8 ms·

They're often considered similar businesses, but intuitively it seems to me that, long-term, Airbnb will be valued higher than Uber and other ridesharing compan

• bobbygoodlatte 8y ago
  Interesting point. I also think the non-fungibility of Airbnb's listings will help them maintain their margins. For many Uber customers, a ride is a ride is a ride.
• mbesto 8y ago
  They're compared because they own the distribution in their respective markets. That's key. That being said, here are the risks on the supply side for both in very different ways: - Uber: Drivers are fungible and can move to any platform they want. Two risks here...unbundling (already happening) and driver acquisition cost. - ABnB: If their supply bundles itself together, it doesn't need to pay a distribution fee and ABnB is done.
  • hndamien 8y ago
    The economics are also much works for an Uber driver than an AirBnB host.
• conanbatt 8y ago
  What im not sure about is Airbnb's moat. They have a great brand name and all, but their service is very limited: 15% is a very large cut to take on these transactions. What prevents another company from doing the same at 12% and costing 50% to operate?
  • heurist 8y ago
    Their social network and brand recognition is their moat for now. Hosts and guests trust Airbnb. An upstart will have overcome a lot of momentum to take on Airbnb in the broad market.
    • xeromal 8y ago
      The reviews are worth the price of admission
      • conanbatt 8y ago
        They are valuable for sure, but are they 1/7 appts rented out? Traditional vacation rentals charge 15~20%, but they truly handle the key hand offs and such.
      • gehwartzen 8y ago
        I suppose the landlords could port their reviews to a new platform by linking to the Airbnb listing similarly to how people used to post their eBay reviews when selling on forums. But yeah having all those reviews viewable natively for comparison is nice for renters.
  • gringoDan 8y ago
    Nothing prevents another company from doing that, but all of the hosts & guests are already on Airbnb. Two-sided marketplaces are very difficult to start, but once they have some momentum, it's even more difficult to unseat them. Look at Craigslist - terrible UI, hundreds of startups have tried to challenge it in the past 15+ years, and yet it's still my go-to when I need to sell some old furniture.
    • polskibus 8y ago
      Moreover, booking.com existed long before Airbnb and is still going strong!
    • conanbatt 8y ago
• bradleyjg 8y ago
  On the other hand Uber is now operating mostly aboveboard while Airbnb, at least in its single largest market (NYC), is like Napster in its second incarnation—-while it may itself not be violating any laws the overwhelming majority of its facilitated transactions are illegal. That’s a dicey thing to invest in.
  • reading-at-work 8y ago
    > the overwhelming majority of its facilitated transactions are illegal. Any source on that? I know some municipalities regulate rentals now, but to say that the vast majority of them operate illegally is a bold claim to make with no data presented.
    • bradleyjg 8y ago
      In NYC, Airbnb’s largest market, with tiny exceptions, it is illegal to rent out an entire apartment (i.e. host not present) for less than 30 days.
      • Shivetya 8y ago
        I am curious if Mayor Bill de Blasio will go after landlords who permit or partake of this following his recent declaration they will confiscate property of landlords they consider abusive or failing to maintain property to new standards. Of course he plans to turn them over to non profits which is code for politically connected groups which support him, but the idea that they don't put an Airbnb clause into the abusive category isn't baseless. AirBnb is going to get knocked down a peg or two once the states get involved, they are able to dance around many cities and their attempts to reign it in but once a state level attorney comes for them it won't be simple. however as with uber this comes down to private property rights, who do you choose to side with. Me, I am with the property owners as a Libertarian but I am with government regulation so that it is not abused to the injury of others. Specifically the idea of evicting people or requiring them to vacate during high profile events in town
        • 8y ago
• xiphias2 8y ago
  Peter Thiel was specifically talking about people thinking that the businesses are similar, while they're not. AirBnB has a much higher network effect, because there's a huge difference in the listings, while I don't usually care which taxi company I use.
  • paulddraper 8y ago
    Not really. AirBnB has renters and listings. Uber has riders and drivers. As long as you have enough of the two sides, you can have a rival.
    • puranjay 8y ago
      But as a customer, your approach to both marketplaces is very different. With Airbnb, I'm far more discerning because a bad host can ruin a long planned vacation. With Uber, a bad driver means an uncomfortable 45 minutes. Uber can tolerate bad actors more than Airbnb
      • paulddraper 8y ago
        That's true, but that just means you the consumer can be more discriminating on other factors, like price.
