Make Known Unknown (Blog 9)

Airbnb Makes Money From “Air”


Weeks ago, we all wrote blogs on the topic “sharing economy”. Most of us had the positive comments on this model of economy. For the whole society, it is environmental friendly, since we could share instead of wasting, fewer natural resources are needed. Also for the consumers, less money is needed to be spent. At that time, when I wrote my blog on the “sharing economy”, I was acting as a big fan of it; however, when I follow this topic and do more research, I start to think the opposite way.

“Something Airbnb doesn’t tell you when you sign up is that you may be breaking the law and/or your lease (its spokesperson says that warning is in its terms of service, but I never saw it).”  This is a quote from an article on San Francisco Bay Guardian. The author attended a dinner with representatives from different collaborative consumption start-ups, Airbnb, TaskRabbit, Shareable, Vayable, and Getaround. It is interesting that when he asked something about the “tax”, he said there was an “uncomfortable silence”.  This silence shows that they all knew they were doing something wrong about the tax.

Besides the tax, what about the hurt to the competitors? Such businesses usually don’t have many employees and even an office. Obviously, the cost is low. Their prices charged for the consumers must be lower as well.  Also, Airbnb don’t have their real estates, but they have dozens of yurts, caves, tepees with TVs in them, water towers, motor homes, private islands, glass houses, lighthouses, igloos with Wi-Fi and tree houses on their website available. How excited! Owners of these properties are responsible to their own properties, not Airbnb! I feel sympathetic for those branded hotels. It costs them millions to build a hotel; however, it could be not attractable with their luxury facilities any more.

This unfair competition between Airbnb and hotels might not be that obvious since it is not advertised well. What if more people get to know it over years? I am afraid that it will “steal” more customers from the traditional hotels.

Related articles:

The problem with the sharing economy

Welcome to the ‘Sharing Economy’

The Best Argument Against the Existence of Airbnb (gizmodo.com)

I Bought an Apartment Just to Rent Out on Airbnb (mashable.com)

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3 thoughts on “Airbnb Makes Money From “Air”

  1. The video mentioned that the Airbnb guests may drive out other people who live in a building because their presence is loud and inconvenient. I wonder if there are landlords that have stopped renting entirely, and are only allowing Airbnb customers to use their rooms in an effort to circumvent rent control laws. Can landlords make more money on Airbnb than by traditional rent?

    • I may say yes, since Airbnb enable the short rent instead of long one. And Airbnb has a better promotion and advertisement rather than local agencies. If the landlord feels that his house is popular, he could increase the price.

  2. I am much more sympathetic to neighbors then to Marriott or other firms. If what Air BnB is offering is an attractive option, that is part of the competition.

    This is a tricky question. In my mind, someone who owns or rents their dwelling is perfectly entitled to occasionally rent said space to travelers. However, when this transitions to something like a full time business for the owner or tenant, then I am less sanguine. The issues of fairness to neighbors comes up. As does zoning and land or property use.

    Air BnB allows a marketplace between consumers and small suppliers to emerge. That can be very positive. But it is different than barter or sharing, even if it has some similarity in being based on trust and relationship.

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