Emmanuel Bamfo is used to fighting uphill battles. Still, his latest fight, with the city of San Francisco, may well destroy his business if he doesn’t win it, and quickly.
Bamfo is the co-founder and CEO of Globe, a year-old, six-person startup that connects customers with rooms in people’s mostly urban homes. Think Airbnb, except that Globe isn’t for users looking for days- or months-long stays, but instead for a day break.
Globe evolved from an earlier company called Recharge that tried convincing hotels to let its customers rent their rooms by the hour and even minute, and had raised around $10 million in funding. When hotels pushed back on the idea of cleaning their rooms so frequently, the nascent outfit entered into the popular accelerator program Y Combinator last summer and came out as a company that connects customers to home owners instead.
Growth at Globe had been slow but steady since, with more than 10,000 hosts around the world signing up to rent out rooms in their homes. Then came COVID-19.
Some hosts kept providing space to guests. One tech worker, Abe Disu, recently told The New York Times that he rented out his San Francisco apartment through Globe about 70 times between August and April, earning about $50 per hour after cleaning costs.
Many others expressed concerns about germs. “I thought we were dead,” says Bamfo.
Instead of giving up, Bamfo began to position Globe as a platform for people needing an escape from home quarantines. Globe can help individuals find that quiet place to make calls, away from roommates and children. It offers a reprieve from loved ones for a much-needed hour or two. It can even help those in desperate straights find better bandwidth. (You get the idea.)
It’s an appealing proposition on some levels. Who doesn’t long for a change in scenery at this point? Still, there is a pandemic, and safety is concern. Indeed, though Bamfo says Globe has layered in policies specific to COVID-19 — its cleaning checklist for hosts has grown longer and customers now have to send in pictures of thermometer readings — the city of San Francisco, at least, doesn’t think they go far enough.
Local officials sent Globe a letter last week noting that the company’s hourly rental business appears to violate the shelter-in-place order instituted in March and extended indefinitely last week with some modifications that do not apply to Globe’s business. They says they are prepared to take action, too. If Globe doesn’t immediately halt its business, the startup — and its founders, Bamfo and Erix Xu, who is a former senior engineering director at Reddit — risk “fine, imprisonment or both, pursuant to San Francisco Administrative Code section 7.17(b) and California Penal Code section 148,” says the letter.
It adds that the “California Penal Code section 409.5 also authorizes the City to close down properties constituting a menace to public health. Likewise, failure to abide by the San Francisco Planning Code is a nuisance and is punishable by fines of up to $1,000 per day. Likewise, failure to abide by Chapter 41A of the Administrative Code is punishable by fines of up to $484 per day.”
It’s a bitter if somewhat unsurprising development for Globe, which is based in San Francisco, and counts the city as its biggest market. Bamfo and Xu have limited resources, and a drawn-out shut-down could very easily become permanent. Still, it’s hard to see how the company avoids a bigger blow-up if it doesn’t comply very soon — or the city doesn’t instead begin to relax some of its policies.
Right now, Bamfo seems to be counting on the latter, and perhaps for good reason. Yesterday, for example, California Governor Gavin Newsom said that barbershops and hair salons can begin accepting customers again in many California counties. San Francisco and neighboring counties are maintaining more sweeping restrictions for now, but that could change in a matter of weeks.
In the meantime, Bamfo — who says he was “shocked” by the city’s letter — is engaging in a game of chicken. He says that while Globe works on an official response, one that it will send by Tuesday of next week, the company is continuing to make its service available in its hometown.
Noting that neither Airbnb nor hotels have received the same feedback from the city, he says that Globe “doesn’t want to focus on regulations, fines, and threats of jail time. We want instead to elevate this discourse around solutions.”