• gandutraveler 8y ago
  Airbnb has long way to go to be major player in hotel/rental market space whereas Uber has effectively killed taxi companies and is the market leader. IMO demand for ridesharing will not lower in bad economy compared to Airbnb which is driven by consumers mostly using during travel.
  • smileysteve 8y ago
    On the other hand, in a bad economy, more people are likely to rent their extra rooms at lower costs, and whether vacationing or even living for short term, consumers are more likely to pay. There is then the argument that such a time would quickly be bad for aurbnb bc the fees quickly cost more than the marketing or insurance are worth.
  • ricardobeat 8y ago
    Counter-intuitively, demand for travel tends to go up in rough times.
    • scarecrowboat 8y ago
      Do you have any sources on that? I have family in the hotel industry and anecdotally the entire industry in my area took a nose dive in the last recession. Not quite the same as general demand for travel but it's more relevant to how Airbnb would perform in a recession.
  • deleted 8y ago
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• wilg 8y ago
  Which is worse on cities, Uber or Airbnb? (My gut says Airbnb.)
  • asdfasgasdgasdg 8y ago
    What's bad for cities is not building enough housing for people who want to be there. That includes people who want to be there for a short time. Airbnb is bad for some city stakeholders, but good for other ones (e.g. people who want to rent out their apartment while they're away on vacation).
    • svarnypetr 8y ago
      That assumes you have an infinite city. However, unless you want to destroy the historical center of the city with skyscrapers, you do not have unlimited space for the housing to grow.
• venantius 8y ago
  The main thing is that Airbnb has a global economy of scale - having more hosts in Japan actually does benefit their guests who reside in New York year-round. Competitors to Airbnb similarly must achieve global scale in order to compete in a serious way. There are one or two meaningful exceptions (China, possibly the US domestic market), but essentially any Airbnb competitor must achieve global scale in order to be a serious threat. By contrast, Uber has to fight to win each city, and most of its users will use Uber for the most part within that city. Adding more drivers to Tokyo does not have a meaningful impact on the resident of New York.
  • hawaiianbrah 8y ago
    Why not? A New Yorker who visits Japan needs a ride around town as much as they need housing? Ok, maybe not quite as much. But they do benefit.
    • lordnacho 8y ago
      But the New Yorker knows that AirBNB is the place to find their place in Tokyo, with few non-hotel alternatives. When you got to Tokyo, even if you don't have Uber installed, you will find a cab.
    • thelastbender12 8y ago
      That is a good point. But presumably most of Uber's revenue comes from the residents of a city who are in town most of the time. Opening up in a new city doesn't benefit Uber as much as it does Airbnb where all properties are accessible options to all of its users.
    • venantius 8y ago
      It’s not nothing, but the difference is at least an order of magnitude. Consider: I am probably 0% likely to book an Airbnb in my own city. Almost all of my Airbnb’s will be somewhere else, so I only really care about remote stock. By contrast, something like 90%+ of my Uber rides are going to be local. In many of the places I might travel to, I don’t need Uber at all (the location is rural/suburban, the public transit system is cheap and effective, cabs are widely available, etc).
• netcan 8y ago
  Agreed. Adding to that, I'd say that a big part of how "monetizing labour" compares to "monetizing capital" is, in simple terms, that monetizing capital (homes) has more too to maneuver. Ironically, labour (drivers) is the more commodified market. Uber is a market maker in a world with hard price competition on both ends: drivers and passengers. Since "rentals" is more variable, a 5-10% change in price/cost/income is tolerable. You can redecorate a rental, for example, to affect its value. Seasonality can shift price by a lot. Etc. This generally lends better to a thick, market-liberal layer. It's a slight irony (again) that this is the end point. Airbnb was innovative. It changed my travel habits immediately. But, conceptually it's just a holiday rentals site. Nothing new apart from quality and scale. One rental's ROI will be very different from another's. One consumer's choice will be very different from another's. It's a differentiation market. Diverse product, flexible prices. For an Uber customer/contactor, both the app and the drivers are commodities. What Uber probably needs to do is ruthless efficiency, low marginal costs. Not many SV-startup style companies have that mentality, so hard road ahead. Also, being capital-oriented, Airbnb gets better over the long term. At this stage, much of Airbnb's stock comprises properties bought or leased specifically to be an Airbnb business.
• pmart123 8y ago
  Another angle is that Airbnb also carries differentiated inventory vs. a completely commoditized good. If you are booking a guys ski trip vs a romantic weekend vs family reunion you are looking for a unique property. Airbnb, as the largest player, is most likely to have differentiated inventory, and therefore, the first place someone looks. So as a two sided market place, Airbnb has more value.