diff --git a/tools/droplets/create.py b/tools/droplets/create.py
index 8fc89fbaef..e23b4fa7e1 100644
--- a/tools/droplets/create.py
+++ b/tools/droplets/create.py
@@ -106,6 +106,11 @@ def set_user_data(username: str, userkeys: List[Dict[str, Any]]) -> str:
         ssh_authorized_keys += "\n          - {}".format(key['key'])
     # print(ssh_authorized_keys)
 
+    # We pass the hostname as username.zulipdev.org to the DigitalOcean API.
+    # But some droplets (eg on 18.04) are created with with hostname set to just username.
+    # So we fix the hostname using cloud-init.
+    hostname_setup = "hostnamectl set-hostname {username}.zulipdev.org".format(username=username)
+
     setup_repo = """\
 cd /home/zulipdev/{1} && git remote add origin https://github.com/{0}/{1}.git && git fetch origin"""
 
@@ -116,18 +121,20 @@ cd /home/zulipdev/{1} && git remote add origin https://github.com/{0}/{1}.git &&
     #cloud-config
     users:
       - name: zulipdev
-        ssh_authorized_keys:{}
+        ssh_authorized_keys:{ssh_authorized_keys}
     runcmd:
-      - su -c '{}' zulipdev
+      - {hostname_setup}
+      - su -c '{server_repo_setup}' zulipdev
       - su -c 'git clean -f' zulipdev
-      - su -c '{}' zulipdev
+      - su -c '{python_api_repo_setup}' zulipdev
       - su -c 'git clean -f' zulipdev
       - su -c 'git config --global core.editor nano' zulipdev
       - su -c 'git config --global pull.rebase true' zulipdev
     power_state:
      mode: reboot
      condition: True
-    """.format(ssh_authorized_keys, server_repo_setup, python_api_repo_setup)
+    """.format(ssh_authorized_keys=ssh_authorized_keys, hostname_setup=hostname_setup,
+               server_repo_setup=server_repo_setup, python_api_repo_setup=python_api_repo_setup)
 
     print("...returning cloud-config data.")
     return cloudconf
diff --git a/zproject/dev_settings.py b/zproject/dev_settings.py
index 171bf2e44a..daffaa277d 100644
--- a/zproject/dev_settings.py
+++ b/zproject/dev_settings.py
@@ -21,12 +21,8 @@ FORWARD_ADDRESS_CONFIG_FILE = "var/forward_address.ini"
 external_host_env = os.getenv('EXTERNAL_HOST')
 if external_host_env is None:
     if IS_DEV_DROPLET:
-        # For most of our droplets, we use the hostname (eg github_username.zulipdev.org) by default.
-        hostname = os.uname()[1].lower()
-        # Some of the droplets (eg droplets on 18.04) has the github_username as hostname.
-        if '.zulipdev.org' not in hostname:
-            hostname += '.zulipdev.org'
-        EXTERNAL_HOST = hostname + ":9991"
+        # For our droplets, we use the hostname (eg github_username.zulipdev.org) by default.
+        EXTERNAL_HOST = os.uname()[1].lower() + ":9991"
     else:
         # For local development environments, we use localhost by
         # default, via the "zulipdev.com" hostname.