5 ms·

I think none of his claims about the cause are the real one. It's more like: Uber undercut taxis by using VC money to try to buy market share, which worked, but

I think none of his claims about the cause are the real one. It's more like: Uber undercut taxis by using VC money to try to buy market share, which worked, but now they have to raise prices and less people want to use it (plus there was a demand shock caused by covid). See this with Airbnb too. They're no longer cheaper than a hotel in many cases and the experience has declined for a variety of reasons.

phreeza 5y ago
Was Airbnb ever really subsidized the way that Uber was (i.e. the host gets more than you paid?)
- jl2718 5y ago
  Yes. I was a large host in 2012, and whenever someone would cause trouble, AirBnB would pay for a Palo Alto hotel room to get them out of there. People would go full psycho just to get a free hotel room. I tried hosting again recently; it was an expensive nightmare, but probably better for their margins. Too bad because I had really enjoyed the community in those places.
  - rticesterp 5y ago
    I'm a host now and roughly 30% goes to AirBnB. There is both a Host Service Fee and a Guest Service Fee. They also take out taxes
    - ornornor 5y ago
      And as a guest, they do jack shit when things go wrong. The best you can hope after spending hours on the phone explaining your case over and over with each new person you’re getting is that they’ll refund your money with a “good luck finding another place to sleep for tonight, you’re on your own” Airbnb ruined so many of our vacations in the last few years that we’ve sworn to never ever use them again. It’s not worth the trouble. And the prices are completely ridiculous now, on par or more expensive than a bona fide hotel.
dehrmann 5y ago
The big difference is AirBnb ended up being a winner from covid, at least eventually.
danhak 5y ago
> See this with Airbnb too. They're no longer cheaper than a hotel in many cases and the experience has declined for a variety of reasons. This is such a common criticism of Airbnb. Maybe I’m an outlier but my use of Airbnb does not compete with hotels at all: e.g. renting an entire pool house with friends, a secluded cabin out in the mountains or an apartment with full kitchen and laundry for an extended stay in a city center.
- halfmatthalfcat 5y ago
  Anecdotally I view AirBnB as a hotel replacement but like the OP said, I've started going back to hotels because the price/quality just isn't there anymore.
- rchaud 5y ago
  You could rent party houses well before Airbnb existed. If you needed a full kitchen and laundry, well, that would be the BnB, wouldn't it?
  - azinman2 5y ago
    No, BnB means you get breakfast in an inn, often shared with other people you don’t know, in a place that other ppl live in. AirBNB means you have an entire place to yourself.
    - dragonwriter 5y ago
      > AirBNB means you have an entire place to yourself. No, it doesn't.
      - azinman2 5y ago
        You’re right. That’s how I use it but I forgot thats not the only way.
        lotsofpulp 5y ago
lhorie 5y ago
I don't think this is right. They have to raise prices in some markets (e.g. California) to meet new regulations, sure, but some cities were already profitable pre-pandemic without money burning shenanigans. The single largest thing that threw a wrench in the profitability projections was the pandemic, which caused two huge impacts in the supply/demand graph (the first one down when everyone stopped going out, and the second up now that things are going back to normal-ish, out-of-whack economy notwithstanding.) Uber, being a two-sided economy company, is extremely sensitive to abrupt changes in supply/demand. There's this persistent notion here that Uber used VC money to lower prices across the board, which is ostensibly true to some extent, but the reality is a bit more nuanced in the sense that Uber operates in a hyper-local fashion, with budgeting strategies catered individually to each city, each with the end goal of eventually stopping the `money => growth` strategy and switching to a self-sustainable model (or if that can't be achieved, then GTFO of there grabbing equity on the way out, as it already has in multiple markets).

phreeza 5y ago

Was Airbnb ever really subsidized the way that Uber was (i.e. the host gets more than you paid?)

jl2718 5y ago
Yes. I was a large host in 2012, and whenever someone would cause trouble, AirBnB would pay for a Palo Alto hotel room to get them out of there. People would go full psycho just to get a free hotel room. I tried hosting again recently; it was an expensive nightmare, but probably better for their margins. Too bad because I had really enjoyed the community in those places.
- rticesterp 5y ago
  I'm a host now and roughly 30% goes to AirBnB. There is both a Host Service Fee and a Guest Service Fee. They also take out taxes
  - ornornor 5y ago
    And as a guest, they do jack shit when things go wrong. The best you can hope after spending hours on the phone explaining your case over and over with each new person you’re getting is that they’ll refund your money with a “good luck finding another place to sleep for tonight, you’re on your own” Airbnb ruined so many of our vacations in the last few years that we’ve sworn to never ever use them again. It’s not worth the trouble. And the prices are completely ridiculous now, on par or more expensive than a bona fide hotel.

dehrmann 5y ago

The big difference is AirBnb ended up being a winner from covid, at least eventually.

danhak 5y ago

> See this with Airbnb too. They're no longer cheaper than a hotel in many cases and the experience has declined for a variety of reasons. This is such a common criticism of Airbnb. Maybe I’m an outlier but my use of Airbnb does not compete with hotels at all: e.g. renting an entire pool house with friends, a secluded cabin out in the mountains or an apartment with full kitchen and laundry for an extended stay in a city center.

halfmatthalfcat 5y ago
Anecdotally I view AirBnB as a hotel replacement but like the OP said, I've started going back to hotels because the price/quality just isn't there anymore.
rchaud 5y ago
You could rent party houses well before Airbnb existed. If you needed a full kitchen and laundry, well, that would be the BnB, wouldn't it?
- azinman2 5y ago
  No, BnB means you get breakfast in an inn, often shared with other people you don’t know, in a place that other ppl live in. AirBNB means you have an entire place to yourself.
  - dragonwriter 5y ago
    > AirBNB means you have an entire place to yourself. No, it doesn't.
    - azinman2 5y ago
      You’re right. That’s how I use it but I forgot thats not the only way.
      - lotsofpulp 5y ago

lhorie 5y ago

I don't think this is right. They have to raise prices in some markets (e.g. California) to meet new regulations, sure, but some cities were already profitable pre-pandemic without money burning shenanigans. The single largest thing that threw a wrench in the profitability projections was the pandemic, which caused two huge impacts in the supply/demand graph (the first one down when everyone stopped going out, and the second up now that things are going back to normal-ish, out-of-whack economy notwithstanding.) Uber, being a two-sided economy company, is extremely sensitive to abrupt changes in supply/demand. There's this persistent notion here that Uber used VC money to lower prices across the board, which is ostensibly true to some extent, but the reality is a bit more nuanced in the sense that Uber operates in a hyper-local fashion, with budgeting strategies catered individually to each city, each with the end goal of eventually stopping the `money => growth` strategy and switching to a self-sustainable model (or if that can't be achieved, then GTFO of there grabbing equity on the way out, as it already has in multiple markets).