articles/its-ideological-struggle